Brownfield Redevelopment Strategies in the United States

• Citation: Vol. 22 No. 4
• Publication year: 2010

Georgia State University Law Review

Volume 22 j g

Issue 4 Summer 2006

6-1-2006

Brownfield Redevelopment Strategies in the United States

James A Kushner

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Recommended Citation

Kushner, James A. (2005) "Brownfield Redevelopment Strategies in the United States," Georgia State University Law Review: Vol. 22: Iss. 4, Article 8.

Available at: http://digitalarchive.gsu.edu/gsulr/vol22/iss4/8

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BROWNFIELD REDEVELOPMENT STRATEGIES IN THE UNITED STATES

James A. Kushner*

Introduction

Redevelopment sites that require a clean up of toxic substances, commonly referred to as brownfields, are often located in rural and suburban locations, particularly around airfields and former military bases.¹ Urban redevelopment employs a policy of infill and seeks to develop a vast range of brownfields from former industrial sites to former filling stations. Redeveloping brownfields is important because it may offer the key to urban revitalization.

The two forces that drive metropolitan development are the centrifugal and centripetal forces, which I have described in an earlier

* Professor of Law, Southwestern University School of Law and Visiting Professor of Law, Seattle University School of Law. The author greatly appreciates comments by Ronald G. Aronovsky, Eileen Gauna, and Austen Parrish on an earlier draft of this article.

1. Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) Section 101(39)(A) defines a "brownfield" as a property, "the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of hazardous substance, pollutant, or contaminant." 42 U.S.C. § 9601(39)(A) (Supp. I 2001). Brownfields are here distinguished from sites that are "superfund" sites under CERCLA, i.e., those highly contaminated sites that the National Priorities List (NPL) lists for cleanup. Instead, brownfields are sites that are usually only slightly or moderately contaminated. Because the extent of contamination is usually unknown, brownfields were previously left idle because no one wanted to purchase them and subject themselves to potential CERCLA (or state) liability, which could occur even in the absence of NPL listing if the site was cleaned up in a manner consistent with the national contingency plan. CERCLA excludes sites that are NPL listed from brownfield classification, and offers prospective brownfields buyers protection from full CERCLA liability if certain conditions are met. See William W. Buzbee, Brownfields, Environmental Federalism, and Institutional Determinism, 21 WM. & mary envtl. L. & pol'y rev. 1, 3-4 (1997); Lincoln L. Davies, Note, Working Toward a Common Goal? Three Case Studies of Brownfields Redevelopment in Environmental Justice Communities, 18 stan. envtl. L.J. 285, 292 (1999); Bradford C. Mank, Reforming State Brownfield Programs to Comply with Title VI, 24 harv. ENVTL. L. rev. 115, 120 (2000). See generally Denice Ferkick Hoffman & Barbara Coler, Brownfields and the California Department of Toxic Substances Control: Key Programs and Challenges, 31 golden Gate U. L. Rev. 433 (2001); Richard G. Opper, The Brownfield Manifesto, 37 Urb. Law. 163 (2005); Hope Whitney, Cities and Superfund: Encouraging Brownfield Redevelopment, 30 ecology L.Q. 59 (2003).

2. Charles Bartsch & Elizabeth Collaton, Brownfields: Cleaning and Reusing contaminated properties 2-3 (1997); Joel B. Eisen, "Brownfields of Dreams"?: Challenges and Limits of Voluntary Cleanup Programs and Incentives, 1996 U. ill. L. Rev. 883, 890-91 (1996); Mank, supra note 1, at 120.

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article. Subsidizing suburban fringe development is an example of centrifugal force. Incentives that encourage infill and central city investment are centripetal forces. Centrifugal forces have dominated during the past generation. Urban sprawl, from suburban growth to the development of "edge cities," reflects this dominance.⁴ Urban and central city revitalization, including the redevelopment of brownfields, can enhance centripetal forces and incentives, as well as harness and reduce centrifugal forces. This Article examines market and government factors related to brownfields redevelopment that drive centrifugal force and strategies that may enhance centripetal force, and it explores reforms that might bring about urban revitalization, including the essential redevelopment of brownfields.

Real estate investment, and thus development and redevelopment, involves a decision-making process used by developers and their investors to determine the most attractive available investment. Considerations such as anticipated cash flow, return on investment, potential increase in property and project value, the risks posed, and the availability of alternative, more profitable or less risky investment opportunities help define whether an investment is attractive. Developers base their decisions about what and where to build upon market projections regarding the potential for returns on investment and changing regional opportunities. They may even shift from building a suburban office complex, shopping center, or subdivision of detached homes to central city brownfield redevelopment to assure the best return and the most secure investments.⁵

Government may enhance the attractiveness and desirability of investing in certain types of development through incentives. For

3. See generally James A. Kushner, The Reagan Urban Policy: Centrifugal Force in the Empire, 2 UCLA j. envtl. L. & pol'y 209 (1982) [herinafter The Reagan Urban Policy].

