Posted by admin | Posted in Inside the Beltway | Posted on 07-08-2011
Tags: Beltway, BiPartisanship, Boost, Brownfields, Inside
Inside the Beltway: Can Bi-Partisanship Boost Brownfields?
With the Washington budget showing no signs of a quick-and-easy resolution, federal brownfields programs are unlikely to get much of a boost in the near future despite their popularity, say Beltway insiders.
When it comes to interest in brownfields in Washington, there are two sides of the coin,” says Evans Paull, executive director of the National Brownfields Coalition (NBC), based in the Washington metro area. “One side of Congress is preoccupied with bigger issues, particularly budget issues. But the other side of the coin is that brownfields has always been a good bipartisan issue, and the committee leaders are looking for issues that they can work together on.”
That bipartisan advantage was evident when the Environmental Protection Agency’s Brownfields Program emerged relatively unscathed in the compromise continuing resolution for fiscal year 2011, signed by President Obama on April 15. Despite widespread cuts in environmental and community development programs, the new federal budget for fiscal year 2011 maintains the brownfields program at its 2010 level of 0 million for site assessment and cleanup and .5 million for brownfields assistance to the states. (See related story XX.)
In fact, a letter writing campaign by the NBC encouraged communities to promote the benefits of brownfields to their representatives on both sides of the aisle, helping to draw support for funding the EPA program, says Jason Marmon, former staffer for U.S. Rep. Joe Sestak, D-Penn., a co-sponsor of the Brownfields Reauthorization Act of 2010.
“We’ve demonstrated that this is not a Democratic or Republican issue,” says Marmon, now a Glen Burnie, Md.-based volunteer with the NBC.
Brownfields program reauthorization
Last September, the NBC—with Evans Paull newly at the helm as executive director—launched a campaign to make brownfields redevelopment a central strategy in community development, environmental and climate plans. Topping the group’s ongoing legislative agenda is re-authorization of the EPA Brownfields Program with expanded funding and programs, says Paull, who is also principal at the consulting firm Redevelopment Economics.
“We have a very vigorous advocacy campaign that includes public outreach to stakeholders and walking the halls of Congress. The non-revenue program enhancements are being more favorably received at this point in time. The enhancements, the financial side of brownfields, is obviously a much harder sell”
shareholder and chairman of the National Brownfields Practice Group with the law firm Akerman Senterfitt in Miami.
“We have a very vigorous advocacy campaign that includes public outreach to stakeholders and walking the halls of Congress,” explains NBC member Michael Goldstein, shareholder and chairman of the National Brownfields Practice Group with the law firm Akerman Senterfitt in Miami. “The non-revenue program enhancements are being more favorably received at this point in time. The enhancements, the financial side of brownfields, is obviously a much harder sell,” he adds.
Goldstein says the NBC supports full funding of the EPA Brownfields Program to its authorization level of 0 million, as a start.
“We would also like to see the funding levels be raised by applying an inflation factor of 3 percent, going back to the original 2002 authorization level,” he explains. “If that were to happen, the authorization level for 2012 would be 0 million, and through 2016 it would rise to 1 million.”
Such an increase “seems defensSible to us,” adds Paull. “It essentially, in real money terms, just holds the brownfields authorization level constant, to keep up with inflation.”
As reasonable as this kind of funding increase might sound, though, for now it’s a long shot, say observers.
“Our optimism is nuanced,” says Goldstein. “We’re optimistic because we think ultimately we’ll be able to make a compelling case for increasing the level of brownfields funding.
“But we’re not unrealistic,” he adds. “We harbor no illusions that [increased] funding will be authorized and appropriated [soon], but we have to lay the groundwork… We think as we do that over the next 12 to 36 months, that Congress will respond because it’s a good investment.”
Marmon agrees, although with a few more reservations.
“We may see possible increases in appropriations in future years… I just don’t think we will see it in the next couple of years.”
former staffer for U.S. Rep. Joe Sestak, D-Penn.
“We may see possible increases in appropriations in future years,” says Marmon. “I just don’t think we will see it in the next couple of years.”
Tax incentive advantages
One federal brownfields program that shows promise for more timely legislative support of enhancements is the less well-known Brownfields Tax Incentive, the only federal brownfields incentive targeted to private site owners. The Brownfields Tax Incentive allows environmental cleanup costs at eligible properties to be fully tax deductible in the year incurred, rather than capitalized and spread over a period of years. In addition, previously filed tax returns can be amended to include deductions for past cleanup expenditures. In 2006, the incentive was expanded to include properties with petroleum contamination.
Initially enacted in 1997, the temporary incentive ordinarily is piggybacked onto another tax bill and extended every year; it was recently extended to expire again on Dec. 31, 2011.
But the incentive has seen relatively little use, with only 170 applications submitted in 29 states from 2004 to 2007, according to the EPA. Part of the problem may be the continuing uncertainty about the incentive’s annual expirations and extensions, which makes project planning more difficult, say brownfield industry observers. Creating a permanent tax incentive, they say, could help encourage its use as a financial tool in more brownfield projects.
Renewable energy efforts
Exploring ways to create better tie-ins between brownfields redevelopment and other incentive programs, especially those related to renewable energy, is another item on the NBC’s agenda for government action.
“There’s a middle ground incentive that we are pressing hard for on both federal and state [levels]—midway between a revenue and a non-revenue enhancement—and that is renewable energy,” says Goldstein. “We strongly feel that a renewable portfolio standard [a state-based requirement for electricity providers to get a minimum percentage of their power from renewable energy by a specific deadline] is potentially phenomenal for brownfields, because brownfield sites are wonderful platforms for renewable energy projects.”
