Brownfields Redevelopment: Is the risk worth the reward?
Brownfields Redevelopment- How does the process start and what does it entail?
According to the Environmental Protection Agency (EPA), a brownfield is a property, expansion, redevelopment, or reuse of land that may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. Brownfields are often abandoned or closed by industrial or commercial facilities including: factories, warehouses, oil and gas refineries, etc. Brownfields can also be subjected to illegal dumping of leftover pollutants. Due to the state of the property, not many people will consider it for a brownfields redevelopment project.
There are currently around 450,000 brownfields in the United States in need of remediation and redevelopment– many of which in prime real estate locations. These abandoned sites sit idle rotting and decaying for decades, often seen as visual burdens to their cities.
Could this vacant property be your next multi-million dollar brownfields redevelopment project?
Key Challenges of brownfields redevelopment:
- Environmental Liability Concerns:
- The amount of contaminants on the property may decrease your desire to purchase the property
- Financial Barriers
- Private lenders are often hesitant to invest in potentially impaired brownfield properties
- Cleanup Deadline
- The cleanup process may be too long for your liking, pushing your development date back
- Reuse Planning and Pushback
- You may have several options on how to redevelop the land, but ultimately it must be economically sound for the community ie: market potential, community goals.
In spite of these challenges, significant opportunities exist for successful brownfields redevelopment.
Key Players in brownfields redevelopment:
The more professionals involved in the redevelopment process, the smoother the project planning is. The redevelopment process must rely on strong coordination between the following participants: property owners, public-sector stakeholders (local governments, community groups), private-sector stakeholders (lenders, investors, developers), and other parties that may enter at different times of the project (attorneys, environmental consultants).
Key Steps in brownfields redevelopment:
- Identify a property with potential economic benefit and refine a development idea
- Conduct environmental due diligence (this is where ESE Partners comes in!)
- Research and secure sources of financing
- Purchase the property
- Negotiate contracts and financing
- Establish remedial action plan
- Remediation and development
- Cleanup (this is also where ESE Partners comes in!)
- Property sale/lease
- Completion and formal opening
- Property management
- Establish long-term operations and maintenance of remedial systems (ESE will be here as well!)
Brownfields redevelopment can be a huge economic benefit to federal, state and local governments. Remediation and redevelopment of these brownfields is often the key to creating jobs, expanding the tax base, and revitalizing the economy of local communities. For this reason, federal and state programs have been put in place to assist the developers in the remediation process by implementing grants, loans, regulatory guidance, technical assistance and more.
Types of brownfield grants: https://www.epa.gov/brownfields/types-brownfields-grant-funding
ESE Partners are the environmental experts in brownfields redevelopment. Check out some of our projects: