Being a Michigan native, I will use Michigan as a reference point to measure Brownfield opportunities across the United States.
According to the National Brownfield Association Michigan leads the nations $6 billion dollar Brownfield market. Nationally, Environmental Data Resources (EDR) reports 24,500 Brownfield projects have been funded and are under construction. EDR also reports 1.7million sites are considered spill sites with some type of contamination and an additional 620,800 leaking underground storage tank sites.
The Michigan Department of Environmental Quality web site lists more than 3,600 sites with regard to clean up of contamination and 9,000 known leaking underground storage tanks.
Environmental Strategist (eS) Strategies Too Drive Your Growth and Profits with Brownfields:
eS Strategy #1: In March 2008 the ASTM E 2600-08 Vapor Intrusion was introduced. For property developers, owners, lenders, tenants, realtors, contractors…. involved in real property ASTM 2600 is a critical area and vapor intrusion has emerged as a significant environmental issue. ASTM 2600 should now be considered part of proper environmental due diligence with property transactions.
ASTM 2600 could double or triple the number of properties that qualify as Brownfields. We are all impacted by Brownfields so professionals in risk management/insurance; real estate development, sales, ownership; legal; financial; environmental investigations and remediation; construction; manufacturing; retail and commercial business, education…. can drive their growth and profits with Brownfields.
If you own, rent lease, occupy a facility you may want to strategize on the benefits of getting an ASTM 2600 assessment. The cost is minimal compared to potential future liabilities and gives you a baseline not only for defense purposes but supports the value of the asset/property.
eS Strategy #2: Government Accounting Standards Board (GASB) #49 Impacts U.S., state and local governments in addressing accounting and financial reporting standards for pollution (including contamination) remediation obligations. The obligations require the governmental entity to address the current or potential detrimental effects of existing pollution by participating in pollution remediation activities such as site assessments and cleanups.
With our governments facing tighter budgets, coupling GASB #49 with Brownfields offers proactive strategies to drive economic growth. The state of Michigan now has 270 Brownfield Authorities (162 city/villages, 57 townships and 51 county authorities) that are open for business.
eS Strategy #3: Two major reasons the Brownfield market has not reached critical mass are uncertainties on clean up costs and financial assurances. The environmental insurance industry has responded with products to reduce these uncertainties.
In January of 2008 Michigan, short on cash but big on Brownfields adopted environmental insurance as a reimbursable expense for Brownfield projects. Other states already have or will follow suit once they understand the value environmental insurance adds to the success of a Brownfield project, while better protecting human health and the environment. Some states limit the amounts to be reimbursed.
If a Brownfield project can be reimbursed for the cost of environmental insurance why wouldn’t every Brownfield project make environmental insurance mandatory and remove the uncertainties that has slowed market growth? Once a Brownfield project is complete it continues to create new business opportunities.
eS Strategy #4: Funding is probably the number one factor that kills a Brownfield project.
Around 2000, the federal government did a survey that showed for every $1 of government money that went into a Brownfield $10 of private money was also invested. The federal government passed a Brownfield funding bill totaling $1 billion over a five year period. This has had a tremendous impact on the Brownfield market.
In Michigan, since 1992, 234 Brownfield projects have received grant or loan funding totaling $104,088,904. This has created in excess of 18,000 new jobs and resulted in $3.2 billion in private investment.
Today, Michigan Brownfield projects can access funds/credits from the Brownfield Tax Increment Financing, Michigan Business Tax Brownfield Redevelopment Credit, Brownfield Redevelopment Grants and Loans, Obsolete Property Rehabilitation and Commercial Rehabilitation, Commercial Rehabilitation Act, Personal Property Tax Exemption, Historic Rehabilitation Credits, Neighborhood Enterprise Zones, Renaissance Zones, Infrastructure Development, Michigan Economic Growth Authority (MEGA) Credits, Industrial Facility Tax Abatement, Smart Zones…. According to the EPA at least 23 states offer some form of tax credits for Brownfield projects.
Funding is opening up and will only continue to do so as the Brownfield market continues to mature and reach critical mass.
In conclusion, we are all impacted by Brownfields. It took the industrial evolution a few generations to plant and grow our current crop of Brownfields and they will take a few generations to harvest. Brownfields are economic multipliers which means tremendous opportunities for a diverse group of businesses and professionals to drive their growth and profits.
ASTM 2600, GASB 49, Brownfields and high gas prices only fuel the flames as we transition from our slash and trash, often called the industrial evolution, economic platform to an environmental economic platform.