In the world of real estate, the effects of environmental contamination can be severe. Environmental contamination impacts property values and can create significant problems with redevelopment efforts. In this resource, we will be discussing contamination risk, brownfields, and their impact on real estate.
Curious if your property could be contaminated? Wondering how close the nearest contaminated site is to you? Find your property on LandGate's map to get a free property report and check out the risk index scores to evaluate your risk today:
What is a Brownfield?
According to the United States Environmental Protection Agency (EPA), a brownfield is a property by which the expansion, redevelopment, or reuse of may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. In other words, brownfields are previously developed commercial or industrial properties that are abandoned or underused due to concerns about contamination. Brownfields can range from old factories and vacant warehouses to abandoned gas stations.
What are the Contaminants in Brownfield Sites?
According to the U.S. Occupational Safety & Health Administration (OSHA), typical contaminants in brownfield sites include petroleum hydrocarbons, lead, construction debris, polychlorinated biphenyls (PCBs), treated wood (cadmium, chromium, arsenic), industrial chemicals, and diesel fuel.
Who is Responsible for Remediating Brownfields?
States and Tribal governments bear the responsibility of establishing and enforcing assessment and cleanup standards for addressing environmental contamination at brownfield sites. In certain scenarios, the current property owner shoulders the financial burden of site assessment and clean-up, while in others, the property buyer assumes these obligations along with their associated costs. The EPA does not clean up brownfield sites- instead, they award competitive grants to government entities and certain non-profit organizations that can be used for cleanup activities. Funding for assessment and clean-up can be obtained through federal programs, such as the EPA's Brownfield Initiative.
Brownfields and Contamination Risk in Real Estate
Properties located near brownfields are at a higher risk of contamination, which can affect property values and the potential for redevelopment. However, there is hesitation among real estate developers to redevelop brownfield sites because the uncertainty around contamination risk adds tremendous uncertainty to development projects. Compared to Greenfield sites, contaminated properties can be subject to a lengthy clean-up process, which can add significant costs to the project and cause substantial construction delays. As a result, many developers tend to avoid brownfield sites in favor of developing greenfield sites that have no previous industrial use. This preference has led to further urban sprawl and the loss of valuable open spaces.
Brownfields present a unique opportunity for renewable energy development. For example, capped landfills are actively being developed into solar farms. Landfill solar farms revitalize property previously determined to be unusable while producing clean energy. Government organizations often own underutilized sites and brownfields that they can lease for renewable energy, which generates revenue and contributes to clean energy production. LandGate helps government agencies analyze the clean energy generation potential of their properties and connect with energy developers at no cost! Book a call with our team to learn more:
Brownfield Redevelopment Process
Generally, there are 3 phases involved in brownfield redevelopment that are undertaken by developers:
1) Pre-Development: The pre-development phase lays the foundation for a successful brownfield redevelopment process. In this phase, the developer conducts due diligence and prepares a redevelopment plan.
2) Development: The development phase includes completing the permitting, environmental cleanup, construction, financing, and marketing activities that lead up to the completion of the project.
3) Management: During the management (operational) phase, the developer determines whether they'd like to hold and manage the property or if they'd like to sell the property to another entity that will be responsible for its long-term management. If the developer chooses to sell the property, they must ensure that the ongoing maintenance required under the remedial action plans are transferred to the buyer.
What are the Benefits of Brownfield Redevelopment?
Brownfield redevelopment serves several important purposes. Remediation of polluted sites has the potential to significantly reduce or even eliminate the risk of exposure to hazardous substances, thereby enhancing the overall environmental well-being of the local area. Reusing brownfield sites can help protect open spaces from development while revitalizing the local community. Additionally, utilizing existing infrastructure for development purposes can save taxpayer dollars.
Property Contamination Risk and Brownfields
Properties located near brownfields can be at an increased risk of property contamination, which affects property values. Finding out if a property is contaminated is typically done through a thorough assessment process that is undertaken by an environmental consultant. They will analyze the history of the property and adjacent properties to identify possible contaminant linkages that could be present. If contamination potential is found, then a formal site investigation is conducted. The site investigation includes an on-site analysis that typically involves collecting soil and water samples.
Curious if your property could be contaminated? Get a free property report by finding your property on LandGate's map and check out the risk index scores:
