The Municipal Setting Designation statute was adopted by the Texas Legislature in 2003 and created a new remediation tool that since, has changed strategies for cleaning up and redeveloping contaminated sites. The MSD is of particular use in cases where properties have been stuck in the Voluntary Cleanup Program or other State of Texas corrective action programs with no resolution in sight. In 2007, the Texas Legislature amended the statute to remove the requirement that a municipality have a minimum population of 20,000 in order to utilize an MSD. That legislative change makes MSDs available to small cities all across Texas.

While there is no way around the increased transactional costs and time involved with deals involving contaminated properties, a Municipal Setting Designation (“MSD”) for a contaminated site has the potential for both lowering the cost of site assessment and remediation and also speeding up the timeline to get a closure determination from the State of Texas, so deals can be completed. MSDs provide an important tool for property owners needing an exit strategy for environmentally-impacted properties, and for purchasers and developers dealing with the challenges of redeveloping contaminated property. As a result MSDs are impacting, in a very positive way, the market for urban infill properties in Texas.

GSF had the good fortune to get significant early experience with the MSD process. In October of 2004 we obtained the first MSD ever issued MSD 001, and later the very first VCP final certificate of completion based upon an MSD, for the Goodwill site in West Dallas. Following that, we represented a client on the buy side in the transaction for a site on Motor Street in Dallas that received the second MSD ever issued MSD 002. And in 2005 we successfully obtained the first MSD issued in Fort Worth, MSD 004, for the Montgomery Plaza development.

We have participated in the development of MSD programs for the cities of Dallas, Fort Worth, Grapevine, Plano, Mesquite, Terrell, Longview, and Abilene and obtained the first TCEQ-certified multi-site owner MSD.

Our firm has been involved with a significant number of the MSDs certified to date by the Texas Commission on Environmental Quality. Those MSDs have made possible hundreds of millions of dollars in new real estate development. 

We invite you to contact one of our attorneys to discuss how we might assist you in addressing any environmental challenges or opportunities that impact your company’s interests.