Governments Push Harder To Bring Contaminated Properties To Tax Rolls
Written by Catherine Lackner on July 4, 2002
By Catherine Lackner
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Federal, state and local governments are trying to move more aggressively to bring brownfields – abandoned or under-used properties with real or perceived environmental contamination – back to the tax rolls.
There also seems to be new interest in the sites from the development community.
"I have noticed over the past few months a greater interest in brownfields," said Terri Manning, coordinator of the Brownfield Project of the South Florida Regional Planning Council. "I think that interest is partially related to the fact that we are running out of land and these lands are being seen as more viable.
"I’ve also seen more interest from banks in loaning money on these properties," she said. "That’s partially a function of education and also because people are realizing that land is a finite resource."
"I think there are a few things that have happened that will make things easier," said Doug Yoder, assistant director the Miami-Dade Department of Environmental Resources Management. "The federal government has enacted changes to its brownfields initiative that makes the funding a little more flexible."
The Environmental Protection Agency in 1994 launched the Brownfields Economic Redevelopment Initiative, following 20 years of environmental regulation with an "enforcement first" approach.
That approach focused on cleaning up environmental hazards and assigning financial liability for the cleanup. Because government policies sometimes had the effect of punishing the new owner of a property for contamination that had taken place in the past and cleanups could be extremely expensive, there was little incentive for investors and lenders to pursue the properties.
Then, in the early ’90s, "the EPA woke up, prodded by the real estate industry, and realized this approach was not working," said Michael Goldstein, chairman of the Brownfields Oversight Committee for Miami-Dade County.
Instead of emphasizing penalties, the agency decided to focus on incentives and involve the private sector. The government developed a "basket of regulatory incentives and a basket of financial incentives," Mr. Goldstein said, and the brownfields program was born.
Until now, Mr. Yoder said, "they were using Superfund money, so you could do assessments but no cleanup. Because of statutory changes that have recently occurred, now you can use federal grant money for cleanup as well as assessment.
"That could make a difference, particularly on properties that are so upside-down in terms of their value in relation to the cost of the cleanup. They’re just sitting there, even though there might be loan funds available."
One historic problem with brownfields reclamation has been the time required to have governmental entities assume ownership of abandoned properties, clear the liens and auction the land to a buyer prepared to clean it up.
"The more liens that occur, and the longer the process takes, the more unlikely somebody is going to purchase it," Mr. Yoder said. "The idea would be to accelerate the time for this type of property to revert back to the county.
"There really haven’t been other statutory changes in terms of further accelerating the time by which properties that have tax liens would accede back," he said. "We’re very actively promoting Virginia Key landfill, owned by the City of Miami. The county is providing the cleanup money."
The county and city are also working to redevelop Virginia Key Beach, he said.
"The idea would be to put playing fields and some sort of other recreational uses consistent with the area," he said.
But in general, Miami-Dade County, "is interested in passing the baton on the redevelopment side of brownfields to the private sector," Mr. Yoder said. "We’re not so much in that business ourselves and it’s not our area of expertise."
He said local and state economic development agencies are the logical venues to alert the public "to tools that are available through the brownfields initiative to encourage development.
"I think brownfields initiatives are not a silver bullet that’s going to solve all of the problems that have historically been present," in economically distressed areas where these sites are likely to be located, Mr. Yoder said. "But they are a needed tool that can be effective in redevelopment."
Ms. Manning agreed that action by the federal government would boost the cause measurably.
"Last December, the US House of Representative passed unanimously – at 4 a.m.- the Small Business Liability Relief & Brownfields Revitalization Act," she said. The US Senate passed the bill unanimously that day and the president signed it into law in January.
"It basically made doing brownfields revitalization a little easier," Ms. Manning said, by streamlining the process.
The bill doubled to $200 million the amount the government allocated to brownfields reclamation and "took the whole brownfields program out of Superfund," which means less red tape and restrictions on how the funds can be used, she said.
"It also revised some requirements to allow brownfields money to be used for petroleum cleanups," Ms. Manning said. "For us in South Florida, that is very significant because we have a lot of old gas station sites. The bill also ensured that there would be money for technical assistance, training and research."
To encourage investors and others in the private sector to take the calculated risk necessary to reclaim a brownfield, "the bill gets into liability and provides clarification," she said. "It talks about how contiguous property owners will be treated, who is an innocent landowner and other issues that have been important."
Her agency will begin implementing and marketing the reforms within a few weeks, after guidelines come down from the federal Environmental Protection Agency’s regional office in Atlanta.
"We’re so excited. They’ve been really pushing on this and things are moving quickly," she said. Guidelines are expected to be formulated in a workshop within the next two weeks, she said.
The federal government has also boosted the program with a fresh infusion of cash.
"Over the past year I’ve been able to get some funding from the EPA to set up a low interest revolving fund," Ms. Manning said, that provides $2 million for cleanups in South Florida. "We loan the money out just like a bank would."
Like Mr. Yoder, Ms. Manning said she’s working with local economic development organizations to publicize the programs and encourage private-sector involvement.
"We’re working with groups throughout the tri-county area to make sure we’re getting the word out. We’re trying to help each other spread the joy around."Details: South Florida Regional Planning Council, (954) 985 4416; Miami-Dade County Department of Environmental Resource Management, (305) 372-6766.