Several case studies of actual remediation and redevelopment projects are presented below in order to provide a functional context to the extensive regulatory and legal information provided in this guidebook. Success stories from Akron, Ohio; Chicago, Illinois; Minneapolis, Minnesota; Fort Collins, Colorado; Mesa, Arizona; and Meadville, Pennsylvania bring to life the challenges encountered and creative solutions sought by communities facing brownfields blight. Given the interests of local economic development practitioners, each case study attempts to describe, in as much detail as possible, the financing aspects that helped make the project a success. In addition, background information on the problems, solutions, and regulatory framework is provided, as well as insights from the key players associated with impacts and lessons learned.
Akron, Ohio, once proclaimed the "rubber city," witnessed the decline of its significant industrial past in the 1970s and 1980s. BF Goodrich, the giant of Akron's industrial economy, gradually began to shut down its operations in the early 1980s. The company's world headquarters was reduced to a mere handful of buildings on the 38-acre property along the Ohio and Erie Canal. The company's plan was to raze the remaining, vacant structures and market the industrial parcel. With the BF Goodrich Tire Complex closed and slated for demolition, Akron's economy was threatened with instability.
Fortunately, Covington Capital Corporation realized the site's potential for successful redevelopment and convinced the company to postpone demolition. BF Goodrich, in hopes of a redevelopment project that would bolster Akron's economy, delayed destruction of the complex. In 1988, Covington Capital purchased several buildings, including a a manufacturing plant with a total of 3.2 million square feet and began plans for redevelopment of the site into a business park, now known as Canal Place.
BF Goodrich cleaned the site, contaminated after more than a century of manufacturing use. Remediation required stripping the facilities of asbestos, retrofitting PCB-laden transformers, removing all underground storage tanks, and treating contaminated soil. Despite the complex's industrial history, cleanup was relatively problem-free.
With cleanup completed, BF Goodrich and Covington Capital jointly invested more than $4 million to renovate the plant. A few buildings were demolished to make way for new construction, parking, and landscaping. The main office building, built in the Italian Renaissance style of the 1920s, was renovated and preserved as the centerpiece of the complex's redevelopment.
BF Goodrich chose to conduct the site's abatement independent of any state voluntary cleanup program. The Mayor's Office of Economic Development was consulted briefly to guide the property's remediation. However, BF Goodrich preferred the absence of government intervention, in hopes of a timely and effective cleanup.
Although no municipal or state funds were secured, the city did support the project through low- cost power supplied from Akron's trash-burning plant. The city was well aware of the beneficial and lasting impact of the project. By 1990, Canal Place had already landed numerous tenants, and was using the incoming rents to finish renovating much of the remaining square footage.
Today, Canal Place is a highly successful business community, housing more than 140 companies and employing 1,800 people. Canal Place houses several different types of businesses, including computer companies, a banking facility, printing companies, architectural and engineering firms, security companies, telecommunications companies, law firms, a day care center, restaurants, and light industrial operations. More than 85 percent of the complex's square footage currently is leased.
In the general vicinity of Canal Place, economic growth has exploded. Established companies continue to move into the area, while new businesses are started regularly. Hotels and restaurants also are considering Akron's downtown as a viable location for business. Recently, the city approved funds to construct a baseball stadium for the Canton/Akron Indians two blocks north of Canal Place.
The area surrounding the Ohio and Erie Canal also has prospered from Canal Place's success. A new park and recreation area have been built, and the towpath along the canal is expected to undergo beautification in late 1996.
Canal Place, in light of its ongoing success, continues to consider the renovation of old structures that still lie empty. When BF Goodrich was readying the plant for demolition, several buildings at the northern end of the complex, which require considerable redevelopment efforts, had electrical lines cut and other infrastructural concerns removed. Canal Place Planning and Development, the redevelopment company, plans to tackle these structures once the complex's available square footage has been leased. These sites are to be marketed as investment opportunities for private parties considering Akron's downtown area. Canal Place hopes these buildings can be developed jointly as the final phase of this extensive project.
According to Ken Roberts, administrator of Canal Place Planning and Development, the key factors that contribute to a successful project of this nature are the tenacity to follow a vision through to the end and the ability to fund that vision. Those behind the Canal Place redevelopment were willing to persevere to carry their project forward. Also, they were willing to fund the project independently, without having to rely on city assistance.
Virginia Lee
Canal Place Planning and Development
(216) 434-8656
(216) 434-9484 (fax)
Buildings 40 and 41 of the former BF Goodrich Tire complex in Akron, Ohio, were sold by the corporation in 1984. A private developer purchased this 800,000 square-foot, two-building parcel, while the remainder of the plant was bought and redeveloped into the above-mentioned Canal Place. The buyer of this other complex, who had hoped for similar success, encountered none.
Shortly after the developer purchased the two buildings, environmental costs were assessed at $2 to $3 million. Due to this high cleanup cost, as well as the inability to secure future tenants, the developer was unable to obtain financing and was forced into bankruptcy. The property sat vacant for a considerable time, with the site's environmental status gradually deteriorating. At the bankruptcy auction, the lending institution, holding a $600,000 loan on the project, refused to bid on the property for fear of implicating itself in liability issues. Instead, the Mayor's Office for Economic Development purchased the ten-acre industrial parcel in hopes of redeveloping the site.
An environmental audit conducted by the city in 1994 reconfirmed the presence of various contaminants. Several underground storage tanks had leaked, causing widespread soil contamination; the site also housed numerous drums containing PCB-contaminated oil products. Both buildings were found to contain friable asbestos and lead-based paint. Groundwater contamination also was identified.
