Redevelopment Of Brownfield Sites example essay topic

The Brownfield Problem Brownfields are abandoned, idled, or under-used industrial and commercial sites where expansion or redevelopment is complicated by real, or perceived environmental contamination that can add cost, time, and uncertainty to the redevelopment process. Throughout the country there are an estimated 450,000 brownfield's. These vacant properties exist mostly in cities, serving no practical purpose, and act as both eyesores and environmental as well as economic pitfalls. The inner cities, where most brownfield's exist, were once the only choice developers had in deciding where to build industry.

However, since the birth of environmental laws and regulation, the redevelopment of these properties has become a complicated and often very costly procedure. This procedure causes many businesses and corporations to look outside of the inner cities and urban areas for locations to grow and develop. This trend not only leaves the inner cities vacant and economically useless, but also leads to urban sprawl, a phenomenon that leads to the development of greenfield's, or the pristine, undeveloped land outside the confines of massive urban areas. Many sites across the country that were once used for industrial, and / or, commercial use have been abandoned by the companies who used them.

Some of these sites are contaminated; however, some of them are merely perceived as being contaminated. In those cases, the sites have been linked to big industry, or nearby sites. In the past, any such site has been avoided or ignored as a possibility for redevelopment. This situation is caused largely by federal and state environmental laws and court decisions that impose or imply potentially serious liability. The circumstances surrounding this uncertain liability has encouraged businesses to build in previously undeveloped and non-urban areas, that are referred to as greenfield's, where they are confident that no previous industry has been active. A report from the General Accounting Office finds that: 'As states and localities attempt to redevelop their abandoned industrial sites, they have faced a number of obstacles, including the possibility of contamination and the associated liability for cleanup.

' This situation has lead to a number of far-reaching problems including social, economic, and environmental. One of the fundamental issues of brownfield's is that the vast majority of the sites lay in urban areas. In these areas, environmental concern pales in comparison to the concerns that the local citizens in these areas have, such as crime, poverty, and unemployment. The brownfield issue, however, is clearly an environmental issue that is linked to a city's economic vitality and competitiveness. Properties sit abandoned because of real or perceived contamination. Cost / benefit analysis has driven development away from these sites toward suburban and rural greenfield's because of a lot of federal and state law with regulations that mean delays and lots of money and paperwork.

This leads to a smaller urban economy and tax base that facilitates urban life. Environmental regulations have been established without regard to economic ramifications, and a general litigation craze has assigned legal liability without regard logical personal or corporate responsibility. Basically, groups of individuals that had little or nothing to do with a site's contamination become responsible, and in turn, liable for its cleanup. Meanwhile, the actual polluters escape accountability. Some cleanup requirements are far too strict, yet others are ambiguous to a point, and changing. Furthermore, the division of authority between levels of government, or red tape, and various agencies make compliance with the laws difficult.

These uncertainties, coupled with related delays and confusion linked to the reuse of brownfield's lead to exaggerated costs, which result in these industrial sites sitting idle. Cost / benefit analyses show that these projects do not prove to be economically feasible in lieu of the possibilities and savings presented by Greenfield development. The resulting environmental consequence is that the sites that require cleanup stay contaminated. Also, the development that ensues in the greenfield's creates further environmental degradation and new infrastructure must be established even though there are existing capabilities in the urban areas at a great expense. The largest concentration of these sites is in the Northeast and the midwestern cities where there is a long history of industrial manufacturing, etc... They are not located solely in these areas though; they can be found nationwide in various places where there is a relatively significant population density.

Much of the complications and related problems of brownfield redevelopment stems from the - Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), commonly known as the Superfund Law. Subsequently, many states have passed their own 'superfund laws. ' The federal Superfund Law derives the name from its establishment of a trust fund, financed by industrial taxes, for the cleanup of polluted sites. Upon the creation of Superfund, federal and state regulators compiled a list of actual and suspected sites. These sites became unmarketable, even after cleanup because of the stigma they carry from attracting the attention of the federal hazardous-waste bureaucracy. This causes the sites with little or no contamination to become stigmatized and caught up in the procedures designed initially for severely polluted toxic-waste dumps.

This trust fund component of Superfund is of secondary importance to the law's liability structure, which is aimed at making the polluters themselves to pay for cleanups instead of the government and taxpayers. 'Strict, retroactive' liability and 'joint and several' liability are the major components of the law. In essence, these provisions mean that property owners of contaminated sites can be held liable for cleanup even if they had nothing to do with the contamination. Liability has not only fallen into the hands of the property owners, but lenders have been hit as well.

