State & Local News Vol. 22, No. 3, Spring 1999 Brownfield Revitalization By Paul Helmke As President of the U.S. Conference of Mayors last year, I made the redevelopment of brownfields a top priority. Brownfields are abandoned urban sites that have perceived or real environmental contamination, but fall short of "Superfund" status. While this topic may not be flashy or easily understood, it is vital that the issue be addressed. The number of brownfield sites in the United States is estimated to be about 500,000 nationwide. The most common are abandoned factories, industrial plants, gas stations, and many vacant lots normally in central city areas. All cities are affected by brownfields. In Fort Wayne, what's known as the "Bowser Site" is probably our most difficult brownfield. In 1997, a fire destroyed a 12.5-acre site at the former Bowser Pump Plant. About 600,000 tires that had accumulated on the property caught fire Labor Day weekend, forcing nearly 1,000 Fort Wayne residents from their homes. In the late 1800s and early 1900s the plant manufactured oil pumps, and it is believed that underground storage tanks remain on the site. Subsequent owners used it as a warehouse, but by 1995, the site, located in one of the most economically depressed census tracts in Indiana, had become tax delinquent and abandoned. The Fort Wayne Brownfield Forum, a group of business people and neighborhood leaders I brought together in August 1995, identified the Bowser Pump Plant as a potential brownfield project. In July 1997, the city initiated conversations with the Indiana Department of Environmental Management (IDEM) to expedite the removal of tires without waiting on a resolution of the court case against the previous owners. The site then burned in a Labor Day tire fire. Since the fire, the site has been the focus of federal, state, and local attention. Fort Wayne, one of the thirty-six communities chosen nationwide to receive a pilot grant for brownfield redevelopment, received a $200,000 federal grant from the Environmental Protection Agency in May 1998 to clean up the site. The city also received a $500,000 loan from the Indiana Environmental Remediation Loan Fund to redevelop the Bowser site and other city brownfields. The city has spent nearly $350,000 to demolish the unsafe structures on the property and IDEM removed all of the burnt tires from the site. But even with all this assistance, we have a long way to go to redevelop the Bowser site. That's because the revitalization of brownfields can be quite expensive. However, leaving the site abandoned is costly to the economic welfare of the community. One brownfield can bring down an entire neighborhood as well as burden the local government. A U.S. Conference of Mayors survey showed that in thirty-three major cities, anywhere from $121 million to $386 million is lost each year in tax revenues because of abandoned properties. The cost of environmental cleanup, coupled with legal issues, leave many communities unable to redevelop the sites. Liability has proven to be a major stumbling block toward brownfield redevelopment because financial institutions and private sector developers are unwilling to risk investment in the contaminated land out of fear of known or unknown cleanup. One of the unintended consequences of the "Superfund" legislation has been to scare developers and investors away from any property that may have any contamination, thus creating more brownfields. In addition, banks often fail to treat brownfields as just another risk and choose not to underwrite them as they would other risks. Last year, the U.S. Conference of Mayors released a report titled, "Recycling America's Land: A National Report on Brownfield Redevelopment." The report recognized that one of the major impediments to brownfield redevelopment was a lack of financing. The Mayors and Bankers Task Force, a cooperative effort between the U.S. Conference of Mayors, the Federal Home Loan Bank System, and the Federal Housing Finance Board, met in Los Angeles last November, in conjunction with the U.S. EPA's Brownfields '98 Conference, to discuss what the FHLB System and the Finance Board could do to help with brownfield redevelopment and financing. Progress has been made. Currently, the Task Force is working with forty communities to determine how to assist them with redeveloping their brownfields. New regulations created by the Housing Finance Board will help in this process. The regulations will help cities create more business opportunities, thus boosting the economy. The new regulations involve a Community Investment Cash Advance and a Letter of Credit for the following areas: projects located in rural and urban Empowerment Zones and Enterprise and Champion Communities; property eligible for the Brownfields Tax Credit; areas affected by military base closures; projects in targeted neighborhoods or those which create jobs at or below targeted income levels; and assistance to small businesses. These regulations will help promote the redevelopment of brownfields, but it is imperative more initiatives are implemented to encourage the revitalization of our central cities. Liability protections are needed, along with tax incentives, and funds for assessment and redevelopment. We've learned to recycle glass, aluminum, and paper-now we have to recycle our land. A commitment to redevelop these urban sites will pay off with more stability in our low-income communities, an increase in decent paying jobs in these areas, and the limitation of economic blight. Paul Helmke is mayor of Fort Wayne, Indiana. State & Local Law News home page | Table of Contents