Undertaking the cleanup of the property, the city removed the various storage tanks and drums, cleared the buildings of all friable asbestos, sandblasted the lead paint from the walls, and proceeded with soil treatment. However, complications arose. With a structure already in place, the city was incapable of excavating and treating contaminated soil below the foundation of the building. The USEPA permitted the site to exceed PCB cleanup standards since excavation would have undermined the building's structural integrity and possibly halted the project. Groundwater testing began in 1995 and revealed slight contamination. Working with the state's voluntary cleanup coordinator, the mayor's office decided to continue routine sampling throughout early 1996 but delay launching a full-scale groundwater treatment program until the state promulgates its new groundwater cleanup standards, expected to be approved by the fall 1996. At that time, the city hopes to move to site closure under the state's regulatory framework by securing a Convenant-Not-to Sue (CNTS) on behalf of the developer. Such a CNTS could prescribe a long-term groundwater monitoring plan, although city officials expect that sampling will continue to show that contamination is minimal.
With both a developer and a major tenant secured, the site proceeded to the renovation phase in late 1994. The smaller Building 40, subject to extensive deterioration, was demolished to provide space for the complex's outdoor parking area. The Tell Companies, a real estate development firm on its flagship development project, proceeded to renovate the fifth and sixth floors of Building 41 for Advanced Elastomer Systems (AES), a leading polymer research company. With the AES's commitment to the redevelopment effort, the complex was christened the AES Business Campus. AES recently moved into its new 100,000 square-foot corporate headquarters. The Tell Companies will continue to develop the remaining floors for the influx of businesses that continue to settle in the Akron area.
Projects undertaken by the Mayor's Office of Economic Development are supervised by the Ohio Environmental Protection Agency. For this project, several other agencies — including the Air Quality Management Agency and BUSTER, an underground storage tank cleanup agency — were involved in a coordinated remediation effort. Together, these entities swiftly produced a cleaned site ready for redevelopment.
Upon passage of the new law, Ohio EPA ran the voluntary cleanup program in an interim status, only promulgating rules to establish a fee structure to make the program self-funding and to put in place the certification programs necessary to facilitate site cleanups. By the fall of 1996, the state intends to gain legislative approval of its proposed criteria for eligibility in the program, soil and groundwater cleanup standards, and loans and tax abatements applying to sites cleaned up under the voluntary cleanup programs.
The Tell Companies secured $22 million for the project's renovation, while the city contributed another $4.5 million for environmental cleanup. The city's funding for this project was derived from tax-increment financing.
AES, a St. Louis-based company, is one of many to contribute to the hotbed of polymer research and development in the Akron area. For the city of Akron, AES's presence means 175 high-technology positions. The company is using 100,000 square feet on the fifth and sixth floors, and expects to expand by another 150,000 square feet within several years. Continuing development plans include installation of a child care center, a fitness facility, banking services, and restaurants within the complex. With space available, the Tell Companies continue to look for businesses interested in the AES complex, marketing the facility aggressively. Continuing projects of this nature promise to greatly enhance Akron's economic vitality.
The AES complex has created an open, campus-like setting adjacent to the National Heritage Corridor of the Ohio and Erie Canal, which runs through Akron. The city plans to make significant improvements in the canal front area adjoining the AES complex.
Without the solid partnership fostered between the city, the developer, the various agencies involved, and the company, Akron officials believe the project's success could not have been achieved. In addition, the Tell Companies are marketing the historic and aesthetic setting of the 1925-era building, pointing out that space within the structure can be adapted for much less cost than new construction.
Mark Albrecht
Mayor's Office of Economic Development
(216) 375-2133
(216) 375-2335 (fax)
The Lawndale section of Chicago has experienced a long decline. Since 1960, Lawndale has lost more than 60 percent of its population and over half of its housing. The area's economic vitality was further weakened when Sears, Roebuck and Company, Lawndale's defining institution, left Lawndale and moved its headquarters to its current location at the Sears Tower in 1973. Currently, the area's median household income, at approximately $12,000 per year, is half that of the rest of Chicago, and Chicago officials estimate a 40 percent unemployment rate in the Lawndale section.
Sears had been involved in Lawndale since 1903, and the community had long been associated with the company. According to Kristen Dean of The Shaw Company, Lawndale is a "loyal community." Thus, a primary concern of Lawndale residents was whether the redevelopment of the 55- acre Sears property would significantly change the community's social composition. In order to avoid this, about 600 multi-income housing units were planned in concert with one-million square feet of commercial space for office and light industrial use. This plan was designed to bring jobs to Lawndale, while providing housing units priced according to the existing economic make-up of the community.
Sears and The Shaw Company developed a three-component revitalization plan — housing, commercial development, and community services — all based on the redevelopment of the Sears property, which was renamed Homan Square. In response to a market assessment that determined Lawndale most needed housing, that component of the plan was addressed first. The housing development was planned for four phases: the first has 74 low- to medium-income units for purchase and rental, and the second has 54 units for purchase, including 16 market-rate houses. The last two residential phases have yet to be designed. The market-rate units are planned in response to the desires of the "better off" residents of Lawndale, who feared that they would not qualify for the subsidies attached to the non-market rate houses.
Homan Square's central location should make it attractive for commercial investment. It is a ten- minute drive to downtown Chicago, two blocks from an "el" mass transit stop and the Eisenhower Expressway, and three miles from St. Luke's Medical Center. The site has been designated a federal Empowerment Zone, gaining access to incentives that make Homan Square even more attractive to business. The developers will try to attract "major" employers who will provide secure jobs for the community. According to a New York Times report, commercial tenants will be obliged to hire a percentage of their employees from the Lawndale community.
The community service component of the revitalization strategy has yet to be developed. The developers wish to provide such services as a day care center, job training facilities, and a gymnasium. They are hoping to construct a new building for this purpose.
A major obstacle to the Homan Square development was the environmental contamination resulting from nearly 80 years of Sears operating a warehouse at the site. The residential development was hindered by the removal of asbestos and PCB ballast that contaminated the three-million square foot Catalog building that was demolished. Environmental problems of the commercial phase included asbestos and lead paint removal. The levels of remediation in these instances depended on future building use.
