January 1, 2001 - From the January, 2001 issue

Governors Urge Brownfields Remediation To Combat Sprawl

Brownfields are undoubtedly difficult properties to develop. The standard of "How clean is clean?" is often prohibitively murky, and state governance has been reluctant to address the problem, as it likely holds environmental and liability ramifications for state, county and local agencies across the board. However, the handful of states that have stepped up to the plate and successfully made brownfield revitalization a priority have found that reusing these otherwise unproductive sites is not only good for individual communities, but can help realize the overall goals of the region as well. TPR is pleased to present the following excerpt of the National Governors Association report: "New Mission for Brownfields: Attacking Sprawl By Revitalizing Older Communities."

Executive Summary

Brownfields occur in older communities where former industrial or commercial operations pose environmental issues that have stymied attempts to reuse the land. Brownfields cleanup projects can play a central role in urban and rural revitalization and offer alternatives to new, greenfields developments. The new mission means leveling the playing field, making brownfields projects competitive with greenfields projects that contribute to scattered, suburban sprawl. By emphasizing urban redevelopment, brownfields projects help preserve farmland, rural communities, and open spaces.

For many years, brownfields programs focused on cleanup of older industrial sites without consideration of the broader growth goals of the community or region. Today, however, brownfields are being seen as key components of state growth management initiatives. There is a compelling economic case for state spending on brownfields. A dollar of state spending produces about 10 times to 100 times more dollars in economic benefits. Expanding the mission of brownfields justifies greater state spending.

State brownfields programs have been very successful, but the new challenge is to improve performance through greater integration into state, regional, and local growth and land-use planning. Five states leading the way are Maryland, Massachusetts, Michigan, New Jersey, and Pennsylvania; and the special tools used by them are described in this report.

Policy & Program Innovations

Private-sector concerns about federal and state liability have driven state policymakers to be innovative as the redevelopment of brownfields becomes a priority in the fight against uncontrolled and haphazard development. State-level creativity and innovation in meeting a host of brownfields needs has been the hallmark of this issue. States are finding that the benefits are worth their investment.

The most effective and innovative state brownfields programs include voluntary cleanups, liability relief, remediation requirements, public participation, and financial incentives. The newest strategy to getting to the next level of brownfields program performance is greater incorporation into state or regional growth and land-use planning.

Michigan's Brownfields Renaissance

Prior to 1995, Michigan's environmental cleanup and urban redevelopment efforts were constrained by strict liability laws and conservative remediation standards. A liability scheme similar to the federal system repelled redevelopment initiatives.

Deceptively termed as a "polluter pay" law, it was designed to go after parties with "deep pockets" regardless of actual liability. In effect, any current or previous owner anywhere in the chain of ownership for a contaminated property could be considered responsible for cleanup actions regardless of who caused the contamination.

This was a major deterrent to brownfields redevelopment. Contaminated sites sat idle for decades, adding to the decay of urban neighborhoods. Developers avoided liability concerns by moving out of urban cores and into suburban green spaces.

Governor John Engler recognized that fundamental reform was needed. Today this vigorous brownfields redevelopment program is central to Michigan's environmental, economic, and land-use strategies.

Michigan 's amended law is designed to assist in returning contaminated property to productive use, and it places fairness in the liability scheme by only holding those parties that caused the contamination responsible for the cleanup.

New, flexible, and clear cleanup standards based on reasonable risk assumptions give developers the option to propose solutions to contamination based on future use of the property and affected resources. Moreover, new owners do not have to completely remediate all on-site contamination before putting brownfields properties back into productive use.

Equally important is the revamped law's underlying concept of accountability. It requires current owners and operators who caused contamination and know of the problem to diligently pursue response actions. Remarkably, the pace of Michigan's environmental cleanups has accelerated dramatically while costs have been slashed by half.

In 1998, Governor Engler expanded his urban redevelopment programs with the Clean Michigan Initiative (CMI), a $675-million environmental bond overwhelmingly approved by voters. More than $300 million of the overall bond is dedicated to environmental cleanup and urban renewal.

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In addition to CMI funding, Michigan offers Brownfield Redevelopment Authorities. These authorities create a specialized institutional structure to promote local planning and implementation of brownfields redevelopment. The Brownfields Redevelopment and Financing Act provides authorities with a number of fiduciary powers. Authorities also may create revolving funds to finance projects. In addition, they are legally permitted to capture increases in state and local (including school) taxes that result from brownfields redevelopment to fund environmental cleanup activities. The existence of an authority also allows a developer/taxpayer a credit on Michigan's Single Business Tax (limited to 10% of capital investment or an absolute cap of $1 million).

In June 2000, the legislature approved several of Governor Engler's proposals to expand the state's brownfields program. These include improvements to make it easier to prepare brownfields for redevelopment and a program that gives developers tax credits and provides low-interest loans. The new provisions include broadened use of state and local tax increment financing dollars for demolition, road construction, site preparation, lead and asbestos abatement, and even relocation of public structures. Developers now can invest in blighted areas and reuse old buildings that are not necessarily contaminated. The new law increases the maximum Single Business Tax credit for developers from $1 million to $30 million.

Lesson For Other States

Michigan's leadership in enacting commonsense statutory reforms, coupled with its financial support for innovative redevelopment programs, has produced enormous benefits in environmental quality, private-sector spending, economic development, urban revitalization, and tax revenues.

Conclusions

An evolution is underway in brownfields redevelopment. Initially conceived as a public health and environmental protection strategy, the cleanup and reuse of abandoned industrial lands promises to become a central component of state growth planning.

Perhaps the most important lesson for states concerned about suburban sprawl and loss of open spaces is that, by leveling the playing field between brownfields and greenfields development, urban revitalization efforts can become more successful in shifting more growth back into o

As states and localities seek to draw development into city and town centers close to existing infrastructure, governors are renewing their commitment to eliminating all barriers to brownfields development. Increasingly, states are linking brownfields development with state growth planning through these approaches.

• Having the governor provide clear and public support for the importance of brownfields in advancing the state's quality of life and economy.

• Viewing brownfields redevelopment in a collective way rather than on a project-by-project basis and integrating brownfields cleanup and redevelopment objectives into state growth planning.

• Broadening state brownfields programs to include involvement of state planning agencies and other appropriate state and local government agencies.

• Working to eliminate all remaining barriers to brownfields redevelopment and improving the full package of incentives, assistance, and liability reduction offered to developers.

• Considering the redevelopment of brownfields sites in the full context of "smart" community design. This includes mixed use, pedestrian-friendly design, urban parks, and close collaboration with community stakeholders.

• Ensuring the protection of public health while shifting emphasis to the broader economic development value of brownfields sites.

It is an ideal time for states to consider these successful approaches. State brownfields programs have been operating for less than a decade. In that short period, programs have successfully facilitated reuse of more than 40,000 sites-but this is less than 10% of the estimated 450,000 to 600,000 brownfields in the nation. With so many more sites to address and so many potential economic benefits to obtain, the advantages of the using the lessons learned from the five states highlighted here are clear.

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© 2021 The Planning Report | David Abel, Publisher, ABL, Inc.