[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: REVITALIZING
AMERICAN COMMUNITIES THROUGH THE BROWNFIELDS PROGRAM
=======================================================================
(115-7)
HEARING
BEFORE THE
SUBCOMMITTEE ON
WATER RESOURCES AND ENVIRONMENT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
MARCH 28, 2017
__________
Printed for the use of the
Committee on Transportation and Infrastructure
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee, ELEANOR HOLMES NORTON, District of
Vice Chair Columbia
FRANK A. LoBIONDO, New Jersey JERROLD NADLER, New York
SAM GRAVES, Missouri EDDIE BERNICE JOHNSON, Texas
DUNCAN HUNTER, California ELIJAH E. CUMMINGS, Maryland
ERIC A. ``RICK'' CRAWFORD, Arkansas RICK LARSEN, Washington
LOU BARLETTA, Pennsylvania MICHAEL E. CAPUANO, Massachusetts
BLAKE FARENTHOLD, Texas GRACE F. NAPOLITANO, California
BOB GIBBS, Ohio DANIEL LIPINSKI, Illinois
DANIEL WEBSTER, Florida STEVE COHEN, Tennessee
JEFF DENHAM, California ALBIO SIRES, New Jersey
THOMAS MASSIE, Kentucky JOHN GARAMENDI, California
MARK MEADOWS, North Carolina HENRY C. ``HANK'' JOHNSON, Jr.,
SCOTT PERRY, Pennsylvania Georgia
RODNEY DAVIS, Illinois ANDRE CARSON, Indiana
MARK SANFORD, South Carolina RICHARD M. NOLAN, Minnesota
ROB WOODALL, Georgia DINA TITUS, Nevada
TODD ROKITA, Indiana SEAN PATRICK MALONEY, New York
JOHN KATKO, New York ELIZABETH H. ESTY, Connecticut,
BRIAN BABIN, Texas Vice Ranking Member
GARRET GRAVES, Louisiana LOIS FRANKEL, Florida
BARBARA COMSTOCK, Virginia CHERI BUSTOS, Illinois
DAVID ROUZER, North Carolina JARED HUFFMAN, California
MIKE BOST, Illinois JULIA BROWNLEY, California
RANDY K. WEBER, Sr., Texas FREDERICA S. WILSON, Florida
DOUG LaMALFA, California DONALD M. PAYNE, Jr., New Jersey
BRUCE WESTERMAN, Arkansas ALAN S. LOWENTHAL, California
LLOYD SMUCKER, Pennsylvania BRENDA L. LAWRENCE, Michigan
PAUL MITCHELL, Michigan MARK DeSAULNIER, California
JOHN J. FASO, New York
A. DREW FERGUSON IV, Georgia
BRIAN J. MAST, Florida
JASON LEWIS, Minnesota
(ii)
Subcommittee on Water Resources and Environment
GARRET GRAVES, Louisiana, Chairman
ERIC A. ``RICK'' CRAWFORD, Arkansas GRACE F. NAPOLITANO, California
BOB GIBBS, Ohio LOIS FRANKEL, Florida
DANIEL WEBSTER, Florida FREDERICA S. WILSON, Florida
THOMAS MASSIE, Kentucky JARED HUFFMAN, California
RODNEY DAVIS, Illinois ALAN S. LOWENTHAL, California
MARK SANFORD, South Carolina EDDIE BERNICE JOHNSON, Texas
ROB WOODALL, Georgia JOHN GARAMENDI, California
TODD ROKITA, Indiana DINA TITUS, Nevada
JOHN KATKO, New York SEAN PATRICK MALONEY, New York
BRIAN BABIN, Texas ELIZABETH H. ESTY, Connecticut
DAVID ROUZER, North Carolina CHERI BUSTOS, ILLINOIS
MIKE BOST, Illinois JULIA BROWNLEY, California
RANDY K. WEBER, Sr., Texas BRENDA S. LAWRENCE, Michigan
DOUG LaMALFA, California PETER A. DeFAZIO, Oregon (Ex
A. DREW FERGUSON IV, Georgia Officio)
BRIAN J. MAST, Florida, Vice Chair
BILL SHUSTER, Pennsylvania (Ex
Officio)
(iii)
CONTENTS
Page
Summary of Subject Matter........................................ vii
TESTIMONY
Hon. J. Christian Bollwage, Mayor, City of Elizabeth, New Jersey,
on behalf of the U.S. Conference of Mayors..................... 7
Hon. Deborah Robertson, Mayor, City of Rialto, California........ 7
Hon. Matt Zone, Councilmember, City of Cleveland, Ohio, on behalf
of the National League of Cities............................... 7
John E. Dailey, Commissioner, Leon County, Florida, on behalf of
the National Association of Counties........................... 7
Amanda W. LeFevre, Outreach and Educational Coordinator, Kentucky
Brownfield Redevelopment Program, on behalf of the Association
of State and Territorial Solid Waste Management Officials...... 7
Jonathan Philips, Managing Director, Anka Funds.................. 7
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Hon. J. Christian Bollwage....................................... 48
Hon. Deborah Robertson........................................... 58
Hon. Matt Zone................................................... 63
John E. Dailey................................................... 70
Amanda W. LeFevre................................................ 83
Jonathan Philips................................................. 93
SUBMISSIONS FOR THE RECORD
Hon. Grace F. Napolitano, a Representative in Congress from the
State of California, submission of the following:
Letter of March 10, 2017, from Hon. Peter A. DeFazio, a
Representative in Congress from the State of Oregon, et
al., to Hon. Scott Pruitt, Administrator, U.S.
Environmental Protection Agency............................ 3
Report, ``CERCLA Lender Liability Exemption: Updated
Questions and Answers,'' July 2007, published by the U.S.
Environmental Protection Agency............................ 118
Report, ``CERCLA Liability and Local Government Acquisitions
and Other Activities,'' March 2011, published by the U.S.
Environmental Protection Agency............................ 125
Memorandum on the Revised Enforcement Guidance Regarding the
Treatment of Tenants Under the CERCLA Bona Fide Prospective
Purchase Provision, from Cynthia Giles, Assistant
Administrator, Office of Enforcement and Compliance
Assistance, and Mathy Stanislaus, Assistant Administrator,
Office of Solid Waste and Emergency Response, U.S.
Environmental Protection Agency, to Regional
Administrators, Regions I-X................................ 137
``FY17 Guidelines for Brownfields Assessment Grants,'' RFP
No.: EPA-OLEM-OBLR-16-08, Catalog of Federal Domestic
Assistance (CFDA) No.: 66.818, published by the U.S.
Environmental Protection Agency \1\
Hon. J. Christian Bollwage, Mayor, City of Elizabeth, New Jersey,
on behalf of the U.S. Conference of Mayors, submission of
letter of March 28, 2017, from Tom Cochran, CEO and Executive
Director, U.S. Conference of Mayors, et al., to Hon. Greg
Walden, Chairman, Committee on Energy and Commerce, et al...... 9
----------
\1\ The 74-page ``FY17 Guidelines for Brownfields Assessment Grants''
published by the U.S. Environmental Protection Agency can be found
online at https://www.epa.gov/sites/production/files/2016-10/documents/
epa-olem-oblr-16-08.pdf.
Amanda W. LeFevre, Outreach and Educational Coordinator, Kentucky
Brownfield Redevelopment Program, on behalf of the Association
of State and Territorial Solid Waste Management Officials,
submission of ASTSWMO position paper ``128(a) `Brownfields'
Grant Funding''................................................ 113
ADDITIONS TO THE RECORD
Letter of March 28, 2017, from Kevin McCray, CAE, Chief Executive
Officer, National Ground Water Association, to Hon. Garret
Graves, Chairman, and Hon. Grace F. Napolitano, Ranking Member,
Subcommittee on Water Resources and Environment................ 142
Letter of March 28, 2017, from Leslie Wollack, Executive
Director, National Association of Regional Councils, to Hon.
Bill Shuster, Chairman, Committee on Transportation and
Infrastructure, et al.......................................... 144
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BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: REVITALIZING
AMERICAN COMMUNITIES THROUGH THE BROWNFIELDS PROGRAM
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TUESDAY, MARCH 28, 2017
House of Representatives,
Subcommittee on Water Resources and Environment,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2167 Rayburn House Office Building, Hon. Garret Graves
(Chairman of the subcommittee) presiding.
Mr. Graves of Louisiana. The subcommittee will come to
order.
Good morning, and thank you for being here. I would like to
welcome all of you to our hearing today on ``Building a 21st-
Century Infrastructure for America: Revitalizing American
Communities through the Brownfields Program.''
Brownfields are properties where contamination was
suspected. These sites include inactive factories, gas
stations, salvage yards, and many other previously used
properties where environmental liability and cleanup standards
prevented their continued use and redevelopment.
Fear of environmental liabilities of these sites caused
developers to look outside cities to previously undeveloped
properties for new opportunities. This left many sites
untouched, driving down property values, contributing to
blight, and reducing tax revenues to cities.
In 2001, Congress created specific authority for dealing
with brownfields, the Brownfields Revitalization and
Environmental Restoration Act of 2001. It amended the Superfund
law and authorized funding through EPA to provide grants for
assessment and cleanup; provided targeted relief for property
owners; and increased Federal support for State and tribal
programs that were already underway.
The authorization for brownfields grants, under the
Brownfields Revitalization and Environmental Restoration Act,
expired at the end of 2006, though Congress has continued to
appropriate funds for the Brownfields Program. As of February
this year, EPA and State and tribal programs have assessed over
25,000 properties, completed over 100,000 cleanups, and made
more than 1 million acres of property ready for reuse.
On average, between $16 and $17 is leveraged for every $1
in Federal funds that is appropriated for the Brownfields
Program, and 120,000 jobs have been created or maintained as a
result of the program.
Benefits of having these sites redeveloped have increased
property values between 5 and 15 percent, and measurable
environmental benefits, such as fewer vehicle miles traveled
and improved stormwater runoff, have also resulted.
In our home State of Louisiana, our Department of
Environmental Quality has passed through approximately $1.8
million to local governments and not-for-profits for cleanup of
brownfields sites. These investments have preserved and created
1,400 jobs and leveraged approximately $120 million in funding,
significantly surpassing the average that I cited earlier of
$16 to $17-to-$1. In this case you are exceeding $65-to-$1.
I want to thank all of our witnesses for being here this
morning and taking time out of their schedule.
And I want to recognize our ranking member, Mrs.
Napolitano, for an opening statement.
Mrs. Napolitano. Thank you very much, Mr. Chairman. Thank
you very much for holding today's hearing on the status of the
Environmental Protection Agency's Brownfields Program.
First, I would like to welcome all of our witnesses to the
hearing and look forward to your testimony, and to our dialogue
on this highly successful program.
I would also like to formally welcome Mayor Deborah
Robertson from the city of Rialto, California, to the
subcommittee. Rialto has benefitted in the past from the
Brownfields Program. Mrs. Norma Torres and Congressman Pete
Aguilar represent Rialto, and I look forward to working with
them to further brownfield redevelopment in the region.
This is the second time this committee has turned to this
subject in as many Congresses. Since we met last on this
subject, the program has continued to operate as it has since
its creation in 2000, efficiently and successfully.
In fact, the data provided by EPA shows that since its
inception the Brownfields Program has leveraged more than
122,800 jobs and over $23.6 billion in cleanup and
redevelopment funding.
Nationwide, communities have assessed more than 26,400
properties, cleaned up more than 1,500 sites, and have made
66,800 acres ready for reuse, back on the rolls.
For every $1 of brownfield funding, more than $16 of other
public and private dollars are leveraged, and more than eight
jobs are leveraged for every $100,000 of EPA brownfields funds
expended. It is undeniable that this program is working as it
should, and that communities across the Nation are benefitting
from the investment of the Federal dollars in the program while
effectively turning brownfields into income producers.
I am troubled, however, by the recent press reports that
the new administration plans to eliminate nearly 40 separate
programs at EPA, including the Brownfields Program. In fact, I,
along with Ranking Member DeFazio, Ranking Member Esty, as well
as Ranking Members Pallone and Tonko from the Energy and
Commerce Committee, sent a letter to the EPA Administrator on
March 10, 2017, on this very subject requesting answers.
Mr. Chair, I would like to ask for unanimous consent to
enter this into the record.
Mr. Graves of Louisiana. Without objection.
[The letter follows:]
[GRAPHIC(S) NOT AVAIALBLE IN TIFFF FORMAT]
Mrs. Napolitano. In this letter, we sought the
clarification as to whether or not the administration will
support or eliminate this program. I would like to note for the
record that as of this date of this hearing we have received no
response.
To me the administration's reluctance to publicly support
the Brownfields Program is puzzling, especially since by all
accounts, this program has been extremely, very, very, very
successful. Every witness that testified at the hearing in the
last Congress spoke very supportively of the program. In fact,
one witness called it ``right law for the right reason.''
However, this program's successes have been hindered by the
lack of funds. By EPA's own estimates, over the past 5 years,
funding deficiencies have cost 1,676 viable proposals to go
underfunded. These sites are not only sitting idle and
unproductive, but we are missing out on the return investment
of these sites.
