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A brighter future in brownfields

A brighter future in brownfields
As Baltimore runs out of land, city officials are cleaning up brownfield sites. Last year, the Canadian theatrical troupe Cirque du Soleil performed on the former AlliedSignal Inc. site near the Inner Harbor. Nearly $100 million was spent cleaning up the site. (Struever Bros. Eccles & Rouse Inc.)
There's no more land in Charm City.

City fathers say it's all gone: Every significant tract zoned for industrial and commercial use within city limits is either home to an active business, or was once used and now stands abandoned, unwanted or unusable.

That leaves developers keen on building in the city with few choices -- wait for a property vacancy in-town, look for real estate elsewhere, or opt for what's becoming a popular choice: building on a cleaned-up brownfield site.

Brownfield revitalization now is an essential element in the city's efforts to market Baltimore to companies that want to relocate here, but can't find vacant property on which to build. It is also another way to boost Baltimore's saggy industrial tax base.

"We have no greenfield sites in Baltimore," said Evans Paull, director of the Brownfields Initiative for the quasi-public Baltimore Development Corp. (BDC). "So, for the city to compete for new modern industry, we must be able to redevelop these old industrial sites."

This alternative has worked for many businesses. It also feeds a budding micro-economy that's being driven by citywide brownfield redevelopment. Since 1996, $300 million has been pumped into the local economy through citywide reclamation projects, with more to come, Paull said. He predicted that Baltimore brownfield redevelopment investment eventually will grow to as much as $100 million a year.

"The pace is quickening now," he said.

'Ahead of the game'

Since brownfield reclamation in the city began, according to Paull, more than 30 contaminated tracts have been successfully restored and redeveloped, creating more than 3,000 jobs. He added that BDC now has its sights set on 60 other city properties designated as brownfields. Those tracts total more than 2,000 acres, and will help to fill out the city's exhausted inventory of vacant industrial properties.

The BDC will make them available for new business development in Baltimore as they become available, Paull said.

As a result, Baltimore enjoys a growing national reputation among other cities and states eager to clone the city's achievements.

"We're probably a little bit ahead of the game, relative to where a lot of industrial cities are," Paull said, adding that BDC "has a longer list of successful projects than some of our counterparts."

Baltimore sets standard

Baltimore's expertise in brownfield redevelopment grew out of two major cleanup projects. The first was the successful 1996 reclamation of 30 acres at the Highland Marine Terminal in East Baltimore. In 1997, the second site cleanup started at American Can Co. in Canton.

"That was such a great project, everyone still points to it," Paull said.

It was the experience from those initial projects, he added, that helped to create the network of local expertise that now serves as the driving force behind Baltimore's ongoing brownfield accomplishments -- a diverse group representing the human, technological, regulatory and entrepreneurial know-how needed to tackle the challenges posed by urban brownfield reclamation.

"Baltimore developers are out there, beating the bushes, working the regulatory programs and finding the projects," Paull said.

Besides BDC, which coordinates much of the city's brownfield reclamation efforts, the network includes environmental assessment and cleanup firms, commercial lenders, real estate brokers and developers. State officials with Maryland's Department of Business and Economic Development (DBED) and the Maryland Department of the Environment (MDE) also are heavily involved in the process of identifying and reclaiming brownfield sites.

Incentives created

The term "brownfield" was developed more than 30 years ago. It refers to an abandoned or underused parcel of property where redevelopment is complicated by contamination -- real or perceived -- with some type of pollutant. Brownfield sites include abandoned factories, commercial buildings, solvent or fuel-storage facilities, manufacturing centers and dry cleaners -- any site where a past business used potentially harmful chemicals.

Some brownfield sites are redeveloped for residential use, but most become office, commercial or industrial business centers. Federal and state programs support brownfield reclamation and revitalization by offering assessment, cleanup and development assistance, including grants and low-interest loans.

Despite its overarching economic success, Baltimore's brownfield reclamation movement is brimming with an assortment of social, environmental and legal complexities. One of the most vexing problems remains concern among landowners, developers, lawmakers, community residents and environmentalists over liability. State and federal brownfield laws most times protect developers, but not property owners.

As a result, brownfield reclamation projects sometimes have been stalled or abandoned by financial institutions and developers too fearful of retroactive legal action to invest in a project. The most prominent fear is that a third party later would claim harm from hard-to-defend charges of lingering contamination at a cleaned-up site.

Liability concerns

Public speculation arose recently that such fears were affecting a major Baltimore brownfield project in its development stage.

Honeywell International Inc. recently decided not to allow developers to build new homes on Harbor Point, its reclaimed 27-acre brownfield site. The site is located where the old AlliedSignal Inc. Baltimore Works chromium plant operated since the late 1800's. Honeywell, based in Morristown, N.J., acquired the site when it merged with AlliedSignal in 1999. Almost $100 million was spent to demolish the plant and clean up the site.

Recent reports have speculated that Honeywell balked at allowing homes on the site because, as the property's owner, it could be exposed to liability in years to come -- even though the U.S. Environmental Protection Agency has certified that the site poses no health risks.

Victoria Streitfeld, a Honeywell spokeswoman, denied that company concern over the health of future tenants, and potential liability extending from that scenario, played a role.

