Pandemic Slows — but Doesn’t Stop — Development and Regulation
A New Environment
The world of development — and all the stakeholders who interact within in, from contractors to engineers; from regulators to municipal officials — have certainly been impacted by COVID-19, mainly because they weren’t able to meet in person anymore. But they adjusted to this new reality, and even learned from it — and continue to grapple with other changes as well, most notably in environmental compliance. To hash out some of these developments (pun intended), five leaders from several interconnected fields spoke with BusinessWest about the lingering effects of the pandemic and how they anticipate pivoting to the next set of changes.
When COVID-19 forced a shutdown of the economy 13 months ago, Jeff Daley said, the impact on development was immediate.
“Everything came to a grinding halt,” the president and CEO of Westmass Area Development Corp. told BusinessWest. “The first few days, watching the economy tank, people were scared — they didn’t know where this was going to go.”
It became clear over the next several weeks, however, that projects would continue, and Westmass ramped back up fairly quickly, even as the health implications of the pandemic remained daunting (and, of course, still linger, despite the availability of vaccines).
“It changed the way we did business, though,” Daley added. “Zoom calls with state agencies and local agencies increased from zero to 100% in the first few months. We had to adjust quickly to having meetings and approvals and denials with a different form of communication.
“We saw some hiccups at the beginning of the pandemic, but when things started ticking up again, it appeared state agencies really had their stuff together, as well as cities and towns.”
“I give credit to towns and cities across the Commonwealth; everyone adapted really quickly,” he went on. “We saw some hiccups at the beginning of the pandemic, but when things started ticking up again, it appeared state agencies really had their stuff together, as well as cities and towns.”
Daley recently took part in a wide-ranging roundtable discussion with BusinessWest about the impact of the pandemic on development and environmental regulation. Also taking part, each bringing a different perspective to the discussion, were David Peter, principal with Site Redevelopment Technologies; Ashley Sullivan, president of O’Reilly, Talbot & Okun Associates (OTO); Mike Gorski, regional director of the Western Regional Office of MassDEP; and environmental attorney Christopher Myhrum.
Peter, whose company cleans up contaminated sites for redevelopment — including, recently, the Games and Lanes brownfields site in Agawam — said the new paradigm of communicating has been a challenge.
“It’s difficult to move forward,” he said. “We rehab sites that have been dormant for many years due to contamination, and it’s very difficult for us right now because a lot of it is interpersonal relationships — meeting with regulators around a table with big maps — and we can’t do that anymore. We’re at a real slowdown for any project still in the planning stages.”
Projects in active development are a different story and, in some cases, have benefited from the pandemic, he added. As one example, last spring, the firm was hauling lightly contaminated soil from Beth Israel Hospital in Boston to a site in Rhode Island, and was able to conduct about twice as many trips as normal due to the lack of traffic on the road during the economic shutdown.
“If you owned, say, a restaurant when this happened, you were severely hit. But many essential businesses benefited, like our trucking situation,” Peter said. “But the biggest impact was not being able to sit down with regulators, politicians, and neighbors. It really slowed us down.”
Sullivan agreed. “In general, we did see a slowdown, and some of the logistics became difficult; there was definitely an adjustment period. But I’ll say we adapted pretty quickly, which was amazing to see,” she said, noting that the company had recently made some investments in technology that eased the transition into a different way of conducting business.
“It’s very difficult for us right now because a lot of it is interpersonal relationships — meeting with regulators around a table with big maps — and we can’t do that anymore.”
And that transition was happening whether or not everyone was ready for it.
“If you had asked me two years ago if we could our job remotely, I’d have said, ‘absolutely not,’” Gorski said. “But we’ve been remote since St. Patrick’s Day 2020. It took a few weeks to figure things out, with staff working at home, and we made some long-term improvements in technology for certain staff.”
Since then, he added, the process has been smooth, if not ideal. For example, early on, “we were very, very lenient in terms of inspections,” but the office was able to conduct limited risk-based determinations and emergency-response actions. “Staff still needed to visit spills on the highway and other releases.”
MassDEP complemented any necessary in-person visits with virtual inspections through FaceTime video and submitted photos, Gorski added. And after the initial slowdown, the pace of activity has been relatively stable.
“We’ve been on par with past years with the number of inspections in the Western Region, with enforcement numbers being a little bit down,” he said. “I think we’ve done pretty well keeping a presence out there and, more importantly, keeping our staff safe and meeting COVID protocols.”