Many Northeastern states, particularly New Jersey, Pennsylvania and Massachusetts, currently have “meaningful renewable portfolio standards, and as a result, there’s a significant amount of renewable energy in those states,” says Goldstein. “We’d like to see that spread far and wide… You are going to generate a broad universe of end users for otherwise unmarketable brownfield sites across the country.”
On the federal level, says Paull, the EPA is promoting its RE-Powering America’s Land initiative to support using contaminated land and mine sites for renewable energy. The program is working with the Department of Energy’s National Renewable Energy Lab (NREL) to identify contaminated land with potential for wind, solar, biomass and geothermal development potential, along with landfill gas energy development possibilities. Pilot projects that assess potential wind and solar generation potential at EPA-tracked contaminated land and mine sites are under way, and the initiative has also compiled state and federal incentives for creating renewable energy facilities and utilizing contaminated land.
“Over the last three years, there have been a lot of efforts in that direction, from EPA’s RE-Powering initiative to use of EPA grant funds on sites being considered for renewable energy, to a lot of case studies out there that point the way for how brownfield sites can be used for renewable energy,” says Paull.
Adding up the numbers
Here’s how the fiscal year 2010 federal budget changes will affect brownfields and brownfield-related programs:
EPA Brownfields Program: maintained at FY 2010 level of 0 million for site assessment and
cleanup and .5 million for brownfields assistance to the states
HUD CDBG (Community Development Block Grant): cut 0 million to .34 billion
CWSRF (Clean Water State Revolving Fund): cut 0 million to .5 billion
HUD Sustainable Communities: cut million to 0 million
HUD BEDI (Brownfields Economic Development Initiative): cut million to
EDA (Economic Development Administration): cut million to 6 million
EECBG (Energy Efficiency and Conservation Block Grant): remains at
Source: National Brownfields Coalition
Historic Douglas Block: HUD brownfield incentives at work in North Carolina
Among the federal government programs that brownfield stakeholders champion are Brownfields Economic Development Initiative (BEDI) grants and Section 108 loans, both administered by the U.S. Department of Housing and Urban Development.
And both programs played big roles in the newly completed Douglas Block brownfield redevelopment in Rocky Mount, N.C., says assistant city manager Peter Varney.
“Section 108 and BEDI were critical and valuable for this project,” says Varney.
The million Phase 1 development, which was completed in January 2011, covers approximately two blocks north of downtown Rocky Mount that includes six historically significant buildings. The area had been a thriving African American commercial district during the early to mid-1900s, Varney says, attracting residents with both stores and the historic Booker T. Theatre.
In 2005 after the Douglas Block master plan was formally approved by the city, the project received three EPA brownfields grants, which were used to assess and clean up the area. Then in fiscal year 2006, HUD awarded Rocky Mount a million BEDI grant and a Section 108 loan for .4 million to redevelop the Douglas Block area with its project partner, Rocky Mount Edgecombe CDC.
Today the Douglas Block offers a mix of residential and commercial space, with more redevelopment planned for adjacent areas as Rocky Mount works to expand a local economy that was formerly based on tobacco, furniture and textiles.
“We issued certificates of occupancy [for Douglas Block] in December 2010,” says Varney, and on April 29, 2011, the city hosted grand opening ceremonies for the development, complete with guided tours for the public.
Michigan cleans up its brownfield cleanup regs
As a national leader in brownfield redevelopment, Michigan knows the value of tearing down roadblocks to remediation.
The state’s latest effort was signed into law by outgoing Gov. Jennifer Granholm in December 2010: an eight-bill package that makes it easier for brownfield stakeholders to comply with cleanup regulations. The changes were amendments to Part 201 of the Michigan Natural Resources and Environmental Protection Act, based on recommendations from work groups made up of brownfield industry members, says Susan Erickson, chief, Brownfield Redevelopment Program Unit, Remediation Division, for the Michigan Department of Natural Resources and Environment (MDNRE).
“We believe this legislation will accelerate the time frames involved in cleaning up contaminated properties,” Granholm said in December. “The new legislation will continue to improve the program and increase Michigan’s competitive edge . . . facilitating the economical re-use and redevelopment of vacant commercial and industrial sites.”
The six new Michigan statutes cover:
updating and adding definitions including All Appropriate Inquiry (AAI) and modifying the definition of Baseline Environmental Assessment (BEA) to incorporate the AAI
expanding the “due care” requirements for an owner/operator of a contaminated property to align with federal rules, and eliminating the current exemption from due care requirements for local governments that own contaminated properties and use or invite the public to use the property
requiring the MDNRE to review a Response Activity Plan within 150 days, or else the plan is considered approved
requiring the MDNRE to act on an NFA Report within 150 days, or else the report is considered approved
providing funding for environmental cleanup, with million in grants and loans for brownfields
Despite the state’s bipartisan support for the new brownfield regulations, says Erickson, it can still be a challenge to keep brownfield issues in front of legislators.
“A large percentage of our legislators are freshmen this year, and they have so many issues to deal with. Brownfields is just one out of many,” she says. “Educating them on the concerns and the risks is a huge issue.”
Complicating the process is the difficulty of producing hard data on brownfield benefits for Michigan, says Erickson.
“Intuitively we all know it’s [brownfield redevelopment] good,” she says. “But there are so many indirect benefits from the program that are hard to measure in an easy way. . . . Trying to draw that distinct link is tough, and it’s time-consuming. We just don’t have the staff for that.
“It’s a tough climate for these types of [brownfield] programs, and we need to document their success,” she adds. “It makes it more difficult when we don’t have those hard numbers.”
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