On two blocks of the site had been a Sears auto center, where BTEX contamination (a mixture of benzene, toluene, ethyl benzene, and xylene) from underground storage tanks was found. Several contractors excavated and removed the contaminated soil to landfills. The entire remediation was overseen by Dames and Moore, an environmental consulting firm based in St. Louis. The expedited manner in which these environmental problems were confronted prevented the expression of any serious concern from the community over potential health hazards.
The remediation followed regulations laid out by the Illinois EPA and the Chicago Department of the Environment. The state laws regarding B-TEX remediation changed in February, 1992. This affected the project as the law was adjusted to accommodate the use of a risk assessment, with particular regard to the threat to groundwater. This change significantly reduced the cost of remediation as it ended the need to remove certain soils. The Chicago Department of the Environment acted as the agent of the federal government in this development by overseeing NEPA rules. This arrangement made sense since some funding came from the U.S. Department of Housing and Urban Development. HUD required a Finding of No Significant Environmental Impact (FONSEI) for the funds to be distributed. The master plan for the development had to be approved by the city before it could be implemented.
The project's funding has come primarily from Sears. Of the $30 million spent, approximately $1 million has gone to environmental remediation and a large portion of that amount covered landfill costs. The city paid for one-third of the cost of remediating contamination that existed under public domain during phase one of the development.
Each housing unit for purchase is subsidized by Sears for $13,000. Furthermore, potential home buyers can apply for a subsidy from Chicago's Department of Housing. Under the department's New Homes for Chicago program, applicants with sufficient financial need qualify for a capital grant of $20,000.
Harris Bank, LaSalle National Bank, and Old Kent Bank, all based in Chicago, are three major banks processing mortgages for potential home owners. One lender, Harris Bank, anticipates a 90 percent approval rate for applicants.
Of the five buildings on the site before the project began, all have been retained for commercial use, except the Catalog building, which has been demolished to provide space for residential development. Phase one of the housing development began early in 1994. These units began to be occupied in the fall of that year. As of June 1995, about 75 families were living on the site. More than half of the home buyers, and over 70 percent of the renters, are from the Lawndale community. To improve the quality of life for these residents, 24 percent of the land developed has been set aside for common green areas, including land donated to the city by Sears for the creation of a park. Furthermore, the Shaw Company undertook high-quality construction in order to show that the area is indeed rebounding.
Sears' redevelopment of its property exemplifies several lessons in brownfield redevelopment. It shows how redevelopment is easier when the prior owner and the developer are the same entity. The fact that Sears took the responsibility for redeveloping its own property, rather than selling or abandoning it, made the project more viable on three counts. First, it prevented any confusion over liability for environmental remediation as Sears is clearly the responsible party. Second, Sears took more pride in the quality of its redevelopment because of the company's strong ties to the community and Chicago. Third, Sears' familiarity with the community and the community's familiarity with Sears spawned high levels of cooperation. This redevelopment also shows the benefits of addressing environmental issues early in the development, a step that reduces the risk of encountering unexpected and costly contamination after construction has begun.
Kristen Dean
Shaw Company/Sears Tower
(312) 875-8970
(312) 382-8815 (fax)
Around the turn of the century, the Milwaukee Road, a regional rail line, inhabited a 40-acre stretch of land in northern Minneapolis. During the 1960s and 1970s, the property was used primarily as a transfer point for rail cars, as well as for storage and repair work. The site also housed an auto marshalling yard, where automobiles were delivered from the factories and distributed to local dealerships.
In 1986, after several years of persistent financial difficulties, Milwaukee Road declared bankruptcy. Legal proceedings required the property's sale to another railroad. The Soo Line railroad company purchased the site, while the auto marshalling yard was separately transferred and sold off to another buyer. Soo Line, in turn, promptly sold the property to the Minneapolis Community Development Agency (MCDA) for cleanup and redevelopment.
In hopes of assuring an effective cleanup effort, MCDA applied a "divide-and-conquer" strategy to the 40-acre site. It was divided into two 20-acre parcels — one clean, one contaminated. The clean parcel has been fully developed and currently houses several light industrial outfits, including a welding company, haberdashey, food processing plant, photographic company, graphic services firm, and air- conditioning and heating unit dealership.
The contaminated 20 acres were further broken down into four zones to facilitate cleanup. Two of the zones — the central and the western zones — encompassing less than five acres, were determined to meet environmental standards. Although a small pocket of contamination was discovered in the western zone, the MCDA was granted a letter of "no further action." However, the two remaining zones — the northern and southern zones — required considerable attention.
The southern zone, a seven-acre site, had once housed two above-ground storage tanks used for refueling. Much of this zone's petroleum-based contamination originated from storage tank leaks. The groundwater was found to be considerably affected. Bioremediation was undertaken, which involved the spraying of water into the soil to wash contaminants into the groundwater, and then the pumping of the groundwater into a bioremediation tank for treatment prior to recirculation. The abatement of the southern zone has been completed at a cost of $2.5 million. The MCDA current awaits site closure. The city has found a buyer for the southern site and is currently involved in negotiations with DC Sales, a distributing company.
The northern zone, consisting of ten acres, involved more troublesome contamination. Although the specific use of the northern zone has not been determined, city officials believe the site once served as a railroad roundhouse and may have been used for refueling activities. Heavy fuel oil product had seeped into the soil. In many places, standing pools of fuel oil were discovered. The MCDA has proceeded with cleanup procedures involving free product recovery, as well as air sparging, in which natural biodegradation is triggered by the spraying of air into the soil. This zone is two years into cleanup, with another year to a year and a half expected before completion. Cleanup costs for this segment have been estimated at $2 million.
Minneapolis is one of the earliest cities to set, as policy, the redevelopment of contaminated industrial sites within its boundaries. During the 1980s, sites were purchased through the Minneapolis Light Industry Land Acquisition Program, in which the city accepted responsibility for the site's environmental cleanup costs. Currently, sites are purchased directly by the Minneapolis Community Development Agency (MCDA). Through the state Volunteer Investigation and Cleanup Program (VIC), a transfer of property without a transfer of liability is possible. Thus, the polluter remains the responsible party despite MCDA activity on the site. The MCDA then can pursue reimbursement for cleanup costs from the responsible polluter. Under the VIC program, municipalities, private parties, and lenders are given this risk protection.
