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Full text of "The Abandoned Land Reuse Act of 1993, S. 299 : hearing before the Committee on Banking, Housing, and Urban Affairs, United States Senate, One Hundred Third Congress, first session, on S. 299, to amend the Housing and Community Development Act of 1974 to establish a program to demonstrate the benefits and feasibility of redeveloping or reusing abandoned or substantially underutilized land in economically and socially distressed communities, and for other purposes, May 5, 1993"

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Y ^.62Si/3--SHR6./^3-/5y 

S. Him. lOS-lM 


HEAEING p,o.8i 










Printed for the use of the Commitlee on Banking, Housing, and Urban AfTain 

Fot ule by the U.S. Gavemmeni Phnili 
SuperinlendenI of Documents, Congressional Sales Office, 
ISBN 0-16-041478-4 

..d by Google 

5. Hkg. 103-1S9 


HEARING ,,0.81 








MAY 6, 1993 

Printed for the use of the Conunittee on Banking, Housing, and Urban Affairs 


^■PM C ^h:'--az 


DONALD W. RIEGLE, JR., Mkhigui, Chairman 




lOtW P. KERRY, Masuchiuetta LAUCH FAIRCLOTH, North CBTolina 


BARBARA BOXER, CaliTaniia WILLIAM V. ROTH, Jr., Delaware 

PATTY MURRAY, Waihiiiston 

SlEVEH B. HaKBIS, Staff Director and Chief Cmmtel 

Howard A. Mbnell, Republican Staff Dinctor 

F. Clkhent Dmsuorb, Coiauel 

TlHOnnr P. MITCHBLL, Profiisional Staff Membtr 

Raymond Natter, Republican Gtneml Counsel 

Laura S. IA«geh, Pnfettional Staff Member 

Edward M. Malan, EdUor 


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Opening statement of Chairman Riegle . 

Prepared statement .. 

Senator D'Amato .. 

Prepared statement .. 

reuired : 
Senator Moseley-Braun .. 

Prepared statement .. 
Senator Do dd 

Prepared statement .. 

Senator Domeniei 

Senator Bennett 

Senator Lautenberg 

Grefloiy Pitoniak, Michigan House of Representatives, Lansing. HI . 
Prepared statement .. 

wnse to issues raised l^ the committee 48 

House Democratic Economic Reinvestment Strategy .. 
Response to written questions of: 

Senator Rkgle 

Senator Boxer .. 

Timothy RS. Kenney, Edward Paricer, Connecticut Department of Em 

mental Protection, Hartford, CT 

Prepared statement 

Introduction .. 

Connecticut's experience at uil>an site remediation .. 

Comments on S. 299 

Response to written questions of: 

Senator Riegle 

Senator Boxer ., 

Ted Wysoclii, Chicago Aaaociation of Neighboriiood Development Organiza- 
tions and Coalition for Low-Income Community Development, Chicago, IL .. 
Prepared statement .. 

Response to written questions of: 

Senator Riegle 

Senator fioxer ., 

Salvatore Scotto, Gowanua Canal Community Development Corporation, 

Brooklyn, NY 16 

Prepared statement 63 

Re^nse to written queatlona of Senators Riegle and Boxer 81-143 

Sandy McColhim, Director of Economic Development for Southeast Commu- 
nity Oiganization, Baltimore, MD 25 

Prepared statement 66 

Resix>nBe to written questions of: 

Senator Riegle 141 

Senator Boxer 142 

Charles Peny, president. Environmental Warranty 30 

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ADDnioNAL Hatbrial Suppubd fob thb Record 

Summaiy of S. 299 

Natioasl AHOciatioa for the Advaocemeat of Colored People 

Introduction of Satvatore Scotto by Repreaentative Edolpnus Towns 

ChlcMO Sun-Timea, uticle dated Much 14, 1993. entitled The Building 


National Congress for Community Ecosomic Development 

Gowajiua Canal Community Development Corporuion, additional comment* 

The Brootkn Paper 

Asaociation of State and Territorial Solid Waste Management OfBdals 

New York Times article dated April 5, 1993 entitled "Connecticut Sedca 

a Return of Jobs as Well as Nature" _ 

Environment & Lending, magazine aitide enUUed Transaction Gnase Can 

Eaae liability," April 1993 _ 

National Asaociation of Counties _.~_~ ~.~ „ 

s. 299 ; 

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ADnmoNAL Hatvbul Supplied for thk Rbcord 

SnmownorS. 299 ™ _ 

MatJonafAiwnriiitioa far the Advancement of Cobred People 

~ mtto by Repreaeatative Edolphua Towns „ 

i dated March 14, 1993, enUtled The Building 

lite BraoUyn hper .. 

a Bebm of Job. a* Wen a> Natm^ .. 

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OF 1993— S. 299 


U.S. Senate, 
Committee on Banking, Housing, and Urban Affairs, 

Washington. DC. 
The committee met at 10:06 a.m. in room SD-638 of the Dirksen 
Senate Office Building, Senator Donald W. Riegle, Jr. (chairman of 
the committee) presiding. 


The Chairman. The committee will come to order. Let me wel- 
come all those in attendance this morning. 

Before we be^ today's hearing, I would note for the record that 
the committee is voting favorably on reporting the nomination of 
Rt^erta Achtenberg and Nicholas Retsinas to be Assistant Sec- 
retaries of Housing and Urban Development. The period for voting 
will begin now. If a quorum of members arrive to cast their votes 
during the hearing, the nominations will be reported to the full 
Senate later today. 

So I want to be recorded in the affirmative on both and I will 
have the clerk also ask Senator Campbell for 

Senator Bond. I have asked to be recorded voting aye on both 
too, Mr. Chairman. 

The Chairman. Thank you, Senator Bond. I will make a brief 
opening statement and then I will call on my colleagues for opening 
comments that they wish to make. 

It is a very important hearing this morning. We are here to con- 
sider S. 299, the Abandoned L^d Reuse Act, that I introduced on 
February 3, 1993, with my colleagues Senators Dodd, Boxer, 
Moselev-Braun, Senator Jeffords, who is here and I will call on in 
a bit. Senator Levin, and Senator Simon. And I am anticipating in- 
troduction of a companion bill in the House of Representatives very 

This le^slation addresses the need to recycle abandoned indus- 
trial and commercial facility sites across the countrv. The trans- 
formation of the American economy from an industrial— from heavy 
industiial production in certain instances — to commercial service 
activiW has caused many casualties. Trade patterns have also had 
an influence. Hundreds of communities have lost jobs and have 
seen their tax base severely eroded. 

As old plants have been shut down and either moved away or 

torn down, there are hundreds of communities with either now idle 

plants or idle plant sites with conditions that require cleanup and 


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which also present very difficult liability risks that deter new in- 
vestors and lenders from providing the capital needed to bring this 
land back into use with new activity. 

Michigan, of course, as the center of the country's automobile in- 
dustry and a major producer of furniture, paper, wood products, 
chemicals, and pnarmaceuticals, has communities and sites like 
this throughout our State, but it is a common problem in the coun- 
try. In fact, Michigan and other States are also considering legisla- 
tion to respond directly to this serious problem. 

The consequences of continued abandonment of formerly useful 
industrial plant and commercial facility sites and buildings include 
the following: 

Limitations on the availability of credit for enterprises, especially 
small businesses, that are prepared otherwise to put these sites 
and facilities back into use; 

Undenitilization of both public and private infrastructure al- 
ready in place that serves these sites; 

Increasing tax and utility fee burdens on residents that impair 
their ability to pav for other basic expenses, because the tax base 
is impaired and, therefore, a larger share of tax spills over on oth- 

Continued deterioration in the financial condition of local com- 
munities which in turn undermines their ability to afford the costs 
of complying with Federal mandates, and often pressures them into 
looking to the State and Federal governments for increased help 
and assistance; 

And, also, the inability to recycle these sites now creates a push 
to go out and many times use prime agricultural land in suburban 
and rural areas and bring that into new development, as opposed 
to reusing the land alreac^ available, if this problem can be solved. 

So, I think it's clear that a national strategy to revive our econ- 
omy and revitalize our distressed communities must address the 
need to recycle these abandoned industrial and commercial facili- 
ties. We have asked each of the witnesses today to address the fol- 
lowing questions: 

What are the potential benefits of the Abandoned Land Reuse 
Act? How can we maximize the leverage of non-Federal investment 
with the grant assistance that we provide? And what changes in 
the legislation and related initiatives will be helpful? 

Our witnesses today are: Greg Pitoniak, who is here from Michi- 

tan. I am very pleased that he is. He serves as chairman of the 
Iconomic Development Committee of the Michigan State House of 
Representatives. Mr. Edward Parker for the Connecticut Depart- 
ment of Environmental Protection; Mr. Ted Wysocki, who is the ex- 
ecutive director of the Chicago Association of Neighborhood Devel- 
opment Organizations; Mr. Salvatore Scotto, who is the president 
of the Gowanus Canal Community Development Corporation of 
Brooklyn, New York; and, Sandy McCollum, director of Economic 
Development for South East Community Organization in Balti- 
more. So, we have a very good panel of expert witnesses. 

Before we get to them, 1 especially want to welcome our Senate 
colleague. Senator Jeffords, from Vermont, who is also serving as 
co-chair of the Northeast-Midwest Senate Coalition. And Senator 
Jeffords has come forward and we are working together on this ef- 

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fort to address the need to recycle these former industrial and com- 
mercial sites. I appreciate his leadership and his co-sponsorship 
and authorship in this area, and 1 am delighted he is here. We 
would like to hear from you now. 

Well, before we go ahead, let me see if other members have open- 
ing statements. 

Senator Campbell. I have no opening statement, Mr. Chairman. 

Senator BENNETT. No, thank you, Mr. Chairman. 

The Chairhan. Senator Jeffords, again, welcome. 


Senator Jeffords. Mr. Chairman, I can't tell you how pleased I 
am to be here at this hearing. I think it is a very important one 
for the coimtry and especially for our re^on. 

As you have already mentioned, this is the Abandoned Land 
Reuse Act of 1993. The purpose of S. 299 is to promote the remedi- 
ation and reuse of abandoned manufacturing facilities. The prem- 
ises underlying the bill are these: First, substantial private and 
public capital nas been invested in these sites already. Second, 
these sites have infrastructure — water, gas, utilities, rail sidings, 
and the like — already in place. Third, these sites, if left abandoned, 
may pose threats to human health and the environment due to con- 
tamination. Fourth, they certainly contribute to the blight and de- 
terioration of surrounding communities. Fifth, it makes more sense 
to redevelop these so-called brown fteld sites than to encourage 
urban sprawl and the destruction of the so-called green Held sites, 
our agricultural lands and open spaces. And sixth, the redevelop- 
ment of these sites will offer important job, economic development, 
and tax-base benefits to distressed local communities. 

S. 299 represents a sort of a bottle bill ethic of recycling and 
reusing rather than abandoning and discarding. 

S. 299 builds upon the pioneering work of the Northeast-Midwest 
Institute in exploring the extent of the problem and possible solu- 
tions. The problem is certainly concentrated in the Northeast-Mid- 
west region, our Nation's industrial heartland. We have abandoned 
machine tool shops up and down Precision Valley in my state of 
Vermont We have shuttered steel mills in Pennsylvania's 
Monongahela Valley, empty automobile assembly facilities, metal 
plating factories, and chemical plants throughout Michigan and the 
rest of the midwest. 

Shifts in America's industrial base from predominantly heavy 
manufacturing to light manufacturing, dependency on just-in-time 
specialty production and distribution, and increasing reliance on 
highways rather than railroads and waterways have rendered 
many of these manufacturing sites underutilized or even obsolete. 
But the problem, while concentrated in our region, is truly national 
in scope. Southern towns have empty textile mills. Western towns 
have ^andoned mining and ore processing facilities. 

S. 299, which amends the Housing and Community Development 
Act of 1974, authorizes $100 million annually for fiscal years 1994, 
1995, and 1996 for a nationwide site reuse demonstration program. 
The bill authorizes the Secretary of Housing and Urban Develop- 
ment to select sites for assistance on a state-by-state basis, or to 

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delegate site selection and related funding to States' governors 
where appropriate. 

Federal grants can cover up to 75 percent of the cost of an ap- 
proved site remediation and reuse plan. Grantees — general purpose 
local governments and non-profit community development organi- 
zations — are required to pay a minimum of 25 percent of the cost. 
Non-Federal third parties may help grantees satisfy this require- 
ment through financial assistance or in-kind contributions. The bill 
contains avoidance of windfall and grant recapturing provisions. 

Federal facilities and national priority list NPL— "Superfiind" — 
sites are excluded. 

Criteria for site and plan selection include the following: The 
project must be economically viable, that is, benefits must exceed 
costs. The project must leverage significant non-Federal invest- 
ment. The site must be located in areas of economic and social dis- 
tress. And the project must offer local job training and employment 

Several States are moving ahead with their own programs, which 
is to be commended and encouraged. But States, local governments, 
non-profits, and the private sector cannot tackle this problem with- 
out Federal assistance. Our bill takes a first step toward providing 
this kind of assistance. 

Mr. Chairman, abandoned manufacturing facilities represent an 
enormous waste of physical resources and capital. Their remedi- 
ation poses a daunting challenge. 

Entities traditionally antagonistic toward one another will have 
to work together to meet the challenge. We need to address com- 
plicated liability concerns. We need to consider creative measures 
such as covenants not to sue, environmental receivership, environ- 
mental warranties, tax increment financing, standardized and ex- 
pedited processes for voluntary cleanups, and tiered cleanup stand- 

It will be difficult to achieve nationwide remediation and reuse, 
but the costs of not making the effort in financial, fiscal, and 
human terms are too great to bear. S. 299 is an important piece 
of l^slation, Mr. Chairman. I commend you for its introduction 
and look forward to working with you to make sure it becomes im- 

Thank you. 

The Chairman. Senator Jeffords, let me just say I veij- much ap- 
preciate your efforts on this legislation. And the fact tnat we can 
do this on a bipartisan basis, 1 think this is precisely the kind of 
an issue that is very much in the national interest. And it's the 
kind of thing, if we don't take a step like this to break the inertia 
in the existing pattern, we're going to find more and more key sites 
locked up and locked out of production with all of the attendant 
bad effects that we have both described here this morning. 

I think this is a good example of a partnership approach between 
the Federal Government, State governments and private interests 
who see opportunities to take and bring these facilities and these 
sites back into the economic mainstream. I think the sooner we do 
this, the better off we're going to be as a Nation. 

And so I am hopeful, too, that as our colleagues in the Senate 
have a chance now to study the hearing recora Uiat we will build 

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today and to examine this, that we will get very strong bipartisan 
support for this. But. again, I appreciate your leadership. 

Senator lyAinato nas joined us. Did vou have an opening com- 
ment, Senator D'Amato, that you wanted to make? 


Senator D'Amato. I want to commend you and Senator JefTords 
for your work in this area. I think there are issues on this bill that 
maybe we will have to work out, but certainly it is movement in 
Uie right direction. I know that we have a number of people from 
New York on the panel that are going to be testifying on behalf of 
the Gowanus Canal Communi^ Development Corporation in 
Brooklyn where they have had an incredible problem. And this 
group nas made a very real commitment to the cleanup luid rede- 
velopment of this area. They're bringing back jobs and creating an 
opportunity for people to live in a good environment. 

So I am especially interested in their comments. But I first want 
to commend you for calling this hearing. 

I would hope that, Mr. ChairmEin, we would have the opportunity 
to do something by passing the lender liability legislation that has 
passed the Senate twice before and maybe make sure this time we 
pet that passed, because that's another area that I think will make 
it possible for us to deal with some of these abandoned sites and 
also free up capital and make it again, once again, opportune and 
attractive for banks to make money available, which they are not 
doing because of uncertainties about their environmental liability. 
I think both of these initiatives make a lot of sense. 

The Chairman, Senator Campbell or Senator Bennett, any ques- 
tions for Senator JefTords? 

[No response.] 

The Chairman. If not, let me thank you again for coming and we 
will continue to work on this and we appreciate your appearance 
this morning. 

Let me now call, if I may, our other panel of witnesses forward. 
We've got name ta^s up here, if you want to come forward at this 
time, we'd be pleased to have you do so. Let me welcome you all. 

As you're getting seated, I want to place in the record a very 
strong supportive letter that we've received from the Association of 
State and Territorial Solid Waste Management Officials, in which 
they endorse this legislation, feel it's very important to reclaiming 
these sites, and which I think will help us in our efforts to move 
this legislation. 

So without objection, we will make that a part of the record. 

And also, before we go any fiirther. Senator Moseley-Braun, did 
you have an opening comment you wanted to make before we go 
to the witnesses here? 


Senator Moseley-Bhaun. Thank you, Mr. Chairman. 

Actually, I would like to file for the record my opening statement 
and not make it, except to welcome the panel. This is important 
l«islation. I have had experience over the years with Mr. Wysocki, 
wno is from Chicago, and good work that CANDO has done in our 
community. And so I just want to congratulate them for continuing 

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to press forward in this area and commend them for doing the good 
work that they have done so far. 

The Chairman. Without objection. And let me say, your cospon- 
sorship of this legislation is also a very important part of the push 
it's receiving and I thank you for that. 

Let me start by introducing Mr. Greg Pitoniak. And if I may just 
take a moment, we have a personal and professional relationship 
that stretches back over meiny years. I want to just acknowled^ 
the leadership that he is giving in the State of Michigan and has 
for some time in the economic development area. I think he's one 
of the most creative thinkers that we have in this area in our 
State. I am very grateful as a citizen of Michigan for the leadership 
that he gives. 

And so we welcome you here today. I am going to have you pull 
that mike a little closer, so people can hear you. You can bend it 
up and down, whatever s convenient. We'll make your full state- 
ment a part of the record. I say that to the other witnesses as well. 
We'd like to have your summary comments, so we have some time 
left for questions. 

Representative Pitoniak, well start with you. 


Representative Pitoniak. Thank you, Mr. Chairman, and espe- 
cially for those kind remarks and for the opportunity to address 
this committee on S. 299, the Abandoned Land Reuse Act of 1993. 

As Chairman of the Economic Development Committee of the 
Michigan House of Representatives, I am acutely aware of the need 
for cooperation among Federal, State, and local governments in 
order to promote models for timely redevelopment of abandoned, 
underutilized, or contaminated commercial and industrial sites. 

Let me briefly review Michigan's situation and give you an in> 
sie^it of how important this legislation is to us. 

Each year, pursuant to the Michigan Environmental Response 
Act, or MERA, a list is prepared of Michigan sites of environmental 
contamination, which identifies environmental contamination loca- 
tions and ranks these sites according to a scoring system that re- 
flects the sites' risk to public health and the environment. The fis- 
cal year 1994 list was just released and identifies 8,757 sites in the 
State of Michigan. There are 83 counties in Michigan and every 
one of these counties has a site of environmental contamination, 
and we average over 100 such sites in each of the counties. 

As defined Dy MERA, environmental contamination means the 
release of hazardous simstance or the potential release of a dis- 
carded hazardous substance in a quantity which is or may become 
injurious to the environment or the public health, safety, or wel- 

Of the over 8,000 sites, over 1,000 are listed as inactive. And 
these inactive sites are defined as sites where a remedial action 
plan has not been approved by the Michigan Department of Natu- 
ral Resources. Every one of our counties has one of these inactive 

Examples of communities which contained abandoned, 
underutihzed, or inactive contaminated sites and are facing severe 

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economic and social distress are located in each of Michigan's three 
DNR re^ons as detailed in my prepared text for toda/s hearing. 
In Michigan, we like to refer to our state as the "Water Winter 
Wonderland." But the abundance of rivers and lakes has also cre- 
ated swamp areas that were once tempting locations for dumping 
industrial nil materials like fly ash, which contain high levels m 

MichigEin has at the State level undertaken some efforts that at- 
tempt to deal with this problem. Let me briefly outline some of our 

Under Public Acts 233 and 234, adopted in 1990, it provides an 
environmental enforcement mechanism and settlement process for 
Michigan. With this legislation, the State is able to more success- 
fully pursue the responsible parties for their share of the cleanup 
costs. These acts set up a mechanism which will increase voluntary 
settlements and decrease the amount of money spent on litigation 
costs. These acts outline the basic enforcement tools of the State 
and liability provisions for contaminated sites. They also outline an 
allocation process which can be used for negotiating a settlement 
re^rding responsibility for cleanup costs. 

These public acts were designed to be a polluters pay policy and 
encourage settlements. The allocation process gives parties an ave- 
nue to avoid joint and several liability through agreement on reme- 
dial action and cleanup procedures. 

Another program in Michigan is known as the site reclamation 

grogram. And this program acknowledges that throughout tiie 
tate of Michigan there is an alarming trend in the growth of older 
towns and cities. As people move away from cities and into the sur- 
rounding suburbs, industry follows. This shift of job centers from 
cities to outlying communities leaves abandonee! industrial and 
manufacturing facilities idle while green spaces and wetlands are 
lost to new development. 

In November 1988, Michigan voters improved an $800 million 
environmental protection bond. Of that bond, $425 million was tar- 

feted toward cleanup and reclamation of sites contaminated with 
azardous substances. The goal of the site reclamation program is 
to facilitate environmental cleanups and promote reuse of contami- 
nated sites. 

And finally at the State level, just last week, a legislative pack- 
age was presented to address the recommendations from a citizens' 
advisory group aimed at encouraging private investment in older 
towns and cities without sacrificing environmental protection and 
public health. The legislation would provide increased incentives 
for lenders to provide loans to businesses for redevelopment of con- 
taminated urban sites, increase liability protection to lenders in 
order to encourage the marketing of contaminated property afler 
foreclosure, expand the kinds of commercial lenders that will re- 
ceive the protection to include large insurance companies and other 
institutions, allow a governmental agency to transfer its liability 
exemption on contaminated property to new owners as certain con- 
ditions are met, and to clarify the process for compensating an 
owner for contaminated property that is condemned. 

I was asked to respond to some specific issues raised by the com- 
mittee and let me do that now. 

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I believe S. 299 will provide local governments on a demonstra- 
tion basis signifiCEint financial tools to reclaim, rehabilitate, and 
eventually reuse abandoned or underutilized commercial and in* 
dustrial sites in communities plagued by social and economic dis* 
tress. This l^slation would allow local government officials to take 
control of their community's destiny by aggressively spearheading 
efforts to restore parcels of property with economic redevelopment 
potential with the goal of making tnose parcels attractive to inves- 
tors and developers. 