In fact, at these sites proposed to receive funding, it is
estimated those grants would have leveraged approximately
54,680 jobs and over $10.3 billion in public and private
financing. It begs the question: why are we not investing more
in redevelopment of brownfield spaces?
If this is the success rate of an underfunded program,
imagine the potential economic impact and potential for job
creation that would come from fully funding the program.
Mr. Chairman, this is a program that has received
bipartisan support in the past, and I hope it will continue to
receive bipartisan support in the future, and we support an
increase for the EPA for this program. The program's success
speaks for itself.
Again, I welcome our witnesses, and thank you, Mr.
Chairman, for holding this important meeting.
And I yield back the balance of my time.
Mr. Graves of Louisiana. Thank you, Mrs. Napolitano.
And I would actually like to associate myself with the end
of your remarks in regard to the importance of the program's
additional funding. So thank you.
Before I begin introducing witnesses this morning, I just
need to dispense with a few unanimous--oh, I am sorry. I yield
to the ranking member of the full committee, Mr. DeFazio.
Mr. DeFazio. Thanks, Mr. Chairman.
I am here because I think this is extraordinarily important
and should be a bipartisan effort in reauthorizing the
brownfields law, and our colleague, Ms. Esty, will introduce a
bill today which I support to do that.
I was here when the original Brownfields bill was approved.
It was actually done by a voice vote in the House, and UC
[unanimous consent] in the Senate, and signed by President
George W. Bush. So this certainly has a bipartisan legacy.
It has been tremendously successful, with one exception,
and that exception has already been mentioned by my colleague,
the ranking member, Mrs. Napolitano, which is the lack of
adequate funding.
I'll just give one quick example of how useful these funds
have been. My largest city, Eugene, Oregon, got a $680,000 site
assessment grant back in 2013. They assessed 15 specific
properties, and development was planned and redevelopment for
all those properties.
And, by the way, this can be obtained locally. The famous
Ninkasi Brewing Company which makes Ninkasi beer now marketed
in the Washington, DC, area--I am not being Kellyanne Conway
here. I am just promoting something that----
[Laughter.]
Mr. DeFazio. They are on a former Eugene brownfield, and
they have gone from 2 employees to 100.
So, you know, there is tremendous leverage of private
investment in recapturing these assets, many of which are urban
areas where the property can be very valuable.
Initially, and that was quite some time ago, 15 years ago,
we were appropriating $250 million annually. Obviously, there
has been inflation since then, but now we have been closer to
$160 million annually, and the current administration is
perhaps proposing further cuts or elimination of the program.
Mrs. Napolitano mentioned the EPA's estimate that over the
past 5 years they have only been able to fund one in four of
the applications, and that means we have foregone tens of
thousands of jobs and billions, billions of dollars in
leveraged private investment.
Now, our former colleague, Mr. Mulvaney, has suggested that
the administration will only fund programs that work. Well, I
would say that if they want to leverage private investment and
they are looking for a program that works, they should be
proposing an increase in funding for this program rather than a
decrease.
I look forward to the hearing, and I look forward hopefully
to bipartisan efforts to reauthorize and enhance this program.
Thank you, Mr. Chairman.
Mr. Graves of Louisiana. Thank you, Mr. DeFazio.
Would you like to give the website as well for the beer?
Mr. DeFazio. I will post it upstairs.
Mr. Graves of Louisiana. I was talking about for the beer.
All right.
Again, before I begin introducing witnesses, I need to
dispense with a few unanimous consent requests.
I ask unanimous consent that the record remain open for 30
days after this hearing in order to accept written testimony
for the hearing record.
Without objection, so ordered.
I ask unanimous consent that the record of today's hearing
remain open until such time as our witnesses have provided
answers to any questions that may be submitted to them in
writing.
Without objection, it is so ordered.
Thank you.
I would now like to recognize our first witness, the
Honorable Christian Bollwage, the mayor of Elizabeth, New
Jersey.
Mr. Mayor, you are recognized for 5 minutes.
TESTIMONY OF HON. J. CHRISTIAN BOLLWAGE, MAYOR, CITY OF
ELIZABETH, NEW JERSEY, ON BEHALF OF THE U.S. CONFERENCE OF
MAYORS; HON. DEBORAH ROBERTSON, MAYOR, CITY OF RIALTO,
CALIFORNIA; HON. MATT ZONE, COUNCILMEMBER, CITY OF CLEVELAND,
OHIO, ON BEHALF OF THE NATIONAL LEAGUE OF CITIES; JOHN E.
DAILEY, COMMISSIONER, LEON COUNTY, FLORIDA, ON BEHALF OF THE
NATIONAL ASSOCIATION OF COUNTIES; AMANDA W. LEFEVRE, OUTREACH
AND EDUCATIONAL COORDINATOR, KENTUCKY BROWNFIELD REDEVELOPMENT
PROGRAM, ON BEHALF OF THE ASSOCIATION OF STATE AND TERRITORIAL
SOLID WASTE MANAGEMENT OFFICIALS; AND JONATHAN PHILIPS,
MANAGING DIRECTOR, ANKA FUNDS
Mr. Bollwage. Thank you very much, Mr. Chairman.
Mr. Graves of Louisiana. Is your microphone on?
Mr. Bollwage. I lost 5 seconds. No.
Thank you very much, Mr. Chairman, Ranking Member, and
Congressman DeFazio.
I was there and testifying back in 2001 and 2000 and 1999,
and was pleased to be there in 2002 in Conshohocken,
Pennsylvania, when the President signed that bill.
So I have been the mayor since 1993, and I am a trustee of
the U.S. Conference of Mayors and the chair of the Brownfields
Task Force of the Conference of Mayors. I am pleased to be here
today to discuss the role that brownfields can play in our
21st-century infrastructure.
For many people, brownfields are just a neighborhood
eyesore of the former industrial site that may exist, but for
mayors, as all of you know, they represent unrealized potential
for tax revenue, economic development, and jobs.
We see the redevelopment of brownfields as a chance to
bring back to a community, to revitalize neighborhoods, and
reuse existing infrastructure.
The brownfields law had a very positive effect and not only
on our economy, but the Nation's economy. Some of the
statistics already mentioned: 26,000 brownfield sites, 5,700
properties, 66,000 acres, over 123,000 jobs, $23 billion
leveraged, and the $1 EPA investment generates $16 in other
investments.
And the last time I was here before this committee, I
talked about the Jersey Gardens Mall, one of our most
successful Brownfields redevelopment sites. A former landfill
on a 200-acre site now has more than 200 stores, movie theater,
4 hotels, 1,700 construction jobs, 4,000 permanent jobs.
Another successful redevelopment project was our
Elizabethport HOPE VI Project. This former industrial spot was
historically made up of businesses that focused upon
complementing the shipping industry in Port Elizabeth. However,
as our city expanded, evolved, and changed, so did the vision
and potential of the land use.
So over a new $15 million townhome redevelopment is now
made up of 55 market rate luxury housing units with market
front views.
A federally funded HOPE VI project in the late 1990s and
early 2000s assisted in the removal and replacement of public
housing complexes into townhouses. Individuals previously
residing in these old, dilapidated facilities had the
opportunity to become homeowners in new residential
neighborhoods because of brownfields redevelopment.
And as I mentioned, the Brownfields Program has had a
proven track record, leveraging private-sector investment,
creating jobs, and protecting the environment. There is much
more work that can be done.
As all of you said, due to limited funding, the EPA has had
to turn away a lot of highly qualified applicants. The EPA
estimates that for the past 5 years over 1,600 requests for
viable projects were not awarded money. EPA estimates that if
those applicants were funded, an additional 54,000 jobs would
have been created with a $10.3 billion of leveraged funding.
I urge Congress to not only reauthorize the brownfields law
with some minor changes to make it more effective, but to
increase the appropriations. If you are looking to revitalize
infrastructure as well and creating jobs, this is one of the
best programs to do that.
And on behalf of my colleagues at NACo, NLC and the USCM,
we have submitted a letter of organizations that we would like
to officially submit for the record, and in this letter we urge
Congress to pass a new brownfields law with some changes.
Mr. Graves of Louisiana. Without objection.
[The letter follows:]
[GRAPHIC(S) NOT AVAIALBLE IN TIFFF FORMAT]
Mr. Bollwage. I want to mention that the challenge that the
communities now face is that many easy brownfield sites have
been developed, and what now remains are the more difficult
sites, the sites that may be more contaminated or are located
with tougher redevelopment markets.
So our recommendations include increasing the grant cleanup
amounts from $200,000 to make it more attractive to a
developer. We would like to see an opportunity of $1 million
and possibly in special circumstances up to $2 million.
Second, creation of a multipurpose grant. The way the
program works now is that a city applies for a grant,
identifies a property where it will be spent. This program,
this problem is not flexible. The development may change. The
developer may need a new site. The money is then targeted for
the one site. You have got to restart the process, and it just
takes too long, maybe up to 6 more months.
Redevelopment of ``mothball'' sites, a very big problem in
some communities where owners are just not willing to sell or
give up their land, and one such tool would be to give cities
additional liability protections if they want to acquire
property through voluntary sales.
Some recommendations include allowing reasonable
administrative costs, clarifying eligibility of publicly owned
land and sites acquired before 2002, encouraging brownfield
cleanups by Good Samaritans.
I would like to thank the Brownfields Task Force and this
subcommittee for having me testify here today. I thank you, Mr.
Chairman and Ranking Member, and all the members of the
committee for making brownfields an important tool for
redevelopment.
Mr. Graves of Louisiana. Thank you. I appreciate your
testimony.
I want to turn to our second witness, the Honorable Deborah
Robertson, the mayor of Rialto, California.
Mayor Robertson, you are recognized for 5 minutes.
Ms. Robertson. Thank you.
Councilman Zone. Good morning, everyone. Good morning
Chairman Garret Graves and Ranking Member Grace Napolitano, and
members of the subcommittee. Thank you for giving me the
opportunity to testify and talk about how we can revitalize the
American communities through the Brownfields Program.
It is a privilege and an honor for me to participate in
this important hearing. I am here today as the mayor of the
city of Rialto, and I share strong support, my community
support, for the U.S. Environmental Protection Agency's
Brownfields Program.
For those of you who are not familiar with Rialto, Rialto
is in the eastern part of California's San Bernardino County,
east of Los Angeles. We are a vibrant, ethnically diverse
working-class community of over 100,000.
The interesting part about Rialto though is that we are
only 4 miles wide and 8 miles long, and yet still we have quite
a bit of activity going on in our community. It is in the
Inland Empire, and we are an environmental justice community.
Like many older communities, we grew up along the
railroads. It has a long and colorful history that evolved from
an agricultural base into a more urban transportation
industrial economy.
Rialto is home to a number of major distribution centers,
including the Staples Center, which serves the entire west
coast of the United States, Toys R Us, Under Armour, Niagara,
Medline, Amazon, and Target for the northern region of our
city, and also the western region.
We also are home to the largest fireworks company, Pyro
Spectaculars, which is headquarters in Rialto and listed as the
world corporate office.
The city hosts the Union Pacific's East Colton
classification yard, Kinder Morgan with the big regional
petroleum and fuel storage farm, and we also have major
trucking companies, such as Old Dominion, Yellow Freight, UPS,
and FedEx.
In addition to that, we have a major defense contractor,
which is Martinez and Turek, who provides construction of
launching pads for the NASA Program, and also we have a major
confectioner manufacturer.
We are in the middle of a confluence between three major
freeways or highways, Interstate 10, the 210, and Interstate
15, which helps us in conveying a lot of goods movement from
the ports of Long Beach and Los Angeles to the rest of the
Nation.
And we have over 95 companies that handle hazardous waste.
In the State of California, the Water Resources Control Board
environmental mapping program, better known as GeoTracker,
indicated a significant number of underground storage tanks
that are leaking, and EPA, moreover, manages and operates a
Superfund site in the northern part of the city.
So while my hometown is a wonderful place to live, work and
play, it also confronts many economic and environmental
challenges that can best be addressed through the assistance
and partnership of local, State and Federal Government.
As an elected official and a public servant for more than
30 years, not just as a local elected official, but also as an
official for the Department of Transportation, better known as
Caltrans, we view these programs as vital to assisting our
community in cleanup, restoring, and reusing the
environmentally compromised properties that exist within our
communities. The partnership is absolutely critical to the
economic revitalization and job growth.
I know in my testimony I submitted, I talked about a number
of sites that are currently underway and the fact that in
Rialto we have identified over 25 remaining sites that are left
to be cleaned up.
But I would like to share one other additional thing. We
have an area as a local agency where we inherited or we took
over a general aviation airport many years ago. That airport
required us to seek Federal legislation to relocate the
aviation activity so that we could then take that property,
over 953 acres, and be able to redevelop it so that it can
bring jobs.
For me, I see the program and the Brownfields Program as
the only program probably that helps our communities, all of
them, in being able to restore the land and put it into a good
economic use, such as bringing about not only the revenue for
the community, the revitalization, and the jobs, but also being
able to deal with the blight that goes on in our community.
