Turning Brownfields into GreenbacksInactive industrial sites are transforming into product

Turning Brownfields into Greenbacks

Inactive industrial sites are transforming into productive facilities.

Brownfields are industrial sites whose future use is restricted because of real or perceived pollution. The number of brownfield sites tins grown exponentially during the, past 25 years. The growth curve has reached epidemic proportions-as many as 650,000 brownfield sites exist in the United States today.

Both the public and private sectors realize the problem cannot continue to grow unchecked.

More of the impetus for redevelopment comes from state and local governments, which is not surprising since the brownfield epidemic directly affects thousands of U.S. communities. Many of these impacts are so serious that they threaten fiscal and social health of communities. Brownfield sites frequently result in a decreased tax base, urban blight, loss of infrastructure, suburban sprawl, the depletion of farmland and a loss of employment opportunities. State and local governments are more directly affected by these problems than their federal counterpart.

Although the impact is felt most strongly at the state and local levels, federal legislation is largely responsible for the brownfield phenomenon. In particular, the Comprehensive Environmental Response, Compensation, and Liability Act's (CERCLA) onerous (繁重的) provisions have induced thousands of property owners, lenders and prospective purchasers to shun industrial property.

Theoretically, various provisions allow owners and lenders to avoid liability. Unfortunately, two of the primary ways to avoid liability are fraught with difficulty. Both the innocent landowner defence and the security interest exemption (免除) contain ambiguous language that is troubling to the members of the regulated community they were designed to protect.

The ambiguity, coupled with CERCLA's draconian liability scheme, has created a vacuum. Existing owners, prospective purchasers and lenders have become alert to industrial properties. Hundreds of thousands of moderately troubled properties sit idle because of the threat of CERCLA liability. These sites constitute the nation's approximately 650,000 brownfields. Until recently, prospective purchasers, lenders and tenants have had no reason to risk CERCLA liability by becoming involved in brownfield sites-but things are beginning to change. Federal and state governments have taken steps to encourage private parties to revitalize brownfields. An important plank in both federal and state programmes are provisions that limit owner and lender liability.

Federal Initiatives

The federal government has revised its policy on prospective purchaser agreements—contracts between the EPA and buyers of contaminated sites. The EPA originally published its Prospective Purchaser Guidance in 1989. At that time its policy was to avoid entanglements in what it viewed as private real estate deals. Since then, the number of inactive industrial sites has increased dramatically. State and local governments across the country complained loudly about the impact the sites were having on the economic and social health of their communities. The EPA now makes it easier for prospective purchasers to quantify their cleanup obligations by executing a prospective purchaser agreement.

Other important initiatives included in EPA's Brownfield Action Agenda were the Underground Storage Tank Lender Liability Rule and Owners of Property Containing Contaminated Aquifers Guidance.

State Initiatives

Many states have enacted Voluntary Cleanup Programmes (VCPs), designed to encourage the reuse of dormant industrial sites. Most VCPs offer mechanisms that limit owner liability for those not contributing to the sites' environmental problems.

Some VCPs allow regulators to enter into covenants not to sue, which provides owners with the abili

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