Brownfield Revitalization

This article, written by ALR executive(s), originally appeared in Environmental Protection magazine, February 1999 issue, Business Talk column, p. 37.  This column is geared towards service professionals who work on brownfield projects, but may also be useful for other business sectors. 

Brownfield Revitalization
How managers and consultants can turn cost centers into cash cows

Welcome to the first column of Business talk.  Every month, we will provide you with information to help your organization turn cost centers into cash cows.  The first series of columns will focus on brownfields.  Many of the brownfield tools we discuss can be used in other parts of the environmental business. 

Each month will focus on a single subject.  This month we will focus on why environmental consultants and managers should take a more active role in urban revitalization.  This will help underscore the size of the brownfield market, and why it merits your time and attention. Upcoming columns will focus on tools you can use to carve out your share of this market. 

Why brownfields?
Brownfields represent a cost center in every sense of the word.  As you know, brownfields are underused properties with either real or perceived environmental problems.  They are a drain on current and past owners, the community in which they are located, insurers, lenders, regulators and the government.  The U.S. Conference of Mayors identified brownfields as the number one problem confronting American cities.

Brownfield revitalization generates jobs and tax dollars, preserves open space and combats urban blight.  You can play a pivotal role in returning many of these sleeping beauties to productive use. 

The transformation can only occur after a variety of issues is addressed.  The issues fall into main categories, such as liability, finance and real estate.  Each of these principal categories can be broken down into subcategories.  For example, topics associated with liability include insurance, prospective purchaser agreements, no further action letters, transfer statutes and site assessments. 

Your firm's ability to add value is essential to its survival and growth.  Real estate is an industry that rewards the ability to see potential.  Developers profit when they can transform their vision of a property into reality.  You can add enormous value to brownfield revitalization by helping developers breathe life into their dreams.  The tools we will discuss in future columns will help you participate more fully in this process. 

People and news
The environmental component of some urban renewal projects is small, but important.  These projects should not be ignored just because they don't fit neatly into the brownfields "slot."  Larry Miller, owner of the NBA's Utah Jazz, wanted to keep his team in downtown Salt Lake City.  This objective could not be reached without some remediation work.  We spoke with Tom Knudsen, vice president of the Delta Center, home of the Jazz.  Tom told us about the environmental problems associated with the Delta Center's construction. The site selected to be the team's new home contained old warehouses, and the soil had some, but not a great deal of hydrocarbon contamination.  Contaminated dirt was stockpiled on-site and aerated until the levels of hydrocarbons were low enough for the soil to be disposed of at an approved landfill.

Brownfields are part of urban revitalization.  Therefore, the market for brownfield services and products is much larger than it first appears.

The revitalization process ignited by the Delta Center has spread to surrounding neighborhoods.  The ultimate range of the revitalization will depend, at least in part, on brownfield management�the design and implementation of new projects in a way that allows them to coexist with older industrial uses.  Union Pacific Railroad owns a yard and tracks across the street from the Delta Center.  Nearby oil refineries and pipelines are two other environmental factors with the potential to limit the expansion of this growing entertainment district.

Nearby industrial uses do not disappear when a brownfield is brought back to productive use.  Even a revitalized brownfield can harbor contamination.  Regulators often allow properties to be returned to productive use without reducing contamination to background levels. Therefore, brownfield revitalization and management must be done in a way that permits old industrial and new, more benign, uses to coexist.

The construction of the Delta Center involved only a small amount of environmental work.  However, firms that become involved with an urban renewal site improve their chances of bidding successfully on nearby projects. Urban revitalization and brownfield development do not take place in a vacuum.  The revitalization of one site often leads developers, regulators and the community to look at other nearby renewal opportunities.  These groups, and other brownfield stakeholders, look favorably on firms that have built a strong local track record.  In addition, the continued existence of on-site contamination and off-site industry ensures an important place for brownfield management. 

Lessons learned

You can add value to brownfield projects by learning about the business and real estate aspects driving these deals. 

Brownfields are part of urban revitalization.  Therefore, the market for brownfield services and products is much larger than it first appears.  These services and products will form an important part of urban renewal projects whose driving force is not environmental. 

Brownfield work is an ongoing process, which allows industrial and more benign uses to coexist.

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Modified:  03/17/03