[CPEO-BIF] Re: Brownfields Digest, Vol 34, Issue 25

["Peter B Meyer" <pbmeyer@louisville.edu>]

I'm going to jump in on the Michigan issue since it relates to the whole issue of targeting subsidies, a topic of a great deal of interest to me.

There are a lot of economic and social issues facing depressed cities and communities in addition to contamination, including abandonment and underutilization. Such settings generally need outside help if they are to regenerate. This is a fact that I doubt is controversial.

There also are brownfields in real estate markets that are so hot that there is little, if any, need to provide any public support (other than regulatory clarity and consistency) to get them remediated and reused. The New York state brownfields program has been criticized for wasting money on such settings, and is undergoing some revisions, for that and other reasons (as has been evidenced in earlier postings to this liostserv).

It is not clear to me whether or not the Michigan program has similar failings, though I suspect it is comparably flawed.  What IS clear from earlier listserv postings is that (a) the state fund is virtually depleted, (b) it was spent in part (wasted) on grants that probably should have been loans (Evans Paull's last comment) -- and might even have been wasted in settings in which no support was needed to overcome non-contamination barriers to incentives, and (c) the case that started this discussion involved "functionally obsolete" student housing -- for which there was demand, since the students are still ther and it is just being replaced, and which was not clearly abandoned nor in a depressed real estate market.

The specific student housing case in Mount Pleasant, in fact, does not appear to qualify for support on either Evans' or Joe Schilling's criteria for aid; it also was not a site with contamination problems, at least not as described.

But the key question is whether BROWNFIELD funds should be used for abandoned or underutilized properties that do not have a contamination problem.  Given the legal constraints under which EPA operates, federal funds should not be used for such projects -- and there is a risk to any state that wastes its brownfield monies on such projects that the funds involved include some federally-funded state records keeping or other program management support under the 2002 Act's funding to states, if not direct transfers of federal subsidy dollars. (I do not discount the possibility that, despite the language of the 2002 Brownfields Act, many of the applications for grants are actually for projects of the type that Joe and Evans would approve ... and I suspect that some have been so well pitched as brownfields in need that they have gotten funds when the key site problems were not environmental, despite the best proposal review efforts of the Office of Brownfields Cleanup and Redevelopment.)

Like it or not, the funds for what I would characterize as neighborhood or urban regeneration are stovepiped legislatively to different functions. Monies appropriated in a stovepipe designated for any one function (such as dealing with brownfields) that get spent on other problems (such as functional obsolescence of buildings, infrastructure or the like) deplete the dollars available for the function for which they were appropriated. 

Larry Schnapf's desciption of the Petoskey Pointe project in Michigan underscores this argument. The developer will, apparently, end up with $4.5 million in tax credits, plus $450,000 for remediation cost reimbursement. The project will produce 115 jobs, it is true, but the subsidy for each of those jobs will be in excess of $43,000.  The subsidy may or may not be needed to "create" those jobs -- and, of course, the claimed "new" jobs may simply be relocating from elsewhere. However, the real issue is what cleanups of dangerous sites with heavy contamination problems the $4.5 million in tax credits could have supported and will not continue to expose people and ecosystems until job creation funds are diverted to brownfields.

I would advise anyone hoping for such an unlikely event not to hold his or her breath -- especially since the brownfield tax credits in Michigan, as is the case with brownfield funds in many other states,  are allocated to projects by the Michigan Economic Development Corporation.  That's Economic, not Environmental development ...

The "novel definition" in Michigan thus tends to deprive true brownfield properties with real or perceived contamination of what we all know to be very limited funding.

Given this conclusion, I wonder if Joe and Evans might want to reconsider their support for it. I know I do not want to see brownfield funds diverted in this manner.

Peter 

Peter B. Meyer
Professor Emeritus of Urban Policy and Economics
Director, Center for Environmental Policy & Management
University of Louisville
WEB:  <http://cepm.louisville.edu>
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Director of Applied Research
Center for Public Leadership and Public  Affairs
Northern Kentucky University
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3205 Huntersridge Lane
Taylor Mill, KY 41015
502-45-3240 (cell)

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