I would encourage you, you know, to really look at this
program and support it, but also, as my colleague says, to
increase it because we have wo many sites that still need to be
addressed, and we will never get ahead of the eight ball if we
are only identifying a few at a time.
In Rialto, we have been blessed to be a part of something
similar, Chairman, that you have in your district, and that is
to be designated as a megaregion, and so we are looking at how,
similar to your transit, do we take that and tie the nexus
between brownfield cleanup and data analytics, logistics,
surveillance and at the same time innovation, things that will
bring more jobs into the community of Rialto and in southern
California.
Thank you.
Mr. Graves of Louisiana. Thank you, Madam Mayor.
Next we have the Honorable Matt Zone, who is a
councilmember from Cleveland, Ohio.
I appreciate you being here, Councilmember Zone. You are
recognized for 5 minutes.
Mr. Zone. Thank you.
Good morning, Chairman Graves and Ranking Member Napolitano
and members of the committee.
I am Matt Zone. I am a councilmember from Cleveland, Ohio,
and president of the National League of Cities. I am here today
on behalf of the National League of Cities, which is the oldest
and largest organization representing 19,000 cities and towns
of all sizes across America.
I appreciate this opportunity to share our perspective on
the importance of the U.S. Environmental Protection Agency's
Brownfields Program, and discuss how the program contributes to
the revitalization of communities, and boosts the localand
national economy.
Mr. Chairman, as an older industrial city, Cleveland has
had a long manufacturing legacy. Today that legacy has left us
with many abandoned factories, vacant commercial spaces, and
polluted industrial sites.
These brownfield properties pose environmental and health
risks, but redeveloping them has helped to bring new life to
Cleveland and to create new opportunities for our residents.
In 2005, the city partnered with the EPA and the State of
Ohio, local businesses, and other entities to create the Land
Bank Program which is targeting former industrial and
commercial properties for rehabilitation. Known as the
Industrial-Commercial Land Bank, the program's mission is
simple: to invest in redevelopment, redeveloping contaminated
properties for productive use.
And to date, Mr. Chairman, our Industrial-Commercial Land
Bank has redeveloped 13 sites. We have cleaned up 137 acres. We
have invested $40 million in Cleveland, and we have created or
retained 2,800 jobs.
In my written testimony, members of the committee, I
highlight three projects that our city has undertaken through
our land bank, but right now I want to talk just about one in
particular, the Trinity Building.
It has been one of the most challenging sites, and I think
it illustrates why the Federal support for brownfields
redevelopment is so critical
The Trinity Building is a small, 6-acre site, but it posed
huge challenges for our city. Today the site is positioned to
be the future home of our city kennel, but it took a difficult
road and a strong Federal-local partnership to get there.
The Trinity Building was originally a factory that produced
aluminum products and employed over 500 Clevelanders, but in
1980 the factory closed, and by the mid-1990s, the abandoned
building had become a blight on our community and a public
health risk for our local residents.
So in 2004, the city took ownership of the property, and we
allocated $2.9 million for remediation. Three years later, the
city discovered that the site was contaminated with dangerous
PCBs. With such a significant public health risk now in play,
the city requested that the EPA investigate the site and assist
with an immediate response.
After conducting its response, EPA announced that the city
itself, and this is important; the EPA announced that the city
itself could potentially be liable for the cleanup. If it had
not been the worst-case scenario, that huge cost of treating
PCB contamination would have put our Land Bank Program in
jeopardy.
Fortunately, the city was able to work with the EPA to
prove that the pollution was not the city's fault, but the
process took years of litigation and delays, and created
substantial uncertainty in the remediation project which
ultimately increased our cost to the city.
You know, when you look at the return on that initial
investment, Mr. Chairman, as a local government official, I can
attest to the fact that the brownfield redevelopment is a
powerful economic tool. Turning polluted properties back into
productive real estate helps us create jobs in distressed
communities, while simultaneously improving public health and
safety.
But brownfields redevelopment involves a lot of risk for
cities and for developers. You know, projects like the Trinity
Building needed public support to compete with newer
development sites and overcome the challenges of working with
contaminated real estate. Our brownfield challenges and unique
opportunities really allowed us to support our cities and towns
as we worked to really revitalize our main streets in downtowns
across economically challenged neighborhoods in America.
So NLC urges Congress to reauthorize the Brownfields
Program and make some key improvements. Our first priority
would be we would urge Congress to increase or maintain the
current overall authorization level for the program.
My colleagues will discuss some of the other shared
priorities like the importance of multipurpose grants and
raising the overall cap on the cleanup grants amounts, but I
want to take a minute to just talk about the issue of municipal
liability.
You know, Cleveland's experience with the Trinity Building
highlights one of the greatest challenges that local
governments face in redeveloping brownfields, and that is the
dangerous liability concerns that can arise when cities acquire
contaminated property.
For most brownfield sites, the only chance of redevelopment
is through public acquisition. But just like with the Trinity
Building, hidden liabilities can arise after cities acquire
property, even if the city had no role in creating those
contaminations.
The result is that many local governments are unable to
acquire property because of the risk of incurring major
liability, and Congress can fix this problem by clarifying and
expanding the liability protections for public entities that
acquire contaminated brownfield sites, especially where that
public entity was not responsible for creating that
contamination.
In closing, Mr. Chairman, in 2009, I had the opportunity to
testify on the reauthorization of this program, and I am
grateful that the city of Cleveland has the experience and the
resources to start redeveloping many of our brownfields in our
neighborhood.
I am joined today by David Ebersole, the director of our
Brownfields Program, and our story in Cleveland is no different
than any other industrial American city, and our residents are
feeling the benefits of turning polluted sites back into
productive places.
But even though there is so much progress that has been
made, the work is nowhere near finished.
Mr. Graves of Louisiana. Would you please wrap up?
Mr. Zone. I want to thank you for this opportunity, Mr.
Chairman, and I look forward to your questions in a little bit.
Thank you.
Mr. Graves of Louisiana. Thank you. I appreciate it,
Councilmember.
Our next witness is Commissioner John Dailey from Leon
County, Florida.
Commissioner Dailey, you are recognized.
Mr. Dailey. Chairman Graves, Ranking Member Napolitano, and
members of the subcommittee, it is my honor and privilege to be
here with you today.
My name is John Dailey, and I serve as the chairman of the
Leon County Commission in Florida, and today I am representing
the National Association of Counties.
Leon County is located in northern Florida, and is home to
our State capital of Tallahassee. We serve a population of
285,000.
As a county commissioner, I have seen firsthand the
positive effects that brownfields redevelopment has had on my
community. Today's hearing is timely since counties play such a
significant role in both land-use planning and economic
development.
Many counties oversee brownfields redevelopment projects
directly because these projects are a natural extension of our
land-use authorities. These authorities include developing
comprehensive land-use plans, setting zoning ordinances,
overseeing environmental monitoring and enforcement, creating
viable economic development districts, conducting public health
evaluations, and running risk assessments at brownfield sites.
These many responsibilities allow us to see the big picture
for our communities and direct our focus on areas that would
most benefit from a brownfields redevelopment project.
In my county, we had a former 450-acre brownfield site that
included a historic rail depot, chemical warehouses, and other
industrial sites, and about 6 years ago, we completely
transformed the area. And it is vibrant. It now includes shops,
restaurants, pubs, hotels, private housing, and a small
business incubator.
As a result, the corridor has brought 200 new jobs,
increased the tax value of the site by $130 million, and
attracted nearly 3,000 new residents. Since additional
improvements are planned, we only expect these numbers to grow.
We are also proud of our 24-acre Cascades Park. This area
was formerly a manufactured gas plant and municipal landfill
located just blocks from the Florida capital. We have
completely transformed this area into a nationally award
winning stormwater facility that just happens to also be a
beautiful central park in downtown Tallahassee.
The successes that we have experienced are not atypical.
Counties across the U.S., large and small, are undertaking
brownfields projects in their local communities. While we have
made tremendous strides, it is estimated that there are over
400,000 brownfield sites that have yet to be addressed
nationally.
As you consider revisions to the Federal brownfields
policies, we have several recommendations to ensure that local
governments can successfully clean up and develop sites as part
of our comprehensive plans.
First, there is more need for funding. I will say it again.
There is more need for funding availability for local
governments. We need that strong Federal partner to address
these sites, no doubt about it.
[The National Association of Counties submitted the
following post-hearing amended portion of Mr. Dailey's opening
remarks:]
We recommend that Congress maintain or even increase funding
for EPA's Brownfields Program and increase the total allowable
grant amount so communities can clean up more sites.
Second, we advocate for a multipurpose grant program which
would allow local governments to apply for one, rather than
multiple, brownfield grants to clean up the site. Under the
current process, county governments bear a significant
administrative burden because we have to apply for multiple
grants for one project and have very little flexibility on how
we apply the grant to meet the needs of the project in our
local community. This places a burden on our staff.
Third, as local governments acquire brownfields, our
ongoing risk of incurring liability under Federal environmental
laws is a continued concern and may prevent us from even
acquiring the sites in the first place, as my colleagues have
also testified.
This is especially relevant, as it was mentioned prior, for
``mothball'' properties where the current property owner is
unreachable or unwilling to discuss a property transfer or
improve the site conditions. These sites are often delinquent
on property taxes, and the local government must foreclose on
the property to address the contamination. However, this is the
option of last resort because of liability issues.
While a number of the States have clarified brownfields
liability protections for local governments, there is a need
for a more permanent national solution.
We believe that Congress should exempt local and State
governments from liability if they neither caused nor
contributed to the contamination and exercised due care with
contaminants once they acquired the site.
In conclusion, we look forward to working with the
committee to address revisions to the Federal Brownfields
Program. Together, we can transform our communities and lay the
groundwork for a new and better future.
Thank you again for the opportunity to testify today on
behalf of America's 3,069 counties. I welcome the opportunities
to address any questions that the committee may have.
Thank you.
Mr. Graves of Louisiana. Thank you, Commissioner.
Our next witness has been misled in the pronunciation of
her name. Coming from south Louisiana, we would pronounce that
very differently. However, I will respect the Kentucky approach
here.
Ms. LeFevre. Right.
Mr. Graves of Louisiana. And I want to introduce Ms. Amanda
LeFevre from Kentucky Brownfield Redevelopment Program.
Ms. LeFevre. We also say Versailles, too, instead of
Versailles. So please forgive us.
But good morning, Chairman Graves, Ranking Member
Napolitano, and members of the subcommittee. Thank you for
having us all here today to talk about this subject.
My name is Amanda LeFevre. I am the vice chair of the
Brownfields Focus Group for the Association of State and
Territorial Solid Waste Management Officials.
ASTSWMO is an association representing the waste management
and remediation programs of the 50 States, 5 territories and
the District of Columbia. ASTSWMO is a strong supporter of the
Brownfields Program. Brownfields are evidence of our country's
proud industrial, commercial and social heritage. These once
thriving properties, now abandoned, contribute to the economic,
social and environmental decline in the places we live, work
and play.
However, the redevelopment has substantial benefits.
Brownfields redevelopment sparks job creation and private
investment, encourages infrastructure reuse, increases property
values, improves the tax base, and facilitates community
revitalization.
For the past 15 years, State and territorial Brownfields
Programs, in collaboration with local communities and our
Federal partners, have served to break down the barriers to
redevelopment. Section 128(a) funding has allowed States to
building a buffet of services particular to their State's
specific needs.
Services can be accessed and combined, depending on the
project and the entity pursuing the project. At any given time
you will find State program staff across this country providing
environmental site assessments, assisting communities to apply
for Federal brownfield grants, providing education on
brownfield redevelopment, assisting entities to manage risk and
liability, providing crucial technical support, and managing
the volunteer cleanup programs that are the basis for the reuse
of properties.
Properties going through our programs may use one or all of
our services, but the underlying theme is that we cannot
provide them without the section 128(a) funding.
While many envision brownfields as just an urban problem,
we would like to highlight the important role that we play in
small cities, towns, and rural areas. Due to limited resources,
these smaller local governments cannot afford to have an
environmental professional or a grant writer on staff. They
require a higher level of project assistance.
In many cases, redevelopment in these towns would not
happen without those section 128(a) supported services. Since
the beginning of the section 128(a) program in fiscal year
2003, funding has been provided at just under the $50 million
level, whereas the number of applicants has more than doubled.
In the first year, 80 States, territories, and tribes received
funding. By 2016, 164 entities requested funding, including 50
States, 4 territories, the District of Columbia, and 109
tribes, 8 of which were new.
The awards in 2003 averaged $618,000. In 2016, they
averaged $293,000. As a result of this budgetary slide and
inflation, States have increasingly resorted to cost saving
measures, such as brownfield staffing reductions, cutting or
eliminating the amount of assistance provided, increasing fees,
and reducing the number of environmental assessments.
This especially impacts our rural partners as they
frequently require more support services than some of our urban
partners.
