Last week's column, "Prefabrication Doesn't Belong on Blocks Anymore," discussed how the city of Cincinnati is revitalizing a brownfields area in the community of Carthage. I emphasized the construction techniques involved and the relevant complexities in working within the city's limited budget.
But more needs to be said about brownfields -- those scattershot, pock-marked plots called "parks" that are freckled throughout the community, disfiguring the landscape with an unnatural grunge that looks and is uninhabitable.
Past efforts by government agencies using regulation and litigation to remedy these eyesores have been futile, since it was difficult to find the legally responsible owners of land that might have been sold many times over. But recent legislation has made it attractive for private enterprises to make money cleaning up and redeveloping the lightly contaminated properties known as brownfields.
With the passage of time, an increased comfort level with the cleanup process and new insurance policies to cover the risks, these urban areas are becoming attractive locations for new or redevelopment -- they're generally accessible to public transportation and other urban amenities.
Then there's the Small Business Liability Relief and Brownfield Revitalization Act enacted earlier this year, which recognizes that there's a difference between lightly contaminated brownfields and severely polluted sites, the latter being covered under Super Fund laws. By doubling the amount of federal assistance available to $200 million, states and communities now have a better chance at fixing the 500,000 to 1 million brownfields the Environmental Protection Agency estimates are scattered across the country.
The new law includes provisions that increase liability protection for landowners who participate in the voluntary cleanup programs. This differs greatly from the Super Fund guidelines, in which a landowner has been held responsible for the entire cleanup cost regardless of who was responsible for the damage or whether the owner made an effort to control the damage. This more realistic assessment removes the virtually unlimited liability that inhibited the development of brownfields, in part because lenders were afraid to get involved in sites they might wind up owning should the developer go under.
The new legislation's weakest link is the provision that allows commercial usage to not have to meet the same stringent standards for cleanup as those for residential, schools or playground usage.
With insurance companies policies capping the financial risk involved, new pools of private capital have been swelling, awaiting the opportunity to tap into the well of high-profit returns that brownfields development now promises. And now that new technologies can increase assessment of the extent of the cleanup and can reduce the cost to a specific number, it'll be a lot easier to determine whether a project makes economic sense.
Some analysts and experts have concluded that what's really driving this activity is the increased interest by communities to develop their urban core. Statistical analysis is difficult to come by, since by definition the term "brownfields development" has no uniformity of meaning from state to state.
A report developed by the National Brownfield Association concluded that the total spending for goods and services by companies cleaning up brownfields totals about $1 billion to $1.5 billion a year and is increasing at a rate of 15 to 20 percent annually.
Over time, many companies simply sat on environmentally questionable properties rather than recognize their potential, but now they're beginning to seek ways of unleashing the value of these holdings. Now that liability can be economically defined and transferred, companies are finding a comfort zone and framework within which they can work. While changes were needed to state regulations, the key has been access to more insurance, thus making the potential for brownfields becoming green fields of earnings for investors more viable.
What seems to be changing is the concept of development. A mild attitudinal adjustment is under way that's subtly moving us from a predominantly suburban-oriented growth pattern to one more reflective of the potential for downtowns and their surrounding older areas. As the value of these forgotten and forsaken areas continues to escalate, so does interest in rejuvenating them.
Many older areas come with pollution and problems that until recently were considered the equivalent of a black hole due to the astronomical costs involved. But, as the cost of reclaiming these urban voids become better understood and the business of reusing and curing these blighted lepers becomes a more workable real estate transaction option, at least one solution has been found.
Perhaps the Pandora's pock that's stigmatized and stymied community redevelopment for decades will now open a new era of appreciation for the urban experience.
This Week's Tip
Don't buy the wrong sized house. Just because you're single or recently divorced now doesn't mean you won't meet someone next year. Where will that leave you, then, if you've just purchased a one-bedroom condominium? Think ahead.
STEVEN J. LOWENSTEIN, a native of Cincinnati, is a Realtor with Coletta & Associates Realtors. He's a graduate of the University of Cincinnati and holds a Master's degree from North Texas State University.
