Fields of dreams
According to the U.S. Environmental Protection Agency and the Washington-based Brookings Institute, 450,000 brownfield sites, comprising more than 80,000 acres, currently blight America’s cities. Because of tight budgets, brownfields often remain idle and abandoned, costing local governments billions of dollars in lost property tax revenues, imposing potential liabilities in the areas where they are located and prompting public outcry for cleanup and reuse. Over the last decade, however, cities and counties have used state and federal programs to restore brownfields without constraining their budgets.
Brownfields are properties for which use or redevelopment may be complicated by the presence or potential presence of hazardous substances, pollutants, or contaminants. Despite the properties’ potential to be restored, would-be purchasers are wary of the liabilities, including cleanup; loss of business; or potential claims for illnesses or death caused by the site’s contamination.
Local officials can help move re-use projects forward by conducting property assessments that define each lot’s potential risks. Because many municipalities lack the capital for assessments, cleanup and, if necessary, environmental insurance funding, a host of state and federal programs can help. In 1995, the EPA inaugurated the Brownfields Assessment Program to issue grants to fund site assessments. Unlike many state programs, cities and counties can use the EPA funds for publicly and privately owned sites. An estimated $1.2 billion in EPA dollars has resulted in $7.2 billion dollars of private and additional public investment, creating millions in tax revenues for local governments.
The U.S. Department of Housing and Urban Development (HUD) offers funds for brownfield redevelopment through its Community Development Block Grant (CDBG) and Section 108 guaranteed loan programs. Capital programs from the Department of Transportation, Federal Highway Administration (FHA), and the Economic Development Administration, also can be used to address contaminated properties.
Glen Cove, N.Y., located on Long Island’s north shore, tapped into federal and state programs to address contaminated properties that were eroding the city’s tax base. For more than 40 years, the 146-acre Glen Cove Creek waterfront, which included 100 acres of brownfields, lay idle and abandoned. But, because of the threat of contamination, the city could not attract developers.
In 1997, Glen Cove received a $50,000 grant from the Brownfields Assessment program to test two abandoned brownfields on the waterfront’s south side. After the tests determined the brownfield’s problems, private developers purchased and redeveloped them, putting the property back on the tax rolls.
More than $70 million was spent to clean up the northwest side of the property, the site of a former ore and scrap tungsten concentrate processing company. In addition, CDBG and Section 108 funds were combined with FHA and New York State Environmental Bond Act funds to better position waterfront sites for development. As Glen Cove’s brownfield program demonstrates, tapping into federal funding programs for site redevelopment can result in billions of dollars of subsequent investment to spur a city’s economy.
The author is of counsel for New York-based Phillip Nizer.