We are at a critical juncture in our national history where
expansion of our municipal boundaries, while attractive short
term, lead to increased infrastructure costs that we can ill
afford. While rebuilding our infrastructure, we have the
opportunity to revitalize the surrounding areas which will help
build a more robust economy. Brownfield development and
economic development go hand in hand.
Keep in mind that brownfield investment is a good one. The
funding provided for brownfields redevelopment multiplies in
our communities and attracts additional public and private
investment. According to the studies indicated in my written
testimony, $1 of brownfield investment in Delaware generates a
$17 return on the State's initial investment. In Wisconsin that
$1 leverages $27 in total funding and resources. In Oregon, $1
equals about $15, according to a 2014 study, and in Michigan in
2016, if you spend $1 on brownfield redevelopment, you received
about $34 in leveraged funds.
And brownfields, of course, are the gift that keep on
giving. Since 2015, Oklahoma has garnered over $10 million in
new State and income taxes annually on remediated sites. A 2014
study of Oregon's program found that the 51 completed sites in
their survey generated 4,300 permanent jobs. Sixty percent of
those were in the industrial sector.
To summarize, ASTSWMO believes that a robust Brownfields
Program at all levels of Government is essential to our
Nation's economic, social, and environmental health. The
ASTSWMO position paper, ``128(a) `Brownfields' Grant Funding,''
which was provided with this testimony, gives additional
information on ASTSWMO's support for the program.
We thank you for this opportunity to offer testimony today,
and I will be happy to answer any of your questions.
Thank you.
Mr. Graves of Louisiana. Thank you, Ms. LeFevre.
And finally, for cleanup, our last witness is Mr. Jonathan
Philips with Anka Funds.
Mr. Philips.
Mr. Philips. Good morning, members of the committee. I am
Jonathan Philips, managing director of Anka Funds out of
Raleigh, North Carolina.
Anka Funds invests institutional capital and expertise in
strategies that often concurrently help solve environmental or
societal problems. We have acquired approximately 700
properties and spun out of Cherokee Investment Partners, which
prior to the 2008 crash, had been recognized as the world's
largest and most active firm specializing in brownfield
revitalization.
And given what we know about the causes of the brownfield
problem, the market forces that both inhibit and encourage
remediation and redevelopment, existing Government programs to
encourage redevelopment, and the criteria that markets use to
select particular sites for investment, we ask: how do we solve
the overall problem? How do we move beyond the current
situation where some of the sites are being remediated and
redeveloped while literally hundreds of thousands of others
continue to languish?
A friend once told me that for every complex, difficult
problem, there is usually a simple solution--and it is usually
wrong. I think that is true for the brownfield issue generally.
If there were one simple solution, we probably would have
found it and enacted it long ago. On the one hand, the problem
seems clear cut. The costs associated with redeveloping a site
must be outweighed, when adjusted for risk, by the potential
economic reward from that transaction. Viewed on that level,
the solution becomes one of reducing costs and risks or
increasing potential income.
On the other hand, the problem is much more complex. In
2005, 2006, 2009, and 2015, I encouraged congressional
committees to think about sites as being ``underwater'' or
``above water.'' A few brownfield sites may be already
economically ``above water.'' That is to say, without
additional incentives, those sites will still likely be
revitalized soon. The risk of unknowns may still drive some
developers away, but the project is economically viable.
The other sites, sort of in the middle band, are those that
are marginally ``underwater.'' That is to say that with some
coordinated efforts, focus, creativity, and a modest economic
push, the sites would likely be redeveloped within a reasonable
period of time.
And then there is a third category of sites in less
attractive real estate markets and/or those with more
substantial contamination. Those sites may be substantially
``underwater'' and without significant help may never be
cleaned up.
Viewed on this level, the solution becomes more
multifaceted. Policymakers need to increasingly understand that
the problem of brownfields is nuanced, and solutions must be
nuanced and targeted, as well.
Some would prefer to focus attention on the geographical
intersection of the most polluted sites and those with the
lowest intrinsic real estate value, as these are the ones that
most need the help from the public sector for reclamation to
occur.
Other folks would prefer to target sites that fall within
the geographical intersection of those with most economic
development potential and those that are most easily, cheaply,
and quickly revitalized. So, you know, perhaps the answer is a
combination of those two views.
If we, as a country, really want to attack the brownfield
issue on a nationwide basis, it is clear that we must create
policies that will truly move the meter well beyond assessment
assistance and expensing provisions--though such programs have
been and continue to be important.
I believe it is on this front that the Federal Government
can have the biggest impact. The challenge should not be to
create a new program that helps better characterize brownfield
sites or that tries to create a larger role for Federal
agencies. The Federal Government's challenge should be to look
for bold, innovative ways to reduce barriers and create
incentives to attract significant volumes of private capital
and hire leaders who know how to do this.
I have spent a good amount of time thinking about creative
ideas related to this issue, from both a policy perspective and
also as an investor who could benefit from a good many programs
that have been put in place over the years across different
agencies. The fruit of some of this thinking was the UBIT tax
exemption for eligible nonprofits investing in qualified sites,
an idea I personally developed in 2000 and one that was passed
into Federal law as part of the American Jobs Creation Act of
2004 with active, bipartisan support.
I understand members of this committee and also in the
Senate have been working on a reauthorization of this
legislation. This is just one example of the Federal
Government's creative path to leveraging private capital to
clean up and recycle America's lands.
It is my basic assessment that the sites most plaguing this
country are more often than not either those that would produce
net losses for private investors or those with a risk reward
ratio that is significantly unattractive relative to
traditional greenfield development. In either case, the problem
stems from rational economic decisions based upon local forces
of supply and demand.
With strong public guidance, private forces can operate
efficiently to produce revitalization in places where
communities most need it, but where without such involvement,
revitalization may not occur.
Right now the EPA has a unique opportunity to dig deep into
the anatomy and, if I may borrow a phrase, ``the art'' of a
private brownfield deal and understand and alleviate the
obstacles that remain. Doing so will forge a pathway where one
day the Federal Government's expenditures will drastically
reduce and be reserved for a much smaller group of sites.
It will take very concerted leadership at the highest
levels of the EPA and other agencies to make this happen, but
it is doable and will not require large expenditures of
taxpayer dollars.
With less than 4 percent of the Nation's brownfields having
been cleaned up in a decade following the EPA's coining the
term ``brownfield,'' it is clear that more needs to be done.
Clearly, if we are to be successful, the Federal Government
must be an active and significant facilitator and partner in
this effort to attract private investment to solve this problem
in our lifetime. We have an opportunity to make real headway
and leverage the private sector as never before.
Thank you for your invitation to provide testimony to the
distinguished members of this committee and repeat our sincere
interest and willingness to continue to serve as a resource to
you and your colleagues as you do your good work.
Mr. Graves of Louisiana. Thank you, Mr. Philips. I
appreciate it.
For the first round of questions I am going to defer to the
gentleman from Illinois, Mr. Davis.
Mr. Davis. Thank you, Mr. Chairman.
I appreciate you convening this panel today. Great
testimony, and this is a very important issue even in rural
communities that I serve in central Illinois.
I would like to ask the panel about access to brownfields
grant funding for some of those rural communities. One such
community in my district in Litchfield, Illinois, has been
working with our regional office, EPA region 5, and the
Illinois EPA to secure funding to clean up and redevelop a
specific property, but unfortunately has not yet been
successful in acquiring that funding.
The city continues to be told that no funding is available
to assist, and the property in question, a small property, sits
downtown and it impacts economic viability during the year when
community events are bringing thousands of people to that rural
community.
Can any members of the panel address any disparities that
exist for rural communities having access to brownfields funds
and make some recommendations for having to improve them?
Who wants to start? Ms. LeFevre.
Ms. LeFevre. Well, in Kentucky, I mean, if you have ever
been there, it is mostly green space. So incentivizing----
Mr. Davis. And horses.
Ms. LeFevre. And horses and some bourbon out in the corner,
right?
So when we first started our program, really all we could
do for you was assessments, but our program in particular, and
all of our programs are different across the States. We have
been given that latitude to create what each State needs.
So part of our strategy, we cannot give you funding, but we
can actually help you get better access to that. And as you
know, the brownfield cleanup grant competition is highly
competitive. So what we undertook was a strategy of teaching
communities who did not have a grant writer on staff how to
better write grants, how to make them more competitive.
So we created a lot of those support services. We also
worked with our Area Development Districts. I am not sure if
Illinois has something similar.
Mr. Davis. Oh, yes, we do.
Ms. LeFevre. If you can educate your Area Development
Districts on those grants as well, they have been strong
supporters of brownfield cleanup grants and things like that,
and they work with their smaller communities.
A lot of times those smaller communities need those gap
services. So that is where our State and local Area Development
Districts really come in.
Mr. Davis. OK.
Ms. LeFevre. So it is more building a support system that
will help them because they are at a disadvantage because you
have a lot of consultants writing grants and professional grant
writers. So you have got to get them on a much more even
playing field.
Mr. Davis. Thank you for your suggestions.
Mr. Philips, in the development business that you are in,
do you see this disparity with any of your properties?
Mr. Philips. Well, there is no question that redevelopment
of brownfields from the private-sector perspective is driven
completely by the real estate markets, and that is the local
real estate markets. And so if that particular rural community
has an attractive real estate opportunity, that is going to
drive the private capital. That is fundamentally what folks, I
think, need to understand.
Now, in rural communities, there are opportunities to be
creative. People have used the USDA loan program. People have
included solar credits as part of brownfield sites
redevelopment. They have included monies from broadband
infrastructure in rural communities.
So people get really creative with dipping into different
pockets, but at the end of the day, you know, it is
interesting. I think the EPA and the administration and
Congress can really do a great job here in focusing attention
and being a facilitator for more difficult sites or sites in
areas where maybe there is less economic activity.
There was a site in Oklahoma called Tar Creek that we
toured with Senator Inhofe at the time. He had asked to come
and look at a private buyout of residents who happened to be in
that locality and who were concerned about contamination. And
what it did was it really focused the lens on that area and
allowed other private companies to come in and were interested
in the sites and began poking around, and it spurred some
activity.
And I think that helps in some of the rural settings.
Mr. Davis. Thank you. Thank you.
Mr. Zone, I want to go on to another question real quickly
while I have got a couple of seconds. What you guys have done
in Cleveland is amazing. I was there this summer, a beautiful
community. You guys did great at the National Convention, which
was probably the best logistically run convention I have been
to out of three. So congratulations to the city of Cleveland.
In cases where State and local governments involuntarily
acquire brownfields by bankruptcy, abandonment, et cetera, how
do they protect themselves from liability?
And what about cases where they voluntarily acquire these
sites, too?
Mr. Zone. So this summer they were calling for a riot and
we threw a block party in Cleveland. So thank you for coming.
You know, local governments can take control of property
through a variety of means, including tax liens, foreclosure
purchases, and the use of eminent domain in order to clear
title.
Consolidating multiple parcels can be very challenging, but
when you are looking to put forth an economic, viable project,
sometimes you need to do that. So we have been conducting site
assessments, remediating environmental hazards to address
public health and safety issues and otherwise preparing the
property for development by the private sector or public and
community facilities.
The issue is that CERCLA includes liability defenses and
exemptions that may protect local governments, and the optimal
word there is ``may,'' that involuntarily acquire brownfields.
We have acquired property through tax delinquencies, and
you know, one of the examples cited in the law often presumes
that we are protected. That creates exposures for cities.
I would be happy to follow up, Mr. Chairman, at a later
date if that is appropriate.
Mr. Graves of Louisiana. Thank you. Thank you,
Councilmember.
I want to defer to the gentlewoman from California, the
ranking member of the subcommittee, Mrs. Napolitano.
Mrs. Napolitano. Thank you, Mr. Chair.
This is for the entire panel. Based on current
appropriations to the Brownfields Program, we know that EPA can
only fund 30 percent of qualified applications that are
submitted to the agency annually. The funding deficiency delays
vital community redevelopment plans and prohibits business
expansion.
In your opinion, what would be the beneficial amount to
increase the authorized funding level to the program?
And should we increase it, yes or no?
[Many panelists nod.]
Mrs. Napolitano. Yes. And to what level?
Mr. Zone. The total amount? Well, we have been asking for
up to $1 million per project, and in some instances, you heard
the mayor talk about maybe in special exemptions up to $2
million.
Mrs. Napolitano. No, for the whole program. All of it. What
would happen if it were doubled? What would happen to the
ability for you to file and get cleanup?
Mr. Bollwage. Currently, in every congressional district in
this country there are at least 30 identified brownfield sites,
and if you look at the 30 identified brownfield sites at a
minimum in every congressional district and you pick a number,
I think this panel would gladly leave it up to this body on
what number you would want to pick.
Mrs. Napolitano. But what would you do with the money is
what I am asking. Every community, would it help foster your
economic growth, your cleanup?
Mr. Bollwage. Oh, go ahead. Absolutely, yes. All of that.
Ms. Robertson. Yes, without a doubt, Member.
I would just like to say, echoing what they are saying, as
I said earlier we have just in Rialto alone 25 identified
sites. That is not counting surrounding communities, and even
though Rialto and the areas, such as Colton and my neighbors,
we are all seen as urban or suburban areas.
