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The Brownfield Problem

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The Brownfield Problem

Brownfields are abandoned, idled, or under-used industrial and commercial sites where expansion or redevelopment is complicated by real, or perceived environmental contamination that can add cost, time, and uncertainty to the redevelopment process. Throughout the country there are an estimated 450,000 brownfields. These vacant properties exist mostly in cities, serving no practical purpose, and act as both eyesores and environmental as well as economic pitfalls. The inner cities, where most brownfields exist, were once the only choice developers had in deciding where to build industry. However, since the birth of environmental laws and regulation, the redevelopment of these properties has become a complicated and often very costly procedure. This procedure causes many businesses and corporations to look outside of the inner cities and urban areas for locations to grow and develop. This trend not only leaves the inner cities vacant and economically useless, but also leads to urban sprawl, a phenomenon that leads to the development of greenfields, or the pristine, undeveloped land outside the confines of massive urban areas.

Many sites across the country that were once used for industrial, and/or, commercial use have been abandoned by the companies who used them. Some of these sites are contaminated; however, some of them are merely perceived as being contaminated. In those cases, the sites have been linked to big industry, or nearby sites. In the past, any such site has been avoided or ignored as a possibility for redevelopment. This situation is caused largely by federal and state environmental laws and court decisions that impose or imply potentially serious liability. The circumstances surrounding this uncertain liability has encouraged businesses to build in previously undeveloped and non-urban areas, that are referred to as greenfields, where they are confident that no previous industry has been active. A report from the General Accounting Office finds that: "As states and localities attempt to redevelop their abandoned industrial sites, they have faced a number of obstacles, including the possibility of contamination and the associated liability for cleanup." This situation has lead to a number of far-reaching problems including social, economic, and environmental.

One of the fundamental issues of brownfields is that the vast majority of the sites lay in urban areas. In these areas, environmental concern pales in comparison to the concerns that the local citizens in these areas have, such as crime, poverty, and unemployment. The brownfield issue, however, is clearly an environmental issue that is linked to a city's economic vitality and competitiveness. Properties sit abandoned because of real or perceived contamination. Cost/benefit analysis has driven development away from these sites toward suburban and rural greenfields because of a lot of federal and state law with regulations that mean delays and lots of money and paperwork. This leads to a smaller urban economy and tax base that facilitates urban life.

Environmental regulations have been established without regard to economic ramifications, and a general litigation craze has assigned legal liability without regard logical personal or corporate responsibility. Basically, groups of individuals that had little or nothing to do with a site's contamination become responsible, and in turn, liable for its cleanup. Meanwhile, the actual polluters escape accountability. Some cleanup requirements are far too strict, yet others are ambiguous to a point, and changing. Furthermore, the division of authority between levels of government, or red tape, and various agencies make compliance with the laws difficult.

These uncertainties, coupled with related delays and confusion linked to the reuse of brownfields lead to exaggerated costs, which result in these industrial sites sitting idle. Cost/benefit analyses show that these projects do not prove to be economically feasible in lieu of the possibilities and savings presented by Greenfield development. The resulting environmental consequence is that the sites that require cleanup stay contaminated. Also, the development that ensues in the greenfields creates further environmental degradation and new infrastructure must be established even though there are existing capabilities in the urban areas at a great expense. The largest concentration of these sites is in the Northeast and the midwestern cities where there is a long history of industrial manufacturing, etc... They are not located solely in these areas though; they can be found nationwide in various places where there is a relatively significant population density.

Much of the complications and related problems of brownfield redevelopment stems from the - Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), commonly known as the Superfund Law. Subsequently, many states have passed their own "superfund laws." The federal Superfund Law derives the name from its establishment of a trust fund, financed by industrial taxes, for the cleanup of polluted sites. Upon the creation of Superfund, federal and state regulators compiled a list of actual and suspected sites. These sites became unmarketable, even after cleanup because of the stigma they carry from attracting the attention of the federal hazardous-waste bureaucracy. This causes the sites with little or no contamination to become stigmatized and caught up in the procedures designed initially for severely polluted toxic-waste dumps.

This trust fund component of Superfund is of secondary importance to the law's liability structure, which is aimed at making the polluters themselves to pay for cleanups instead of the government and taxpayers. "Strict, retroactive" liability and "joint and several" liability are the major components of the law. In essence, these provisions mean that property owners of contaminated sites can be held liable for cleanup even if they had nothing to do with the contamination. Liability has not only fallen into the hands of the property owners, but lenders have been hit as well. When property owners and developers cannot foot the cleanup bills, or when banks have been forced to foreclose on contaminated property, it is the lending institution that is stuck with the litigation and compliance costs. The fear of these possible costs steers possible funds to other safer investment opportunities. Once again the government has exhausted the private sectors' attempts to alleviate a public nuisance.

The unrealistically stringent cleanup standards imposed by the EPA and other regulators are not only dissuading factors involved in brownfield redevelopment. This liability strategy



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