last modified: Monday, December 12, 2005 3:04 PM
State and Local Strategies for Brownfield Redevelopment: Harnessing Economic Development Potential
Shayna H. Hirshfield
The US Environmental Protection Agency (EPA) defines brownfields as “property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.” These sites tend to be abandoned or underutilized, and are often associated with impoverished, industrial, and/or post-industrial areas. Brownfield redevelopment involves both remediation – cleanup of contaminants at the site; and reuse – new development that will make the site accessible and usable.
While Federal laws provide for an array of assistance for brownfield cleanup and revitalization, States and localities are primarily responsible for setting and carrying out specific programs. Having the proper mix of state and local support through policy provisions, financing schemes, and local community support and involvement, is critical to the success of a project. These three components – political, financial, and social viability – must each be addressed early on and throughout the redevelopment process.
This essay provides a brief overview of state-level policy strategies, which include funding mechanisms, to spur brownfield redevelopment. A discussion of the social component, or community goals, is then offered. Some inherent challenges presented by the existence of brownfields are outlined in an effort to demonstrate the interconnectedness of the three components of redevelopment.
Primary state and local government mechanisms for providing support:
A combination of these strategies is often seen in a single state or municipality. Inasmuch as brownfields are viewed as a problem for local economic development, approaches are designed to address barriers to redevelopment and are often subsets of local comprehensive economic development strategies, such as empowerment zones.
Brownfields are rarely isolated blemishes in an area. Rather, they are often marks of general community economic decline. In Wayne County , Michigan – home of Detroit – there are over 2,000 brownfields (EPA, 2004). Contaminated sites can cause interruptions in local infrastructure, such as by contaminating local drinking water, making roads impassable, and creating difficulties in accessing underground utility cables. These sites also tend to be surrounded by pre-existing infrastructure problems associated with general economic decline: crumbling roads, inadequate utilities provision, lead pipes, etc. The social stigma that sites tend to create, both real and perceived, increases the effects of these interruptions.
Improving infrastructure around brownfield sites has several beneficial outcomes. Remediation becomes easier because the site can be accessed more easily by cleanup and construction crews. Reuse is stimulated when developers see that they do not have to spend time and energy with water and electricity upgrades and hookups, and when they know that potential buyers will not be deterred by an inaccessible property. Another important effect of infrastructure development is to reduce the impact that brownfields may have in propelling the trend towards urban sprawl.
Massachusetts, for example, has made a priority of improving transportation infrastructure to facilitate brownfield redevelopment. This has included building new and connecting existing roadways, installing traffic signals, and rehabilitating freeways. Both the Massachusetts Highway Department and the Federal Highway Administration are involved in these projects (Bartsch & Wells, 2005).
Voluntary Cleanup Programs
According to McCarthy (2002), over 45 states have Voluntary Action Programs (VAPs). These allow private developers to rehabilitate brownfield sites on their own in exchange for a promise of “protection from future state enforcement action” (p. 290). They also aim to streamline the reporting, review and approval, and oversight mechanisms in order to make remediation and redevelopment easier for potential investors. In Maryland, for example, developers are provided with “limitations on liability” as well as “certainty in the process by knowing exactly what will be required.” However, the criteria for which sites are eligible are quite strict, as Superfund sites, newly contaminated sites, and others are excluded.
For further discussion:
The case of Ohio 's VAP
Colorado 's Voluntary Cleanup Roadmap
Targeted Financial Assistance: Revolving Loan Funds
States and municipalities offer many different kinds of targeted financial assistance to encourage brownfield redevelopment. Revolving Loan Funds (RLFs) are established by governments or foundations to provide locally targeted financing for economic development where borrowers would not otherwise be able to obtain sufficient funding for projects. Both the principal and interest of loans remains within the community; resources are thus recycled locally so that projects may continue.
The impetus for RLFs lies in the fact that many smaller private developers, especially those in “non-traditional” areas such as disinvested urban areas, are unable to access the capital they need from private banks. RLFs provide low-interest loans to individuals and entities who request smaller amounts than large businesses; have minimal credit history or collateral; or are commencing projects whose return may not been seen for some time, or with a risky outcome (as is often the case in brownfield redevelopment, where the extent of contamination may not be known until mid-project). RLFs have positive benefits for the individual borrower as well as for the community or site of redevelopment. Borrowers can use records of successful RLF loan repayment to establish positive credit history, so that in future projects they are able to access traditional lending institutions.
In another strategy for easing the financial burden of cleanup and redevelopment on property owners and investors, many states have developed tax incentives for individuals or corporations who meet certain requirements. Comprehensive, place-based economic development initiatives, such as enterprise and empowerment zones, have often included tax incentives for brownfield investment within the target areas. Increasingly, however, states have developed their own legislation establishing tax relief and credits for the remediation and reuse of contaminated sites. Legislation tends to be housed within a State's Department of Environmental Protection (e.g., Florida ) or the equivalent. In Colorado, however, the program is administered by the Department of Public Health, while in Maryland, the Department of Business and Economic Development is responsible.
Colorado provides a stepwise tax credit where developers may receive 50% of the first $100,000, 30% of the second $100,000, and 20% of the third $100,000 spent in cleanup activities. The Massachusetts Brownfields Act (1998) provides eligible taxpayers who “achieve and maintain a permanent solution or remedy operation status” with a tax credit of either 25% or 50% of “net response costs.”
This strategy may be as simple as canceling delinquent taxes, or as controversial as “relaxing” environmental regulations. It is therefore often viewed by communities with a degree of skepticism. VAPs, for example, have been criticized for over-zealously relaxing oversight for those who promise to develop contaminated sites on their own (McCarthy, 2002).