The state of Minnesota, through the Contaminated Sites Cleanup Program, recently appropriated funds — $7.8 million — for cleanup of contaminated sites in an effort to refuel economic redevelopment. This measure became effective on July 1, 1995. The money is to be dispersed through competitive grants, which are then to be matched by local funds. Sites are subject to certain eligibility criteria, one being that a site cannot be designated a Superfund site. Three-quarters of these state appropriations have been earmarked for metropolitan cleanup sites, while the remaining fourth is intended for rural and suburban remediation sites.
To remedy the various problems surrounding the movement of economic development (involving new jobs and new housing) into outer-ring suburbs, the state has levied a cleanup/redevelopment tax on the Twin Cities metro area. The property tax creates a fund of approximately $6.8 million per year, all of which is intended for site remediation grants to be distributed by the Metropolitan Council. Although no specific criteria have been written into the recently-enacted statute, eligibility requirements are being developed. The grants would be available to sites in Minneapolis and St. Paul and in the counties surrounding the two cities. The passing of this statute guarantees a considerable collection of funds for redevelopment and cleanup costs. Funds from this statute will be available for use following the tax collection in 1996.
Another recently-passed statute involves the intended use of a redevelopment site when judging cleanup standards. Although the Minnesota Pollution Control Agency (MPCA) had considered such factors in the past, the issue of "how clean is clean" is now determined in light of future site use.
In May 1995, MPCA and federal EPA's Region V office signed a memorandum of understanding that exempts purchasers of cleaned-up sites from any past liability on the federal level once the state has issued a certificate of completion, a letter of no further action, or a letter of no association. Although EPA previously had promised verbally to honor the state's liability exemption measures, private parties continued to be suspect of EPA intervention. With this clause now in writing, private parties have been more willing to undertake the development of contaminated sites. MPCA officials believe this agreement's impact will far outweigh the effects of various statutes recently passed in the Minnesota state legislature.
Funds for the Soo Line railyard were derived from a tax-increment financing (TIF) mechanism, known as hazardous waste subdistricting. This approach, authorized in 1988 and renewed in 1994 through a land write-down mechanism, utilized funds taken from the difference between the base assessment and the new increment after redevelopment. In order to utilize monies from this financing plan, the cleanup site must be approved by and under the supervision of the Minnesota Pollution Control Agency.
The MCDA also is pursuing reimbursement for the Soo Line project through the state's Petro Fund. The Petro Fund law requires petroleum companies to place a tax on their products into a fund to aid in the cleanup of petroleum tank leaks. This measure has been supported by the industry.
When cleanup of both the northern and southern zones is complete, MCDA expects developers to begin considering the other two zones, which have remained undeveloped — because of fears about spreading contamination and liability — since being declared suitable in 1988. With all 20 acres remediated, MCDA foresees considerable light industry redevelopment. A fulfilled project promises an influx of jobs, income, and economic vitality.
Larry Heinz of the MCDA firmly believes the long-term benefits of a cleanup project, like Soo Line, far outweigh the difficulties encountered in such an endeavor — railroad bureaucracy being one of the most frustrating. Future development activity on this property promises to more than repay the city for its investment.
Larry Heinz
MCDA
(612) 673-5028
(612) 673-5186 (fax)
Judd Reitkerk
MCDA
(612) 673-5803
(612) 673-5186 (fax)
The Wilensky Salvage Yard, located at 1200 North Washington Avenue in Minneapolis, has been one of MCDA's more recent redevelopment projects. For the past 50 years, the three-and-a-half- acre Washington Avenue property has served as an automobile scrapyard for the salvaging and disposal of auto parts. The property, owned by the Wilensky family, was purchased by MCDA, along with similarly used properties, in 1994.
The Wilensky Salvage Yard is part of the existing North Washington Industrial Park, which is largely blighted and under utilized. City officials would like to restore light industrial activity to the park, which has excellent transportation access to nearby interstate highways and the Minneapolis River Terminal on the Mississippi River.
An environmental audit conducted prior to purchase detected the presence of heavy metals and some petroleum-based soil contamination. In February 1995, cleanup efforts commenced. Several structures, including garages, sheds, and other minor buildings, were demolished and cleared from the site. The petroleum contamination required the removal and incineration of the top three feet of the property's soil. Also undertaken were excavation, treatment, solidification, and removal of the heavy metals to an approved hazardous waste landfill. Groundwater contamination levels were assessed at levels satisfactory with state health concerns. In May 1995, cleanup efforts were completed, with the cost of remediation totaling $900,000.
In June 1995, MPCA approved the site remediation activities and issued a letter of "no further action." Microtron, a minority-owned electronics company seeking to expand its Minneapolis-based operations, expressed interest in the property but was wary of the liability issues involved in the purchase of a cleanup site. To allay the company's fears, the city arranged for a letter of "no association." With this, the new purchaser was cleared from all liability for past contamination. Reassured, Microtron purchased the property and has since begun construction of a 65,000 square-foot facility.
When planning to undertake a redevelopment effort, the MCDA conducts an environmental audit and a property appraisal prior to negotiating a selling price with the owner. A parcel's purchase price is determined by subtracting the estimated cleanup costs from the property's clean value. The private owner is offered the selling price, as well as an exemption from site liability. An environmental cleanup procedure, to be approved by MPCA, is compiled and carried out. A site's closure is approved by MPCA and a buyer is sought. The new purchaser is offered the parcel at its clean-property value and provided with an exclusion from liability.
Through the state's Volunteer Investigation and Cleanup Program (VIC), a transfer of property without a transfer of liability is possible; this can expedite reuse. Thus, the polluter remains the responsible party despite MCDA activity on the site. The MCDA can then pursue reimbursement for cleanup costs from the responsible polluter. Under the VIC program, municipalities, private parties, and lenders are given this risk protection.