I would think that if you were to increase the program,
perhaps we would be able to move forward on not only our own
sites, but also on some of our neighboring sites, such as the
application I have right now.
Mrs. Napolitano. Well, what would it mean to the economy to
each site?
Ms. Robertson. Right, but at least it would allow us to
include, do multijurisdictional assessments with the county and
with our local agencies, and so we could attack and address the
issue, I think, a more effective way if we knew we had more
resources available.
Currently, we have to decide how can we, one, be successful
and at the same time do it in a manner that we look at
multijurisdictional applications from now on.
Mrs. Napolitano. OK. And you heard me state that we sent
the letter to the leadership in regard to the cut of funding to
the EPA program, the Brownfields Program. We have not received
a response.
Are any of you concerned about the elimination of the
program?
Mr. Zone. Yes, absolutely, and I would say that only about
one-third of all applications that are submitted are actually
funded. So to answer your previous question, if you increased
the program by three, I think that would be moving in the right
direction.
Mrs. Napolitano. Anybody else?
Mr. Bollwage. A couple of weeks ago, I met with the
Administrator, with the U.S. Conference of Mayors, and part of
his comments were extremely encouraging when it came to funding
brownfields and Superfund sites.
Mrs. Napolitano. Just remind him of that.
Mr. Bollwage. I am. Hopefully, I will have the opportunity
to do that, but he also said that he was going to take that
position to the White House and be firm and stern about funding
brownfields and Superfund sites, and he saw that from his
perspective as the new Administrator as a priority in the
upcoming budget.
Mrs. Napolitano. Let's hope the President agrees with him.
Mr. Bollwage. I agree, Congresswoman.
Mrs. Napolitano. One of the original goals of the
brownfields law was to invest in communities of underserved
populations. Has the implementation followed through on the
original goal? Anybody?
Ms. Robertson. Well, if you do not mind, I would like to at
least address that to begin with. In some degree, the money,
the resources that have been made available in Rialto has
definitely helped. When I was making my comments earlier about
the Federal legislation that allowed for the relocation of the
general aviation airport, it was very ironic. The city took on
the facility which was really in the past a military
installation.
Yet when it was time for us to do cleanup and identified
hazardous waste there at that property, because the city owned
it, it is back to what we were talking about: the liability
that becomes a big problem.
We could not even apply funds to that. Nonetheless, we are
moving forward. We are redeveloping an area that is going to
bring about a significant retail, commercial, industrial, and
housing area to the tune that when we build out the total 1,500
acres, we are going to see approximately a $2 billion
investment.
Sadly, that investment and what we will see envisioned will
not have occurred with the brownfields dollars. But
fortunately, we have used them in other areas within the city,
an 18-acre area where we are going to be able to do similarly,
and we will be able to bring about a public fire station and
other open spaces.
So it has been an advantage to the underserved communities.
Mrs. Napolitano. Thank you, Mr. Chair.
Mr. Graves of Louisiana. Thank you, Ranking Member.
We are going to next go to Mr. Ferguson from Georgia.
Mr. Ferguson. Well, thank you all for taking time today.
It was not but just a few months ago I was sitting where
you all are as mayors and representatives of your local
communities. Lord, sometimes I surely do miss that compared to
what we get to go through now.
But I will say this. As a mayor, I have dealt with this
issue before, and I was mayor of a community that really had to
go through an important revitalization to begin to put itself
back on track.
And one of the things that we found that was very, very
difficult in this process with brownfields was the complexity
of the process, and we always tried as a local government to
make the process of application through the permitting as
smooth as seamless as possible.
Could you all address, you know, two issues? First of all,
how would you recommend or what are your thoughts on
streamlining the process, getting through the procedures?
Because that is one of the things that developers would
always come to us and say. ``Hey, we understand there is a
process here, but sometimes it is so complex and so complicated
that the economic viability of the project is in jeopardy
because of the longevity.''
And private dollars will follow the opportunity to make a
profit, and they get hung up in a swamp, so to speak, it really
makes it more difficult.
And the second thing is: can you all speak to--and, Mr.
Philips, maybe you could address this--how much, even with
brownfield grants; what is the economic viability gap on many
of these projects, particularly in rural communities, and how
would you address that?
So we will start with Mr. Dailey, if you do not mind
talking about how would you streamline the regulatory process.
Mr. Dailey. Congressman, that is a fantastic question, and
we appreciate it. What we tend to forget nationwide is that 70
percent of the counties have a population of 50,000 or less. We
are small; we are rural, and so we deal with these issues day
in and day out.
In the State of Florida, we have a population of over 2
million, half of which live in the unincorporated areas. We
deal with these issues every day.
Counties are in charge of comprehensive plans in many
situations. And addressing brownfields is a piece of the
puzzle. Getting back to the funding issue, those in small
communities do not have tremendously big staffs.
My colleague testified to the fact, and this goes directly
to the process; my colleague testified to the fact that when we
have smaller communities with smaller staff, there are staffing
gaps that we need to address as well.
But the fact of the matter is that when we are dealing
specifically with private industry on a particular project, if
we say, ``I am afraid that this process is going to take
anywhere from 18 to 36 months. We are going to have to apply
for several grants from beginning to end in order to accomplish
our goals.''
A lot of times the private industry might not be interested
in moving forward with the more extended timeline; on top of
that, for us to be even able to dedicate the staff.
The answer is, number one, of course, more funding, and
every opportunity that I have to speak, I will stress that
need. I think we all agree that more funding can be put into
the program, it would be great because it also levels the
playing field for our smaller rural communities to be able to
compete for these projects.
Number two, more flexibility within the grants themselves.
If you could be able to empower local governments to work hand
in hand in partnership with the Federal and State governments
along with the private sector on these particular programs,
that would be fantastic.
First and foremost, funding; secondly, flexibility.
Thank you.
Mr. Ferguson. Mr. Dailey, I am going to go to Mr. Philips.
I have only got about a minute here.
If you could briefly touch on that economic viability gap
question.
Mr. Philips. Sure. I think the gap is really huge,
honestly, for most of the sites that concern people, and the
gap is not just in fungible dollars as we think about it. The
gap is in time, and this is particularly true for the
investment community.
You know, your return on investment clock, your IRR, is
ticking, ticking, ticking, and every moment that you wait for
the next step, for approvals and for processes, it just makes
it much more difficult.
Just to give you a feel: a couple of years ago we did an
assessment internally to see how many sites are we looking at,
how many sites come through that funnel and that we actually
invest in. Now, remember this was the largest investor in
brownfields in the world.
We reviewed about 450 sites, and in the next 2 years we
were able to invest in 10 of those sites. We researched these
and found out other entities across the world only invested in
an additional 10 of those sites, leaving 430 of those sites
underwater, unable to attract investment, and this is despite
the State and Federal programs and incentives that existed at
the time, and these were not rural sites mostly, I can assure
you.
So in terms of the gap, it is significant.
Mr. Graves of Louisiana. Thank you, Mr. Ferguson.
We are going to go to the gentleman from California, Mr.
Lowenthal.
Dr. Lowenthal. Thank you, Mr. Chairman, and thank you for
all the witnesses for joining us today and really informing us
on some of what is really taking place in the communities
regarding the Brownfields Program.
I am really glad that we are having this hearing and that
we can understand a little bit more what the Federal
Government's role is in working with the States and localities
in funding and helping to redevelop many of these sites.
You know, I think the Brownfields Program has been a great
example of a win-win situation which both improves the
environment, improves the health of our citizens, and at the
same time spurs economic growth and development. That is a win-
win situation.
That is why I am particularly disturbed when I read that
the program might face severe cuts. You know, we talked about
what additional monies we have heard you might need, but let's
just talk about the reality, that this program might receive
severe cuts or even elimination if the President and the EPA
Administrator have their say and that is really the direction
we move in.
So really I want to start with Mayor Robertson. You know, I
represent the port area of Long Beach, and so I am familiar
with many of the critical issues that face Rialto and the other
cities in the Inland Empire that serve as logistic centers, and
so we are really connected to each other.
So what happens in reality in Rialto directly affects my
district also, and so I am very impressed with what you are
trying to do.
So my first question is: could you really elaborate a
little bit more deeply on some of the positive benefits of your
successful projects?
Tell us a little bit more, Mayor Robertson, about some of
the successful projects and what the benefits have been
economically and also to the health of your community.
Ms. Robertson. Thank you. Thank you, Member.
You know, I guess I would just quickly say that one of the
things this tool, this program, has really helped Rialto in the
community and a lot in California with public-private
partnership, a willingness for our partners to know that we are
in this together.
From that, just recently in a lot of the sites that we have
identified in Rialto and that we have actually done the cleanup
of the hazardous areas in partnership with some of our
developers, we have managed to help them cobble together a lot
of small pieces of property to facilitate the development of a
major industrial or warehouse. It brings directly 1,500 jobs
every time we assemble some land and we create a more efficient
way to use the land.
At the other side, the other thing I need to speak to
constantly we seem to lose and I know from your district we
have all dealt with health assessments.
Dr. Lowenthal. Yes.
Ms. Robertson. And what is ongoing not only from the mobile
activity, the mobile source of what is in the air, the
particulate matters, but we also have to recognize that because
if we fail to address these areas, a lot of these brownfields
are also fallow land, dry land, and the elements are still in
the air and then they are contributing factors not only to the
adults and the people in the area that are working, but they
are contributing factors to a lot of our young adults who are
now highly affected with asthma conditions.
So it is imperative that we address it and we figure out
how to address it not only, yes, the economic opportunity is
great because it brings about jobs; it brings about some local
revenue to our community; it helps us come up with some type of
sustained revenue source for the local jurisdictions.
But it also has a significant health impact, and we are not
talking about only airborne, what is in the air, but also what
can go into the air by the fact that we continue to not address
these designated, identified brownfield sites.
Dr. Lowenthal. This is for any, including yourself, Mayor
Robertson.
We are living in a time of uncertainty. We are not sure
where the EPA is going, what funding will be available. I am
wondering how does this uncertainty affect your planning
process. Anybody.
Where are you now hearing about these cuts and not really
understanding whether this program will be cut, not cut?
What is happening in the communities now about planning?
Anybody want to jump in?
Mr. Zone. I would just add, Congressman, the private sector
wants predictability. You know, the public sector dollars is
the yeast that raises the dough from the private sector. There
is so much uncertainty right now that the private sector is,
quite frankly, skittish. They want to know if I am going to
invest in an area, is Government going to be with me and
supporting me, and there is a lot of uncertainty.
Dr. Lowenthal. Yes. Thank you, Mr. Chair, and I yield back.
Mr. Graves of Louisiana. Thank you, Mr. Lowenthal.
We are going to go to the gentleman from New York, Mr.
Katko.
Mr. Katko. Thank you, Mr. Chairman.
And thank you all for your testimony today.
Mr. Dailey, I have to note at the outset that I am
absolutely shocked and stunned that you think more funding
would be helpful.
[Laughter.]
Mr. Katko. But I, quite frankly, happen to agree with you.
I am from the industrial Northeast, and Syracuse has been
ravaged by loss of industry, but loss of industry also comes
brownfields because they are not always the best stewards of
the environment when they leave, and that is always a problem.
So I happen to agree with you, and I am proud to say I have
partnered with my colleague on the other side of the aisle, Ms.
Esty, to present a reauthorization bill that we introduced
today and we hope to see Congress act on that bill because we
truly believe this is a critically important program to
revitalize areas.
There are towns and cities all across my district, Auburn,
New York; Wolcott; Fulton; Oswego; Syracuse, and others have
all benefitted from that program, and the differences have been
absolutely remarkable.
It is a critical aid to the redevelopment and the use of
blighted properties, and I really hope that we can continue
robust funding of this.
Now, my colleague, Mr. Ferguson, noted about the complexity
of the process, and I wanted to dig into that a little bit
deeper because that is something I am very interested in.
Assuming we can be successful, Ms. Esty and myself and
others, in getting this reauthorization, I want to know how we
can make it better. It is clear to me from talking to
businesses across my district that time and again that
overregulation and the labyrinth of paperwork and regulatory
structures are choking businesses just as much as the programs
themselves sometimes.
So if someone can just give me some examples, pick one
thing. What is one thing we could do to really make this
process less complex?
Let me start with the councilmember from Cleveland because
I want to go to the Rock and Roll Hall of Fame, and you are
making me think of it. So we will start with you.
Mr. Zone. Well, Congressman, I would love to give you a
behind the scenes tour.
Mr. Katko. Oh, be careful about that because I will take
you up on it.
Mr. Zone. I am going to give you my card at the end of the
hearing.
If I had to give one thing, we have reviewed the summary of
your bill. Thank you for putting that forward. We would hope
that the Brownfields reauthorization could include liability
protections for local governments that take ownership of
properties through both voluntary and involuntary means.
The example that I cited about the Trinity Building, what
once was a public safety hazard, we came in there to remediate
the public safety hazard. Now we are left with an environmental
hazard on our hands.
So really holding governments harmless who were not the
original polluter would be the one thing I would encourage you
to include in your bill.