Myhrum knew any leniency wouldn’t last. “I think clients recognized the likelihood of reductions in inspections at the start of the shutdown order, but they were cautioned, at least by me, that inspections were likely to come back,” he said.
Myhrum, who also serves on the Westmass board, agreed with the other roundtable participants that various stakeholders in the development process, from developers to inspectors to municipal officials, handled the transition to remote operations remarkably well. And he believes the construction and development sector is on the rise after an unusual year.
“Yes, construction was deemed essential, but behind that are a lot of support organizations, and things necessarily slowed down,” he said. “And that has created a lot of potential energy for when things return to some semblance of normal. Beyond that, it has been something of a brave new world, but the adaptability to remote work has been striking.”
The most distressing pandemic-driven change in Gorski’s job is “the inability to collaborate on certain projects, to sit around a table and push those plans back and forth,” he said, adding that his agency and others have come up with some innovative ways to collaborate remotely. “We’ve become more productive in some ways. And there are some efficiencies with working from home. But we do miss out on the ability to build off collaborative ideas.”
Myhrum agreed. “Screen sharing cannot substitute for a 24-by-36, or larger, exhibit in terms of communicating ideas and demonstrating evidence of what one wants to do. It’s essential to not only understanding what a project is, but also building the trust that’s necessary among the parties to reach a goal together. I believe collaborative efforts within the office are very, very important.”
Some ways business was done in the past won’t completely return, he added, like the idea of people flying to and from California to attend a 15-minute pre-trial conference. “That’s gone; everything is done remotely, through Zoom or Teams or other platforms.”
But to undertake truly effective negotiations and other business, he went on, in-person meetings need to remain an important component.
“They were backing off enforcement a little bit, but it was unofficial. Some of it wasn’t clearly communicated.”
Everyone figured out the new normal together, Gorski said, and that included the DEP. “We were very lenient during the first couple months, recognizing that companies were under a tremendous burden in terms of staffing. Once they figured out how to do things remotely, we started getting back into a normal program.
“Now, while we’re certainly not normalized, our inspection numbers here in the Western Region are on par with past years,” he added. “Some of the enforcement penalty numbers were down as well — we were careful how we adjusted penalties because of COVID — but that’s getting back to normal, too.”
Daley noted that any slowdown in regulatory activity was matched by a curtailment of development. “Everyone was trying to figure things out in the first month or two; I don’t think anyone was trying to move projects forward at a rapid pace. It all played in concert; environmental programs were moving forward at the same pace developments were with COVID.”
Sullivan said it was natural for the pace of activity to slow down as the logistics became difficult. She noted that her firm performs many environmental site assessments, doing due diligence about what a project’s environmental concerns may be, which requires communication with fire departments, boards of health, and other municipal departments. “A lot of those were closed for a while, the process would get delayed, and that would, in essence, delay the whole project.”
Reviews on the regulatory side slowed down locally as well, she said, but grace periods became the norm. “They were backing off enforcement a little bit, but it was unofficial. Some of it wasn’t clearly communicated, particularly in the first eight to 12 weeks, and we wondered when things would start up again.”
No one was surprised when it did, Myhrum said. “Massachusetts certainly has a reputation for sound and aggressive environmental enforcement, as well as rigorous regulation, which has gone hand in glove with statutory and regulatory requirements.
“I know, during the pandemic, we had two different cases involving air permits, which can be among the most complicated DEP issues,” he went on. “Those two permit applications were turned around faster than any we’ve worked on. I’d like to think we did a good job on the applications, but the turnaround times were most satisfactory to our clients.”
It’s difficult to gauge how the pandemic has affected regulation on the national level, Myhrum said, adding that a change in presidential administration will likely have a greater impact.
“I think one would be in error to believe the EPA’s priorities and activities are going to continue the way they did under the previous administration.”
“The EPA under Trump was not known for being particularly aggressive, having a former coal lobbyist as its administrator. So I think one would be in error to believe the EPA’s priorities and activities are going to continue the way they did under the previous administration. I think it will be interesting to see how the situation plays out.”
Another issue impacting developers during the pandemic is the shift by so many companies to remote work, Peter said, noting that he does a lot of work in the seaport district of Boston, and commercial real estate there is worth about 50% of its pre-pandemic value, while suburban locations with plenty of fresh air and space have risen in value.