The thrust of the bill is empowering local officials to directly at- 
tack the financial impediments they face in rebuilding their com- 

Other benefits of S. 299 include promoting the utilization of ex- 
isting infrastructure. Instead of abandoning our older towns and 
cities in favor of urban sprawl, we must place a priority on redevel- 
oping areas that already have roads, sewers, and other public im- 

In addition, S. 299 would promote spinoff economic activity. Once 
a site has been selected and redeveloped, its reuse could spur eco- 
nomic development in the immediate vicinity. For example, under 
one Michigan program, we funded the reopening of an old snipping 
canal throu^ cleanup activities including excavation of the con- 
taminated fill materials in the canal. The resulting economic bene- 
fit was the establishment of commercial businesses, offices, retail, 
and restaurants in buildings near the canal. 

Also, S. 299 would encourage an area-wide approach to the prob- 
lem. Currently, our State reclamation program in Michigan pro- 
vides grants and loans to encourage redevelopment of specific sites, 
but area-wide incentives are needed to create a more comprehen- 
sive redevelopment program. Instead of reclamation on a site-by- 
site basis, under S. 299, planned programs for a varietv of new eco- 
nomic developments comd be encouraged for multiple properties 
encompassing meiny blocks or several square miles within local 

What about the feasibility of S. 299? Without exception^ from the 
largest city to the smallest village in Michigan, communities have 
become warehouses for abandoned and underutilized parcels of 
commercial and industrial property. For a variety of complex, inter- 
related reasons, commercial and industrial enterprises have en- 
gaged in a steady exodus from our State's more established towns 
and cities to green field sites in distant suburban commimities. The 
job-seeking population has followed, leaving behind thousands of 
attractive commercial and industrial sites served by superb infra- 
structure that could be rehabilitated and redeveloped. The greatest 
impediment to reuse from the local government level is a lack of 
adequate financial resources to begin and complete the rehabilita- 
tion process. 

The principal objective of S. 299 would be to provide local govern- 
ments with the financial means that will bring about renewal and 
reuse of these valuable pieces of property. There are literally thou- 
sands of properties and hundreds of Michigan communities that 
could qualify for funding under the site redevelopment demonstra- 
tion program envisioneain S. 299, which would give our local offi- 
cials the means to inventory abandoned and underutilized commer- 

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cial and industrial sites in their communities, to prioritize local 
communities' site inventory lists, for reuse and redevelopment po- 
tential, and to assess the costs for removing unsafe structures, re- 
mediating environmental contamination, and rebuilding site infra- 

In order to achieve the legislation's objectives, I do believe it is 
critical to the success of the program that the factors for selecting 
these demonstration projects be as specific and stringent as pos- 
sible. In order for the selected projects to adequately serve as mod- 
els, considerable weight should be given to a well-documented com- 
mitment to the project at the State and local community level. We 
believe Michigan has superb legal and programmatic tools in place 
to take full advantage of the opportunities proposed in the bill be- 
fore this committee. 

Some other ideas for legislative or administrative action to sup- 
port S. 299 would include assistance in land acquisition to encour- 
age redevelopment with modem facilities on parcels which were 
suilicientlv sized and shaped for another era but do not meet to- 
day's needs. 

In addition, communities may need assistance in relocating resi- 
dences or businesses from newly planned industrial commercial 
areas to make room for modem development. Consequently, com- 
munities may need assistance in the development of new housing 
or in the rehabilitation of existing housing in order to accommodate 
relocatees. And, of course, although jobs will be created through S. 
299, there will be the need for tiie continuation and expansion of 
job training programs in order that disadvantaged commiuiity resi- 
dents will be prepared to step up to those new employment oppor- 
tunities when tiiey occur. 

Mr. Chairman, members of the Senate Banking Committee, the 
vitality of mf^or industrial centers in this country, such as my dis- 
trict, relies heavily on a foundation of industrial jobs. With the de- 
cline of industrial jobs, the problems we are facing today seem 
monumental. And certidnly no one single program can address 
them all or reindustrialize America. 

However, a part of our industrial policy must be to insist that 
former industrial and commercial areas are given equal consider- 
ation for investment as are new, green space areas. I believe this 
l^slation will help promote this policy and assure a strong envi- 
ronmental stewardship. 

Thank you for the opportunity and honor to share my views and 
ideas. And I am available for questions. 

The Chairman. Great Excellent statement. We appreciate it and 
the leadership as well. 

Senator Shelby, did you have an opening comment you wanted 
to make? 

Senator Shelby. No, I don't I appreciate being called. 

The Chairman. Senator Domenici, did you have a comment you 
wanted to make at this point? 

If not, Mr. Parker, you serve with the Connecticut Department 
of Environmental Protection and we are delighted to have you and 
we will make your fall statement a part of^the record. We'd like 
to hear from you now. 

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Mr, Parker. Thank you, Mr, Chairman, Good morning to you 
and good morning to the other Senators present this morning. I am 
honored to be here to have an opportunity to share with you Con- 
necticut's experience in dealing with this very important issue. 

The Chairman. Before you proceed, let me just say Senator Dodd 
veiy much wants to be here. He's got a conflict that he's working 
witn, but he wanted me to say that and he's very interested in your 

Mr. Parker. Thank you. 

We've taken a look at this bill and worked closely with your staff, 
and we would like to commend you and the co-sponsors for intro- 
ducing a bill that takes a straightforward, common sense approach 
in dealing with a very important issue. 

This proposal will provide much needed funds which in part will 
be used to undertake the evaluation and remediation of abiandoned 
and underutilized sites in distressed communities throughout this 
country so those sites can be returned to productive use. 

From the perspective of an environmental agency, this bill will 
remove the single most important constraint on redevelopment and 
reuse, which is on-site pollution and the environmental liability as- 
sociated with it. 

Time and time arain it has been our experience in Connecticut 
that investors, developers, and banks will not provide the capital 
for reuse and redevelopment unless at a minimum site evaluations 
are undertaken to determine the extent and degree of pollution on 
sites, to identify what if any remedial measures could be imple- 
mented. No one wants to be responsible for the pollution that was 
created by others. And in some cases, that pollution was created 
30, 40 years ago if not longer. If we are to return these sites to pro- 
ductive use, this environmental obstacle must be overcome. 

In Connecticut alone, we have identified more than 100 contami- 
nated industrial sites in our migor urban areas that were once vi- 
breuit manufacturing centers. 

The Chairman. Could I interrupt just a minute? Would you pull 
the mike a little closer to you? I think people in the back of the 
room may be having a hard time hearing you and I just want to 
make sure they can as well. 

Mr. Parker. Sorry. 

In Connecticut alone, there are more than 100 abandoned 
underutilized sites in our urban areas that were once vibrant man- 
ufacturing centers. We've identified these sites as part of our urban 
site program, which was enacted into law in Connecticut as Public 
Act 92-235 in the last legislative session. 

We recognize that in order to go forward with rebuilding our 
State's economy and to bring back the industrial manufacturing 
jobs that we have lost, it was critical to provide clean sites for busi- 
ness and industry to come back to. So in undertaking this program, 
the State of Connecticut, using bond funds, has implemented a pro- 
gram to do just that. We are utilizing State money to have consult- 
ants do environmental evaluations so the State of Connecticut can 
give investors and developers and lending institutions the highest 
degree of confidence that a thorough and comprehensive study and 

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evaluation have been done and to determine what I cal] the envi- 
ronmental base line. Until an environmental base line has been es- 
tablished at these sites, no one will accept a risk associated with 
contamination that is undefined. 

Currently, our General Assembly is considering legislation to ex- 
pand further the program that we implemented as a pilot last year. 
An additional $20 million in State bond funds will be committed to 
this effort. In addition we are providing funding for six full-time 
staff to implement this program. 

S. 299 will enhance ana complement our efforts to date and is 
a little broader in scope than what we have offered in the State of 
Connecticut. There are clearly many benefits associated with this 
program that you, Mr. Chairman, have identified as well as Sen- 
ator Jeffords and my colleagues here. I am not going to repeat 
those; they're in my written statement. 

But to touch on a few, we do not want to see environmental 
sprawl continue in our rural areas. We want to reutilize the exist- 
ing infrastructure in our cities. We want to bring back to life these 
old facilities, restore tax revenue to our cities, additional revenue 
to the State of Connecticut. And the only way to do this, again, is 
to go forward and take the initial step with the help from State 
government and the additional help that this bill would provide 
from the Federal Government to implement this program, 

There are a couple of issues that I would like to bring to the com- 
mittee's attention with respect to specific provisions in the bill. I 
would ask that the committee consider additional flexibility to en- 
able the State, at the State level, to fully implement this program 
in those cases where States have already enacted legislation. In 
doing so, it would minimize administrative and oversight costs, and 
would help to minimize duplication of effort at the local level ver- 
sus the State level. 

The State has a program already set up to implement this par- 
ticular program. If that is duplicated at the local level, time and 
energy will be spent redoing what the State has already done. 

In closing, we would be happy to provide additional assistance to 
the committee as you work to complete this initiative, and I would 
like to thank you for the opportunity to testify and we'd be happy 
to answer any questions that you might have. 

The Chairman. Veiy good. Before we proceed, I want to call on 
Senator Dodd, who I indicated was very interested in your testi- 
mony here this morning. 

Senator Dodd. 


Senator Dodd. Well, very briefly, Mr. Chairman, let me com- 
mend Mr. Parker for his testimony. As Mr. Parker has pointed out, 
our State of Connecticut has developed a pilot program in this 
area. And Connecticut has a number of sites that could benefit 
from this legislation. A good example is the Century Brass site, 
which covers almost 100 acres in downtown Waterbury. It was a 
munitions factory, basically, going back to the Civil War. But the 
pollutants at that site have made the cost of redevelopment over- 
whelming. Yet it is a m^or site in the center of a city. To be able 

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to rehabilitate, if you will, recapture that land would be a great 
benefit to the city of Waterbury. 

We need to develop creative ways to help cities like Waterbury, 
Hartibrd, Bridgeport, and New Haven develop these sides and pro- 
vide jobs. This oill is a healthy start. I would like to commend you, 
Mr. Chairman, and also Senator Moseley-Braun and Senator Boxer 
for your efforts on this le^slation. I think it's an absolutely essen- 
tial ir^redient for economic development in cities and towns across 
this country that have these sites just littering tjie landscape. 

I'll submit my complete statement for the record. 

The Chairman. Without objection. I want to thank you also for 
your role in this, your cosponsorship and your advocacy on this 
issue, and I think now strongly reinforced by our witness Irom Con- 

Let me now move to Mr. Wysocki. You're the director of the Chi- 
cago Association of Neighborhood Development Organizations and 
obviously your testimony is a matter of great interest to Senator 
Moseley-Braun, as to all of us here. 

We will be pleased to hear from you now. We will make your full 
statement a part of the record. 


Mr. Wysocki. Good morning. Senators, and thank you for this 
opportunity to discuss one of the most difficult obstacles facing 
older urban areas. Your leadership and hard work of your commit- 
tee staff should be commended for proposing this demonstration 
program to restore abandoned sites to productive economic uses. 

I also wish to express my appreciation for Senators Moseley- 
Braun and Simon for their cosponsorship of this legislation. 

