What is a brownfield?
The term brownfield typically refers to land that is abandoned or underused, in part, because of concerns about contamination. The federal government defines brownfields as “abandoned, idled or underused industrial and commercial properties where expansion or redevelopment is complicated by real or perceived environmental contamination.”
Brownfields may make you think of dirty, blighted, abandoned industrial property, but that image is too narrow. Though some brownfields are old industrial sites, others are commercial buildings with little or no environmental contamination. Brownfields could be –
- former service stations,
- former dry cleaners,
- parking lots,
- lots where heavy machinery was stored or repaired,
- abandoned railroads,
- former railroad switching yards,
- air strips,
- bus facilities,
- and many more types of facilities.
Many of these brownfields could be turned from possible liabilities into successful developments.
Is there a brownfield in my community?
Ask yourself –
- Is there land that is idle, vacant, or less productive than it could be?
- Are concerns about environmental contamination contributing to the problem?
If you answered yes to both questions, then that property might be a brownfield.
Why the interest in redeveloping brownfields?
When brownfields sit idle, everybody loses. Neighbors face environmental worries and reduced property values. Cities see roads, sewers, and other infrastructure underused. New business seeks out “greenfields” or undeveloped land, encouraging sprawl. And brownfield owners must deal with a long list of worries–from potential lawsuits to deriving too little income from their property.
When owners or developers clean up brownfields and put them to new uses, many people benefit. Cleanups address environmental problems. Redevelopment can bring new jobs and higher tax revenues. Revitalized brownfields can breathe new life into neighborhoods.
Brownfields offer opportunities that go beyond their old uses. Developers have transformed brownfields into everything from golf courses and driving ranges to mixed developments with housing, offices, shopping, and open space. Smaller properties have found new life as bakeries and greenhouses. In short, many uses may be open to a clean site.
Many communities, businesses, and environmentalists agree that brownfield redevelopment is worth encouraging. As a result, a variety of private and public sector guidance and incentives have been developed to encourage brownfield redevelopment. Redevelopment is seldom easy or risk-free. But if done right, redevelopment can bring special rewards: peace of mind, income, and a cleaner environment.
What are the benefits of brownfield redevelopment?
- Benefits to the community:
- Eliminating health and safety hazards;
- Eliminating eyesores;
- Bringing new jobs into the community:
- Bringing new investment into the community;
- Increasing the productivity of the land;
- Increasing property values and tax receipts by local and state governments (the effects of increased property values on poor residents may, however, need to be mitigated).
As a community member interested in a brownfield it is important for you to know and be able to discuss with potential developers and property owners the benefits to them of cleaning up and reusing a site. Some of the advantages to owners and developers are:
- Avoiding potential environmental enforcement actions by federal, state, and local regulatory agencies that could impose penalties and costly cleanups;
- Receiving tax benefits for cleaning up and reusing the property;
- Reducing the likelihood that contamination from the property will migrate off site or into the groundwater under the site, thereby limiting liability for, and long term costs of, cleaning up the property;
- Creating good will from the community;
- Reducing the potential need to address liabilities associated with the property in financial statements and Securities and Exchange Commission filings;
- Realizing an enhanced return from the property by making it more valuable and marketable.
Why do some owners leave a brownfield property in its current condition?
Many brownfield owners are satisfied with leaving their properties in their current condition. In some cases the neighborhood property values may seem too low to justify any sort of investment in the site. In other cases, the level of contamination is so slight that it seems unlikely to harm anyone.
A property owner who decides to do nothing should be sure that the decision is based on a full understanding of the situation. Unfortunately, many owners may not have full information or analyze all the implications of leaving a brownfield as is. Community members may be able to convince an owner to reconsider the decision to let the property sit, but the owner may resent such an intrusion. In particular, the owner should look at possible liabilities for environmental contamination. Even potential liability can affect a business, making it harder to get credit or raise equity for projects not directly related to the brownfield.
