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Brownfields ROI: Risk, Opportunity, and Impact Patrick Kirby, Director Brownfields Assistance Center at West Virginia University @

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Page 1: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Brownfields ROI: Risk, Opportunity, and Impact

Patrick Kirby, Director

Brownfields Assistance Center at West Virginia University

@

Page 2: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Overview

Brownfields Background

Risk: Liability, All Appropriate Inquiry

Opportunity: Federal, State and other resources

Impact: Jobs, Redevelopment, Success

Page 3: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

SUPERFUND - 1980

Comprehensive Environmental Response,

Compensation, and Liability Act (CERCLA)

enacted in 1980

Page 4: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Brownfields-1990s

Early 1990s courts decisions led to an increase concern

about liability associated with “brownfield” deals

Example—A manufacturer wants to purchase a former

industrial space for expansion and the site has

contamination that is not an imminent threat from a

previous user

Capital Investment runs screaming from the brownfield

market

Page 5: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Brownfields Cycle

Older industrial properties are placed

at a considerable disadvantage in the real

estate market.

A property owner abandons it for any number of reasons.

Vacant facilities deteriorate and are vandalized further

reducing value

Untended pollution may worsen and spread, further

diminishing the property value and adding to its

cleanup cost

The site becomes an unwanted legal, regulatory, and financial burden on the

community and its taxpayers.

Page 6: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Brownfield Definition

“Real Properties, the expansion, redevelopment or reuse of which

may be complicated by the presence or potential presence of a

hazardous substance, pollutant or contaminant”

Page 7: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Practical impact of this definition –

Includes all types of sites, in cities, small towns,

everywhere

Abandoned factories, strip shopping centers, gas stations, mining sites,

grocery stores, foundries, power plants, old apartment buildings,

orchards, etc.

Formal estimates indicate 450,000+ brownfield sites

With gas station/LUST sites included, figure could top one

million properties

What Are Brownfields?

Page 8: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Is my project a Brownfield?

Brownfield Hazardous Materials Include:

ASBESTOS

MOLD

LEAD-BASED PAINT

Page 9: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

West Virginia Brownfields Assistance Centers

Northern WV Brownfields Assistance Center at WVU

Southern WV Brownfields Assistance Center at Marshall University

The West Virginia Brownfields Assistance Centers were created in 2005 by the West Virginia Legislature to promote economic development and environmental and public health protection through innovative redevelopment of brownfield sites.

wvbadbuildings.org

Page 10: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Services

The Brownfields Centers facilitate the redevelopment of brownfields properties by assisting local governments, economic development organizations, community non-profits and private developers with:

Identification ofredevelopment opportunities

Engagement of communitystakeholders

Technical assistance to overcomeproject barriers

Obtaining project resources andleveraging funds

wvbadbuildings.org

Page 11: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for
Page 12: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for
Page 13: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for
Page 14: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

@

Page 15: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Liability: Due Diligence

Due Diligence before EVERY

commercial real estate transaction

Why Perform a Phase I Assessment

under “All Appropriate Inquiry?

What A Phase I Won’t Determine

Phase I / All Appropriate Inquiry

Assessment Requirements

Page 16: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Why Perform a

Phase I Assessment

A Phase I assessment answers the following two questions:

1. Is there a possibility, based on historical and/current facts and observations, that the site in question has environmental impacts from on-site source(s) and/or off-site source(s)?

2. What types, if any, of environmental impacts are most likely to be associated with the site?

Page 17: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Why Perform a Phase I

Assessment

1. Current and past property uses and occupancies

2. Current and past uses of “hazardous” substances

3. Waste management and disposal activities

4. Current and past corrective actions and/or response activities associated with hazardous substance releases

5. Engineering/Institutional controls/Land use covenants

6. Environmental conditions on properties adjoining or located near the subject property that may have resulted in adversely affecting the property

Page 18: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

What A Phase 1 Won’t Do

No sampling is performed, so

no contamination levels are

known, nor the extent of

contamination

Potentially responsible parties

are identified, but may not

give complete details of any

given party

Doesn’t establish any

significant level of risk or

cleanup cost associated with

the property

Page 19: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Opportunity: $ and resources

Like any real estate deal, brownfield projectsneed to answer 3 key $$$ questions –

How Much Does it Cost

What is the Risk

How Long will it Take

Page 20: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

BUILD ACT of 2018

Page 21: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

EPA Brownfnields

FY19 Assessment and Cleanup

Grant Competition Timeline

21

Guidelines Issued

(Anticipated)