"The Abandoned Land Reuse Act of 1993 will serve as a catalyst 
for encouraging the development of affordable modem industrial 
space in the city of Chicago and throughout the country. This is a 
pressing need tnat began to draw the attention of our coalition in 
1989. CANDO is the largest city-wide economic development coali- 
tion in the United States. Our 65 nonprofit members and our 100 
affiliate members are working every day to improve the local econ- 
omy of Chicago's neighborhoods. My written testimony describes 
CANDO's variety of economic development strategies. 

My reason for providing you with that background on CANDO is 
to emphasize to you that the part of our economic development 
platform with the most potential for jobs is industrial development 
All of our components are critical, but the largest number of jobs 
will be retained and created by turning fallow land into new homes 
for industry. 

The missing piece of this puzzle to date has been environmental 
remediation of these sites that are in proximity to labor force, 
transportation, and existing infrastructure. We must turn these 
eyesores, which have become urban liabilities, into assets that de- 
liver jobs for Americans. 

I had the personal and professional privilege of discussing with 
President Clinton yesterday his plan tor 10 empowerment zones 

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and 100 enterprise neighborhoods. I took the liberty to draw his at- 
tention to the bill before this committee today as a key element in 
implementing the comprehensive strate^es for job growth and eco- 
nomic recovery that his dramatic new mitiative is designed to en- 
courage. He responded by noting not only the need to aodress envi- 
ronmental remediation, but also its potential for job generation. 

I offer my testimony today in support of S. 299 on behalf of 
CANDCVs members who are actively confronting the problem in 
their communities. For example, Greater North Pulaski Develop- 
ment Corporation is working with the city of Chicago to develop a 
9-acre site to capture industrial growth while replacing a block of 
ruin. And 1 have attached a Chicago Sun Times article from March 
14 of this year that gives a full case of the stories and the issues 
that they are confronting. 

Another example is to oe found in Bethel New Life which has en- 
tered into a parbiership with Ar^onne National Laboratory to clean 
up abandoned properties on Chicago's west side as a job strategy 
itself And again, I have attached an article, this time from Craiivs 
Chicago Business in February that talks about this new public-pri- 
vate parinership. 

The provision in S. 299 that includes non-profit community de- 
velopment corporations as eligible grantees is a key component to 
encourage loc^ initiation and involvement. 

I also offer nvy testimony as a Steering Committee member of the 
Coalition for Low-Income Community Development, a national 
group focused on ensuring local benefit from Federal programs. 
They, too, support nonprofits as eligible grantees in order to assure 
more connections to employment opportunities generated by 

projects funded. 

The Coalition is pleased that 5 percent of funds appropriated 
under S. 299 may be used for technical assistance grants to deter- 
mine appropriate means of implementing job training programs in 
connection with reuse projects. 

I also testified today as a delegate agency of the city of Chicago's 
Department of Planning and Development, which is currently pur- 
suing the development of 7 industrial parks within the city. A 1991 
study l^ Chicago's Economic Development Commission documented 
the demand for 45 million square feet of industrial space in the 
city. Yet, we only have 15 million square feet currently available. 
And most of that is obsolete for modem manufacturing. 

Planning and Development Commissioner Valerie Jarrett testi- 
fied on January 29, 1993, at a Northeast Midwest Congressional 
Coalition hearing in Chicago. She noted: 

We eatimate tiiat there are over 200 acres of moderately to severely contaminated 
■itea within Chicago. Even if the cost or remediation may onlv be a small percentile 
of Uie tend value, it is extremely difficult to package a redevelopment project for 
the property given laws which expose prospective purchasers and lenders with risk 
of hability. Past envirDmneDtal contamination may become their liiture liabilihr 

riak ia too hi^ eapecially in light of the availability of so-called green grass envi- 
nomentally deaji altea. 

I would note that we continue to build roads to where it's greener 
while sites with good transportation have been left to decay. We 
continue to condemn America's work force to long commutes while 
they live surrounded by abandoned land. This is not environ- 

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mentally sound or family friendly public policy. It is not profitable 

public investment. 

I would also like to testify on behalf of small businesses 

The Chairman. Could I ask you to stop just a minute. Senator 

Domenici had a question Uiat he wanted to pose right here and 

rd — 


Senator Domenici. Thank you, Mr. Chairman. 

When you speak of these industrial sites that are not going to 
be developed because — one reason being because of the environ- 
mental degradation and liability costs, who owns most of this kind 
of land? Is it abandoned literally? 

Mr. Wysocki. It's a variety, Senator. Some of it still has current 
owners who aren't doing anything with the property. Others have 
reverted back to local municipalities, whether they be the city or 
the county, because they're tax delinquent, and basically they are 
abandoned; the previous owners have walked away from them. 

Senator DOMENICI. Thank you, Mr. Chairman. 

The Chairman. Why don't you go ahead, Mr. Wysocki. 

Mr. Wysocki. I would also like to testify on behalf of small busi- 
nesses who run into this roadblock to their expansion plans. My 
written testimony offers part one of the ongoing story of Trendler 
Metal Products, a family owned company that is trying to stay and 
expand in Chicago. 

The current episode leaves Trendler without a site. Meanwhile, 
the clock is ticking on their future expansion, and they may be 
forced to leave the city with their 100 jobs, specifically because of 
this issue of environmental contamination. 

In closing, I would like to acknowledge the collaboration of the 
Northeast Midwest Institute. We cosponsored with them a con- 
ference in Chicago 2 years ago that brought much attention to Uiis 
issue of confronting environmental and economic issues to indus- 
trial use. And my written statement offers a quote from a recent 
study of theirs that emphasizes the need for financial incentives to 
encourage this new development. 

Finally, let me emphasize that S. 299 offers a new direction for 
the U.S. Department of Housing and Urban Development to pursue 
jobs by encouraging local initiatives to reuse a fundamental re- 
source: land. Let me assure you that the principal objective of the 
legislation, to restore the marketability of abandoned land, is very 

In fact, the funding proposed is exactly the kind of up-front pub- 
lic investment required to leverage maximum private capital in re- 
developing abandoned sites. Chicago would welcome this new Fed- 
eral fimding. We will invest it wisely, and you will see a return in 
more Americans working. Blocks of rubble and debris can again 
produce livable wages. But the land must first be cultivated. 

Again, tJiank you for your initiative. I look forward to monitoring 
the legislation's progress. Projects are waiting to be done in Chi- 
cago's neighborhoods. 

Thank you. 

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The Chairhan. I would like to note for the record that all Sen- 
ators but two have come and recorded their votes. There are suffi- 
cient votes for the nominations to be reported out favorably. 

I so indicate, and I expect that we will have the last two votes 
recorded here shortly, find then well announce those final votes. 

Senator D'Amato, do you want to introduce Mr. Scotto? 

Senator D'Amato. Mr. Chairman, veiy briefly, Salvatore Scotto 
has been one of the tremendous community leaders in the fight to 
reclaim and make habitable the entire community in surrounding 
Gowanus Canal, an area that has been blighted through no fauft 
of the people, by the contamination of the canal, the filling up of 
it, and the failure to be able to respond in a positive manner. 

I want to say that they have never given up, and as a result, I 
think we are at a point where, hopefully, once we get an area to 
determine where we can dump the dredged materials 

By the way, you talk about a catch 22. Here they have all these 
contaminated areas. You know the land and water are contami- 
nated so you pick it up, and EPA says, well, no, you can't put it 
here, and you can't dump it in the ocean, and you can't put it in 
a landfill. So they are stuck, I mean, literally, as they're ready to 
go. And this is the kind of situation that we address. 

But, Salvatore, I want to congratulate you and thank you for 
coming to testify. We are looking forward to your testimony, and 
more importantly, to help make your efforts a reality so that we 
can really give vitality to a great neighborhood. 


Mr. Scotto. Mr. Chairman, members of the committee, I appre- 
ciate that you've given me the opportunity to testify before your 
committee today, on a bill that could prove to be of immeasurable 
value to my community's 20-year-long struggle to rehabilitate 
Brooklyn's historic Gowanus Canal area. The Abandoned Land 
Reuse Act of 1993 represents an important step in the recognition 
of the importance of rehabilitation and development of industrial 
land to the economic condition of America's inner city. 

Before addressing some of the questions you have raised about 
the proposed legislation, I'd like to dve you some background on 
OUT efforts to clean up the Gowanus Canal. 

The Canal, once a creek that was widened in 1774 by the Colo- 
nial Assembly of New York, was one of the busiest commercial-in- 
dustrial waterways in the world, and was the heartbeat of Brook- 
lyn's industrial area. Over the years, the Gowanus Canal became 
polluted, and the lack of any way to flush it out hampered efforts 
to clean it up. 

A tunnel was constructed in the early 1900's that extended out 
to the channel near Governor's Island, which allowed fresh water 
from the Bay to be pumped into the head of the canal to flush out 
Uie pollutants. The tunnel remained in operation until the mid- 
1960's, when a propeller shaft on the pump broke. An inadequate 
pumping station and broken propeller shan; returned the canal to 
its previous stagnant state. The unsightliness, stench, and disease- 
ridden canal contributed to a decline of industry in the area as 

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about 50 percent of the commercial space became unused and dere- 

The Gowanus Cfinal Community Development Coiporation, in 
the 1970*3, began to focus on the environmental degradation of the 
Gowanus Canal and its environs. The Gowanus Canal Community 
Development Corporation has been struggling with the issue and 
is committed to deal with the problem of the abandoned and con- 
taminated sites along the Gowanus Canal. The contamination of 
land in the area has clearly been a barrier to private investment. 

Our concern over adaptive reuse cannot be addressed until the 
cleanup of the waterway and underutilized industrial land is ac- 

The GowEuius Canal CDC has completed the first stage of the re- 
habilitation process by spearheading an aggressive campEiign in the 
early 1970's to leverage public funds. Nearly $480 million was allo- 
cated to build the Red Hook Interceptor Sewer Treatment Plant, 
and to repair and replace mechanical systems of the Flushing Tun- 
nel and Pumping Station of the Gowanus Canal, and to dredge the 

In recent years, the community has had New York City's commit- 
ment for clean-up efforts. The municipal government has alreat^ 
committed funds to fully reactivate the Flushing Tunnel that has 
been inoperable for nearly 40 years. New York City's Department 
of Environmental Protection is required to dredge the canal from 
time to time as necessary. DEP has the money secured to dredge 
the canal. However, the Army Corps of Engineers' Federal guide- 
lines precluded the opportunity of ocean dumping, which leaves the 
city to deal wiUi this material. 

The clean-up is necessary to adaptively reuse the land bordering 
the CEUial that the Abandoned Land Reuse Act of 1993. 

Our communi^-based housing, economic and environmental or- 
|;anization, the Gowanus Canal CDC, has reached out to a groiq> 
in Pennsylvania that has developed a highly innovative application 
of ancient technolo^, the process of vitrification, that would allow 
for the possibility of dredging the canal and dealing with the mate- 
rial at the bottom of the canal. A Federal investment could help 
with the clean-up and be instrumental in providing new markets. 

An environmental technology corporation, Global Inner-Harbor 
Remediation, Incorporated, is developing new approaches that 
could not only prove to be highly effective in dealing with the 
Gowanus Canal, but could be a technology that America could ex- 

Much of the property on both sides of the canal is underutilized 
and abandoned dumping grounds. The possibilities of contamina- 
tion of many of the sites and the secretion of gas and oils firom 
abandoned automobiles and trucks on property adjacent to the 
canal need to be addressed. 