4. See generally joel garreau, edge city: life on the new frontier (1991).

5. Kenneth A. Manaster & Daniel p. Selmi, State Environmental Law § 9:52 (2005) (noting costs of brownfield development and the attraction of greenfields, but noting the high cost to society from urban sprawl); Connie Kertz, Incentives for Brownfields Development, 32 real est. L.J. 207, 220-21 (2003) (discussing greater development risks as compared to pristine property, and advocating deeper tax incentives to offer enhanced profitability and attractiveness for brownfield redevelopment); see also Neil Harris, Spaced-Out at the Shopping Center, new republic, Dec. 13, 1975, at 23-26 (discussing central city suburban site choice). See generally mke E. miles, et al., real estate development: principles and process (2000).

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example, tax incentives presently exist for residential home ownership through state tax,⁶ mortgage interest tax deductions,⁷ and affordable housing under the Low Income Housing Tax Credit program. Prior to the 1986 Tax Reform Act, the government offered tax incentives for multifamily rental projects.⁹ The government also uses incentives to encourage urban revitalization using the federally-funded urban renewal programs,¹⁰ state tax increment-financed redevelopment,¹¹ and enterprise zone and empowerment programs.¹² Government may also implement programs to discourage particular types of real estate development. These disincentives include complete embargoes such as zoning that restricts development to specified permitted uses;¹³ height limits that preclude high-rise residential, office, or mixed-use structures;¹⁴ and zoning that places land in open space,¹⁵ agriculture,¹⁶ or other preservation

6. Internal Revenue Code (I.R.C.) § 164,26 U.S.C. § 164 (2006).

7. Id. § 163(hX2XD), (hX3) (up to $1 million in debt); see Mona L. Hymel, The Population Crisis: The Stork, the Plow, and the IRS, 77 N.C. L. REV. 13, 114-15 (1998) (arguing law encourages overconsumption and overpopulation); Roberta F. Mann, The (Not So) Little House on the Prairie: Hidden Costs of the Home Mortgage Interest Deduction, 32 ariz. ST. L.J. 1347, 1391-92 (2000) (discussing whether a repeal of the home mortgage interest deduction will reduce urban sprawl).

8. IRC § 42; see Allison D. Christians, Breaking the Subsidy Cycle: A Proposal for Affordable Housing, 32 COLUM. J.L. & Soc. probs. 131,142-48 (1999).

9. John C. Chommie, Federal Income Taxation § 64 (2d ed. 1973); Arlene Zarembka, The urban housing crisis 21-22 (1990); Laura M. Padilla, Reflections on Inclusionary Housing and a Renewed Look at Its Viability, 23 Hofstra l. Rev. 539, 546 (1995).

10. The Housing Act of 1949, 42 U.S.C. §§ 1441-1490 (d) (1970); Benjamin B. Quinones, Redevelopment Redefined: Revitalizing the Central City with Resident Control, 27 U. mich. J.L. reform 689, 700-09 (1994). See generally urban renewal: THE record and the controversy (James Q. Wilson ed., 1966).

11. See, e.g., In re Advisory Opinion, 422 N.W.2d 186 (Mich. 1988); see also Susan Mead, Initiatives for Downtown Revitalization: Tax Increment Financing Districts, Chapter 380, and Other Tools, 32 urb. Law. 1013 (2000) (discussing Texas TIF).

12. Empowerment Zones and Enterprise Communities Program, Omnibus Reconciliation Act of 1993, 26 U.S.C. §§ 1391-1400(E) (2000 & Supp. I 2001 & Supp. II 2002). See generally Wilton Hyman, Empowerment Zones, Enterprise Communities, Black Business, and Unemployment, 53 Wash. U. J. urb. & contemp. L. 143 (1998).

13. Euclid v. Ambler Realty Co., 272 U.S. 365 (1926). See generally zoning and the american Dream (Charles M. Haar & Jerold S. Kayden eds., 1989).

14. Welch v. Swasey, 214 U.S. 91 (1909) (sustaining height limit); William C. Haas & Co. v. City of San Francisco, 605 F.2d 1117 (9th Cir. 1979) (height downzoning).

15. Crider v. Bd. of County Comm'rs, 246 F.3d 1285 (10th Cir. 2001).

16. Furey v. City of Sacramento, 780 F.2d 1448 (9th Cir. 1986) (agricultural zoning); McGonigle v. Lower Heidelberg Township Zoning Hearing Bd., 858 A.2d...