Local Governments Can Take Several Steps to Turn Contaminated Lots Into Viable Properties for Redevelopment
American City & County
By Eric Williams
Brownfield properties are burdens on cities and counties even in the best economic times. The polluted parcels are commonly abandoned and considered unusable, so they are overlooked or deliberately avoided for commercial and residential developments. Inventories of distressed properties are growing, often despite their ideal locations — many are in city centers — while construction marches through newer, “clean” areas. Such sprawl compromises the environment, strains public infrastructure and other resources, and weakens communities.
The engineering capability to renew most of the estimated 500,000 to 1 million brownfields in the United States has existed for years. However, relatively few of them have been cleaned up because landowners, lenders, brokers and developers lack knowledge, confidence and capital. Increasingly, though, downtown redevelopment atop brownfields is being recognized as not only a possibility, but as a better choice in many cases.
Cities and counties can encourage and benefit from that change, including generating badly needed new tax revenue and jobs, by making their communities attractive to brownfield redevelopment. They can do that by:
Parchment, Mich., took many of those actions when it committed to transforming a contaminated former paper mill that was derelict 10 years after the mill closed. The city had a particular interest because, although many brownfields are privately owned, it held title to the 83-acre property and its structures following a 2001 settlement over unpaid taxes.
In 2009, Parchment contracted with Frontier Renewal to create River Reach, a public‐private partnership to purchase and redevelop the mill property. Moving forward that way allowed the city to extinguish its environmental liability, and rightly protects future buyers and developers from similar responsibility.
The $100-million River Reach project has entitlements for a master-planned development of more than 80 townhouses, 265 single-family homes and 80,000 square feet of retail and office space. Parks and trails are planned for the development, with links to others nearby.
Environmental engineering for the site, which hugs the Kalamazoo River, integrated plans for clearing the property, and cleaning up soil and groundwater, with how the site would be redeveloped. In October 2010, 200 people showed up to see heavy equipment tear down the first of the mill’s structures, part of 650,000 square feet of dilapidated buildings that had to be razed. That work wrapped up in April.
Construction of a main road, made possible by $1.3 million in federal funds, as well as installation of public utilities and preparation of individual parcels, will begin soon. When the first phase of the project is complete in 2012, Parchment will have an attractive site ready for vertical development, a source of long-term jobs and tax revenue, and a new and vibrant image for the community.
Access to capital is a critical reason why Parchment’s River Reach is succeeding where earlier proposals for the same parcel failed. As intense regulatory work was going on, the public-private partnership assembled a “capital stack” for the first phase, comprising money from Frontier Renewal’s own equity fund, a $1 million state grant, a $1 million state loan, $2 million in municipal infrastructure improvements, and $50 million in tax-increment financing and state tax rebates.
Public-private partnerships significantly increase the likelihood that brownfield redevelopment ideas become reality. Collaboration helps assure the expectations of all stakeholders are understood early on and fulfilled in the process, and that there are sufficient sources of capital. Cities and counties that take steps to make brownfields more appealing for development can realize extraordinary outcomes.
Eric Williams is president and chief executive officer of Frontier Renewal, based in Denver and Seattle. Frontier Renewal brings new thinking, a comprehensive approach and vital capital to redeveloping brownfields, unlocking their value in ways that are environmentally responsible and create shared benefit for communities, landowners, developers, investors and others. Contact Eric at email@example.com.