This is the final post discussing the current state of brownfield redevelopment in Ohio. It provides suggested changes to the regulations and incentives in Ohio to accelerate brownfield redevelopment. The prior posts in this series discussed the following:
- The Issues Presented by Brownfields- In particular the impact to Urban Centers
- The Current State of Brownfield Redevelopment in Ohio- Including the issues of urban sprawl and the number of brownfield sites in Ohio.
- Progress made in Addressing Brownfields in the Twenty Years Since Ohio's Voluntary Action Program was Adopted
As discussed in these prior posts, Ohio needs to accelerate brownfield redevelopment in Ohio. So how does that occur?
- Need to be Faster- The ability to address the environmental, public health and liability risks presented by brownfield properties needs to occur much faster. A cleanup under Ohio's Voluntary Action Program (VAP) can take anywhere from 1, 2, 3 or even more years to complete.
- Need Lower Costs to Redevelop Brownfields- According to the Cleveland Department of Economic Development the per acre are significant. These costs push businesses to consider greenfield sites
- On average it can cost $13,000 per acre to perform sampling to determine how contaminated a brownfield site may be
- It can cost on average $66,000 per acre to remediate a brownfield site
- Brownfield redevelopment projects currently require a minimum of 32 -35% in public subsidies
- Effectively Address Liability- VAP can be effective but takes too long and costs too much. The Bona Fide Purchaser Defense under CERCLA provides no regulatory sign-off that due diligence and cleanup were adequate.
- Broad Based Incentives- Current incentive programs require creation of jobs or specific types of redevelopment such as manufacturing. More value needs to be placed on simply returning idle property to productive use.
- Cleanup Grants should Target Public Health or Catalyst Projects- Some portion of brownfield funding should be used to address highly contaminated sites that present public health risks to local communities or catalyst projects that may attract more development.
Rethinking Ohio's Incentive Programs
The first major hurdle to a brownfield redevelopment project is the unknown cost of cleanup. Therefore, a large portion of incentives need to fund assessment activities.
Ohio should drop the complicated VAP automatic tax abatement. There are too many implementation issues (discussed in the prior posts) and the abatement does not cover new structures. In its place, Ohio should adopt a brownfield based tax credit program that allows developers to take assessment and cleanup costs as a tax credit. Such a credit would start to even the playing field between brownfield and greenfield sites.
Rethinking Ohio's Tools to Address Environmental Liability
The VAP should remain in place with an effort to reduce the current complexity of Ohio's primary brownfield cleanup program. The VAP is a very good program for full assessment and cleanup of a property. However, full assessment and cleanup isn't always necessary to put property back into productive use.
U.S. EPA's Bona Fide Purchaser Defense under CERCLA does not require a complete Phase II assessment or full remediation. Under the program, a buyer must take "reasonable steps" to address any threats to public health or the environment. Reasonable steps is far less than full remediation of soil and ground water. It typically means preventing ongoing release and eliminating complete pathways for human health exposures. Such flexibility dramatically lowers to the cost of redevelopment.
The major issue with the BPFD is that it is a legal defense with no regulatory review or sign-off. Some purchasers are comfortable with no oversight. However, many would prefer the comfort of knowing their assessment and cleanup strategies received regulatory sign-off.
Ohio should adopt a State version of the BFPD that includes some level of regulatory oversight. A similar program was adopted in Michigan- Baseline Environmental Assessments (BEAs). While Michigan's program could be improved, it has greatly accelerated brownfield redevelopment.
According to figures provided by Joe Berlin, BLDI Environmental Engineering, here is a comparison between the Michigan BEA and Ohio VAP Programs:
- Michigan BEA
- 1995-2015 there has been 20,634 BEAs completed
- Average of 1,032 per year
- Ohio VAP Covenant-Not-to-Sue (CNS)
- 1995-2015 there has been 527 CNS issued
- Average of 26 per year
The proof is in the numbers. Maybe its time Ohio look to its neighbor up north for new ideas to accelerate brownfield redevelopment.