Many US communities have been based on deep industrial activity and have, as a result, been beset with concentrated pollution and abandoned facilities. A difficult tension exists in these areas: On the one hand, there is an urgency to attract new investment in order to jumpstart economic development. On the other, compounded public health concerns and concentrated poverty indicate a desperate need to eliminate environmental toxins and guard against further contamination. In the face of the competing demands of environmental/health and social/economic sustainability, regulatory relief is a dubious redevelopment strategy.
The case supporting regulatory relief claims that particularly contaminated sites or regions should be held to a lighter set of environmental standards, since they will likely never be put to anything other than industrial use. If a site is certain to never be used for, say, housing or a school, developers argue, higher levels of groundwater, air, and other contamination should be acceptable. A second argument states simply that in cases where cleanup costs will be too high for investors or developers to take on the project, allowing less-intensive cleanup or easing insurance requirements are the only effective means of ensuring redevelopment.
Consolidation of Administrative Assistance and Requirements
This includes an array of technical assistance and cooperation between state departments to facilitate site remediation and redevelopment. The many and intertwined complications of brownfield sites constitute a significant barrier to redevelopment. Numerous issues must be addressed at once, and a confusing array of regulatory frameworks must be negotiated before plans can be made. States and municipalities that can streamline this process greatly increase the ease (and pace) with which contaminated sites can be remediated and put to use.
The New Jersey Brownfields Redevelopment Interagency Team (BRIT) is coordinated by the New Jersey Department of Community Affairs' Office of Smart Growth, yet it involves access to and resources from over 24 state agencies, including:
| Board of Public Utilities|| Department of Labor|
| Department of Agriculture|| Department of Transportation|
| Department of Community Affairs|| Economic Development Authority|
| Department of Education|| Historic Preservation|
| Department of Environmental Protection|| Housing and Mortgage Finance Agency|
| Department of Health and Senior Services|| Office of Smart Growth|
A team of experts reviews projects and works with communities and (potential) developers to determine the best mix of public resources for each stage of redevelopment. Responses crafted by BRIT address needs ranging from infrastructure, to financing, to environmental concerns. Developers, community leaders, or local government officials can contact BRIT directly for assistance in creating a development plan and accessing the necessary resources in an efficient and coordinated manner.
The complex nature of brownfield contamination – intertwining environmental pollution, public health risks, economic decline, and community (social) dislocations – necessitates solutions that are created and carried out in partnership between a range of different entities. The inclusion of community members in identifying and planning for the redevelopment of key brownfield sites is often a critical component of projects. In fact, the impetus for brownfield cleanup often comes first from local residents themselves. In the case of the Dudley Street Neighborhood Initiative (DSNI) in Boston, community members forced the city to recognize illegal dumping in their neighborhood and work with them in stopping the practice.
Bartsch (2003) proposes a framework for community participation in brownfield redevelopment that includes four elements:
A number of challenges inherent in brownfield redevelopment provide practical incentives for community involvement. A prime example is that of scale. Many brownfield sites are small – sometimes an acre or less – and thus financially unattractive to potential private investors. This fact compounds challenges to redevelopment. In many disinvested, post-industrial urban areas, neighborhoods are dotted with “mini brownfields.” These sites blight the landscape, creating feelings of decay and hopelessness that further deter development.
Communities that are able to create a sense that the sites are linked – either through grassroots cleanup and reuse programs, place-marketing, or other strategies – may be more successful in spurring comprehensive redevelopment of multiple sites and gaining new investment in their neighborhoods. Alternative community-based strategies, such as creating mini-parks, installing basketball courts, or other public-use areas, are also positive ways of turning brownfield sites around while boosting the image, usability, and even safety of blighted communities.
Sustainable brownfield development demands a total process in which community members, developers, investors, and local government officials are fully involved in the planning process. A combination of approaches should be pursued to make certain that the variety of community, financial, and environmental needs are met. Community involvement throughout the process – from site identification to having ownership in reuse – ensures that redevelopment will occur in concert with local economic and community development. Residents are often best able to identify the most urgent sites in need of remediation. Their involvement in reuse planning ensures that the site's new function will best meet community needs – such as by building a much-needed library, a grocery store, or creating a well-lighted path to facilitate non-auto transportation.
For further reading:
Bartsch, C. (2003). Community Involvement in Brownfield Redevelopment. Northeast-Midwest Institute.
Bartsch, C., & Wells, B. (April 2005). State Brownfield Financing Tools and Strategies . Northeast-Midwest Institute.
EPA (September 17, 2004). Brownfields 2004 Grant Fact Sheet: Detroit/Wayne County Port Authority, MI.
Howland, M. (2004). The role of Contamination in Central City Industrial Decline. Economic Development Quarterly, vol. 18 , no. 3, p. 207.
Lewis, M. (2000). Brownfields – The California Approach.
McCarthy, L. (2002). The brownfield dual land-use policy challenge: Reducing barriers to private redevelopment while connecting reuse to broader community goals. Land Use Policy, vol. 19 , no 4. pp 287-296.
Meyer, P. B., & Yount, K. R. (2003). Financing Redevelopment of Brownfields. In S. White, R. Bingham, & E. Hill, Financing Economic Development in the 21 st Century . M. E. Sharpe, Inc. Armonk: NY.
Robinson, K. (2002). Revolving Loan Funds. In S. White, R. Bingham, & E. Hill, Financing Economic Development in the 21 st Century . M. E. Sharpe, Inc. Armonk: NY.
Wong, A. K., and Owens-Viani, L. (May 2000). Brownfields Redevelopment: Meeting the Challenges of Community Participation . The Pacific Institute.