October 2018

Proposals/Requests Due 60 Days Later

(Anticipated before

Christmas)

Announcement of Awards May/June 2019

Grant Funds Available October 1, 2019

Page 22: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Other Items of Note

Small, Rural & Disadvantaged Communities:

Allows U.S. EPA to provide $1.5 million annually for grants, up to $20,000, to

brownfields support to small, rural and disadvantaged communities

Allows States to use their EPA funding to assist small, rural and disadvantaged

communities

“Small” = Less than 15,000 population; “Disadvantaged” = Annual median household

income <80% of statewide median household income

Waterfront Brownfields & Clean Energy Projects: Directs EPA to add criteria

for evaluating grant applications to support brownfield projects on waterfronts

and in floodplains, and to support brownfield projects involving renewable

energy, energy efficiency, district energy, and combined heat and power

projects

Page 23: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

EPA Brownfield Grants

Brownfields Grant Fact Sheet Search

Search Criteria:

Grant Type(s): Assessment, Revolving Loan Fund, Cleanup

Award Year(s): 2017, 2016, 2015

Grant Recipient Name EPA Region State/Territory Grant Type Announce Year (FY) Hazardous Funding Petroleum Funding

Bath, Town of 3 WV Cleanup 2017 $100,000.00 $0.00

Brooke-Hancock Regional Planning and

Development Council 3 WV Assessment 2017 $395,000.00 $205,000.00

Business Development Corporation of the

Northern Panhandle 3 WV Cleanup 2015 $600,000.00 $0.00

Business Development Corporation of the

Northern Panhandle 3 WV Assessment,Cleanup 2016 $553,500.00 $205,000.00

Huntington, City of 3 WV Assessment 2015 $200,000.00 $200,000.00

Martinsburg, City of 3 WV Assessment 2015 $200,000.00 $200,000.00

Thomas, City of 3 WV Cleanup 2016 $200,000.00 $0.00

Thomas, City of 3 WV Assessment 2017 $200,000.00 $0.00

Upshur County Commission 3 WV Cleanup 2017 $200,000.00 $0.00

Vienna, City of 3 WV Cleanup 2017 $200,000.00 $0.00

Wayne County Economic Development

Authority Inc. 3 WV Cleanup 2016 $200,000.00 $0.00

West Virginia Department of

Environmental Protection 3 WV Assessment 2015 $200,000.00 $0.00

West Virginia Department of

Environmental Protection 3 WV Revolving Loan Fund 2016 $660,000.00 $160,000.00

West Virginia Department of

Environmental Protection 3 WV Assessment 2017 $200,000.00 $100,000.00

Page 24: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Technical Assistance to Brownfields (TAB)

Program

24

• Free Planning, Environmental and Economic Development

expertise

• Directly to local governments, non-profits,

and tribal communities

• Webinars, workshops, resource roadmaps & E-Tools

Page 25: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

TAB Assistance Providers

New Jersey Institute of Technology (NJIT)—EPA Regions 1, 3, & 4

Colette Santasieri | 973-642-4165 | [email protected]| www.njit.edu/tab

Kansas State University (KSU)—EPA Regions 5, 6, 7, 8, & all for Tribes

Blase Leven | 785-532-0780 | [email protected] | www.ksutab.org

Center for Creative Land Recycling (CCLR)—EPA Regions 2, 9 & 10

Sarah Sieloff | 415-398-1080 | [email protected] | www.cclr.org

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Page 26: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Bellows College

Identifying Project Needs

Finding a Foundation

Engaging the Foundation

Making the Fit

Applying for Support

Maximizing Success

Free resources

The Foundation Center

www.foundationcenter.org

Chronicle of Philanthropy

www.philanthropy.com

Other Grant Ideas: Foundation Funding

Page 27: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

State Voluntary Cleanup Programs

Allow Potentially Responsible Parties

to clean up sites on voluntary basis

Provide incentives for clean up:

Expedited review process

Flexibility in cleanup levels and

methods

Release from state liability

Possible release from federal liability

Financial assistance

Page 28: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

Takeaways

Risk: Always do a Phase 1 (maximum 180 days)

before closing on any commercial real estate

deal

Opportunity: There are resources to help on your

current projects and potential to gain additional

work/clients

Impact: Health, Economic, Visual, Mental

Page 29: Brownfields ROI · 2018-09-26 · Brownfields Cycle Older industrial properties are placed at a considerable disadvantage in the real estate market. A property owner abandons it for

You Got this!

Patrick Kirby

[email protected]

304.293.4267

304.216.4267

www.wvbrownfields.org