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The Economic and Social Impacts of Brownfield Redevelopment - The Role of the Public Sector in Detroit Brownfield Redevelopment

HISTORY OF INCENTIVIZING BROWNFIELD CLEANUP AT A NATIONAL LEVEL

The United States Environmental Protection Agency (USEPA, or commonly noted as EPA) defines a brownfield site as “a parcel of real property at which expansion, redevelopment, or reuse may be hindered by the presence, or potential presence, of hazardous substances, pollutants, or contaminants” (EPA 2017). These sites are typically areas that are contaminated by low concentrations of hazardous materials and pose a lower risk to human health than other hazardous waste sites. Brownfield sites are excluded from the National Priorities List (NPL) – “list of sites of national priority among the known releases or threatened releases of hazardous substances, pollutants, or contaminants throughout the United States and its territories” (EPA 2017) – and the Toxic Substances Control Act of 1976. The EPA estimates that there are 450,000 brownfield sites nationwide.

The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) established liability of contaminated brownfield sites to those who historically created the problem and those who now own the land, regardless of their role in the original contamination (Smith 2001). This is a significant deterrent to investors as they could be liable for any contamination on land they purchase, and is especially concerning since the extent of contamination is usually unknown. As a result, incentivizing the cleanup of Brownfield sites is a main roadblock in redeveloping these lands. It is thus necessary for the public sector to step in and make brownfield sites a real option for those looking to invest in land.

The Brownfield Program, initiated by the EPA in 1995, aimed to help the public and private sectors in revitalizing these brownfield sites by providing grant funding. By initiating this Program, the USEPA anticipated an improvement for the environment along with an increase in social and economic investments for these sites. It was not until the Small Business Liability Relief and Brownfields Revitalization Act of 2002, known as the Brownfield Law, that  the policies set forth earlier by the EPA were formalized. This issue was addressed by creating funding sources through which brownfield redevelopment could be financed.

Since CERCLA was passed in 1981, the EPA has provided economic incentives for brownfield remediation in various forms. From 1997 to 2011, the EPA offered a tax break to investors. Today, the EPA offers 5 different types of brownfield grants: assessment grants, revolving loan fund (RLF) grants, cleanup grants, area wide planning grants, and Environmental Workforce Development and Job Training (EWDJT) grants (EPA 2017) (Table 1). 

Table 1. Types of Brownfield Grants as defined by the USEPA (USEPA 2017).

epa 5 grants table

 

Along with creating new funding opportunities, the Brownfield Law also addressed part of the issue surrounding liability of contamination. If the prospective owner did their due diligence in determining the extent of site contamination and addressed problems that needed addressing, they were no longer liable for any contamination identified subsequently due to the legacy use of the site.

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