Brownfields

I. Introduction

A. Definition

What are brownfields?

Brownfields are a vacant or underutilized commercial or industrial property where known or perceived contamination has hindered the property’s reuse or redevelopment. That property has usually been abandoned, idled, or under-used. In short, brownfields represent industrial and commercial facilities where expansion or redevelopment is complicated by real or perceived environmental contamination.

B. History of Brownfields

At the same time that the U.S. has experienced an economic transition during the last decades of the 20th century, it has become more diverse and less reliant on heavy manufacturing. Many businesses have closed older and less efficient plant operations and, in many cases, relocated. Brownfields are a consequence of this transition.

Brownfields redevelopment, also known as land recycling, has been challenged by numerous obstacles. Cleanup costs are often uncertain and can add significantly to the overall development price tag. Liability issues are complicated by a mix of federal and state laws and court rulings that confound the question of who is responsible for the pollution and who must clean it up. Many lending institutions are hard-pressed to finance redevelopment projects with contamination problems, real or perceived.

When these issues have been addressed and a site is ready for redevelopment, it still may not meet the needs of today's development interests. These hurdles encourage new development to migrate to outlying undeveloped areas or greenfields, where real estate transactions and development processes are simpler and more predictable, further undermining prospects for brownfields redevelopment.

A 1994 IRS ruling allowed property owners who caused contamination on their property to deduct their environmental cleanup costs as a current expense. Other parties, such as developers who purchased contaminated property, still had to capitalize their cleanup expenses and deduct them over the life of the property. This disparity was thought to be a disincentive to the redevelopment of abandoned or underutilized contaminated properties known as "brownfields".

In August 1997, President Clinton signed the Taxpayer Relief Act, which included a Brownfields Tax Incentive. The tax incentive applied to certain targeted areas, and gave developers and other parties who didn't cause contamination of the property the same tax advantage as parties responsible for the contamination. The tax incentive is applicable to properties meeting specified criteria.

C. Frequently Asked Questions

What are the barriers to redeveloping brownfields?

Prospective purchasers sometimes fear that the cost of investigating and cleaning up a site will end up being too high to make it a profitable investment. And until the property is investigated, the cost of cleaning it up is unknown. There may turn out to be no contamination but lenders are reluctant to finance sites with unknown risk. Other concerns include uncertainty about regulatory processes and timelines, and liability for past contamination.

Why should we care about brownfields?

Contaminated property may pose health and safety risks to the surrounding community. Even if the site is only perceived as contaminated it can impact neighboring properties by lowering real estate values. On the other hand, cleaning up and redeveloping brownfields helps communities by providing jobs and increasing the tax base. Other benefits include making use of existing infrastructure and preserving Oregon’s natural resources and pristine rural areas.

In what ways is brownfield redevelopment evolving?

Agencies and organizations are increasingly:

- providing preliminary information, in some cases, to determine if a property is contaminated and to what extent provide technical assistance and grant information to local governments

- providing liability limits to buyers through “Prospective Purchaser Agreements”

- providing liability protection for lenders

- assisting with redevelopment financing strategies, including links to potential funding sources

- helping form partnerships to facilitate the reuse of brownfield properties

- providing grants via EPA to local governments for site assessments at brownfield sites

Sources: Department of Environmental Quality, State of Oregon; The Great Lakes Regional Online Brownfields Information Network

D. Lecture of Charles Wolfe, Attourney

Charles Wood of Foster Pepper and Shefelman PLLC spoke to the growth management class of Christine Bae.

II. Resources

A. Federal

1. Environmental Protection Agency

EPA's Brownfields Initiative is designed “to empower States, communities, and other stakeholders in economic development to work together in a timely manner to prevent, assess, safely clean up, and sustainably reuse brownfields.”

See http://www.epa.gov/brownfields/

2. Brownfields Technology Support Center, coordinated through EPA's Technology Innovation Office

The Brownfields Technology Support Center seeks to ensure that brownfields decision makers are aware of the full range of technologies available in order to make informed or "smart" technology decisions for their sites. The center works to provide the expertise and information necessary to help brownfields decision makers determine whether innovative options are available and feasible for their sites.

See http://www.brownfieldstsc.org/

3. Congressional Report on Brownfields

A U.S. House of Representatives staff report, prepared for the use by the House Committee on Commerce in November 2000, is critical of EPA efforts to date.

The report is titled “The Reality Behind the Rhetoric: The Failures of EPA’s Brownfields Initiative”

See http://com-notes.house.gov/brown/brown.htm#VI.%20CONCLUSION

B. State

1. Oregon Brownfield Showcase Program

Since 1996, Portland has been working to build a set of government, business and community-supported processes that foster restoration and reuse of contaminated land, and promote revitalization of neighborhoods within Portland's North/Northeast Enterprise Zone, the Enterprise Community, and along the Portland waterfront. Public and private partnerships within Portland have cleaned up and recycled hundreds of acres of contaminated property and created thousands of jobs, while promoting brownfields redevelopment, pollution prevention, and greenspace protection.

See http://www.brownfield.org/

2. Oregon State Department of Environmental Quality

The Oregon State has one of the most extensive websites on brownfields.

See http://www.deq.state.or.us/wmc/cleanup/brn0.htm

Oregon State’s DEQ also has a slideshow called the Oregon Brownfields Sampler. It can be viewed at

See http://www.deq.state.or.us/wmc/cleanup/BFss/index.htm

3. Washington State Department of Ecology’s Voluntary Cleanup Program

See http://www.ecy.wa.gov/programs/tcp/vcp/vcpbf.htm

C. Non-Government

1. Institute for Responsible Management (IRM)

See http://www.instrm.org/links/index.htm

The website also contains a large number of state links.

See http://www.instrm.org/links/stateags.htm

2. The Great Lakes Regional Online Brownfields Information Network

See http://www.glc.org/robin/

III. Other

A. Annual Brownfields Conference

The Brownfields Conference is a forum on brownfields redevelopment for all stakeholder groups. The Annual Brownfields Conference provides an opportunity to learn about successful brownfields redevelopment and to experiences with other stakeholders.
See http://www.epa.gov/swerosps/bf/bfconf.htm

B. Brownfields News

The Brownfield News provides a current source of information on brownfields and their development.
See http://www.brownfieldcentral.com/v3/news.asp

C. Reports

1. Brownfields and Transportation

A new report is available that highlights the links between brownfields and transportation. "Redeveloping Brownfields with Federal Transportation Funds," produced by the US Environmental Protection Agency (USEPA) and the Association of Metropolitan Planning Organizations (AMPO), is intended to assist developers, transportation planners, economic development professionals, policy analysts, and others interested in achieving better transportation, environmental, and community outcomes. To download the report, click on the following URL: www.smartgrowth.org/library/brownfield_tea21.html
See also http://www.brownfieldstech.org/news/index.html#news

2. Innovative Technology Options and Brownfields

This recently published edition includes 91 new and updated resources, an easy to navigate list of the 150 resources referenced in the document, and one-page spotlight discussions on topics impacting technology decisions at brownfields sites. The topics include the keys to technology acceptance, use of the "triad" approach for streamlining site investigations and cleanup decisions, and data quality and representativeness.
See http://www.brownfieldstsc.org/

3. Brownfields Resource Guide

The Brownfields Resource Guide provides agency assistance for
brownfields redevelopment in Washington State.
See http://www.ecy.wa.gov/programs/tcp/brownfld/bf.html