Effective July 1, 1995, Minnesota, through the Contaminated Sites Cleanup Program, made available $7.8 million of appropriated funds for cleanup of contaminated sites in an effort to refuel economic redevelopment. The money is dispersed through competitive grants that are then matched by local funds. Sites are subject to certain eligibility criteria; for example, they cannot be designated a Superfund site. Three-quarters of these state appropriations are targeted for metropolitan cleanup sites, with the remaining funds devoted to rural and suburban projects.
The state also has levied a cleanup/redevelopment tax on the Twin Cities metropolitan area in order to counter the various problems associated with urban sprawl. The property tax, beginning in 1996, will generate $6.8 million per year, which is placed in a fund that provides site remediation grants distributed by the Metropolitan Council. Although the new statute contains no specific criteria, eligibility requirements are currently being developed. Grants are available to sites in the two cities and in the seven counties surrounding Minneapolis and St. Paul.
Another recently-passed statute directs MPCA to consider the intended use for a redevelopment site when judging cleanup standards. In May 1995, MPCA and EPA's Region V also signed an agreement exempting purchasers of cleanup sites from any past liability on the federal level once the state has issued a certificate of completion, a letter of no further action, or a letter of no association. With this new policy, private parties have been more willing to undertake the development of contaminated sites.
Funds for the Wilensky scrapyard project were raised through the hazardous waste subdistricting tax-increment financing (TIF) mechanism established by special legislation in 1994. In this case, property tax revenues collected from businesses in the eight-block area surrounding Washington Avenue are devoted to this brownfield reuse effort. Thus, the city's completed redevelopment projects, as well as other businesses, contribute to on-going cleanup efforts within the district.
Although the city applied for state grant money, the absence of severe groundwater contamination disqualified the site for funding.
Microtron's redevelopment of the parcel is expected to retain 114 jobs and provide another 50 new positions, as well as contribute to the city's tax revenue. Moreover, Zipsort, a 150-employee premailing and packaging company housed in Microtron's current facility, has reconsidered plans to move out of Minneapolis. Microtron's expansion promises to afford Zipsort enough space to hire an additional 50 employees.
The city is hopeful that such successful redevelopment efforts will encourage other companies to consider the revamping of prior industrial sites as a viable business option. MCDA currently is negotiating the purchase of numerous under-utilized parcels in the vicinity of Washington Avenue in an effort to unite several smaller plots purchased from the Wilensky family. With a larger site, the city is confident of securing a major developer. With each completed project, the city is hopeful that this section of Minneapolis, now known as the North Washington Industrial Park, can be reborn as a center of economic vitality. When completed as planned, the industrial park will include 400,000 square feet of manufacturing space and provide nearly 1,000 jobs. The property's market value is expected to increase from its current $2 million to approximately $15 million.
MCDA's Patrick Connoy, director for this project, argues that cleanup efforts of this magnitude require solid financing. Municipalities, as well as private parties, need to possess the necessary funds prior to beginning such a project. He advises against depending upon government aid programs, which, complicated by the uncertainties of politics and bureaucracy, can threaten a project's success.
Larry Heinz
MCDA
(612) 673-5028
(612) 673-5186 (fax)
Judd Reitkerk
MCDA
(612) 673-5803
(612) 673-5186 (fax)
Patrick Connoy
MCDA
Project Director, N. Washington Sites
(612) 673-5193
Lone Star Steel, a Texas-based company, sought in 1994 to market its inactive Fort Collins, Colorado, plant. The property, a 12-acre parcel situated on the outskirts of the city, had undergone considerable manufacturing use. For more than two decades, the facility had been utilized for the manufacturing and finishing of steel piping. In 1962, Southwestern Pipe purchased the property and constructed a pipe-making facility. In 1970, the plant was acquired by Lone Star Steel, who continued manufacturing pipe until the plant's closure in the mid 1980s. After two owners and much manufacturing-related contamination, the property required cleanup. In order to secure a buyer for the site, Lone Star set to work to bring the plant within acceptable environmental standards.
In September 1994, Lone Star Steel submitted its remediation strategy to Colorado's Voluntary cleanup Program. With this plan approved, Lone Star began cleaning the facility's waste pits in November of 1994. These pits, used for the disposal of various manufacturing materials, were contaminated with manufacturing debris: scrap metal and machine cuttings, wood, concrete, and absorbent materials mixed with hydraulic oils. None contained hazardous waste covered by the Resource Conservation and Recovery Act (RCRA), although two pits contained PCB-contaminated materials. During site investigations, the company removed a total of 4,360 cubic yards of contaminated material from the site, including 160 cubic yards of high-level PCB-contaminated waste, which was taken to a hazardous waste landfill. Eight hundred cubic yards of fill and debris exhibited low-level PCB contamination—defined as below 50 parts per million PCBs—and was disposed at an industrial landfill. The remaining 3,400 cubic yards were classified as oily waste and dumped at a municipal landfill operated by Waste Management, Inc.
Low levels of hydrocarbons also were discovered in the groundwater at areas of the site away from the waste pits. After conducting a risk assessment and finding levels of BTEX (benzene, toluene, ethyl benzene, and xylene) too low to warrant remediation, the company filed a no-action petition with the state, agreeing to monitor the water table for a year after the site's abatement. In December 1994, after just a month of remediation, the site cleanup effort was considered complete.
The cleanup effort was filed under Colorado's Voluntary cleanup Program, as established by the Voluntary cleanup and Development Act of 1994. Within this framework, the company's remediation plan was discussed, altered, and approved. A schedule and deadlines for the site's abatement were set. The program's structure allowed the project to move quickly and smoothly, with only a few pitfalls. Lone Star was the first site to be completed through the Colorado cleanup program.
Lone Star Steel spent more than $200,000 on studies and analyses, and an additional $250,000 for the cleanup effort. None of these funds came from cleanup grant or loan programs. With this private-sector investment in the Fort Collins plant, the facility was quickly sold and much of the company's cleanup funds recouped.