When property owners and developers cannot foot the cleanup bills, or when banks have been forced to foreclose on contaminated property, it is the lending institution that is stuck with the litigation and compliance costs. The fear of these possible costs steers possible funds to other safer investment opportunities. Once again the government has exhausted the private sectors' attempts to alleviate a public nuisance. The unrealistically stringent cleanup standards imposed by the EPA and other regulators are not only dissuading factors involved in brownfield redevelopment. This liability strategy generates expensive litigation costs.

These costs have been detrimental for both economic development and environmental protection. The expense of this litigation, though benefiting lawyers, inflates costs by more than 30%. The result is that these properties are shunned by big business, whose eyes are instead fastened to previously undeveloped properties. It is clear that the political and regulatory tides must change in order to clean up the brownfield problem, something that will have extensive benefits for America's environment, economy, and aesthetic beauty, not to mention the opportunities for real estate developers across the land. The leadership in the Conference of Mayors has made the development of brownfield's a top priority. Through a cooperative agreement that EPA granted to the Conference of Mayors in 1996, the Conference has pushed forward on a number of issues and fronts to encourage the redevelopment of brownfield's and the creation of additional tools for local governments and businesses.

Some of the accomplishments of the Conference so far include: have established a national database on brownfield's redevelopment that is available for local governments and others, three nationally distributed reports have been written on the status of brownfield's in the U.S., research symposiums have been held with businesses; financial institutions and other interested parties on the impediments of redeveloping brownfield's, resource books have been created to educate financial institutions and businesses on the tool available to redevelop brownfield's, mayors have contributed to the 'Best Practices' book on how they were able to redevelop their brownfield sites in the hope of providing tools to other local governments, and a partnership has been established with American Farmland Trust on the formation of an urban / rural coalition working together to encourage the redevelopment of brownfield's and the preservation of farmland and other open spaces. The United States Conference of Mayors calls upon the President, Congress, and other affected parties to remedy the effects of brownfield's, and enact the following measures. Liability protection should be provided to innocent parties involved with brownfield redevelopment. Tax incentives should be made available to attract potential investors to brownfield sites. Federal program resources should be significantly increased to assist cities with site assessment, cleanup, redevelopment, infrastructure improvements, and other related needs. Redevelopment should be encouraged through support for voluntary cleanup initiatives and development of standards based on the future uses of the brownfield sites.

National attention should be drawn to the quality of life and the economic impact of brownfield sites, including the cost of urban sprawl. Local governments should have regulatory flexibility and be given latitude in the use of federal resources to address their brownfield needs. Partnerships should be established to involve a broad range of affected parties in brownfield's redevelopment. Prevention strategies should be developed to prevent properties from becoming future brownfield sites. Liability reforms are needed for innocent parties as well as tax and financial incentives to accelerate the redevelopment of brownfield sites. There are three actions that can be taken to really take a stand in this area.

First, liability protection should be provided for innocent parties including lenders, purchasers, re developers, and other blameless third parties. Second, liability protection should be provided to local governments who become owners of contaminated properties. Third, liability protection should be provided to entities that participate in voluntary cleanup programs. Some tax incentives can really make a change in the redevelopment process as well.

These actions that can be taken are as follows. The Administration and Congress should establish a targeted remediation tax credit program that would be administered by states and local governments. Tax credits should apply directly to a certain percentage of removal and remediation costs incurred by the private sector in developing brownfield's in distressed communities. Tax exempt financing should be provided for private remediation of brownfield sites. Beyond liability protection, the first critical step to attracting private sector investment to brownfield sites is an environmental assessment and site characterization to determine the extent of environmental contamination and the cost of removal or remediation. Then, funds should be set aside either from the Superfund Trust Fund or general revenues to provide resources to local governments to develop brownfield site inventories, site assessments, and brownfield redevelopment strategies, the main goal of which would be to attract private investment.

EPA should expand their Brownfields Initiative to include funds for preparation and implementation of brownfield redevelopment strategies. Federal funds should be made available for the creation and capitalization of local revolving loan funds for local governments or the private sector to perform activities such as removal, remediation, and small business development at brownfield sites. HUD should provide resources to accelerate actual development, through leveraging private sector investment and other means, to move beyond cleanup and remediation. All agencies need to find ways to assist by providing resources that will aid in the redevelopment of brownfield sites.

Bibliography

EPA Homepage Brownfields Inc. Homepage Chicago Tribune; 3, 1: 2, May 30, 1996. Urban Land; Vol. 55, #6, pg 43.