Brownfields:Recycling Real Estate

The presence of pollutants or

contaminants (Real or Perceived)

may complicate your ability to use,

reuse, or transact your property

Brownfields

A Market Issue

• Automotive Services

• Dry Cleaners

• Metal Plating and Fabrication

• Wood Products/Processing

• Industrial/Commercial Districts (aggregation of small sites)

• Dumps & Landfills

• Ag related facilities

What does a Brownfield look like?

Why Do We Care?

• Private return on investment

• Public return on investment

• Community benefits from public

and private investment

Community Benefits of Infill

Preserves land resources

Reduces public infrastructure & service costs

Reduce vehicle miles travelled

Update obsolete buildings

Improve Economic stability

Increase public safety

Incorporate energy efficient building

Install water-wise landscaping; reduce runoff

and improve drainage management

Reduce heat island effects

Clean polluted sites

Business growth and job creation

Increased tax base

Economic stability

Increase overall property values

Encourage infill vs. sprawl

(Reduce infrastructure costs/Service areas)

Public Investment Opportunities

Renovate

Redesign

Redevelop

Clear Environmental Stigma

Private Investment Opportunities

Thomas Plating

Total City Tax Revenues $2,424

Total County Tax Revenues $4,834

School District Tax Revenue $14,677

New Employment 5

Annual Payroll $100,000

Developer Cash-on-Cash 27%

Blight removed

Business-ready building created

New business and jobs for the

community

Business development goodwill

Bottom Line Benefits

Redevelopment that bolsters downtown

Large Sites

Proximity to downtown brings daytime population

Possible historic interest

Industrial Legacy

• Legacy – processing water; waste disposal

• Could be open space amenity for business; Community

• Could be central feature for business park development

• Recreation related industry opportunities

Riverfront Industrial Legacy

•Downtown revitalization opportunities

•Gaps on Main Street

•Underutilized Sites

•Underutilized Corners

•Assemblage Opportunities

•High Historic Potential

Downtown Legacy

Gateway Building

Dairy

King

Auto Service/Gas

Petro Plume

Site Layout

Before

Dairy

King

Auto Service/Gas

Petro Plume Retail/Office

Redevelopment

Site Layout

Petro Plume Retail/Office

Remediation Hut

Redevelopment &

Remediation System

Site Layout

Economic Benefits

Blight removal

Now small business incubator,

offices

New businesses 15

New employment 32

New payroll $1.1. million

Public Investment

Land acquisition

Street improvements

Fee waivers

Financial modeling

Public Rate of Return

Investment $550,000

Direct Revenue 2.2%

Direct/Indirect Revenue 10.0%

Fiscal Impacts

City sales tax revenue: $12,200

County sales tax revenue: $2,400

Property Tax Increment $35,000

HAZARDOUS WASTE?

• Most often a by-product of a manufacturing,

commercial, or industrial processes – material

left after products are made or equipment is

serviced

• Household garbage can include hazardous

wastes such as old batteries, bug spray cans,

and paint thinner.

What is Hazardous Waste?

> A CORROSIVE MATERIAL can wear away

(corrode) or destroy a substance.

> An IGNITABLE MATERIAL can burst into flames

easily and poses a fire hazard.

> A REACTIVE MATERIAL can explode or create

poisonous gas when combined with other

chemicals.

> TOXIC MATERIALS OR SUBSTANCES can

poison people and other life.

Types of Hazardous Waste

Contamination Pathways

How Do Toxins Affect Us?

Exposure: Coming into contact with a substance

DermalInhalation

Ingestion

Hazardous

Substance

How to Quantify the Problem?

• Phase I Assessment− Non-intrusive/No Sampling

− Is there a concern?

− What and where?

• Phase II Assessment− Sampling/Lab testing

− Confirms if there is a concern

− What and how much

− Risk Analysis (pathways/populations)

How to Fix the Problem?

• Cleanup plan− Engineering solution

− Cost estimates

− Voluntary Cleanup

• Cleanup− Implement cleanup plan

− Regulatory closure

Financial Gaps

& Gap Funding

Standard Real Estate Investment

Market Studies & Due Diligence

Equity

Debt & Financing Costs

Capital Improvements

Time & Coordination

Brownfields Development Hurdles

Environmental Assessment & Engineering Studies

Cleanup Costs

Added Capital Costs

Liability Management

Extended timeline

Brownfields Lender Hurdles

Qualifying the Collateral

Qualifying the Borrower

Liability in Foreclosure

Value as Real Estate Owned

Limited Ability to Lend on Cleanup

• Brownfields Site Assessments

• Brownfields Cleanup Grants

• Brownfields Tax Incentives

• Cleanup Revolving Loan Funds

• Underground Storage Tank Fund & Petroleum Redevelopment Funds

• Voluntary Cleanup Program

• Technical Assistance Available – Sonoran Brownfields Partnership

GRANTS, LOANS & TOOLS

Aging Housing Stock

Early- and mid-20th

century homes

‒ Inadequate utilities & code upgrades

‒ Inadequate room count

‒ Inadequate plumbing

‒ Difficult senior access

Housing construction:

‒ Scrape

‒ Renovate

Gold Hill Mesa

Former Gold Mill Site

Housing Construction:

‒ Single-story, ranch and

multi-family town homes

‒ 850 units at build out

‒ 1,500sf to 2,000sf, 3-bed

‒ Formerly barren land

Landfill/Dump

Former burn & fill

Housing construction:

‒ Neighborhood Park

‒ Building site ready for 54 units

‒ Market rate attainable housing planned

Clandestine Drug Lab

Meth lab

Scrape to foundation

Complete rebuild

Blight removal & upgrade

Durango Discovery Museum

•Former power plant

• Now children’s museum & tourist

destination

General Iron Works

Manzanola Train Depot

Oak Creek – Water Treatment Site

Now Ice Hockey Rink

Creede, CO

Mock-up of

Mineral

County

Fairgrounds

Lorenzo Park

Jesse SilversteinSenior Advisor, Colorado Brownfields Partnership

&

Senior Economist, Development Research Partners

303-991-0074

jesse@DevelopmentResearch.net

DevelopmentResearch.net