Following remediation, the site was purchased by Temple and Petty Construction, which proceeded with some minor demolition and extensive retrofitting of the facility. The site is now complete, and a number of tenants already have been secured for the future light-industry incubator complex, including electricians, contractors, a cold storage company, and a canvas-awning manufacturer. The complex, situated in the midst of an extensive high-technology industrial area where properly-zoned space is in high demand, has attracted much business interest. The finished facility promises to further contribute to Fort Collins' economic development.
For Leah Cooper, Manager of Environmental Projects at Lone Star Steel, the success of this endeavor originates with the support and assistance of Colorado's Voluntary Cleanup Program. With the program in place, Lone Star's remediation effort was easily coordinated in a timely fashion within the state cleanup requirements. Texas, the company's home state, recently passed similar legislation. Lone Star is using this new program to help remediate a site in Texas.
Leah Cooper
Lone Star Steel
Manager of Environmental Projects
(903) 656-6313
(903) 656-6312 (fax)
Jeff Deckler
Colorado Department of Public Health and Environment
(303) 692-3387
Williams Air Force Base was established in 1941 as an Army Air Corps Training Facility. In September 1993, the Air Force left the 4,042-acre base with its three 150-foot-wide parallel runways, 200 buildings, and approximately 700 single family housing units. The Williams site also offers 1,023 undeveloped or "unimproved" acres for industrial and commercial development.
The base had several environmental contaminants that the Air Force needed to address before it could be converted to civilian use. Several areas of the site were contaminated with fuel spills or underground storage tanks. A landfill left on the site required remediation. Asbestos and lead-based paint also pose problems.
Located 17 miles from Phoenix, Williams is easily accessible. It is five miles south of the Superstition Freeway and one-half mile south of the proposed San Tan Freeway. The site also is well served by a grid of arterial roads. The Southern Pacific Railroad provides rail access to Williams, with a line that nearly intersects the site's southwest corner.
When the federal government announced on July 12, 1991, that Williams Air Force Base would close, the region faced the loss of a major part of its economy. At peak operation, the Air Force employed 4,000 people at Williams. The Williams Air Force Base Economic Reuse Advisory Board, formed by the Arizona governor, began to develop a framework for accommodating possible future land uses at the base, with an emphasis on maintaining the site's importance as an economic contributor to the region. The board is comprised of nine representatives from the surrounding communities, Arizona State University, the Salt River Project, Arizona Department of Commerce, and Maricopa and Pinal Counties. In its Williams Air Force Base Economic Reuse plan, the board recommended the development of a civilian airport, to be called Williams Gateway Airport, on 3,300 acres of the site. On the remainder of the property, the board suggested developing an educational, research, and training (ERT) facility named Williams Campus.
When debating possible future uses for the areas without runway access, the board placed heavy consideration on the desires of the community. One of the most prevalent fears among local citizens was that the base would be converted to a federal prison or other facility that would not maximize the site's economic potential. The East Valley Thinktank, a local organization that addresses problems in education, proposed that the base be reused as an "educational mall," holding classes for kindergarten through the doctorate level.
The conveyance of the base to its civilian owners is contingent upon the remediation of the environmental contamination on the site. By federal statute, none of the property can be transferred until it has received a statement of no further action from EPA. Thus, before any buildings are occupied or any land developed, it must be inspected, and if contaminated, remediated.
Environmental regulations did pose delays because the deed could not be transferred without a no-further-action letter. Of course, no renovations or development can begin until the deed is transferred.
In an effort to give communities the earliest access possible to closed bases so they can begin the economic redevelopment process, it is common for the sites to be leased to redevelopment authorities before the remediation is complete, even though renovations cannot begin until the deed is transferred. This practice has allowed progress to be made at Williams.
Several regulations allow property to be conveyed at no cost if it will be used for educational purposes or for a civilian airport. This significantly reduced the cost of the development of Williams Campus and Williams Gateway Airport. However, this did not extend to the Gila River tribe's acquisition of the base's golf course, as the no-cost conveyance regulations do not cover recreational uses.
The Williams Gateway Airport Authority has received funding from federal, state, and local agencies to cover the estimated $253 million cost of redevelopment. The Department of Defense's Office of Economic Adjustment since 1992 has provided annual grants between $300,000 and $400,000, and it will continue to do so until 1996. These grants are used exclusively for planning and administration. Under its Title IX Sudden and Severe Economic Impact Program, the Economic Development Administration has provided about $250,000 for the planning of utility systems. The Federal Aviation Administration has given approximately $300,000 to the project as part of the Airport Master Plan Grant for the planning of the civilian airport. The Arizona Department of Commerce has granted $350,000 for the marketing of the airport to prospective tenants. Collectively, the local governments have agreed to provide about $5 million per year from their general funds for the last three years for operations and maintenance costs, and they will continue to do so until the airport breaks even, estimated to happen in 2015. The Williams Gateway Airport Authority further supports operations and maintenance costs from the profit the airport generates. In only its third year of operation, the airport is expects to generate income of about $1.5 million.
All costs for environmental remediation were paid by DoD's Base Realignment and Closure (BRAC) account. This account is funded by annual congressional appropriations and by the proceeds from the sale of former military installations.
Williams Gateway Airport is currently in full operation, well ahead of production forecasts. Annual takeoffs and landings have increased to 130,000 from 114,000 in 1995. In 1996 the airport secured a major contract with McDonnell Douglas Corporation to run its Avionics Modification Program, which tests aircraft upgrades before expanding them to other airplanes. Already the project has created 1,000 jobs, and officials forcast a total of 17,000 jobs over the next 20 years. Seventeen companies have located at Williams, filling all but one of the site's original 40 buildings. Williams Campus also has begun to take form. ASU East currently leases three buildings and 100 houses from the Air Force. ASU's School of Technology has been moved to ASU East from the main campus, bringing 1,200 students to the site. ASU plans on moving its School of Agri-Business to ASU East as well; the university expects about 400 agri-business students at Williams by the fall of 1996.
Redevelopment of the Williams Air Force Base demonstrates the need for flexibility in brownfields planning. With the enormous number of regulations surrounding the reuse of a military base, players must adapt to the unexpected. In this case, the board had a reuse plan ready to implement when the Gila River tribe and homeless advocacy groups made their claims to the property. Though these claims delayed development of the airport and campus, redevelopment authorities were able to accommodate these claims without drastically altering the substance of the original plans. This pleased all parties involved, as the tribe and homeless groups received their share while the development continued to move forward.
Utilizing existing facilities for redevelopment is another lesson that is particularly relevant to base reuse. Military bases usually have facilities that in their current form can be productively reused. This was certainly the case at Williams, as most of its buildings are being reused without modification.
The hierarchy of redevelopment authorities that was created for the reuse of Williams is another valuable lesson. From the Williams Air Force Base Economic Reuse Advisory Board appointed by the governor, to the Intergovernmental Agreement Group and the Education, Research, and Training Master Planning Steering Committee that shared responsibility for the redevelopment, to the community through meetings such as Public Information Workshops, multiple levels of authority were in place at Williams. This type of organization aided the redevelopment by involving many people and countless ideas. In 1996, the Williams Gateway Airport received the Facility of the Year Award from the National Association of Installation Development, an organization that focuses on military base reuse.
Mary Baldwin
Williams Gateway Airport
(602) 988-1013
(602) 988-2315 (fax)
Meadville is a small community located in a depressed region of western Pennsylvania, about 40 miles south of Erie. The entire area, once filled with manufacturing and processing plants, is now in severe decline with closed factories and high unemployment. The Meadville Redevelopment Authority (MRA) has struggled for many years to attract industry back to Meadville and surrounding towns. Meadville still has intact rail links, and a trainable work force. It also has some seriously polluted industrial sites. Cleanup and reuse are high priorities for local and state agencies.
Redevelopment officials selected a former synthetic fiber manufacturing plant, northwest of Meadville, as one of their larger projects. Several firms have occupied the site since the Vicose Company began operations there in 1929; the FMC Corporation was there from 1963 to 1976, and Avtex Fibers Inc. bought the business in 1976 but began to phase out operations a few years later. The plant shut down completely in 1986, sacrificing 850 jobs and leaving the 300-acre complex, and over 1.4 million square feet of building space, empty. At its peak, the plant employed as many as 4,000 people.
The county in 1989 bought the western two thirds of the property and the main processing buildings, which it turned into the Crawford County Industrial Park (CCIP), now known as the William J. Bainbridge Technology Center. It leases the 125-acre parcel to the MRA, which runs the day-to-day operations and marketing. The eastern one third of the site currently is held by the bankruptcy trustee of Avtex, but it probably will be turned over to MRA by 1996 after it has been remediated. Remediation of the site was completed in October 1995. On August 6, 1996, the bankruptcy court ordered the property transfered to Crawford County Properties, Inc., a real estate holding corporation in the MRA office.
Renovations began almost immediately after the county purchased its parcel,which was the least contaminated portion of the property. The primary contamination MRA had to address was asbestos that covered the spinning machines used on the site. Once this was remediated, tenants began to occupy the site. According to Maryann Martin of MRA, the media played a large and helpful role in informing prospective tenants about the site, as news coverage of developments at the Center has been extensive. The Governor's Action Team, part of the Pennsylvania Department of Commerce, also has been helpful in finding tenants for the park. This team has matched companies in need of office or industrial space with the Center.
A primary impediment to reinvestment in the Center is the environmental problems on the property east of broadway, the main access road into the center. The former owners of the plant burned coal and stockpiled fly ash, actions that elevated naturally-occurring arsenic levels in the soil. In addition, disposal of oil caused polychlorinated biphenyls (PCBs) to accumulate in the soil, and burning of certain types of debris caused carcinogenic polyaromatic hydrocarbons (PAHs) to do the same. USEPA inspected the site following its conversion into the Center and determined that the contamination was not extensive enough to warrant its involvment.
However, environmental difficulties were significant enough for the Pennsylvania Department of Environmental Resources (PADER) to name the area a state Superfund Site in 1990. In response, PADER proposed a remedy involving solvent extraction of PCB-contaminated soils, an experimental technology, and, in the event the solvent extraction failed, a contingency plan of excavation and off-site disposal. The agency also researched the site's prior occupants to determine who would be liable for the remediation, and found that Avtex had gone bankrupt and Vicose no longer existed. PADER was able to identify two financially-viable potentially responsible parties. FMC was identified because it once owned and operated the facility. Hoechst Celanese Corporation (Celanese), a chemical company, was liable for some of the remediation costs based on its provision of acetate flake to the facility, which was found to be one of the contaminants at the site.
At an estimated cost of $28 million for approximately four years of work, PADER's remediation plan was critiqued by several stakeholders, including FMC Corporation, Celanese, and MRA, which argued that the risk factors were inconsistent to the site's future use. They also objected to the plan's adverse impact on MRA's efforts to keep present tenants at the site and to attract further tenants. FMC contracted with Environmental Issues Management, Inc. (EIM) to help work with the community and elected officials to develop a cost-effective remedial plan that would be consistent with the site's future use and be equally protective of human health. Once this was accomplished, FMC continued to advocate the alternative remedy to the community by working with community leaders, local businessmen, elected officials, and environmental consultants.
This educational effort included preparing fact sheets on both PADER's proposed remedy and the alternative proposed by FMC, Celanese, and MRA; assisting MRA prepare a presentation on the FMC/Celanese/MRA remedy to be used at PADER's public meeting; and hosting community meetings to discuss both proposals. As a result of these and other efforts, PADER reconsidered its initial proposal, accepted the FMC/Celanese/MRA remedy, and signed in March 1995 a consent order and agreement to implement that approach. This agreement allows tenants to continue their operations on the site, and it permits future expansion by providing locations where buildings could be constructed. At an estimated cost of $5-10 million, implementation of the plan began in early May 1995, and was completed by December 1995.