Mr. Katko. Thank you.
It is funny you say that. I was just thinking of a property
in Syracuse where they were a scrapyard and adjacent on
Onondaga Lake, and they basically just went out of business, up
and left and just basically left the keys on the table for the
county to mop up.
And that is the type of thing I am concerned with, and we
need to do a better job with that. So your point is well taken.
Anyone else want to chime in? Mr. Bollwage?
Mr. Bollwage. Congressman, section 3 of your bill where it
talks about multipurpose cleanup grants would be extremely
important in streamlining the process because it affords a
flexibility opportunity for not only the developers, but the
municipality as well.
Mr. Katko. Thank you.
Anyone else? Mr. Philips?
Mr. Philips. On the issue of----
Mr. Katko. I feel like I am in a game show. Whoever presses
a button first I call on. So this is fun.
Mr. Philips. On the issue of complexity, I would just note
that it tells you something when cities that are active in
brownfields redevelopment are the ones that have to hire a
brownfield coordinator as a full time position in the city or
the county.
I mean, think about that for a moment. A city has to hire a
special person just to navigate through the complexities of
these different programs, of the grants, of the assessments.
You know, so there is not enough time to go into the
complexities in detail now, but I think we were certainly in
agreement with the premise of your question.
Mr. Katko. Well, I encourage after the hearing feel free to
submit Ms. Esty and myself or others some of the laundry list
of things we can do to make it less complex because, you know,
we are in an era where we are reviewing the overregulation of
everything, and this is a good time to have a wish list.
So I encourage you to have a wish list. Does anyone else
want to chime in?
Ms. Robertson. Yes.
Mr. Katko. Ms. Robertson.
Ms. Robertson. I just would like to say along with the
things that they identified I guess for me and for a lot of us
in the local communities it would be great if we could
expedite. Sometimes the time alone just to know if, in fact,
you are going to be successful in a competitive process.
We already know that there are way more projects than there
is money available, but then you have to still wait. So if we
had some way of knowing a preliminary of whether we are going
to get the nod or not, we need, yes, it clearly goes without
saying. Everybody says we need more money, but the other thing
I would say, too, is it had created kind of an industry niche
in Rialto because we have 95 companies that specialize in
hazardous waste cleanup.
So I don't know. It spurs growth. It spurs jobs, and it
gives us an opportunity to have that qualified staff and
consultants available and onboard.
Mr. Katko. Thank you very much.
I know my time is up, but I encourage all of you to please
submit some papers on this because they are very helpful, and
we will look at them.
We are committed to try and streamline the process. We
understand very well how regulations sometimes well intended
can end up as a whole really choking the process to the point
where it is not worth it, and that defeats the purpose, and we
do not want that to happen here.
Rest assured Ms. Esty, myself and others, we are robust
supporters of this program, and we will work hard to keep it.
Thank you very much, and I yield back, Mr. Chairman.
Mr. Graves of Louisiana. Thank you, Mr. Katko.
The gentlewoman from Connecticut, Ms. Esty.
Ms. Esty. Thank you, Chairman Graves and Ranking Member
Napolitano, for convening this hearing today on an incredibly
important topic, and as you may have gathered, rare in this
place these days, one of bipartisan support because we know as
you indicated, Mr. Bollwage, this is across every single
congressional district in America. The low estimate is 400,000.
The high estimate is 600,000 sites.
They are gas stations in our rural communities at
crossroads. They are large industrial sites like the brass
centers in Waterbury, Connecticut, that I represent, and these
are all opportunities as well as obligations for us to do
better.
So I wanted to lay out a few things, a bit about the bill
that Mr. Katko and I are introducing today, get your response,
but also to have you think about while I am doing that about
some of the themes that I heard from you: the importance of
predictability; the importance of de-risking. You did not use
that language, but de-risking is critically important for
liability. The assessment grants are about de-risking so that
people like Mr. Philips know what they are getting into.
And the importance of saving time which translates to
money, and so if we are going to leverage those private
resources, we have to find ways to get determinations, as Mayor
Robertson noted. Yes or no, let us know so we can move forward.
And we are all committed to doing that. We have got what we
think in part, due to many of you and your organizations helped
us craft this bill over some considerable period of time, but
it certainly can be improved, and we look forward to continuing
to work with you and our colleagues across the aisle to get the
right bill that can make it through both Houses and get signed
by the President, get out there making a difference in our
communities.
So I wanted to talk a little bit about those provisions and
lay them out. One, it creates multipurpose grants. This is
something I was just in New Britain, Connecticut. We do not
really have those. So we have right now our State is doing
this, and Connecticut is one of the States doing it, but
clearly we have heard from everybody this crosses across
jurisdiction.
We need more flexibility, to go to the point. Commissioner
Dailey, I think you mentioned the point of flexibility. We need
flexibility. So that is going to allow characterization,
assessment, inventory, planning, remediation with greater
certainty over funding streams and can flow into the areawide
planning revitalization, which I know especially, again, can be
important when you have got properties that cross boundaries.
It also clarifies and expands eligibility. We have
discussed this at considerable length. If we are going to have
public-private partnerships, there is not enough money in the
Treasury to clean up every one of these properties so the dirt
can be eaten with a spoon.
That is not the objective. The objective is to try to get
them back into play to make sense to deal with category 1, Mr.
Philips, of the worst contaminated sites that are public health
hazards. Clean those up, and the category 3 things that can get
back into productive use. How do we leverage those? How do we
move both of those categories?
To encourage those partnerships, our bill expands
eligibility for brownfields grants to certain nonprofits that
have been excluded; limited liability corporations; limited
partnerships; and community development entities. And I can
tell you Waterbury, Connecticut, where I do a lot of work, this
has been a huge stumbling block for them.
They have a redevelopment authority. It is not actually the
city that wound up with the keys, as Mr. Katko noted. They wind
up with the keys, and the entity that is empowered to do it
actually is ineligible for these grants.
Well, that is clearly wrong, and with your help, hopefully
we will fix it.
It also expands to include governments that acquired the
brownfield sites prior to 2002, and we know those legacy sites.
How could you possibly have complied with the post-2002 rules
pre-2002 unless you were clairvoyant. You were not able to do
that.
And, third, the bill eliminates eligibility barriers for
petroleum brownfield sites. We know that in certain communities
that has been a huge issue. I have got one two blocks from my
house which we are still waiting to get fixed.
So we have talked a little bit about expanded liability.
Commissioner Dailey, maybe you can talk a little bit about the
multipurpose grants and what a difference that might make if we
expand, as our bill does, to do that.
Mr. Dailey. Sure. Again, Congresswoman, it is a wonderful
question. Thank you for the opportunity to speak to it.
I am sure my colleagues will agree with me. Any time that
we can provide the most flexibility to local governments to
make the best decisions on behalf of their communities, we are
going to be moving in the right direction.
Any time we make assumptions, either nationwide or even
within the State, that every community is the same and all
community needs are the same, I think that we are not moving in
the right direction.
So when we look at the multipurpose grants and the
flexibility within, especially with smaller communities that
have limited resources to even begin the process, we need to
provide them flexibility, so that when they are in the game and
they are moving forward, they have the flexibility to do the
best they possibly can for their community.
Ms. Esty. Mr. Philips, just a quick question as the
private-sector representative. On this de-risking notion, what
are these most important elements, things you like about the
bill that we have got out there, things that we could maybe
improve as we move forward?
Mr. Philips. Well, first, I would welcome talking to you
about some details about the bill.
But I would say that, you know, just in your own State, you
know, we looked at the Stratford Army Engine Plant, and at the
time there was no clarity on the cleanup at all. We tried. We
worked hard. We spent a lot of money. We made a lot of trips.
We engaged in a lot of officials, and at the end of the day,
there were multiple entities involved with determining who was
responsible and how it was going to be cleaned up.
And we did not even know where to invest dollars, and we
ended up pulling out. That delayed the process by at least 10
years, at least a decade, probably more because it still has
not been redeveloped, and they are looking at it now.
Ms. Esty. Thank you.
I appreciate your indulgence and I will follow up with all
of you again. Thank you very much.
Mr. Graves of Louisiana. Thank you.
Next we are going to go to the gentleman from California,
Mr. LaMalfa.
Mr. LaMalfa. Thank you, Mr. Chairman.
Panelists, thank you from joining from a wide range of
diverse places and backgrounds.
I have a very rural district in far northern California
that borders Oregon to the north and just north of Sacramento
to the south. The largest cities, a couple of them, around
100,000 and many of them are at 1,000 or less.
So we have issues as well with brownfields that over the
years with industrial use, et cetera. But let me give you an
example real quickly. There is one city in my district called
Yreka, different from Eureka on the California flag. Yreka is
right near the top, nearly the Oregon border. It has just 7,000
residents, but it was able to take a $400,000 grant and turn it
into many millions in private investments that came in after
that grant on former mill sites when basically the timber
industry had been run out of business by regulations, et
cetera.
So the brownfield activity that came from that conversion
has fortunately turned up to a little over $4 million of annual
activity, and then for a small town, again, like Yreka of about
7,000 people, the project created about 100 jobs. So
proportionally, that is pretty good. OK? Not the biggest maybe
across the country, but for a proportion, it is a pretty big
hit.
So I guess for folks on the panel here, maybe I would like
to get maybe a couple of extreme ends perhaps, Mr. Dailey and
Mr. Zone, on rural and urban.
The Federal dollars we put in, does it change a lot based
on the locality or its size, such as, you know, rural areas
like mine?
Does it require a bigger emphasis on the administrative
side, the staff side proportionally, but at less cost? Do urban
areas have more cost? Were they able to spread that over a
wider range of staff or, you know, internal costs?
But then, on the other hand, are they able to get more
private attraction out there because it is a large city?
Mr. Zone, would you like to go first? Then we will call on
Mr. Dailey.
Mr. Zone. Thank you, Congressman.
I would answer your question with a question and then just
add some commentary.
I mean, if local government does not perform the cleanup,
who will?
And you know, in our city we have cleaned up 13 sites. It
totaled about 137 acres and invested over $40 million in our
city, which has created nearly 3,000 jobs.
We are fortunate. There is our brownfield administrator. We
have a full-time person. He is now also doing double duties,
acting as our interim economic development director, but we are
fortunate and blessed in that respect.
We are an older, urban legacy city that built America. I
mean, John D. Rockefeller got his start, Standard Oil, in
Cleveland, Ohio, and built America, and now we are left with
these old legacy sites, and we are fortunate to have somebody
like David, but on the administrative side, it is very, very
heavy.
Mr. LaMalfa. Thank you.
Mr. Dailey. Congressman, a wonderful question. Remember
that a lot of times your county is going to be responsible for
the overall vision of the community, which is your
comprehensive plan, your economic development vision. A lot of
times it is the county health department which is the first
line of defense for your health issues in our communities.
We also are the first line of defense for your
environmental permitting issues. My point is this: smaller
communities have smaller staff. Smaller staff are already
spread thin under normal responsibilities, and as it was
testified earlier before, some communities have had to
literally put a new staff person in place solely to handle
brownfields issues and the county's relationship with the
Federal Government.
Is it taxing local communities? Yes, sir.
Mr. LaMalfa. So do you think that is a disproportionate
amount of staff per benefit because it is a smaller situation
at rural or is it made up for by how disproportionately
positive it could be on local employment, et cetera?
Mr. Dailey. I think it would be unfair for me to categorize
every local government as the same, but I will say that
obviously the smaller the government, the smaller the staff,
yes, the more taxing it is going to be, which was also
addressed earlier on some of the service gaps, even before
applying for the process, let alone carrying through with the
grants themselves.
Mr. LaMalfa. OK. Go ahead.
Mr. Philips. I was just going to add that I think a big
piece of the answer to your question and probably some other
questions that are circulating here relates to the kind of
zoning and entitlement issues.
What is going to happen to these sites? That is being
controlled by the local governments, and you know, in our
experience with rural and smaller communities, they are much
easier to work with, overall.
The urban communities, there is just a tremendous amount of
resistance to development. There is a scrutiny associated with
every decision that is made that takes more time and takes more
money. Of course, the cruel irony is that there is generally
more value--intrinsic real estate value--associated with the
more urbanized areas. So that is the paradox.
Mr. LaMalfa. It would seem, you know, when you are talking
about a brownfield in an urban area there would be even more
incentive to want to make something flip over to more positive
on that.
But my time has expired. So I thank you, panelists, for
your comments.
Mr. Graves of Louisiana. Thank you, Mr. LaMalfa.
We are going to go to the gentlewoman from Michigan, Mrs.
Lawrence.
Mrs. Lawrence. I want to thank you for this hearing.
To the Honorable Mayor Bollwage, we were colleagues. He is
a mayor's mayor. I am glad to see you and cannot wait to talk
about our children.
One of the things I have not heard from a single panelist
here today was the pushback on what defines property as being
contaminated. As we move forward today, conversation is about
our EPA standards and qualifications.
Mayor Robertson, you brought up asthma, which we know is
directly tied to air quality and contaminants. I want to hear
from you.