Significant opportunities for new investment in the area have 
been lost in recent years because of the problem of possible site 
contamination. The existing state of derelict Ismd is what helps iso- 
late the redeveloping areas from the areas that continue to suffer. 
Being able to overcome that problem of contamination or otherwise 
blighted sites could make a real contribution to the reweaving of 
the fabric of South Brooklyn. 

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There is a vibiBnt demand for housin? in these communities. 
This demand took the foim of the New Yonc City Housing Partner- 
ship's interest to develop a desperately needed affordable housing 
project on a 6V1i-acre site alongside the canal. This area, known as 
Public Place Site, was to have been developed as the community 
saw fit, had it not been for the cloud of contamination on that site. 
The Gowanus Canal CDC has efTected the necessary borings and 
soil analysis at a cost of $150,000. 

As we can best determine, the Public Place Site was taken off the 
contaminated list but it was su^ested that the site might be put 
back on ^e list if Federal guidelines changed. This has paralyzed 
the possibilities of any development coming onto this site. 

Southwest of the canal is an area called Red Hook, which is 
amon^ the poorest communities in the Nation. Red Hook is ^o- 
graphically isolated by water on three sides, and an elevated high- 
way. Red Hook's isolation from the rest of the city may have been 
less critical in the decades when the community was sustained by 
its own waterfront industrial economy. 

The crime and drug problems that plague the Nation's first Fed- 
eral housing project were tragically manifested in December 1992 
by the killing of public school principal Patrick Daly. 

The impact of the highway and the post-industrial shift in the 
urban economy have contributed to the social and economic isola- 
tion of low-income areas and other parts of South Brooklyn. 

Making that derelict land reusable is part of what is needed to 
get the isolated communities of South Brooklyn back together 
again. The process of rehabilitation and redevelopment can contrib- 
ute to overcoming the problems of drugs and isolation in the poor 
communities of Fted Hook to the south, and Gowanus Houses to the 
immediate north. 

To the east and west of the canal are brownstone revival areas. 
There are enou^ resources in the indigenous community that, if 
interlockedproperly, has real opportunity to stabilize and integrate 
the area. The stable communities of Park Slope on the east and 
Carroll Gardens and Cobble Hill on the west have already dem- 
onstrated a tremendous interest on the part of the private sector 
to undertake development. 

The Gowanus Canal CDC was instrumental in the conversion of 
several obsolete multistory industrial buildings to residential use. 
But we should not go on this way, one parcel at a time. What the 
area cries for is an overall plan, a possible urban renewal designa- 
tion which would be a logical way to assemble necessary parcels. 

We feel sure of the success of such an effort by virtue of our past 
experience working with the stable communities. Park Slope on the 
east, and Cobble Hill-Carroll Gardens west, the low-income com- 
munity, Red Hook, on the sou^, and Gowanus-Wycoff Gardens to 
the north. 

This would be a great sodal experiment, bringing the people into 
an int^;rated social and economic development opportunity. Some 
250,000 people are within walking distance of the Gowanus Canal. 
Two subway lines servicing the east-west boundaries of the canal 
puts the area within a 12-minute subway ride to Manhattan. 

"The benefits to the community of a national demonstration 
project are to have a homegrown, technically trained work force 

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that is employed in the clean-up and is available to industry after 
the clean-up. 

Through NEPETE, a Northeast Partnership for Environmental 
and Technical Education, and branch of the national PETE (Part- 
nership for Environmental Technology Education) coalition which 
is sponsored by the Department of Energy and the Department of 
Defense, NEWTREACK (Northeast Waste Technology Research, 
Education, and Applications Center) is the Rensselaer- Brookhaven 
lab-industry partnership involved in the environmental programs 
like education, remediation, and applied technology, we have a 
partnership in place to carry out Uie technical, educational, and 
training aspects of the clean-up. The economic and social benefits 
go hand in nand with creating a work force that industry can use. 

Gowanus Canal CDC already has mechanisms in place and does 
not have to invent them just to satisfy legislation. Gowanus Canal 
CDC recognizes that the problem is multidisciplinary and that the 
solution requires a coordinated effort among and between several 
Government agencies, educational and research institutions, and 

The proposed le^slation can take advantage of the preexisting 
entities. A Federal investment could draw additional commitments 
from New York State and New York City and one of our major pri- 
vate sponsors, Brooklyn Union Gas. 

Thank you for the opportunity to appear before you today. And 
rd like to add that I'm very happy that Senator D'Amato is here 
because it wasn't too long ago that he helped us dedicate a senior 
citizens' housing within spitting distance of that canal, so I know 
he's familiar with the area. Thank you. 

The Chairman. Thank you very much. 

Our last witness this morning is Sandy McCollum, who is the Di- 
rector of Economic Development for South East Community Orga- 
nization in Baltimore. 

I want to say that Senator Sarbanes is very interested in your 
testimony. He's between committees this morning, and hopes to be 
here, but we'd like to hear from you now. 

Senator Moseley-Braun. Mr. Chairman? 

The Chairman. Yes? 

Senator Moseley-Braun. Mr. Chairman, before Ms. McCollum 
starts, I really hate to leave on the only lady witness we've had, 
because I really wanted to hear your testimony, as well as read it. 
But I have a previous commitment. I have a committee hearing at 
this time, and so I would ask to be excused, but also to say again, 
in closing, I really am delighted that these witnesses have come to 
talk about this very importont issue. 

Our country is the only nation, industrialized nation in the world 
in which "inner city" means slum. Most nations recognize the value 
of preserving their inner cities. And I'm delighted there is a real 
awakening awareness in our country of the value, the economies, 
if you will, of going back, reaching back to preserve, revitalize, and 
renovate these urban areas. 

Because there are savings, there is potential for job creation, and 
we should reclaim our urban areas, which will benefit all Ameri- 
cans, whether they live in the urban area or not. And so, again, I 
Wiuit to underscore my commitment to this area, and I look for- 

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ward to working with you, Mr. Chairman and the other cosponsora 
of the legislation, and the witnesses on behalf of community eco- 
nomic redevelopment. 

Thank you. 

The Chairman. Thank you very much. 

Senator DOMENICI. Mr. Chairman. 

The Chairman. Senator Domenici. 

Senator Domenici. I wonder if you might indulge me for 2 min- 

The Chairman. Of course. 

Senator Domenici, I'm very apologetic, ma'am. Frankly, I didn't 
even intend to be here for very long. I came over to vote, but actu- 
ally I'm intrigued enough to nave some questions and some con- 

I want to share with you, Mr. Chairman, and members of this 
committee, that if the plight of the inner-city with reference to pol- 
luted properties can be used in a way that would force Congress 
to take a look at the Superfund and its absolutely ludicrous liabil- 
ity schemes, it would serve a major purpose. 

Senator Dodd. Here, here. 

Senator Domenici. Let me tell you, there is no way to take these 
sites that have any kind of pollutant liability for toxicity, and de- 
velop them under the laws today, unless we change tjie law witji 
reference to what is clean enough. We have such stringent laws re- 
garding what is clean enough that technologies aren't even avail- 
able to clean the sites. 

So what are we engaged in principally? We're engaged in getting 
a bunch of bulldozers and a bunch of trucks to move land. 

Senator Dodd. If the Senator would yield? 

I mentioned the Waterbury example to the Chairman, Century 
Brass. That's 100 acres that nave been offered to anybody. Ill use 
this forum here. Anybody that wants 100 acres in downtown Wa- 
terbury can have it for nothing. 

Senator Domenici. And nolwdy will take it. 

Senator Dodd. Have it for nothing. It's zero. You can own 100 
acres in Connecticut for nothing, in Waterbury, Connecticut, pro- 
vided you're willing to assume the cost of cleaning it up and the 
liability. And you don't get a taker, not a single taker on that. 

Senator Domenici. Well, I just want to say that 1 really appre- 
ciate the fact that it is growing, the knowledge is growing that ev- 
erything's interrelated. The Superfiind has many situations that 
you all must have confronted already, where there is no escape 
from permanent liability because you can't get a release from any- 

You hire a company and spend $50 million cleaning this up. And 
you know what theyre saying? When I'm through doing what you 
asked me to do precisely, you can investigate it, ana when Vm 
through, will vou give me a release that I'm not liable anymore. I 
was just callea in to clean it. 

You can't even get that in this misdirected Fund. Imagine. 
There's no technology that is precise enough to be relied upon? In 
fact, this brings it into focus. A little bit, Mr. Chairman, and if the 
inner city and the problem focuses it on us, it's good. It also raises 

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in Uie issue of bankers' vicarious liability for lending money on a 
polluted site. 

A bank won't lend $5 million now, because they have to go 
through cleaning it up first, or they're going to be liable for the 
next 50 years for having loaned money on it. 

There is a very compelling case for addressing lender liability. I 
want to saj;, as a former mayor of a little city, Albuquerque, I real- 
ly sympathize with the situations you've got in the nigger cities. I 
really hope we can find a way to help. 

My last observation is, and I don t know what you all will think 
about it, but perhaps, before you're finished, you might just address 

I think a new approach should be built around the quickest way 
to get the land into the hands of the private sector for development. 
I think if we have a scheme that vests it in the State or the city 
or the county, we're going to be right back in the muddle because 
the marketplace is not going to be the clearinghouse, and we're 
going to have to get more public involvement. 

I hope part of the scheme is to get land back on the market, Mr. 
Chairman, where that acreage is subject to some bids. And not that 
we want to own it, the city doesn't want to own it. 

Senator DODD. Yes, they don't want to own it, they don't want 
to own it. They want it on the tax rolls. 

The Chairman. That's their big thing, taxes. They want private 
owners and taxes. 

Senator DOMENICI. And my last point is that I know you can't 
limit the scope of your legislation. I'm not sufficiently familiar to 
be giving you advice. I don't know enough about it. But it seems 
to me that, on the one hand, if you make it too big, you're going 
to run into some real problems up here of getting it through. On 
the other hand, if you make it so narrow that we're only talking 
about polluted sites, because I understand you use public welfare, 
public health, public safety, but if it's just polluted sites, you might 
have a better shot of getting it through. Would that be too narrow 
for development? 

I don't Know the answer to that one. But from my standpoint, 
even though I clearly am out of my parochial domain, I think, I'm 
willing to listen and work with you to see if I can be helpftil. I 
think we ought to call in our environmental experts from other 
committees and tell them the realities about the clean-up situation 
under current law. 

The Chairman. And I want to invite, I know at least one of you 
wants to respond to that last point he's raised, which I think is an 
important point and deserves a comment from the witnesses. 

Senator Dodd. I was just going to point out, we have in the audi- 
ence the president of a company called West Hartford Connecticut 
Environmental Warranty. What they do is site assessments and in- 
surance policies that pay for the value of the propertj; if environ- 
mental contamination is discovered. Charles Perry is in the audi- 
ence, Mr. Chairman. 

I'd just note for the record. You mi^t want to afterwards ask 
him to comment, because this is a company that's in the business, 
on how successful they can be, and how expensive they can be. 

Thank you, Mr. Chairman. 

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The Chairman. Yes, by all means. And on that point you wanted 
to make a comment? 