The regulations followed for this remediation were detailed under Pennsylvania's Hazardous Site Cleanup Act, the state's Superfund law that went into effect in 1990. The Avtex site, in fact, was first on the state Superfund list. Because Pennsylvania's Superfund regulations were more stringent than U.S. EPA's, the federal agency chose not to bring the site into the Superfund program, although it reserved the right to do so. PADER's strict adherence to the Hazardous Site Cleanup Act made it difficult for MRA, FMC, and Celanese to commit to the proposed cleanup plans. This conflict was resolved by FMC's public participation efforts and a change in agency leadership that brought in officials who seemed more willing to consider a less expensive remediation plan.
The state legislature in June 1995 passed Senate Bills 1, 12, and 13. These bills accomplished three things: they limited the liability of entities willing to redevelop contaminated property but did not cause the contamination; provided funding for site assessment and remediation; and establish a deed covenant that restricts the property's future use and forces those who wish to go outside of those restrictions to ensure the site's proposed new use is protective of human health and the environment. The Avtex project embodied the underlying principles of the new bills, even though these bills were passed after remediation had begun at the Center.
The site's reuse limitations, outlined in the Consent Order and Agreement, restrict the use of remediated areas, unless they are paved or sufficiently capped with clean soil, to industrial use and recreational exposure patterns. Certain areas on the site, such as those impacted by PCBs, will be restricted to industrial use and exposure patterns regardless of the required pavement. Use of the fly ash disposal area, once remediated, will be unrestricted, except to prevent the disturbance of the soil cover.
Public resources have proven essential to this project. Funding for this redevelopment has come primarily from federal Economic Development Administration (EDA) grants. MRA received three awards from EDA, two for $1 million dollars each and one for $700,000, which covered 50 percent of the costs of the renovation of buildings on the site and infrastructure improvements. MRA paid the remainder.
MRA also received funding through state programs. The Pennsylvania Department of Commerce, through the Industrial Communities Site Program, granted $300,000 for MRA to upgrade the main road that bisects the site. That agency's Industrial Communities Action Program also funded this development through three grants of $700,000, $220,000 and $175,000, a large part of which was used to rebuild many of the roofs on the site. A rail link to the Center is under renovation, using two grants totalling about $250,000 from the Pennsylvania Department of Transportation.
The state also has provided loans for the tenants on the site. The Pennsylvania Industrial Authority loans these businesses money at a lower interest rate than banks. However, the tenants must couple their state loans with loans from private investors, and the tenants must invest their own capital in their business in order to receive the state loans. Some of these loans came from the Sunnyday Fund and the Capital Loan Fund. The Sunnyday Fund provides capital for large companies capable of creating a high number of jobs, and the Capital Loan Fund provides money for businesses to invest in equipment, infrastructure improvements, and working capital.
The environmental remediation was funded by FMC and Hoechst Celanese, the only financially viable PRPs identified by PADER. By the time remediation is finished, it is estimated that FMC will have paid between $5 million and $10 million and Hoechst-Celanese $500,000. PADER holds MRA responsible for the operation and maintenance costs associated with the site and its remediation.
Prior to the beginning of the remedial operations, 800,000 square feet of space were renovated. This space now houses 19 businesses with more than 1,200 jobs. The payroll at the site exceeds $10 million, and taxes generated by the Center for the local municipalities amount to nearly $4 million per year. The park has brought international investment to the area, with companies based in Japan and England locating at the Center. Other firms at the site include motor products services, international packaging firms, screw manufacturing companies, and day care services.
With such a broad range of industries located at the Center, there was a need to upgrade significantly the transportation system to and from the site. The main access road, Broadway, was improved to handle the stresses of heavy truck traffic. Also, MRA purchased for one dollar and later upgraded the Vallonia Branch Railroad, a 1.1 mile track that Conrail abandoned. With a federal surplus locomotive engine purchased for $6,000, MRA made its first delivery to the Center by rail on February 20, 1995. The shipment consisted of plastic pellets that Andover Industries, Inc.used in its plastic injection mold process to manufacture truck door panels.
As the centerpiece for the the Center's economic development, a three-story building is being renovated for use as the Technology Center. Key to this renovation, fiber optic cabling was installed; attracted to this high-technology redevelopment, the National Institute of Flexible Manufacturing (NIFM) was the first tenant to occupy the Technology Center. This is particularly significant to the Meadville area, as NIFM was launched to fit the needs of the tool and die industry, an important part of Meadville's economy. MRA is constructing an amphitheater that will be used as a multimedia communications center.
The Avtex project demonstrates the benefits of high levels of cooperation between public- and private-sector individuals on a brownfield redevelopment. The site's development almost certainly would have followed a different course — or halted altogether — had PADER refused to consider alternative remediation proposals. First of all, tenants at the site would have been displaced had the PADER plan been put into effect. This would have halted the progress MRA made in attracting businesses to the site, placing the redevelopment years behind where it is now. Furthermore, by implementing the alternative remedy, all parties who contributed to the cost of the cleanup, including PADER, saved a significant amount of money without compromising public health or environmental protection. By working together, MRA, FMC, and Celanese not only were able to gain PADER's support for the alternative remedy, they informed tenants and the community of the nature of the site's environmental conditions and the proposed remedies. That this was an effective cooperative effort between all parties is proven by the lack of inquiries and complaints that PADER has received about the site.
MRA's decision to cater to businesses relying on state-of-the-art technological equipment, such as fiber optics, made the Center unique among industrial parks. MRA saved NIFM the cost of installing essential high technology features. NIFM, in turn, has become a stable employer at the Center, and will generate more business for the Meadville area through its operational and educational functions.
Maryann Martin
Meadville Redevelopment Authority
(814) 337-8200
(814) 333-9508 (fax)
Anita Stainbrook
Northwest Regional Office of Pennsylvania DER
(814) 332-6648
(814) 332-6121 (fax)
http://www.nemw.org/cmclean5.htm