I was a mayor for 14 years, and the question of if we do
not clean it up, who will, I represent Detroit. We are the,
quote, unquote, Comeback City. If we did not have in Michigan
over $1 million of investment from brownfields, I can tell you
that properties and the insurgence of development that we are
seeing at historic levels would not have happened.
But it happened not only for development purposes. I get
that because as a mayor I did not want a site sitting there
vacant and, you know, undeveloped, but also it gave me that
sense of responsibility that I must redevelop with
responsibility for health, quality, respect of the earth.
So if you are bold enough, I would like to ask that
question.
And, Mr. Philips, you are the private guy, and so I know
you look at the dollars and cents, but you know, I had former
gas stations that closed down. I had dump sites that are
sitting there and buildings in Detroit that were almost a
century old, and you know the quality of the material and
asbestos and everything that is in the building.
So would you please talk to me about that? Take a deep
breath.
Mr. Philips. With regard to the question of how to define
contamination, well, for us our opportunity is to invest in
places where we are wanted and invest in places where we think
we are solving a problem.
And so in some ways we use the word ``brownfield'' a little
bit differently than the EPA has defined it. For us we view
brownfield as anything where there is a perceived environmental
issue from historic use or, it is, as people would refer to it
in the State or Federal sense, a CERCLA or a Superfund site.
Even if it is a heavily contaminated site or petroleum site, we
view any environmentally distressed site, or potentially
environmentally distressed site, as a brownfield, and we think
that those are opportunities.
So if we are solving a problem for a community, then that
is sort of how we define the brownfield target.
Mrs. Lawrence. Mayor Bollwage, please comment on this for
me, please.
Mr. Bollwage. We as mayors, as you know, Mayor,
Congresswoman, we define brownfield site as any site that has
basically laid fallow for a number of years and unable to
generate any tax revenue to our community.
There are some that are contaminated, and there are some
that are just not marketable maybe because of location or
zoning or other issues, but that is within the town's ability
to correct if that was the case.
The brownfield sites with some type of minimal
contamination will need an assessment grant, will need some
type of followup in order to make it marketable for a
developer.
Mrs. Lawrence. Mayor Robertson?
Ms. Robertson. Yes, I was sitting here thinking about the
same thing as well. Sometimes it is very complicated because
the land lays fallow, but then we also have an absentee
landlord, a person who is not interested in moving forward,
trying to improve that property. So we have to spend a lot of
energy resources to try and either bring that property owner
forward to work with us, figure out a way that we can mutually
do something because in the case of our city, Rialto, which is
over 100 years old, a lot of land was bought by others and they
have moved away. Now they are sitting back and waiting. They
are waiting for the value to go up, and they are waiting on it,
and they are not in the environment.
Mrs. Lawrence. Mr. Zone?
Mr. Zone. Congresswoman, in your hometown, I mean, it took
skillful coordination between the Federal, State and local
governments to clean up and make Detroit the comeback community
that it is.
It is not only an economic issue. It is an environmental
issue, and look at all of those young people in your city who
are suffering some ill health effects as a result of that.
Mrs. Lawrence. Yes. Thank you.
I just want to make this statement before I close.
Michigan, for every dollar invested, over $35 was generated in
economic development. The brownfields work. I know that my city
that I represent would not be the Comeback City and have the
ability to grow and enhance the overall economic GPA of this
country without it.
So thank you so much.
Mr. Graves of Louisiana. Thank you, Mrs. Lawrence.
I recognize myself for 5 minutes.
I am going to take a little bit of liberty here with my
good friend, the ranking member. I think that we all agree that
some objectives like environmental restoration and cleanup are
important; that economic development and returning properties
to commerce are important; that local revenues and economic
activity are important. And I think we agree on that.
I think that the more we can do to eliminate blight is an
objective that we share. Obviously, ensuring that we have an
efficient program and removing bureaucratic hurdles, I think,
is important to both of us, and I think we both support
additional funding for this program.
In moving forward, I look forward to working with you to
focus on those objectives and a number of others, but I still
think we are hearing a few things that I would like to
understand a little bit better.
Mayor Bollwage, could you talk a little bit about some of
your experiences in dealing with brownfield sites prior to the
2001 Act?
Mr. Bollwage. Thank you, Mr. Chairman.
Before 2001, it was really almost impossible to develop a
brownfield site. There was very little direction or very little
help from any other government.
So in developing the EPA Brownfields Program in the 1990s
and when the law was passed in 2002, I testified here probably
between 1994 and 2001 at least four or five times. In order to
get one done, the developer had to take a lot of risk, and I
think Jonathan could probably speak to some of that risk, but
it was mostly based on the risk of the developer.
And those deals were really rare for a lot of communities.
Developers would usually just look to the pristine or the green
areas, and as a result, we had all of these abandoned and
underutilized property.
The Jersey Gardens, which started in 1997, was actually
started based on an EPA assessment grant where we assessed the
property and we worked with the developer, OENJ Cherokee at the
time, in order to remediate it and vent the methane gas, which
was a former landfill that then created the Jersey Gardens
project.
But the developer took a risk, and the quick story is they
could not get heavy equipment in there. So when the developers
came to see me in 1993, they said, ``Mayor, we can get heavy
equipment in there and remediate this 200-acre landfill if you
will build a road.''
Now, the road cost the city taxpayers $10 million to build
to get the heavy equipment in there. So I could see my
reelection campaign where the opposition would say mayor builds
$10 million road to dump and nothing gets done.
So there was a lot of risk involved, both a trust factor in
the developer and the city to build that road and then
remediate the landfill in order to create what is now a 2-
million-square-foot mall with 4 hotels and movie theater and
4,000 permanent jobs.
Thank you, Mr. Chairman.
Mr. Graves of Louisiana. Thank you, Mayor.
I am going to start a new trend. Ms. LeFevre, look. The
French influence in south Louisiana, the people at home are
going to be looking at me like, ``What is that guy saying?'' if
I pronounce it the other way. Sorry.
I have two questions for you. Number one, just very
quickly, roughly what percentage of properties that you deal
with that are in rural versus urban areas, brownfields
specifically?
Ms. LeFevre. I would say probably 25 percent urban and 75
percent rural.
Mr. Graves of Louisiana. Wow, wow.
Ms. LeFevre. Yes.
Mr. Graves of Louisiana. And one other question. It seems
like in reading some of your testimony some of the specific
approaches that you have taken in Kentucky to remediate
brownfields, to return those properties to commerce seem to be
unique and not necessarily Federal centric approaches.
Do you care to comment about some specific approaches that
you have taken that you think with perhaps more State-based
leadership would have been successful?
Ms. LeFevre. Yes. Like I said, you know, being a mostly
rural State, we know that, you know, the same person who is
your mayor might be your wastewater operator, might be your
brownfield redeveloper. So we built a very service friendly
program with our State.
You know, we spent a lot of time holding hands, learning
what our folks need, whether that be visioning workshops and,
you know, educational workshops and things like that. Those are
the things you do not initially see in our reports to EPA, but
we do a lot of that hand-holding work and that support work.
We actually sort of work as a multipurpose grant from the
first place. So them saying multipurpose grants, it is a great
idea for cities, too, because I mean, that gives you that
flexibility, you know.
And we have developed over time from nonprofits to for
profit and from assessment to cleanup, different things for
different people.
I just want to emphasize when you talk about liability, one
of our most successful parts of our program now is our risk
management program and clarifying that risk. We basically have
letters, a program that mirrors Federal bona fide prospective
purchaser, and you get a letter saying that you are not liable
for that contamination, and that has really spurred brownfield
redevelopment and movement in those areas.
So over time, we have just sort of paid attention to what
our folks need, and States need to do that.
Mr. Graves of Louisiana. Thank you.
Next is the gentlewoman from Illinois, Mrs. Bustos.
Mrs. Bustos. Thank you, Mr. Chairman.
And thanks to all of our panelists. I appreciate you guys
being here.
My congressional district is in the northwestern part of
the State of Illinois, and like everybody that I have heard
since I have been here anyway, they have all spoken about the
importance of the Brownfields Program.
We are the world headquarters for John Deere in the town
where I live called Moline, and literally had it not been for
the Brownfields Program, what is now a beautiful Mississippi
riverfront civic center, which had been an old, closed down
factory, never would have happened.
I live right along the Mississippi River. So when I walk
down along our bike path and head to our downtown area, I mean,
it is just virtually all a result of what has happened with the
Brownfields Program.
So I think we have all seen the value of that. What I would
like to start out with is a question for Commissioner Dailey.
You mentioned the role of brownfields in creating jobs. Part of
the Brownfields Program is a job training grant program.
In your experience, are environmental technicians in high
demand in areas with brownfield projects? If you could address
that please.
Mr. Dailey. One more time. I am sorry. Could you repeat the
question one more time?
Mrs. Bustos. Sure, sure. Part of the Brownfields Program is
a job training grant program. In your experience are the
environmental technicians in high demand in areas with
brownfields projects?
Mr. Dailey. I would answer yes, absolutely, and we have got
some pretty interesting examples, not just from private
industry, but as I referenced in my written testimony, King
County, in Washington State, had a diversion training program
for those that were coming out of incarceration. The county
trained them to work at these sites.
So we are getting creative with job creation specifically
not only working with the private industry, but also using some
of the resources that we have as well.
Mrs. Bustos. And, Mr. Philips, do you have anything to add
to that since you are more in the private end of things?
Mr. Philips. I would agree that environmental technicians
are in high demand and there are large companies out there that
we have hired a lot of their services to provide technical and
remediation support for the cleanups.
You know, you can analogize it to, you know, when you spot
some mildew in your house from a ventilation fan maybe not
keeping up with your shower exhaust and your steam. You can
hire somebody who can clean it up pretty quickly with some
bleach or you can hire a certified company to cordon off the
place and perform a fumigation, you know, all kinds of
remediation. The differences in cost are, you know, orders of
magnitude.
And I see there is sort of an analogy here with brownfield
cleanup, too, and that may be getting us a little bit off
course for what you guys were trying to look at right now for
this hearing, but I think that relates to the technician
question. Where do we need to focus? Where is the expertise
really needed, and how can we do that more inexpensively?
Mrs. Bustos. All right. Thank you.
Mayor Robertson, in your experience how has the Brownfields
Program interfaced with other community redevelopment programs,
such as the Rails to Trails or transit programs in your city?
We have seen some of that in, again, the community where I
live.
And could the Federal Government do more to encourage the
selection of projects that incorporate multiple redevelopment
design elements?
Ms. Robertson. Yes, absolutely, and thank you for pointing
that out because in addition to just taking the land and
creating economic opportunities, there is an opportunity to
take some of this land and create open space, create active
transportation opportunities. People can do walking and biking,
and so that is what the Rails to Trails Program has done, and I
am hoping that we can continue it.
I would like to just add one other item on the workforce
thing, which is just to say that one thing that I think we are
missing here on the workforce development and training that is
available for EPA is an opportunity for those skill sets to
bridge into other environmental areas.
And so I just wanted to point that out because we have used
the training program in the Superfund site, and we have been
able to employ, but the training program that the Brownfields
Program has, they have had a much higher success rate in terms
of placement, and those skills are transferrable into other
areas, such as water treatment, wastewater treatment.
And so we have lost sight of an opportunity where people
can, regardless of where they are coming from, begin to deal
with getting skills that can be transferrable in an area we are
going to continue to be in, and that is the environment.
So I just wanted to say that. I am sorry, but speaking to
the Rails to Trails and all of our open spaces, even within our
commercial areas we are finding better ways to incorporate the
open space, the Rails to Trails, but areas where people can
find solace. That is the best way to put it.
Mrs. Bustos. Thank you, Mayor Robertson.
And my time has expired. I yield back.
Mr. Graves of Louisiana. Thank you.
Next we are going to go to my friend from Florida, the
cowgirl from Florida, Ms. Wilson.
Ms. Wilson. Thank you so much, Chairman Graves and Ranking
Member Napolitano, for holding today's hearing.
The Brownfields Program is a proven catalyst for
redevelopment and revitalization that is truly, truly needed.
In fact, when I served as the principal of Skyway Elementary
School, I fought to prevent the creation which could ultimately
become a brownfield across the street from the school where a
composting plant had been built. The facility was polluting the
neighborhood and eroding the children's ability to focus and
learn.
My students and I mobilized the community and lobbied
school board and government officials until the $27 million
plant was shut down just 2 years after it had opened its doors.
It was quite a victory.
But there are remarkable brownfield success stories in the
heart of my congressional district. Thanks, in part, to the
Brownfields Program, a former railyard that was contaminated
with lead, arsenic, and petroleum was transformed into Midtown
Miami, a $1.2 billion mixed-use development that supports
nearly 2,000 jobs.
This project garnered national praise, including the
prestigious 2009 EPA Phoenix Award.
While I am very proud of the Midtown Miami success story, I
remain extremely concerned about the brownfield sites in my
district and across the Nation that have yet to be remediated.
Due to the current fiscal limitations and recent proposals by
the current administration to eliminate the program, I am very
worried about the future of the program.
