Congress Greenlights Brownfields Legislation

Spring 2018 Issue
By: Alex Ford

NAIOP continues to advocate for the reauthorization and expansion of the federal Brownfields Program in 2018.

WHILE THE REPUBLICAN tax bill got most of the attention in 2017, lawmakers from both sides of the aisle were quietly working to reauthorize and modernize a successful federal program that enjoys widespread bipartisan support. These efforts largely remained out of mainstream press reports but, once completed, could have tremendous upside for NAIOP members and local governments alike.

At stake is the federal government’s once-vibrant Brownfields Program, into which Congress has breathed new life. Brownfields are properties that may be contaminated by a pollutant or other hazardous substance. A relic of the nation’s industrial past, they are typically abandoned and dilapidated industrial properties, but can also be the sites of former gas stations or dry cleaners, businesses that can produce high levels of subsurface contaminants.

With close to half a million brownfields currently dotting the American landscape, chances are most Americans have come across one at some point. What’s more, that staggering figure only represents places where a detailed environmental assessment has been conducted. The total number of U.S. brownfields is thought to be in the millions.

Perhaps the biggest hindrance to development of brownfields is the threat of liability under the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA). Commonly known as Superfund, this law made the purchaser of real property strictly liable for any contaminants on the site, even if the contamination happened before the owner took possession. Because of this uncertainty and considerable financial risk, owners of potential brownfields sites generally withheld them from the market or abandoned them altogether.

Many of these sites were once hubs of economic development – think Pittsburgh steel mills, Iowa agricultural distribution centers or New Jersey ports. Brownfields often sit on prime real estate, with access to existing infrastructure such as railways and rivers. More than just an eyesore, brownfields deprive local governments of much-needed tax revenue, even dragging down the values of surrounding properties. According to the National Brownfields Association, as much as $2 trillion of real estate may be undervalued because of the presence of contamination.

On the other hand, cleaning up and reinvesting in these properties improves and protects the environment, increases local tax bases, facilitates economic growth and utilizes existing infrastructure for development. Administered by the U.S. Environmental Protection Agency (EPA), the Brownfields Program was created in 1995 with the goal of doing just that. Through various grants, the program enables states to tackle these sites head on, stimulating cleanup and economic redevelopment.

After more than two decades, the results speak for themselves. By any measure, the Brownfields Program has been a resounding success. Since its inception, according to the EPA, the program has created 130,000 new jobs and leveraged $16 in private and state development funds for every $1 of federal taxpayer-funded grants. From a biomedical research facility in Shreveport, Louisiana, to a job training facility in Oakland, California, to Minute Maid Park, home of the 2017 World Series champion Houston Astros, the Brownfields Program has been responsible for the cleanup and subsequent reuse of more than 117,000 properties across the country.

So why is this now an issue? Authorization for the Brownfields Program expired back in 2006. Recognizing its value, Congress has wisely chosen to appropriate money to fund the program each year since then, but it has done so at varying and often decreased levels, subjecting the fate of brownfields sites to the political whims of the legislature in any given year.

Fortunately, last year the House passed legislation – H.R. 3017, the Brownfields Enhancement, Economic Redevelopment, and Reauthorization Act of 2017 – that would formally reauthorize the program, setting its annual funding at $200 million. It also would provide increased liability protection to local governments for acquired brownfields, and would increase the $200,000 limit on grants to $500,000, further enhancing the program.

In an overwhelming show of support, 409 representatives from both sides of the aisle voted in favor of the bill. Similar legislation has been introduced in the Senate, sponsored by the bipartisan duo of Sens. Jim Inhofe, R-Okla., and Ed Markey, D-Mass. Lawmakers often have difficulty enacting sweeping legislation in an election year, and that may be the case in 2018. But thanks to the efforts of various stakeholders, brownfields legislation might end up being the exception to this rule.

In communities across the country, the Brownfields Program has had considerable success. But at its current pace, it will be more than 300 years before every underutilized property is remediated and made suitable for development. We simply cannot afford to wait that long, which is why NAIOP will continue to advocate for reauthorization and expansion of the Brownfields Program.

By Alex Ford, director of federal affairs, NAIOP,