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April 2007 — Vol. 85, No. 3
COVER STORY
Picking up the pace of
brownfields redevelopment
Reforms proposed to simplify and speed the process
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By Debra Susca
Freelance writer in Portland
When Stephen Soler set out on his own, he remembers his uncle pulling him aside for some advice. “Get into garbage. We’re going to have to recycle,” he told his nephew. And that’s exactly what Soler did — in a very big way.
For 15 years now, Soler, president of Georgetown Land Development Co., has been developing contaminated properties that have been abandoned or underutilized and that no one else has been willing to touch.
“At some point I realized we have to recycle properties that already exist,” says Soler, who has redeveloped 50 properties from Miami to Boston. His current venture is in Georgetown, Conn., where he’s turning the 55-acre site of an old mill into a mixed-use development that is garnering awards and praise worldwide. “That philosophical view helped me to target ‘dirty’ and underused properties for ‘recycling.’ There’s a real business here returning these properties back to usable real estate, and the economic impact of that is staggering.”
Renewed focus on removing roadblocks
Redeveloping these “brownfields,” as they are known, isn’t new in Connecticut, where other high-profile properties have been developed since the 1990s. What is new, however, is the renewed focus on doing whatever it takes to remove obstacles so that thousands of smaller properties can also be reclaimed. That will help revitalize cities and reduce sprawl by preserving open space and pristine “greenfields” in rural areas.
“Connecticut needs to take advantage of the opportunities that are out there to revitalize the significant number of brownfield properties that are already located in urban areas or along major transportation routes,” says Eric Brown, CBIA associate counsel and director of the association’s Environmental Policies Council. “We’ve had a few success stories, but they’ve been mostly very large projects — for example, the Brass Mill Center in Waterbury. Meanwhile there are thousands of smaller properties around the state that could be redeveloped if the roadblocks weren’t there. There’s a lot of need for this to happen, and a lot of potential. The question is: how to tear down the roadblocks?”
It’s a question being asked not only by environmental, economic and redevelopment professionals but also commissioners at the state agencies that are instrumental in the process, municipalities, legislators and the governor herself.
In fact, brownfields seem to be on everyone’s agenda these days. Last year the legislature, at the urging of state Rep. Jeffrey Berger (D-Waterbury) and the Commerce Committee, which he co-chairs, passed an act that called for a task force to study the issue and offer recommendations. The legislature also established and funded the Office of Brownfields Remediation and Development (OBRD) within the state Department of Economic and Community Development. The OBRD is set up to be the first point of contact for those interested in brownfields issues. It serves as a facilitator to help developers and municipalities maneuver through the complicated redevelopment process.
And last October Gov. M. Jodi Rell approached the issue from a different angle when she created the Office of Responsible Growth. That office encourages “smart growth” development along transportation corridors where roads, transit facilities, sewers and other infrastructure already exist. It promotes reinvesting in urban centers — many of which have brownfields sites with existing infrastructure — and preserving open space.
The legislature is now considering another bill (House Bill 7079) that expands on the one passed last year (Public Act 06-184).
“There is a lot of movement on this issue and some real excitement around it,” says Lt. Gov. Michael Fedele, whom the governor has charged with working with businesses and state agencies on brownfields redevelopment and smart growth. “Most brownfields are in urban centers where we’re trying to create areas of smart growth. We need to identify these areas, create a program that provides remediation and fast-track [the projects]. This isn’t just a state initiative. Many are interested, including local municipalities that want to reclaim these properties and put them back on the tax rolls.”
Comprehensive program needed
So the interest is there, people are talking, and the foundation is laid for substantive change. Now what?
“We need to develop a comprehensive and integrated program for the state of Connecticut,” says Gary O’Connor, a partner at the law firm Drubner, Hartley & O’Connor and co-chair of the brownfields task force.
The task force met with scores of stakeholders before issuing its recommendations Feb. 7. They found three major impediments to redevelopment: lack of a cohesive program and funding, the expense and uncertainty of cleanup, and regulatory and liability concerns.
“Currently the state doesn’t have a cohesive, efficient and effective brownfields program. Rather, there is a patchwork of different programs and funding mechanisms, administered by several agencies,” says CBIA’s Brown. “One of the big goals is to have a consolidated, one-stop brownfields office where someone can go to find out what the rules are and what help is available. It has been a cumbersome process for developers and others interested in investing in these properties.”
Brown says the legislature’s creation and funding of the OBRD was a step in the right direction. Having that office work as a facilitator to help developers make the right contacts between all the other departments involved in a brownfield development and to access funding will help streamline the current process. “But,” adds Brown, “much more needs to be done. We must have a more self-directed process that folks can follow. The state should be there to facilitate, encourage and help, not to micromanage each proposal that comes in.”
Chet Camarata, who heads the OBRD, says the law that created the office gave it the leadership role in brownfields redevelopment, which will make the process more efficient than in the past. Already, the office has created a Web site with links to various departments; has commissioned UConn to conduct a comparative study of other states’ brownfields redevelopment programs; is preparing a state-funded, four-town pilot program to identify brownfields economic opportunities; and is building an outreach program to educate stakeholders about the support they can receive.
“We help coordinate solutions for the customers who come through our door,” says Camarata. “We can help them open lines to other departments.”
Uncertainty and funding
Funding has been a critical stumbling block for municipalities, developers, businesses and other stakeholders interested in remediating brownfields. Cleanup of these properties can be enormously costly. Commercial lenders are reluctant to finance these operations given the uncertainty of the outcome of investigations, the length of remediation, and the sometimes long time frames in getting permits and approvals. And, although the state has established several funding programs to help, they’re cumbersome and limited in scope, applicability and geography.
“There is no set fund of money,” says attorney Ann Catino, co-chair of the brownfields task force and the chair of the environmental and land-use group at Halloran & Sage. “We do have some funding programs in the state, but for a variety of reasons, they’re not being utilized, nor are they effective. To some degree, it’s [because of] the process you have to go through as an applicant, but also, funding is restricted to certain types of developments in certain communities. So you don’t know if you ultimately will be funded. Funding should be made available to any municipality for any end use.”
Dave Hurley, a vice president in charge of the brownfields department at the environmental firm Fuss & O’Neill, is also an executive member of the Connecticut chapter of the National Brownfields Association. He says states with robust brownfields remediation programs offer significant incentives for the private sector to develop brownfields, including tax credits and rebates.
“Massachusetts, New Jersey and Pennsylvania all stand out for having innovative programs,” he says. Massachusetts offers tax incentives and quick turnaround for funding requests, while Pennsylvania provides a “one-stop shop” that has very good coordination between agencies and a good program for promoting brownfields redevelopment. Hurley adds that some states also offer insurance and liability relief to developers.
Regulatory and liability concerns
Property owners and other developers of brownfields sites are often discouraged from cleaning up properties because of the liability issues and regulatory concerns. They worry, for example, that even if they remediate a property to current standards, could they be liable for further expensive cleanup if regulatory standards change down the road? Are so-called “White Knights,” developers who are not responsible for the contamination on the property they’re redeveloping, liable to third parties whose property may have been contaminated by the previous operation?
“There’s a critical need for liability reform,” says Brown. “There’s clearly insufficient certainty with respect to liability, and it makes it very difficult for a developer to take action on one of these sites or for an existing owner to do a voluntary cleanup.”
O’Connor agrees. “We need to streamline the regulatory process. Developers want certainty, and part of that is finality of liability exposure with the state,” he says.
Despite the roadblocks, many share the attitude of brownfields task force co-chair Catino: “We’ve set the blueprint for a new brownfields initiative in the state, and we’re very intent on moving it forward.”
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