Mr. ScoTTO. What I was going to say, Senator Domenici, that 
you refer to sites that are very heavily polluted. You're absolutely 
ri^t. But there are many other sites that are not that polluted 

Senator Dohenici. Very good point. 

Mr. ScoTTO. — that are adjacent to sites that are or have a degree 
of pollution tiiat could and might be handled by a combination of 
State, city, and municipal agencies and the private sector that 
would be very interested. 

We have a very good working relationship with Brooklyn Union 
Gas, Con Eldisonj and Pfizer. Those companies are there m Brook- 
lyn, very committed to redevelopment. I think this ledslation 
would be extremely helpful. As is, it's a very positive step forward. 

The CHAIRBfAN. So in other words, your view would be that, in 
a sense, this doesn't solve all the problems, but it tackles a class 
of problems that we really can get at, and you get this economic 

I take it that the private utility companv would much rather 
have an abandoned site put back into use. 'That helps them, that 
helps everybody else in the rate-paying base for the utility. 

Mr. ScoTTO. Absolutely. 

The Chairhan. So, I mean, everybody comes out ahead on that 
deal, plus you get the jobs to boot. 

Senator BENNETT. Mr. Chairman. 

The Chairman. Yea, Senator Bennett 


Senator Bennett. I'm interested in your comment, and I must 
give way to sharing an example, as Senator Dodd has done. 

You talk about 100 acres in Waterbury, Connecticut. If you go to 
the busiest intersection in Salt Lake City, which means it is the 
busiest intersection in the State of Utan, presumably therefore, 
firom an industrial or retail point of view, the prime piece of prop- 
erty in the entire State. It's not serious pollution, it isn't even p(H- 
lution to stand up under EPA investigation as being polluted at all. 
But the owners of the site cannot get from the EPA a hold-harm- 
less letter. 

What they have gotten from the EPA, after 4 years of fooling 
around with it, is a letter that says: 

We contemplate no action at this time. However, . . .' in the claasic bureaucratic 
lansuBge, ... we reserve the right to re-enter the site at some future time in case 
poInitioQ should raoccur. 

And like your 100 acres in Connecticut, they can't give it away. 
The county called the owners and said, we're going to seize ^our 
land for failure to pay back taxes, and the owner said, how quickly 
can you do that? 


Please let us facilitate that 

The Chairman. Can you come in the next hour? 

Senator Bennett. Yes, can you do that immediately. 

The county said, well, wait a minute. Nobody's ever responded 
that way to a condemnation threat before. And then they looked at 
the letter and said, no, don't want anything to do with it. 

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The bank looked at the property that they had the lien on to 
foreclose, and refused to foreclose. Even though the EPA investiga- 
tors had finally, after 4 years, been to the site, conducted their in- 
vestigation, and having come to the conclusion that there was no 
pollution, not lesser pollution that could be cleared up, but no pol- 

But having put it on Superfund at the beginning, they would not 
bureaucratically ever take it ofT, b^ saying, we reserve the right to 
re-enter the site at some fjture point. 

I happen to know about it pretty definitely because I'm one of the 
shareholders of the company that lost everything when the prop- 
erty went on the Superfund site in the first place. 

It became an issue in my campaign, as my opponent kept saying, 
why don't you clean it up. You're running for the Senate. What are 
you going to do about it. Why don't you clean up this blight. And 
the answer is. 111 go to Washington and abolish the EPj^ if nec- 
essary, that kind of a flippant answer, and obviously not the ri^t 

But that is my concern, as I hear these things. I'm obviously in 
favor of this legislation. I'd like to review the language particularly, 
before going on it as a cosponsor. But assuming that the language 
is what all this testimony says it is, I'd like to become a cosponsor. 

But I echo Senator Domenici's comments, Mr. Chairman, that 
this may not be where the problem is. The problem may be in deal- 
ing with the Superfund legislation and the absolute determination 
that there is no fault liability. There is fault for everyone who even 
looks at the property at any point. 

Consequently, everybody's turning their backs on it. And I think 
that's one of the major reasons we have this kind of problem in our 
inner cities. 

The Chairman. Well if I may say that I think these are very im- 
portant illustrations. And this is a problem with many facets to it 

We've drafted this legislation to reach the part of^the problem 
that we can within the scope of this committee. But you're quite 
ri^t. There are related problems of precisely the kind that you de- 
scribe that fall into the jurisdiction of other committees which need 
to be dealt with in a different way, because we're jammed up. 

And, you know, when you look at our trade deficit and you look 
at a lot of other things in terms of how we're doing find 
underperforming on the economic side, and you see these sites in 
critical locations that can be reused, need to be reused, you see an 
impaired tax base, you see people frustrated and angry because 
there aren't enough jobs to go around, and jobs could come to these 
sites, if they could get economic activity restored to these sites. 

We've gone after the part that we think we can get at directly. 
But I would urge you to take a look at it, and I'd like to consider 
your suggestions. And if you see something that you think, within 
the range of what we can reach directly, we should alter or modify, 
I'm open to that, because this ought to be a nonpartisan effort, a 
bipartisan effort, because this is an issue of how do we solve a 
problem that's out there and can't solve itself right now. In fact, 
as it piles up, you get a downward spiral going, and so if nobody 
intervenes, we're left witii the worst possible outcome. 

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So what we're trying to do is interdict this problem, and at least 
regarding Uie part we can g«t at, see if we can't get an upward spi- 
ral, rather tJian a downward spiral. 

Senator Bennett. Well, the reaction is, as you say, or many of 
the witnesses have said, and once again, using myself as an exam- 
ple, the company that I headed simply went out, bought ourselves 
some land far away from the area, a clean piece of land that 
nobody'd ever done anything on before, and we built our facilities 
out there, and we took the jobs out there. And there are now about 
a thousand jobs in Salt Lake in a former lake bottom, which we 
have landscaped and built up. And it looks wonderful. 

But we could just as easily have stayed in tjie inner city if we 
hadn't had the absurdity of the regulations surrounding Superfund. 

I don't want to intrude further on Ms. McCollum's time. 

The Chairman. She's been very patient, 

Senator Bennett. I would just say, Mr. Chairman, maybe we 
could use the anomaly available in the Senate rules to offer a non- 
germane amendment on the floor when this gets up there, and do 
something about some of these other areas. 

The Chaihman. We've tried that. You know, we've aimed at that 
problem before, and this committee has had a great concern about 
it with respect to lender liability. Of course, then that starts to 
bridge over into municipal liability. I mean they are kind of kissing 
cousms. And so then the question is, how do you do that? 

And then you start to move into the jurisdictions of other com- 
mittees, and then when we get to the floor, you're quite right. I 
mean, amendments could come in that are outside the direct legis- 
lative scope of this committee. And we've tried to take this as far 
as we can. 

This is an area where I think we can come in and take a piece 
of the problem, and we're getting good testimony not just from 
these wibiesses, but from across the country. But there's a part of 
this problem that can be dealt with, and that doesn't solve it all, 
and I'm open to solving the rest of it. 

But this is very helpful. I mean, ttiis is the kind of record I think 
we need to decide what kind of room we have to move here. 

Senator Dodd. Mr. Chairman, I want to put into the record a list 
of some other sites in my State that could be helped by this bill. 
I do not have a complete list of the many sites in my State that 
could be helped, but this hst provides some additional examples. 

The fonner Bryant Electric facility ib a multi-atoi^ indUBtrial building in the heart 
of BridgeporL The present owner has initiated preliminary environmental investi^a- 
tionsj however cxtenaive investigation and Dosaibly remediation ia required before 
the Bite can become a viable economic redevelopment site. 

Royal BuslneM Machines is an old industrial facilitv which was severely dama^d 
by fu« in 1992. l^e city of Hartford has actively sought funds to demolish the exist- 
ing buildings and tumediate environmental prohlema to encourage the revitalization 
and redewlopment of the property. 

llie Meriden Rolling Mills facibty is a historic industrial site located in Meriden, 
a former industrial mainstay of Cormecticut's economy. Multiple projects have been 
pToposed ofr Uie 12 acres parcel, but redevelopment has been restrained by out- 
standing environmental issues at the sit«. 

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Hie fbnner lAS-Tuniiiig MachiiieB r«dlj^ ia a 92 acre parECl located in the d^ 
of New Britain, llie radUty ia presently vacant and often eppnxiinately 476,000 
* ' ' - - ' ^ mental isauea at the aite nave been 

e propeny. 

Hie former Centuiy Braaa facility in Watertnuy waa once the mainatay of the 
dtya economy, llie 90 acre aite haa remained predominantly vacant since Century 
Brass ceased operationa in the 1980'a. The city of Waterbuiy is eager to redevelop 
the aite and revitalize the dty. A roi^ developer is prssently interested in building 
a regional ahopping mall on the propertv. However, the coat of the environmental 
dean^up will probwly exceed 10 milhon dollars. 

The Chairman. Very good. Theyll be made part of the record. 

Senator Domenici. 

Senator Domenici. Mr. Chairman, I want to make one other sug- 
gestion. One of the witnesses spoke of a public/private partnership 
with Argonne National Laboratoiy. 

Frankly, Mr. Chairman, it's a little known fact that the Departs 
ment of Energy's laboratories — Argonne, Livermore, and Oak 
Ridee — have an enormous capability in waste minimization and the 
budding technolo^ of clean-up for toxic wastes. 

I would think it mi^t be good for us to invite the Department 
of Energy's experts to become a partner in developing a strategy 
to best implement a clean-up. 

Let me assure you, we're not going to be cleaning up these sites 
in 15 years the way we are today. If we keep the liability scheme 
like it is we may not ever clean sites up. 

Senator Dodd. Presently, the average time to clean up a 
Superfund site in 12 years. That's how much time it takes. 

If the amount of money we're spending in other areas had been 
dedicated to the actual clean-up, we would have taken a lot of 
these sites off the list a lot sooner and with less hardship. But 
that's the goal. I mean, we're missing an opportunity. 

Senator Domenici. I also think. Senator Dodd, that there is a 
way to use the evolution of science to make this much easier, much 

Let me just tell you, the art of cleaning up underground tank 
seepage has just changed dramatically because a small contractor 

tot the idea that instead of moving so much earth around, why 
on't we pump into the ground oxygen that percolates up and car- 
ries with it the pollutant, a very simple thing. And it's working and 
even^body's using it. It reduced the cost of clean-up by about one- 
That's going to happen over and over with real technology, not 

i'ust simple ones, I would urge that we trj^ to many the techno- 
ogical base of some of our national labs with the problems we've 
got, because I think they'd love to be part of tryit^ to help us solve 

Thank you. 

The Chairman. Well, and I think too, you know, just if we're 
going through this defense conversion, and we're kind of moving 
out of some areas. And we've got all this expertise, we've got aU 
these talented people, and rather than just sort of throw them out 
with resumes into a soft job market here's a way to kind of graft 

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them right into the economic system, so we can get this private sec- 
tor humming, get some job creation. 

Ms. McCollum, you've been very patient, and we've saved the 
best to the last, I m sure. So we'd like to hear from you now. 


Ms. McCollum. Chairman Riegle, Senator D'Amato and distin- 
guished members of the committee, thank you for the opportunity 
to appear before you today. 

I speak to you today, not only as the director of Economic Devel- 
opment for Southeast Community Organization, but also as one 
who has spent numerous years working toward the stabilization 
and revitaJization of many of our aging commercial and industrial 
communities of Southeast Baltimore. 

