As land prices rise and competition for real estate escalates, retailers and developers are turning to brownfields. Environmental agencies generally define brownfields as abandoned or unused properties where expansion or redevelopment may be complicated by environmental problems. Greenfields, as opposed to brownfields, are undeveloped, fresh properties and are generally found in rural and suburban areas.

The General Accounting Office estimates the existence of between 130,000 and 425,000 brownfield sites nationwide. Brownfields are located in every city and state and are even found in many rural areas.

Brownfield Issues
The environmental problems of brownfields range from minor to immense. Brownfield sites include former gasoline stations, former dry cleaning plants and buildings that have gone unused because of asbestos, lead paint, underground storage tanks or other hazardous waste. Properties posing significant environmental health risks and high levels of contamination are termed “Superfund sites.” Only a small percentage of all contaminated sites—approximately 13,000—are designated Superfund sites.

Historically, real estate developers, lending institutions and investors have been cautious when dealing with brownfield redevelopment. Often cited factors for staying away from brownfields are liability and remediation costs. Many of these entities, however, are becoming more tolerant as any past, future or present owners of approved sites are released from civil liability.

Brownfield Bonuses
Despite their downsides, brownfield sites often provide bonuses not found with greenfield sites. Brownfields are often located in industrial areas and have abundant or underused infrastructure. Highways and major transportation arteries, rail, sewer, water, gas and electric grids are in place and many brownfields are centered in densely populated concentrations.

Local governments are realizing the potential benefits of brownfield revitalization. In addition to the health and environmental benefits of brownfield cleanup, cities appreciate the economic and social benefits such as:

• Reclaimed sites for retail, commercial and industrial development
• New employment opportunities
• Increased property values and taxes
• Decreased vacancy rates
• Halting neighborhood deterioration

Incentives
Eager to encourage private sector involvement to turn brownfields into tax-generating properties, cities and states are offering tax and financial incentives and other assistance including incentives from federal sources. These incentives are designed to close the gaps associated with the higher cost of remediation and include:

• State tax credits
• Sales tax exemptions on remediation costs
• Property tax abatements
• Infrastructure grants
• Low-interest loans or load guarantees
• Utility rate reductions or exemptions

Long Beach, Calif., is just one example of a city using incentives to fund brownfield cleanup to attract retail development. Using its existing loan programs, Long Beach works with developers and land owners to prepare remediation plans, clean up sites and construct developments.

In a May 2006 survey of cities issued by the U.S. Conference of Mayors, 154 cities responded that they have successfully revitalized over 1,409 sites or 10,806 acres and currently redevelopment is underway in 1,189 sites composing 10,256 acres.
The respondents to the survey indicated that 439 retail projects have been developed in former brownfields. Mayor Beverly O’Neill of Long Beach said, “Brownfields are too costly to ignore, not only from the environmental standpoint of contamination, but also the social aspect of decayed properties and the potential they hold.”