With every Member of Congress having at least one
brownfield site in their district and the broad bipartisan
support, I am looking forward to working with my colleagues on
this committee to reauthorize and strengthen this critical
program.
And thanks to the panel for coming today. I appreciate your
testimony and I have learned a lot from just listening to you
and your responses.
I have a question for all of you. We have heard multiple
times today that for every $1 spent through the Brownfields
Program $17.50 is generated in economic return. Can you
describe for us how this economic return is generated? What
does this look like on the ground in the community that has
received the brownfields grant?
First come, first serve.
Mr. Bollwage. Congresswoman, thank you for the question.
I can only tell you that when we built the Jersey Gardens
Mall and I went out there one day and saw some of the young
people that were working there or a senior citizen and they
would come up and they would say, ``Mayor, I want to thank you
because this job opportunity gave me the ability to help my
granddaughter go to college,'' or if it was a high school
student, it gave that high school student the ability to save
money in order to get enough to go into college.
So the glee on someone's face when they have a job because
of the work of the city government and a developer is second to
none, and that is how I can tell you that you feel the effect
of the Brownfields Program when somebody says, ``Thank you.''
Ms. Wilson. Honorable Dailey?
Mr. Dailey. Congresswoman, it is great to see you, and I
have enjoyed working with you when you were at the State level
as well. I know you are very familiar with Tallahassee from
your great service in the State of Florida, and next time you
are in town, I would love to take you out on a stroll down
Gaines Street.
Ms. Wilson. OK.
Mr. Dailey. When I testified earlier about it, the whole
redevelopment, which I know you are very familiar with, the old
industrial side of Tallahassee which now has 3,000 new
residents, over $130 million of economic vitality with hotels
and pubs and restaurants and our local incubator program. I
think you will be absolutely amazed, and I think it will bring
it home because you know and are familiar with this area that
this is a great project to stand up and say, ``Job well done.
We worked together in partnership.''
Ms. Wilson. Honorable Zone.
Mr. Zone. Thank you, Madam Congresswoman.
In my district, there is an old abandoned battery factory.
It is called the Energizer Factory. It was owned by the
Energizer Company. We were able to use some assessment dollars
to do an analysis of that land.
Today on this 14-acre site, we are in the midst of a $150
million housing redevelopment project. So that initial small,
little investment of assessment dollars has leveraged the
private sector investing nearly $150 million in repurposing
land, along the rail spur, right along Lake Erie, next to our
fresh drinking water source.
Ms. Robertson. Yes, Member, if I could just chime in and
add as well that on one of our remedial grants that we used to
clean up, it was $136,000 that was used to clean up a site.
That site now is a site that is going to be home to a fire
station, a $9 million fire station, also with housing and
commercial.
We are anticipating there will be about $15 to $20 million
in a retail center and economic benefit and over 1,500 jobs.
And then back to Member Bustos' point about the Rails to
Trails, this is another area where we are not necessarily
looking at the economic benefit, but we are looking at the
trail and the cleanup there has caused us to have a connection
with six communities along a corridor that has brought us all
the way from the Los Angeles County line well into San
Bernardino County line.
So there are also economic benefits, and then there are
quality of life benefits.
Ms. Wilson. Thank you.
Mr. Graves of Louisiana. Thank you. I appreciate the
gentlewoman from Florida.
Next we are going to go to the vice chair of this
subcommittee. The gentleman from Florida, Mr. Mast.
Mr. Mast. Thank you, Chairman.
You know, I actually just recently used Florida's
Department of Environmental Protection for Brownfields
GeoViewer and to explore some of the brownfield sites in my
congressional district. There were not very many, only a
handful, but I am very thankful that that kind of technology
exists. I think everybody up here should have the opportunity
to view that and see that, and hopefully I think we all want to
see the number of these actually drop down to zero.
Now, from what I have heard, this program is a pretty fine
example of the way Federal Government programs ought to work. I
think they should probably be mirrored. You know, the Federal
Government should not necessarily be involved in doing
everything at the State and local level that they can handle on
their own down there, but you know, provide support where need
be, you know, and even in circumstances where the Federal
Government may get involved should probably be very careful not
to sideline State and local partners, you know, really allow
the State and the locality to take full ownership of the
problems that are faced that were developed in those areas, and
I think unfortunately that is where Washington gets into
trouble, is when Washington takes full ownership of these
programs.
So in that, Mr. Dailey, I would like to ask you a question
if you do not mind. You know, when it comes to what they did in
Leon County with the Cascades Park, I think it is interesting
to turn the brownfields into public parks. I think that is
certainly one of the decent ideas that is out there and also
have it function as a stormwater management area. That is a
good marrying of what you can do in there.
My community is pretty conscientious of pollutants entering
into our waterway. We have water from Lake Okeechobee that
comes into the Indian River Lagoon in my area, and so we are
pretty in tune with that.
So I am interested to know from you what kind of
monitoring, what kind of assessment has been done after the
cleanup to essentially ensure that there was not anything
leaching out and things were not washing downstream, what goes
on after, and then maybe even follow up beyond that and state
has the EPA been of good assistance in providing technical
support after everything has been said and done, or are you
getting that support downstream that you need?
Mr. Dailey. Congressman, first of all, thank you for the
question and the opportunity to respond.
I can tell you when it comes to Cascades Park, and you
being a Floridian understand the importance of Cascades Park to
our history where St. Augustine and Pensacola met halfway to
form the government of the State of Florida, it has always been
very important to us.
But obviously, over the years we did not necessarily take
enough care of it on the local level and had to move forward
with the redevelopment of it.
I can tell you that I will need to follow up with the
specific details on the environmental remediation and continue
monitoring. However, I can tell you that it is a national award
winning park and stormwater facility, not only based on the
design in the flow of the work, but also based on our
environmental record as well for maintaining that facility and
being able to move forward.
But you are absolutely correct that first and foremost it
is a nationally award winning stormwater facility. When the
hurricane came through Tallahassee back in September, knock on
wood, it worked beautifully. It is built to flood and then draw
down immediately. It just also happens to be a beautiful park.
I will be more than happy to follow up with your office
with the intimate details, but, yes, as far as I know, we have
not had any problems with the EPA in partnership with the
monitoring moving forward. They have been good partners for us.
Mr. Mast. That would be outstanding, yes, if you could
certainly get back to me or this committee and let us know, you
know, what is being done going forward. If there is further
support needed or something that needs to be addressed to
ensure that this continues to be sustainable in that way, I
hope you will let us know.
And I yield back, Chairman.
Mr. Graves of Louisiana. Thank you.
I am going to go the second round. Mrs. Napolitano, ranking
member.
Mrs. Napolitano. Very quickly, I just want to take one last
swipe at this.
In the last Congress, this subcommittee held a similar
hearing for the reauthorization of Brownfields Program. There
were questions on the potential Superfund liability for local
governments that acquire brownfields property that were also
raised.
In response to the question, for the record, EPA testified
that section 101(20)(d) of Superfund law provides a specific
statutory exemption for properties involuntarily acquired by
local governments through bankruptcy, tax delinquency,
abandonment or other circumstances in which the government
involuntarily acquires title by virtue of its function as a
sovereign.
I ask unanimous consent that the four different documents
on EPA, CERCLA liability and local government acquisition and
other activities, be made part of the record.
Mr. Graves of Louisiana. Without objection.
[Three of the four documents can be found on pages 118-141. The 74-
page ``FY17 Guidelines for Brownfields Assessment Grants'' published by
the U.S. Environmental Protection Agency can be found online at https:/
/www.epa.gov/sites/production/files/2016-10/documents/epa-olem-oblr-16-
08.pdf, as noted in the table of contents.]
Mrs. Napolitano. There you go.
For properties that are acquired by local government
voluntarily, the Superfund law treats these parties the same as
any other bona fide prospective purchaser and requires the same
level of due care with respect to hazardous substances at the
property.
Since the statute seems pretty clear on this and provides a
pathway for local governments to redevelop properties acquired
both voluntarily and involuntarily, how would you have the
proposed changes for municipal liability differ?
Mr. Bollwage. Congresswoman, on those exemptions there is
eminent domain and tax liens. The exemptions are not covered.
So if we are going to change it, we would want to make sure
that municipalities and/or counties that go through an eminent
domain process or acquire the property through tax liens, that
the exemption is in place.
Mrs. Napolitano. Anybody else?
Mr. Zone. I would just add that, you know, a lot of the
properties that my colleagues around this country have acquired
through involuntary actions have become voluntary. Working with
the State EPA and the Federal EPA saying this has become a
hazard on our community and we need to step in to remediate it,
working every step of the way, having that indemnification and
working with the Environmental Protection Agency to support
that local government would be highly important.
Mrs. Napolitano. That is it.
Well, then if it is voluntary, would there be a different
way of looking at it?
Mr. Zone. Well, I would just say, Congresswoman Napolitano,
even properties that we acquire through tax delinquencies, one
of the examples that has been often cited in the law and often
presumed to be protected may not necessarily be exempt if local
governments took it affirmatively or voluntarily through that
tax delinquency process. That is always a risk to local
government, and one of the reasons or the impediment to
cleaning up that property as well.
Mrs. Napolitano. All right. Well, the EPA guidance includes
a third party lender liability and the low-risk petroleum
sites. So that would be part of the record to show that this is
covered.
Thank you, Mr. Chairman.
Mr. Graves of Louisiana. Thank you.
I just wanted two issues to try and finish up here. Number
one, Councilmember Zone and a few others have talked about
helping to address liability issues for local and State
governments and whether it be through voluntary or involuntary
acquisition.
I just want to get your thoughts, Councilmember Zone, on, I
guess, relegating that liability protection to public entities
or should that also carry over to private entities that choose
to come participate and clean up, but perhaps had nothing to do
with the actual contamination. These are folks who, again, have
chosen to come in and help clean up blighted properties or try
and recondition these properties back to economy development.
Mr. Zone. Often remediating a brownfield there is usually a
private-sector developer that is waiting to partner with that
local government and come in and do that.
It is risky. We do not want to. When I say ``we''
collectively, on behalf of cities, we were not necessarily the
original polluters of that property, and letting that sit
fallow, as the mayor has said several times here, presents a
challenge.
We need to create the conditions to allow the private
sector to come in. I am certainly open to having the expansion
to private-sector developers, working closely with our State
EPAs to make sure that all the rules are regulations are
complied with.
Mr. Graves of Louisiana. Thank you.
Other folks care to comment on that?
Mr. Bollwage. He said it best.
Mr. Graves of Louisiana. Thank you, Mr. Mayor.
Next, Mr. Philips, I am very curious. Ranking Member
Napolitano and myself, we have talked about concerns expressed
with decreased public resources available for investment into
brownfield properties, and we talk about some of the objectives
that I think we share.
You talked about a model whereby some properties are
actually ripe for private investment. Could you just talk
perhaps about some of the characteristics, number one?
Number two, just based upon your personal experiences, what
percentage of properties perhaps do you think are actually ripe
for private investment?
And I understand in your testimony you cite the downturn in
the economy and economic activity, real estate activity, back
in the 2008-2009 timeframe, but I am just curious if you could
talk a little bit on that and basically just the role you see
the public sector playing versus the private sector in some of
this redevelopment.
Mr. Philips. Sure. I think the answer to the question as to
how many sites are ripe for redevelopment without much public
involvement, at least without public resources, is one that
fluctuates greatly depending upon the local, and even national,
real estate markets.
And, I think one of the things we talk about is public
resources. You know, for us, one of the biggest, most important
elements of a transaction, particularly the larger
transactions, is not necessarily the cleanup assistance
specifically, but is more associated with maybe a tax increment
financing associated with the future activities that are going
to happen on that site. And, if people can buy into what is
going to happen there and the tax revenues that are going to be
generated from that activity, then the markets can say, ``We
are going to float a bond,'' and then the bond can help front
end some of that more costly remediation associated with that
site.
A similar example might be the entitlements that I had
mentioned earlier, particularly in urban areas. You can take a
city like Portland, Oregon, with an urban growth boundary. I
mean, there are very constricted views as to what can be done
on those sites, and maybe brownfields should receive special
considerations, essentially, in exchange for a certain amount
of cleanup and/or for a certain amount of extra entitlements.
That is something that we look at quite a bit.
Another piece is taxation. Institutional investors, at
least a big pool of them, are not-for-profit. Essentially, they
are structured such that they are only subject to unrelated
business income taxation.
And there is a piece of legislation that I mentioned that
also exempts for qualified brownfield redevelopments the gain
on those developments from incurring unrelated business income
tax. Something, perhaps, could be offered for the taxable
entity, as well. For the unrelated business income tax, that
was sort of the low-hanging fruit, and what that is what we
targeted then.
Mr. Graves of Louisiana. Thank you, thank you.
If there are no further questions, I would like to thank
our witnesses for being here today. I appreciate all of your
testimony. This has been very informative and helpful, and I
just want to reiterate that there may be additional questions
submitted to you for response in writing for the record for the
hearing.
And if no one has anything else to add, then the hearing is
adjourned. Thank you.
[Whereupon, at 12:04 p.m., the subcommittee was adjourned.]
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