When state lawmakers approved a program giving companies incentives to clean up polluted properties, both business leaders and environmentalists heralded the action as an important step toward cleaning up contaminated sites and saving farms and forests from development.
But two years after the so-called brownfields program passed with thunderous applause, many state officials, business executives and environmentalists say the program has failed to meet expectations and may need to be changed.
Although there are thousands of suspected brownfields sites ranging from closed manufacturing plants to corner gas stations and local dry cleaners, only 52 property owners have applied for the brownfields cleanup program. And only four of those have qualified for state grants and tax credits to help their cleanup efforts.
"It's not the big deal everyone thought and hoped it would be," said Terry Harris, president of the Cleanup Coalition in Baltimore, an environmental group that monitors brownfields sites. "In terms of Smart Growth and bringing jobs back [to the city], it's not happening."
While there have been a few highly publicized brownfields success stories, such as the American Can development in Canton and the landing of a General Motors Corp. transmission assembly factory in White Marsh, the state had hoped for more participation.
Officials with the Department of Business and Economic Development expected to help 10 to 15 property owners a year. There is $1.35 million available to help companies clean up brownfields sites, but state officials expect to award less than half that amount this year.
"It's off to a slower start than we had hoped," said Richard C. Mike Lewin, secretary of the Department of Business and Economic Development.
Business and environmental experts blame the lack of participation on a number of factors: the failure of local governments to support the program, lingering fears about liability and cleanup costs and continued preference to build on greenfields -- land never before developed.
Only seven jurisdictions in Maryland have passed the local legislation required to give companies tax credits to clean up brownfields sites. Recently, Lewin and Maryland Department of Environment Secretary Jane T. Nishida sent letters to local governments that have not passed the brownfields legislation, urging them to do so, but some Baltimore-area counties are still hesitant.
In Anne Arundel, officials are not sure whether the county can afford to give companies tax credits when the county's finances are constrained by a tax cap.
Officials in Harford and Howard counties say they have not felt the need to pass brownfields legislation because they have few sites that qualify and have seen no interest from businesses to redevelop the sites.
Fearful of revelations
On top of that, businesses remain wary of revealing brownfields problems, fearing that the state will use the information against them, or that they will be sued if contaminants leak onto adjacent properties.
"We knew when we started brownfields, the concept is right. But when you are working with private property owners, getting them to come forward and admit they have contamination, it's not something they want to do," said Baltimore County Economic Development Director Robert L. Hannon.
Michael C. Powell, a lawyer who represented Essex Community College in its proposed redevelopment of the Esskay site, said businesses are uncertain about the cleanup requirements and the overall cost of developing a brownfields site.
Business fears have been exacerbated by the Maryland Department of Environment's enforcement policies, said George Kelly, a lawyer who helped write the brownfields legislation.
"After the initial passage, there was a great deal of conservatism at MDE," he said. "They were being very, very cautious."
Kelly said the department appears to have developed greater confidence in the process. "They have evolved where they have greater understanding and are more in tune with the statute."
Standards too strict, too lax?
While business representatives say participation in brownfields is curtailed by cleanup standards that are too strict, environmentalists say the opposite is true.
Harris of the Cleanup Coalition criticized the Maryland Department of Environment for not forcing the owners of polluted properties to clean them up. "If MDE were enforcing the law, there would be more incentive to do it voluntarily," he said.
Quentin Banks, a spokesman for the Maryland Department of the Environment, brushed aside the criticisms. "The standards we have were tough to begin with and they continue to be tough," he said. "We give it an extremely stringent review."
He said the department has no plans to seek changes in the program. "We are seeing some successes," he said.
Most notable are the American Can project in Canton and the recent decision by General Motors to build a transmission assembly factory on a brownfields site in White Marsh. GM will receive a 50 percent tax credit for the next 10 years on the improvements made on the property.
Hannon says the program played an essential role in wooing GM to the site.
"Brownfields gives you a tool leading to environmental improvement and economic opportunities," he said.
Charles W. Fraley, a GM manager who helped select the White Marsh site, said the brownfields designation wasn't the sole reason the company chose that location, but agreed it played a part. "It is one of several significant elements in the financial incentive package," he said.
Developing a brownfields site is also good for the corporate image, he noted. "GM tries to be a good corporate citizen," he said.
The decision by Struever Bros. Eccles & Rouse to apply for the brownfields voluntary cleanup program to rehabilitate the American Can factory pleased the company's lender, but was not crucial to the project, said Kathie Hearn, development director for Struever Bros.
"It was not the decisive issue, but it was a great bonus," she said.
But the financial incentives offered by the program are essential to making the Esskay project work for the Essex campus of the Community College of Baltimore County, said Powell. "They could not have afforded to do it without the incentives," he said.
But, he noted, few companies meet the state's rigorous standards to receive the aid. The incentives are not available to companies deemed responsible for the pollution, either because they caused the pollution or now hold title to the land. About half of applicants to the Voluntary Cleanup Program are responsible parties.
Even so, Hearn says more companies would apply to the program if the financial incentives were greater. Some states dangle millions of dollars to developers and businesses to clean up brownfields, but in Maryland the incentives are relatively modest: a 50 percent tax break for 10 years on the improvements to the property and $100,000 to $200,000 to help clean up the site.
But some of the biggest costs companies encounter are for the studies needed to determine the extent of contamination. These environmental studies can cost up to $200,000 -- but those costs can not be refunded by the state incentive programs, Kelly noted.
Brownfields vs. greenfields
Overall, new, or greenfields, sites still are cheaper and pose less risk, Powell said. "I fear when and if the economy slows down, there will be less pressure to get to brownfields," he said.
But Lewin says companies soon will have to look at brownfields sites more seriously. "They have eaten through the [green site banks around the state," he said.
Lewin said the state must do more to identify and market brownfields sites, which are critical to maintaining an adequate supply of industrial land. He also is considering a change in the program that would expand tax incentives to companies that own the land and are responsible for the pollution.
Environmentalists, however, are likely to oppose such a revision, believing it would reward the polluter.
"It doesn't seem right to take taxpayers' money to bail out the responsible party," Harris said.
But Powell disagrees. "The truth is that the cleanup is so enormously expensive, no one who thinks they will have to clean up, will pollute."
House Speaker Casper R. Taylor Jr., an Allegany Democrat, said he expects the General Assembly to take a critical look at the brownfields program next session and consider amendments to improve it.
"It's such a good conceptual program, we must continue to find ways to make it work," he said.