That trend may not last forever, Daley said, for some of the communication-related factors mentioned earlier.
“Once the pandemic subsides a little bit, I think people will go back to the office, if for nothing more than partnership and collaboration efforts,” he noted. “I know we do a lot of work on 24-by-36 paper and laying things out, and it’s hard to do that in a Zoom meeting, to look at plans and assess the true value of what you’re going to do.
“Not everyone will go back to work — I agree with that — but I do think, as time goes on and the pandemic hopefully subsides and we pass through this, people have to go back to the office, at least on a hybrid basis,” he went on. “I’m a firm believer in working together and collaborating, and Zoom doesn’t really produce that.”
Issues of Justice
Last month, Gov. Charlie Baker signed a new climate-change law that codifies a commitment to achieve net-zero emissions in 2050; authorizes the administration to implement a new, voluntary, energy-efficient building code for municipalities; allows the Commonwealth to procure additional offshore wind energy, and — most notably for urban developers — significantly increases protections for ‘environmental justice communities’ across Massachusetts.
EJ communities, as they’re known, are those which have, historically, been overburdened by poor air quality and disproportionately high levels of pollution; they are often low-income. The new law requires an environmental-impact report for all projects that affect air quality within one mile of an EJ neighborhood, and requires the DEP to conduct a stakeholder process to develop a cumulative-impact analysis as a condition of permitting certain projects.
“That’s needed, I think,” Daley said, noting that he hopes the environmental council the law calls for has adequate representation from EJ communities in Western Mass. “It’s important that we have representation on that council. Far too often, Western Mass. has one token person on a committee, and 17 from the Boston area. This is a great start, but our people need to have a say.”
Gorski said the emphasis on environmental justice is positive because people have a right to a meaningful say in what goes on in their neighborhoods.
“The DEP has had an EJ policy for some time, and we’ve had public involvement in the planning process, but the climate bill now makes that law, and we’re going to be proactively reaching out to various community groups to involve them and educate them, so when we have these public hearings for complicated permits and things of that nature, people understand what we’re talking about, and can come at it from a knowledgable viewpoint, rather than just ‘we don’t want that in our neighborhood.’ It’s important to give people a voice.”
Myhrum agreed. “EJ has evolved from policy to statutory law in Massachusetts,” he said. “People will have the opportunity to participate in an interactive way to discuss the impact and specific ways people are affected.”
It’s important to remember, Sullivan noted, that development projects in urban areas often have a positive impact on the environment, especially those that remediate brownfields and other contamination.
“I’d love to see more mixed-use revitalization and really cleaning up some of these issues,” she said. “At OTO, we love working on these projects, and we’re happy when there’s more funding and regulations pointing that way — if a development can be done in a way that could be responsible, with some thought behind it.”
While he believes there’s significant pent-up energy in the development community, Daley understands plenty of changes are coming related to energy and other aspects of doing business. In the short term, though, the way the pandemic has altered business as usual may have a broader effect.
“Is COVID going to be a transitional time for business, or is it transformational? It’s going to be both,” he said, answering his own question. “It’s going to be transitional in the way we do business, whether it’s the regulatory process or the actual development, lease, and sale of properties and the way they go to market. But it’s also transformational — an opportunity to rethink the way we do business, shifting us more into the digital age.
“I don’t think the office space will ever go away,” he went on, “but [technology] allows people to be more creative with their time and productivity and the way they do business.”
Even though MassDEP is still working largely remotely, Gorski said, “we look forward to getting back to hybrid, or something approaching normal operations. We’re still available for technical assistance, and we still want to collaborate to move projects forward.”
Depending on the project, Sullivan said, OTO works with developers, property owners, other civil engineers, structural engineers, attorneys, regulators … the list goes on, and speaks to the importance of communication, and the ways in which it has been altered by COVID.
“Each of those has been impacted similarly during the past year,” she noted. “We did adjust to not being face to face, but there’s so much that can be accomplished face to face, meeting on site. When that goes away, things slow down, and your meetings aren’t as effective.”
But her firm, like everyone else in the broad, complex, cross-disciplinary business of development managed to adjust, and even learned a few lessons about pivoting and melding traditional and remote ways of doing business.
“This is the new way,” she said. “We’ll take the best of both worlds and hopefully move forward.”
Joseph Bednar can be reached at [email protected]