COVER STORY, APRIL 2005

SMART GROWTH ENCOURAGES BROWNFIELD REDEVELOPMENT
Developers are finding brownfield redevelopment more attractive as smart growth becomes a priority.
Leo Pierre Roy

Recently, developers have had more reasons than ever to consider urban infill development. Interest rates remain low, infrastructure funding is available and investment capital is plentiful. And smart growth, a planning concept that has been espoused by public policy administrators for years, has become mainstream. Promotion of smart growth policies by government at local, state and federal levels is one core reason why interest in brownfield redevelopment is experiencing a resurgence.

Making Smart Growth a Priority

Smart growth, or development where existing infrastructure exists, is broadly defined by the U.S. Environmental Protection Agency (EPA) as the encouragement of healthy communities, economic development and jobs, strong neighborhoods, and transportation choices. Smart growth is the opposite of sprawl; it is about growing where it makes the most sense — in and around central business districts or traditional town centers, near transit stations, or in areas that have been previously developed for commercial, industrial or institutional use. Not surprisingly, many brownfields, or underutilized, environmentally impaired properties, meet these criteria.

An interest in sustainability has grown, particularly in the Northeast, and is evidenced in the push by the administration of Massachusetts Governor Mitt Romney for smart growth. He has made it a priority, establishing an Office of Commonwealth Development (OCD) and promoting a list of 10 sustainable development principles. OCD intends for these principles to guide agency decision-making, particularly in the allocation of public funds. The commonsense principles include redevelop first, concentrate development, be fair, restore and enhance the environment, conserve natural resources, expand housing opportunities, provide transportation choices, increase job opportunities, foster sustainable business, and plan regionally.

The Romney administration’s push for smart growth has forced many communities to consider sustainability issues for the first time. Now, any community in Massachusetts that seeks state funding has to fill out a Commonwealth Capital application form, which grades them on their adoption of the 10 sustainability principles.

Not only is Massachusetts making sustainability a mandate, but the federal government is promoting this as well. The EPA has launched a Smart Growth Strategy, which includes promotion of infill and redevelopment, catalyzing smart growth transportation solutions, partnering for innovative development and building regulations, supporting state smart growth initiatives, and ensuring that EPA policies are consistent with their sustainability goals.

Brownfields and Smart Growth

Brownfield projects can be difficult and costly to develop, so any additional incentives help. Having communities and regulators proactively focused on these sites can help move them through the development process. For example, attention to brownfields is specifically required on the Massachusetts Commonwealth Capital application. To increase a municipality’s score on the application, it must have an affirmative strategy for the redevelopment, remediation and return to productive reuse for brownfields in the community. This creates a strong incentive for municipalities to promote brownfield redevelopment and use the tools at their disposal, including zoning changes, direct funding and tax incentives.

Zoning Changes

The focus on smart growth is inspiring communities to take a fresh look at zoning bylaws to create or expand special-use or overlay districts. In Massachusetts, the town of Bellingham revised zoning to allow the conversion of a vacant, abandoned mill into a mix of multifamily and senior housing. Other communities are using zoning revisions to trade dimensional waivers, such as reduced set-backs and lot sizes, for affordable housing. Many developers find this new openness to considering creative solutions in zoning regulations a welcome change.

Funding Programs

In addition to encouragement, cash is available. The EPA is continuing its popular programs, the Brownfields Assessment Demonstration Pilot program and the Brownfields Cleanup Grant program, which offer funding to public entities for assessing and cleaning up brownfield sites. Scores of communities in the Northeast have received these grants, from large cities like Boston to small cities like New Bedford and Worcester, Massachusetts, to groups of small rural communities in Vermont. The U.S. Department of Housing & Urban Development (HUD) is also supporting the effort with the Community Development Block Grant program that provides an annual grant to municipalities with populations over 50,000. Funds from the grant can be used for brownfield-related activities, including remediation, demolition, rehabilitation and construction.

Massachusetts and other states are also providing dollars for the cleanup and redevelopment of brownfield properties. The Massachusetts Brownfields Act established the Brownfields Redevelopment Fund (BRF), which provides loans for site assessment and cleanup to both public- and private-sector parties. Those eligible can receive up to $50,000 for site assessment funding, and $500,000 for remediation funding. For work designated as priority projects, up to $2 million is available.

Tax Incentives

In addition to grants and loans, state and federal tax incentives exist for brownfield-related activities as well. As its name might suggest, the Brownfields Tax Credit Program provides a tax credit of up to $50,000 after cleanup is completed. The Municipal Tax Abatement Program allows municipalities to negotiate taxes — including interest — with developers undertaking brownfield projects. In Massachusetts, the Economic Development Incentive Program (EDIP) offers tax incentives to attract new business owners to targeted areas. And finally, the federal Brownfields Tax Deduction Program allows a 100 percent deduction against federal income for cleanup costs.

Getting it Done

Developers considering brownfield redevelopment typically need the services of an army of specialists. Not only are traffic analyses, surveys, site, civil, and permitting assistance services needed, but also environmental assessment and remediation, and often historic preservation advice, in the case of adaptive reuse of structures. Developing brownfield projects in this era of smart growth can add the additional complication of zoning reforms and tax credit work. Coordinating these disciplines is harder than ever, which is why many developers seek firms that provide integrated services. Choosing a full-service firm enables improved coordination and collaboration among client, consultant and community, saving time and money.

All real estate is location, location, location. With brownfield sites providing available land or adaptable buildings in urban areas, or in locations with pre-existing infrastructure, they have become more important than ever in meeting governmental smart growth goals. By promoting sustainability objectives, supporting local and regional planning efforts with funding, supporting changes in local zoning that advance sustainable development, and promoting the success of projects that demonstrate the advantages of urban infill and transit-oriented development, all levels of government are committed to helping Northeast states grow smart.

Leo Pierre Roy is the director of the Massachusetts Environmental and Energy Services Group for Vanasse Hangen Brustlin Inc.

Understanding a Property’s Reuse Potential Makes for Smart Growth on Brownfields A brownfield site in West Springfield, Massachusetts, before redevelopment. The physical landscape of the Merrick-Memorial neighborhood in West Springfield, Massachusetts, has long been dominated by a CSX rail yard, which has also served as an economic engine for the community. An EPA-funded brownfield-planning study was conducted for the West Springfield Trade Center, a 7.5-acre redevelopment parcel adjacent to the rail yard. The project entailed an environmental assessment of soil and groundwater, a hazardous material and structural assessment of the existing building, and identification of feasible redevelopment options for the site. While nearly all EPA brownfields grants to municipalities include site assessments, this project was unique in that the property reuse potential was also assessed in a smart growth context. The site, like many brownfields, was underutilized despite excellent infrastructure, including water, sewer and electric service. The planning process identified that only truck route enhancements would be needed to help the site meet its full potential. Understanding the reuse potential and possible increase in the property’s value enables the town to consider tax increment financing (TIF), as well as state and federal funding, to support transportation infrastructure improvements. — Leo Pierre Roy

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