Also, a property owner who is letting a brownfield sit idle probably should make sure that things are not about to get worse. If the site is posing a health or environmental threat to neighbors, delay could lead to bigger injuries and bigger liabilities. On a site bad enough to justify government attention, an owner who waits may be inviting cleanup on expensive terms dictated by the government, possibly with years spent with attorneys arguing over the process. In such a situation both the owner and the community may lose as the cleanup is likely to take longer, be more expensive, and not be coordinated with redevelopment options. Even when cleanup appears to be a losing proposition, prompt cleanup may make sense as a way for an owner to cut losses.
Does the government provide incentives for brownfield redevelopment?
Federal, state, and local governments provide incentives for brownfield cleanup and redevelopment. Some of these incentives are provided directly to communities and local governments. Certain incentives are offered only to property owners. They include:
- Federal, state and local tax incentives;
- Grants and low-interest loans;
- Technical assistance;
- Liability protection; and
- Streamlined government oversight of cleanups.
Who are the key players in brownfield cleanup and redevelopment?
A variety of private and public sector organizations may play a role in the course of cleaning up and redeveloping brownfield sites. Not all of these organizations will be involved at every site. Key players include –
State Environmental Agencies: Property owners or developers that decide to clean up brownfield sites, either for sale or reuse, may perform the cleanup under the oversight of a state environmental agency. In addition to overseeing cleanups, state environmental agencies may offer incentives such as liability protection from further cleanup.
State Economic Development and Planning Agencies: Some states provide economic incentives, such as low-interest loans, for the redevelopment of brownfield properties. These incentives may be offered through state economic development and planning offices that are interested in attracting new businesses and investors to their states, as well as guiding their state's growth.
Commercial Lenders: An increasing number of commercial lenders are willing to provide loans to support the cleanup and redevelopment of brownfields.
Technical Consultants: Technical consultants can help design and implement the investigation and cleanup of environmental contamination on brownfields. Technical consultants may also help property owners or developers work with state regulatory agencies and communities surrounding the property.
Legal Counsel: Lawyers can assist in many aspects of the cleanup, redevelopment, and sale of brownfields by advising all interested parties, from owners and developers to neighbors and community members, about regulatory requirements, negotiating with regulators and prospective buyers, drafting sales agreements, and communicating with the other people interested in the project.
Citizens and Community Groups: State and federal cleanup programs may require public involvement such as opportunity for notice and comment from the public. Furthermore, some economic incentives, such as grants and loans, may not be available unless supported by the surrounding community. Even when not required, support for the project from communities surrounding brownfields may be needed for it to be successful over the long term.
Local Government Agencies: Local economic development, planning and tax agencies may provide incentives for brownfield redevelopments in order to attract investors and businesses to their communities, guide growth, and increase jobs. Local health agencies may have an interest in ensuring that contaminants on brownfield properties do not pose a threat to community health.
United States Environmental Protection Agency (EPA): EPA is unlikely to be directly involved in the cleanup of brownfield properties, because most cleanups will be overseen by the states. EPA provides cleanup and redevelopment incentives and financial support, however, that may be available for some brownfields projects.
Developers: Developers typically manage the entire process of cleaning up and adapting properties for new uses, but they may limit their involvement to determining and implementing marketable reuses of brownfields.
Brownfield Developers and Investors: A new group of firms specializing in cleaning up and reusing brownfields has emerged in recent years. These firms rely on a mix of engineering, legal and real estate technical and financial backing and expertise.
Real Estate Professionals: Real estate professionals can provide advice on the market for a particular property and can help locate buyers or developers.
Local Community Development Corporations (CDCs): CDCs, nonprofit organizations created to encourage local urban redevelopment, can assist in determining the value of a property, redeveloping a site, and marketing a site.
Federal Government Agencies: Federal government agencies, other than EPA, may provide technical and financial support for brownfield redevelopment including the Department of Housing and Urban Development, the United States Army Corps of Engineers, the Commerce Department's Economic Development Administration, and the Department of Interior's Groundworks USA Program.