Southeast Baltimore has its economic roots embedded deeply in 
heavy industry. Firms such as Bethlehem Steel Corporation's Spar- 
rows Point Plant, and the Broening Highway plant of General Mo- 
tors Corporation still function in this capacity. However, with the 
loss of such iirms as Western Electric and American Smelting and 
Reiining Company, Esskay Meat Products, a subsidiary of Smith- 
field, accompanied by the downsizing of firms such as Eastern 
Stainless Steel and Armco Steel, this area has been impacted by 
overall changes occurring at both international and national levels. 

Stabilitv in the manufacturing sector has declined. Companies 
often find that relocation is more desirable than renovation, and 
automation is more cost-effective by decreasing employee levels. 

Even with the problem of some employment losses, the area is 
still Baltimore City's largest and most concentrated industrial area. 
Its importance is reflected by both the number of people employed 
here, and in the amount of tax revenue generated. Estimates indi- 
cate that approximately 8,600 people work in the Canton Industrial 
area alone, with other scattered sites throughout the Southeast 

Continuing decline in this area could seriously jeopardize 
Southeast's standing as a leader of industry. During the course of 
1980 through 1987 alone, 48 percent of the total jobs of the indus- 
trial area were lost. The closing of the Western Electric Plant 
eliminated 6,000 jobs at one time. 

The loss of jobs is only a part of this problem. There's also the 
loss of vast amounts of revenues. Only vacant sites remain where 
once productive industry provided monies for Southeast Baltimore. 

'The potential benefits to the community and the economy, 
through legislation, are far-reaching. This could begin to stimulate 
the economic activity within the communities that now stand dor- 

Increases in local tax revenues, the conservation of capital re- 
sources, and the employment opportunities would stand to benefit 
us all, and jda training programs to equip our work force and make 
it second to none. 

With the redevelopment of now-vacant industrial sites and the 
employment opportunities tfiat would arise, the citizens of our area 
would directly nenefit through an increase in per capita income. 

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Buying power would be increaBed, homeownership would once 
again return tx> our communities, along with a rise in the popu- 
lation as people return to the areas of their employment 

Southeast Baltimore has a population of 78,000 people, a sub- 
stantial loss in population from years gone by. Many have been lost 
to other jurisdictions as they follow their employers or search out 
a job. According to the 1990 census, 23 percent of the Southeast 
residents have an income below the Federal poverty line, compared 
to 22 percent in 1980. Redevelopment and employment opportuni- 
ties are not the only answer, but it's a good place to start. 

With such an emphasis on the environment, many of the con- 
taminated properties are overlooked for a clean location, thus leav- 
ing many of our once viable sites and their adjacent properties to 
sit xmtil someone will take a chfuice. 

The State of Maryland is currently considering a voluntaiy clean- 
up program to aid in the funding of administrative expenses of 
State stafF in reviewing and implementing such programs. The 
State has also exercised discretion in entering into suit cases 
against purchasers of contaminated sites, where it was the prior 
owner, and not the purchaser, who was responsible for the condi- 

Maryland has also occasionally extended credit to site purchasers 
where part of the loan funds were used for clean-up. These initial 
programs are a step in the right direction, making these abandoned 
sites more acceptable for redevelopment and less risky. With initia- 
tives such as these, accompanied by legislation, the potential for re- 
development of our abandoned industrial sites becomes more real. 

It is all too apparent what these idle sites are costing this Nation 
with each passing day: infrastructures that were built to service 
the industrial regions, not to mention sewi^, utilities, and tiie list 
goes on. However, the cost doesn't stop. Maintenance continues, but 
at whose expense? 

Unfortunately, there are no quick fixes to a problem that's been 
growing over the years, but there are steps in the right direction. 
Senate bill 299 is one of them. Cooperation between the public and 
private sectors is another. 

Communities need to get involved and urge their public officials 
to begin to begin taking the initiative toward remediation. South- 
east Development Incorporated, along with several other local com- 
munity-based groups, some public officials and staff, have begun 
this process. 

By identifying problematic areas and addressing each individ- 
ually, with research and recommendations, the Soutneast plan will 
come together in the fall of this year. 

One specific agenda item has been the industrial and poorer 
areas of Southeast Baltimore. Vast amounts of vacant land sites 
and underutilized properties have been identified. For redevelop- 
ment of tjiese sites there is opportunity, opportunities such as com- 
bining several parcels and developing an industrial park. 

Seeing how the city-owned Holabird Industrial Park has been 
such a success, more businesses are interested in locating in our 

Opportunity. The opportunities are there. However, what we 
neea now are the incentives, accessibility to once taboo sites and 

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the availability to fund theBe undertakings. Senate bill 299 may be 
the beginning of a resurgence of development in our industrial 
areas, and a brighter future for many of our communities. 

liiank you. 

The Chairman. Thank you very much. 

Let me just pose a couple of questions, then I'll go to my col- 
leagues for the questions that they would like to raise. 

I thought, Mr. Wysocki, that the conversation that you had with 
President Clinton yesterdav on this approach, I think, is very help- 
ful insight as to the fact tnat S. 299 is an attractive concept, and 
he apparently found it so in your conversation. 

I assume the answer to the following question is yes, but are you 
all of the view that many nonprofit community development cor- 
porations today do have the kind of capacity to carry out these 
^pes of redevelopment projects, if we ciui proceed along the lines 
ttiat S. 299 contemplates? Is that correct, Mr. Wysocki? 

Mr. Wysocki. Yes. In my testimony, 1 only gave two examples, 
because I had the attachment of press stories to give you the fuller 
story. But we have other members. 

Jane Addams Resource Corporation, they're taking on their sec- 
ond industrial building — in this case, it's not abandoned land, but 
it was abandoned property that they are rehabilitating. 

There's also another one of our members. Greater Southwest De- 
velopment, that has plans for using vacant rail yards for a new in- 
dustrial park. They've already done a shopping center, a senior 
housing project in their comprehensive plans for their communities. 

Anower group on the cit^ s southeast side, heavily hit by the de- 
cline in the steel industry, nad plans for a resource recovery facility 
that I think is still viable. That particular site is owned by BOA, 
so it's not quite, it's federally owned, so it doesn't quite fit this cur- 
rent legislation. 

That capacity exists, and one of the points that I made to Presi- 
dent Clinton yesterday is, given the demographic targeting that are 
going to be involved in dnese empowerment zones or enterprise 
nei^borhoods, you could guess that we're also looking at commu- 
nities in the country that are faced with this kind of abandoned 
land situation. 

So the point I was making to him was to know ahead of time 
that you're roing to be running into this issue of environmental re- 
mediation, 'niat needs to be part of the puzzle. 

"The ChairIiIan. Greg, let me ask you. In terms of cleaning up 
these former industrial and commercial sites and getting them re- 
cycled, what are some of the uses that are appropriate and some 
of the situations you've seen? We've just had some examples, but 
in your experience, you know, what kind of range of options are we 
looking at here, if we can just get these facilities and this land back 
in use? 

Mr. PiTONiAK. Sure. Well, first of all, in some respects, the uses 
are endless. I mean, if they were manufacturing to begin with, they 
have obviously potential, for example, to be manufacturing again. 

But certainly one evolution that's occurred across the country, 
and indeed in our State, is that you had heavy manufacturing and 
industrial along attractive waterfront locations, waterfront and 
lake fVont and so on, so that a conversion to commercial, retail, or 

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residential is a very real and attractive possibility, if we can over- 
come the obstacles. 

The Chairhan. IVs a hi^ value use, too, is it not? 

Mr. PiTONlAK. Absolutely, a hi^h value use. It creates population 
growth, which then spurs the spinoff economic development and so 
on. And so I think that would be one of the most beneficial aspects 
of the use. 

The Chairman. Anybody else want to contribute on that? Yes? 

Mr. Wysocki. rd just like to note, in looking at developing from 
scratch on some of uiis abandoned land, that you also have the op- 
portunity, when you build t^ese new industrial parks, to make it 
a mixed use facility as well, so that you're putting on site training 
centers, day care facilities. So you're meeting all of the demands of 
the work force ri^t there on site. And that kind of innovation, I 
think, is veiy critical to our urban areas. 

The Chairman. Let me say how much I appreciate the testimony 
this morning. I'm about to yield to my colleagues. I've got to go 
down and participate in a meeting with the First Lady, Hillary 
Rodham Clinton, on the health care issue at noon and so I must 
leave to do that. I'm the Chairman of the Subcommittee on Health, 
of the Finance Committee. 

I'm going to call on Senator Bennett, first, and then Senator 

I want to say, with respect to the two nominations that weVe 
been voting on today, the vote on Mr. Retsinas was unanimous, 19 
ayes, nays. The vote on Ms. Achtenbere's nomination was 14 
ayes, 3 nays, and 1 not voting. So they'll both be reported favorably 
to the Senate as a whole with those vote totals from the committee. 

You wanted to add one other thing, then I'm going to go to Sen- 
ator Bennett. 

Mr. PrrONIAK. Thank you, Senator. 

1 just wanted to indicate that I think one of the very positive as- 
pects of the legislation is that it's focused. It's not attempting to 
cure all the environmental problems, including administrative and 
policy, that we're confronting in this country. 

I heard the discussion of some of the other Senators about the 
Superfund and the EPA and so on. And listen, I absolutely am 
frustrated myself in my own State with very similar case studies. 

But I think one of the beauties of this legislation is it's a tool to 
deal with some of the problems, specific problems right now, and 
I guess it's a word of caution to say, I'd hate to see the bill bogged 
down with broader policy issues or environmental issues. Andin- 
stead, let it move forward as a tool where states and local govern- 
ments have said, we have a project in mind. We know we can re- 
mediate the contamination. We want to move forward, but we need 
some financial support. I think this legislation provides that kind 
of impetus, and if we can keep it focused on that, maybe it has 
greater prospects of passing. 

The Chairman. Well, you know, that raises another interesting 
point. And that is is t^at if we can demonstrate, by means of this 
effort, that this works and this is a quick way to get an economic 
return and get private sector strenetn growing again, and taking 
these properties off the sidelines ana getting them oack functioning 

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again, it may help us break the logjam in committees outside our 

In other words, if we can show a working model here, it gets 
pretty hard for somebody else to throw something up to say, well 
we can't solve this problem in some other situation thafs com- 
parable in many ways. 

I think maybe we can engineer something of a breakthrough of 
process and technique here, where everybody comes out ahead, and 
maybe that'll help lever a breakthrough m areas that we can't 
reach as directly. 

So, Senator Bennett, let me call on you. And Senator Dodd has 
consented to finish the hearing. 

I want to thank all of you again, and we appreciate your testi- 
mony very much. 

Senator Dodd. Mr. Chairman, would you mind if we invited Mr. 
Perry to join the witness table? 

The Chairman. Sure. 

Mr. PrroNiAK. I have to excuse myself. 

The Chairman. He can take your seat. Thank you again for com- 

Senator Dodd. I would just introduce Mr. Perry. He's the Presi- 
dent of a company called Environmental Warrant in Connecticut. 
They insure against the very thing we've been talking about. I 
thought it mi|^t be interesting from someone who has experience 
in that industry, to talk about some of the problems. 

But welljust go to the questions. 

Senator Bennett, why don't you proceed with your questions and 
then I'll have some for our witnesses. 

Senator BENNETT. Thank you, Mr. Chairman. 