"Long-term planning and development objectives for the site," she wrote in an e-mail interview with SunSpot, "have always focused on the retail and commercial use, along with some recreational opportunities for Baltimore residents. That is what the lease reflects."

Tightening regulations

But lingering doubts about future tenants' health persist at other sites, according to Dru Schmidt-Perkins, executive director of 100 Friends of Maryland, an anti-sprawl organization that promotes neighborhood revitalization.

Overall, brownfield revitalization in Baltimore is enormously beneficial to the city's communities and its residents, Schmidt-Perkins said.

"What we have is toxicity running amok," she said. "It's much better for the community to clean up" contaminated sites than to leave them abandoned.

Schmidt-Perkins cautioned, however, that gaps remain in rules regulating even cleaned-up and revitalized sites, as many times contaminants are covered with a layer of soil or other material, instead of being removed.

Present and future homeowners and tenants must be made aware of the risks should new construction begin on a revitalized site, she said.

"When a brownfield is cleaned up, there are limits to what should be done on the land -- and that's to protect future tenants," Schmidt-Perkins said.

Stronger regulations will help to ensure tighter monitoring and stricter oversight of later changes at revitalized sites, she said.

One way to accomplish that, she said, is to create a central database of sites where contamination still exists. The database would be maintained and administered by a service like Miss Utility for the electrical industry. The service would inform tenants, homeowners and construction personnel about the locations and nature of buried contamination.

'A national phenomenon'

Despite this process -- what he calls "the grey, murky, scary mush of environmental liability and obligation" -- Carl W. "Bill" Struever, chief executive of Struever Bros. Eccles and Rouse Inc. remains a champion of the movement.

Struever's development firm has its offices at Tide Point in South Baltimore on a cleaned-up and reclaimed Proctor & Gamble Co. brownfield site. He believes brownfield cleanup and redevelopment is an economic and cultural windfall for the city, if not for the country.

"The whole new attitude toward encouraging the responsible redevelopment of contaminated industrial sites is a national phenomenon," Struever said. "It cleans up pollution, reclaims and rebuilds cities, reduces sprawl -- and lures people back into the city.

"The entire Baltimore waterfront was industrial and probably was polluted," Struever added. Now, there is "literally billions of dollars in private investment on the waterfront because there is a process to re-adapt the use of this industrial land."

"It's one of the great win-win scenarios of all time, where environmentalists and developers come together" to clean up polluted sites, Struever said. "Now, it's much easier to understand the black and white of what you've got to do, to do responsible remediation."

Ensuring compliance

State government is trying to further streamline the incentive to redevelop brownfields through the MDE's Voluntary Cleanup Program. In exchange for strict state oversight of brownfield cleanup, VCP-certified sites and their owners are exempted from federal cleanup laws, making lawsuits less likely.

Frank Pine, of E.A. Engineering Inc., a science and environmental consulting firm in Hunt Valley, has worked on brownfield remediation projects since the early 1990's. He said MDE's program "is working and has evolved" since it began in 1997.

Pine said VCP is important to the brownfield movement because it strictly enforces regulations to ensure that contaminated sites are thoroughly cleaned up. That, Pine said, attracts more lenders and developers to the remediation business because of less liability exposure. It also helps to reassure the public that state government is providing credible oversight on the cleanup of contaminated land, he added.

Terry Harris, director of the environmental advocacy group the Cleanup Coalition, agreed that the VCP has helped to responsibly advance the cause of brownfield reclamation in Baltimore.

"It's pretty effective," he said, "and, it works well in its current formulation." But Harris, who sits on a legislative task force charged with finding ways to improve the program, said he worries that extensive changes to the program could allow brownfield property owners to evade their responsibilities to comprehensively clean up sites.

"The Voluntary Cleanup Program is a good thing, as long as the environment is taken care of," Harris said. "And, it's good as long as we're not letting people off the hook who ought to be paying for it."

New legislation to streamline VCP liability regulations was introduced last week by Gov. Robert L. Ehrlich Jr. The Brownfields Redevelopment Reform Act also would strengthen MDE's authority to impose harsher penalties on property owners who do not adhere to cleanup regulations.

Creating opportunities

Despite all of the legal complexities, Baltimore's brownfield reclamation movement and the redevelopment economy it fuels continues to churn ahead.

The most recent "hot major project" in the city, said Paull of the BDC, is 10 acres of derelict property on East Fayette Street near the downtown post office. The city bought the site -- only one parcel of which was contaminated -- and redeveloped part of it for the Chess Communications Group at a cost of $4 million.

Paull said that 60 to 70 people are now employed there.

Struever predicts a bright future for brownfield reclamation in Baltimore, and around the country. "It's made environmentalists happy, and business happy," he said. "In cities across America, I see an unleashing of enormous reinvestment opportunities" for jobs and for cleaning up the environment.

Paull agreed. "The way the [brownfield] economy evolves, it's a moving target. By the time you finish one project, more brownfields are created" or discovered, he said.

There also are many more brownfield sites that experts predict are still out there, hidden and unknown -- sites Paull considers ripe for cleanup and development, and an indication that the city's brownfield economy has room to grow.

"Our goal is to redevelop all of that," he said. "So, we're not going to run out of projects any time soon."
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