Connecticut’s urban centers are filled with vacant, decaying industrial sites that companies have kept off the market for decades to avoid the state’s Transfer Act requirements. These abandoned properties represent missed opportunities for density and walkability in the very locations where the state wants to encourage growth. A new release-based cleanup system, set to take effect March 1, 2026, is built on the hope that eliminating mandatory investigation requirements will finally unlock these sites for redevelopment. But whether this bet will pay off remains uncertain — and the answer won’t be clear for at least 18 months.
Brendan Schain, Partner at Shipman & Goodwin and former legal director at the Connecticut Department of Energy and Environmental Protection, explains that the Transfer Act created strong disincentives for owners to sell contaminated sites. When Connecticut’s manufacturing base declined in the 1990s, many companies fenced off their properties and paid minimal taxes rather than risk triggering the Act’s requirements. “Instead of selling the property for redevelopment, they just put up a fence and let the property crumble,” Schain says.
The Transfer Act required extensive environmental investigation and cleanup whenever certain properties changed hands. For owners of contaminated industrial sites, the costs and uncertainties of compliance often outweigh the potential benefits of selling. As a result, these properties — often in central, transit-accessible locations — sat vacant for years, while Connecticut’s goals for dense, walkable development went unmet.
How the Transfer Act Distorted the Market
The Transfer Act applied only to properties with certain historical land uses, mainly industrial and commercial sites. This created, Schain argues, an arbitrary distinction that warped the market. Properties that fell under the Act were subject to mandatory investigation and cleanup, while similar properties outside its scope had no such obligations, regardless of their environmental risk. This made Transfer Act properties harder to finance and sell, especially to out-of-state developers unfamiliar with Connecticut’s unique regulatory landscape.
“The Transfer Act creates winners and losers,” Schain says. “It chooses between different properties depending on their historical land use, and imposes requirements on some but not on others.”
The resulting uncertainty pushed many developers and lenders away. “People don’t want to do things that are different or unfamiliar,” Schain notes. The law’s complexity limited interest from outside investors, further reducing the pool of potential buyers for brownfield sites.
The new release-based system eliminates these distinctions. Rather than tying the investigation to the property type or transaction, it requires reporting and cleanup only when contamination is actually discovered. This approach, Schain says, is more consistent with how other states manage environmental risk and should make Connecticut properties more attractive to national investors.
The Flexibility Tradeoff
The rationale behind the release-based system is straightforward: by removing regulatory barriers, the market will drive appropriate investigation and cleanup. Buyers, sellers, and lenders will assess environmental risks and negotiate responsibilities based on their own interests. Sites that were kept off the market to avoid the Transfer Act will become viable for redevelopment.
However, this flexibility is also a weakness. The Transfer Act set out a clear, prescriptive process: investigate, remediate, then transfer. The new system is less rigid, relying on market participants to decide when and how to investigate. This works well if all parties are sophisticated and informed, but it can lead to uneven outcomes when information is lacking or risk tolerance varies.
“The new system relies on the market to drive investigation,” Schain says. “It takes business needs as the driver for cleanup, and because it’s less prescriptive, there’s always going to be some uncertainty.”
Some property owners may still choose to do nothing, even without the old regulatory trigger. Others may investigate and find contamination that is costly to address, and the requirement to remediate to state standards remains if contamination is discovered. The new system does not eliminate the challenges of remediation — it only changes when and how they surface.
“If a property owner acquires knowledge of pollution, it still has to be addressed to the state standard,” Schain notes. “The same remediation challenges exist for discovered releases.”
Will Developers and Capital Arrive?
The critical test will come over the next 18 to 24 months, as Connecticut observes whether removing regulatory hurdles leads to actual redevelopment of long-abandoned industrial sites. If out-of-state developers and lenders view the release-based system as more predictable and in line with national practices, investment should increase. If not, the state will have replaced one regulatory problem with another economic one.
Schain is cautiously optimistic. He believes the new system could “spur redevelopment” on properties that avoided the Transfer Act for years, but he acknowledges that change will take time.
Shipman & Goodwin is preparing to guide property owners and developers through this transition, leveraging Schain’s experience drafting the new regulations and leading the multi-year stakeholder process. The firm’s environmental team, including Aaron Levy, who also contributed to the release-based cleanup working group, expects that firms with regulatory expertise will be well-positioned to interpret ambiguous rules and anticipate how the state will enforce them.
What’s at Stake
The next phase will determine if Connecticut’s brownfield sites become attractive investments or remain fenced-off liabilities that owners ignore. This outcome will show whether the state’s 40-year experiment with the Transfer Act has been replaced by a system that truly encourages redevelopment, or simply by a different set of uncertainties.
The stakes are high: Connecticut’s ability to revitalize its urban cores, attract new investment, and realize the full potential of up to $40 billion in brownfield value depends on whether this market-driven approach can succeed where prescriptive regulation failed. Over the next two years, developers, lenders, and local governments will reveal whether the new system delivers on its promise — or whether the state’s most valuable sites remain stuck in limbo.