I too am ^oing to have to slip away, but I'm delighted that Mr. 
Perry is joining the witnesses, because this is the heart of the prob- 

And Mr. Wysocki, you, in your statement, summarized part of 
the frustration that surrounds this whole circumstance. Even if 
Trendler Metal Products cleans up the site, remains within the law 
and has the contaminated dirt hauled away, it retains ownership 
of the dirt. 

Mr. Wysocki. And let me just not«^ Senator, that this is dirt that 
thejy were not responsible for contaminating in the first place. 

Senator BENNETT. You are using common sense here, and that's 
a rare commodity when you're dealing with these kinds of issues. 

Back to the example that Senator Dodd cites, and that I cited — 
many of these sites became contaminated because the people who 
used them abided by the law. That is, the practices that the^ were 
following at the time were perfectly legal when they were bemg fol- 

Then the law got changed and liability then went to anyone who 
had anything to do with the property, whether it's a lender who 
lent money on it, strictly abiding oy the law, someone who bought 
it after, like Trendler here in this circumststnce, who had nothing 
whatever to do with the pollution. 

The legal stream says, we don't care. If you have anything to do 
with this property, you have joint and several liability. Then we go 
to the deep pockets, which is why counties won't condemn and ta£e 

71-592 0-93-2 

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it over, banks won't foreclose, people won't buy and clean up and 
use, because they will be tainted by it. And wmie I agree with the 
request that Mr. Pitoniak made that we move ahead on this legis- 
lation, I think we can't ignore this overriding legal maze tiiat we're 
in, and we need to try to do as much as we can. 

l^e only comment I would make, and I'd be happy to hear what 
Mr. Perry might have to say about this, is that tnere are ways of 
cleaning this up. There are ways of putting it behind us. 

We have an industiy in Utah where dirt is brought in from otiier 
places. I don't know that it comes from as far away as Chicago, but 
it's dealt with. It's dealt with in the west desert. And let me tell 
you, if you want an area where there doesn't seem to be anything 
else to do, the west desert in Utah is ideally suited for dealii^ witn 
this kind of circumstance. And there are industries that do it re- 
sponsibly, they do it in sat environmentally clean fashion. 

We need to recognize that there must be sat end to this liability, 
or there will never be £in end to the problem. And, Mr. Perry, if 
you're in that business, I'd be pleased to hear what your comments 
mi^t be. 

Mr. Perry. Thank you, Senator. 

I've been in this business, which is a very small business, for sev- 
eral years now. 

My background is as a lender, so I initially eot into this business, 
because I saw first hand, having been in the oanking business for 
almost 20 years, as to what some of the problems were. 

Lenders are just plain afraid of making a new loan or renewing 
a loan on a piece of property that may be contaminated. Many of 
the properties that we deal with lenders on are not contaminated, 
but there's a perception, as you've indicated earlier, that there is. 
Much of the contamination is light. There's more made of it than 
there really is. 

The sectors of the business community that we're working with 
are lenders, municipalities, and also one that hasn't been men- 
tioned today, which is trustees. And I don't know if eveiyone is 
aware of the fact that there have been cases recently decided that 
trustees, that may be a trust department or a trust officer working 
in a bank, that may be managing a piece of properly for a trus^ 
can be held liable for contamination to a piece of property. 

There's a case in Arizona ri^t now which is a near disaster for 
a trust department where there is contamination on a piece of 
property that is causing havoc now in the banking industry on the 
trust side, as well. 

What we've tried to do to make banks more comfortable lenders 
in general — not only bonks, but insurance companies as well — more 
comfortable along with State municipal agencies, such as housing 
departments — we ve been working with the Department of Housing 
in the State of Connecticut — is to combine the use of a very hi^ 
class environmental site assessment with the use of an insurance 
vehicle which is really what I've been involved in developing for the 
last 2 vears, which is a very inexpensive form of insurance cov- 
erage tnat looks and works a little bit like title insurance. Which, 

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for the very first time now, guarantees a lender that if there is con- 
tamination on a property, that it has been identified and can be 
cleaned up, and tiiat there is notiiing more beyond that that they 
can be held responsible for. 

A lender likes the sound of the word, guarantee; they like the 
sound of being able to transfer risk. 

Up until now, all the/ve been able to do is their due diligence 
to the best of their ability, and worry about someone rewording or 
reworking a statute to get around that. But when you accomplish 
risk transfer, by putting a piece of insurance in place, the lender 
now can say that I not only have done my due diligence, but I've 
gotten rid of the risk. 

So the program that we're attempting to bring to the market- 
place in a pilot, and we're focusing on a number of lending institu- 
tions in the Northeast, but properties that we've looked at so far, 
and coverage that we're in the process of writing to date is on prop- 
erties across the United States. 

It Eiffords a lender an opportunity to transfer the risk, which is 
a tremendous way of levera^ng dollars, by the way. Because, as 
I say, the cost of the insurance coverage is not very much at all, 
compared to the cost of the clean-up. 

Senator Bennett. Well, I commend you for finding a market 
niche and filling it in the grand American tradition of free enter- 
prise. And I may have a customer for you. Thank you veiy much. 


Mr. Perry. Wonderful. 

Senator DODD [Presiding]. Thank you very much. Senator. I'm 
going to submit two articles for the record that I thought were par- 
ticularly worthwhile. 

One is called "Connecticut Seeks Current Jobs," New York 
Times, and I'll read the lead paragraph. It says: 

The bleak and vacant induitrial landscape that HtretcheB along the Shetudcet 
River will never be featured on the Sierra Club Calendar. The rata are more likely 
to be seen than spotted owls, but in Connecticut, and a handful of other States, 
places like this represent the new environmental frontier. 

And it goes on. 

I grew up on the Shetucket River. It's in Norwich, Connecticut, 
where my great grandparents settled when they came to the Unit- 
ed States. I know that river as well as 1 know any river, I suppose. 
I live on the Connecticut River today. 

And this article goes on. It talks about this particular bill, and 
pilot program, and obviously what we're doing in Connecticut, as 
well. Another article, called Transaction Grease Can Ease Liabil- 

Mr, Perry, this makes reference to your company so I thought 
that might be worthwhile to have for the record. 

Senator Dodd. Some of the best hearings that I've attended in 
the past have been when things have digressed a little bit. Earlier, 
Senator Domenici raised the issue of Superiund. 

I realize this is getting beyond the jurisdiction of this committee. 
But rd like to hear each of you just briefly comment on Superfund. 
I hear about it every time I go home from businesses and indus- 
tries in the State. The insurance industry is very outspoken on it. 

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Their concern is that we take various e^roups off the table, so we 
have lenders off the table, and miinicipaUties off. 

It's a narrower and narrower group that's going to assume the 
lion's share of the responsibility. 

We're just politicals taking people off the table because we don't 
want to go back and look at our mayors in the face, and say, we're 

going to nold you accountable. So that's an easy groMp to take off 
iie table. And lenders may be the second group to take off the 
table, because that's fairly easy to do, I suppose. 

So I wonder if each of you nu|;ht comment? I mean, all of you 
here work and care about the environment deeply, and tiie commit- 
tee would benefit from your observations. 

Ms. McCollum, why don't we start with you since we ended with 
you, just on your thoughts on this whole question of whether or not 
we ought to take a dramatically different view of Superfund legisla- 
tion in light of the problems that have been articulated here tod^. 

Ms. McCollum. Well, in order to do any tvpe of development, 
we're ^ing to have to have incentives, and obviously that would 
be a big incentive. Because, as it stands right now, people go else- 
where. Thats plain and simple. I mean, they look at the property. 
When they see what's involved, they look at the liability, they go 
elsewhere. So tJiat's going to have to be addressed. 

Right now, Maryland is trying to address it on a local level as 
best as we possibly can. But there still are liabilities out there, and 
they understand that, and they're trying to address them as best 
they can. So from the Federal level, you ^ow, there's going to have 
to be some form of legislation. 

Senator Dodd. Mr. Scotto? 

Mr. ScoTTO, Yes. I'd like to reiterate what I've already said. 
There are sites which I think this legislation is ri^t on target 
with, and there are other sites where uie Superfand nas to be m- 
volved beyond a shadow of a doubt, and whether it's a coalition of 
insurance companies that can come together to pick up that liabil- 
ity or not, technology has to be brought to bear on, in essence, what 
do you do with that dirt that was picked up tiiat they continue to 
be responsible for. And it is a responsibili^ that I think is more 
than worthwhile to take veiy seriously. But it would seem to me 
that the other committees that the Senate has in place ought to be 
working too. 

Senator Dodd. Well, you run into a wall of hostility when you 
talk about changing Superfund. There's as much of a political prob- 
lem here as a substantive one. 

Mr. Scotto. One step at a time, then. Senator. 

Senator Dodd. Mr. Wysocki, 

Mr. Wysocki. There's no doubt that there are these other issues 
in terms of municipal liability, lender liabili^. We run into that in 
terms of the city being willing to take title to transfer to a non- 
profit and asking the nonprofit to hold the city harmless. 

I think there are some legal interpretations that would say that 
the city's just passing title, and therefore mie^t be exempt. 

The lender liability is a mojor issue. We had a particular indus- 
trial developer that our organization was working with. There are 
very few of these people who invest their own capital to go in and 
rehab these older buildings and lease them up. And he oaaically 

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was just lookine to cash out to move on to do another building. He 
wasn't just looking to cash out for profit; he was going to take that 
capital and reinvest it in another building. 

I actually think there's also an issue, with all due respect, to the 
environmental consultii^ business. There's also an issue of some 
self-policing out there. Because in this particular case, when vou 
read the detailed phase one, you could come to the conclusion that 
there was no big problem here. 

But, yet, that environmental comp{iny was giving this developer 
an unsolicited bid for phase two, and if you read me conclusion of 
the phase one, and you were a lender, as lenders were involved 
with this, you would come to the interpretation that you could not 
lend on any building in Chicago built before 1955. 

I think uiere are issues here of clarifying for lenders. And we try 
to pursue the point with the lenders involved here that, you know, 
read the full report. This is no big deal. You're drawing the erro- 
neous conclusion here, but it wasn t drawing an erroneous conclu- 
sion 80 much as being concerned about their lender liability. So I 
think there are these other issues. 

But going back to points that were made earlier, and one of the 
reasons I ended my testimony emphasizing that there are projects 
waiting to be done, I think as the Chairman said, this can really 
demonstrate, this bill can demonstrate, it can put hard dollars out 
^at will clean it up said move some of these projects forward, and 
at the same time, allow us to have the opportunity to forge these 
kinds of partnerships that were bein^ referred to, with some of the 
new technology, and let us get some jobs going on, that I think will 

R've you all in the Senate and in the Congress, the opportunity to 
ok at these larger issues. 

And so I think we need to start somewhere, and thatfs the first 
point tiiat I think needs to happen with this bill. 

Senator DoDD. Before asking you, Mr. Parker, for comments, you 
know, coming again from Connecticut, as I do. that the insurance 
industry is a nuyor employer in our State. And obviously today 
with discussions about health care reform, the insurance industry 
is a nice target. It's a pretty easy target to go after in 49 States. 
Even in Connecticut, people feel pretty free to do it politically. 

But I pust want you to know, as well, that there are a lot of con- 
flicting issues that the insurance industry is asked to assume. And 
the industry is going to walk away from a lot of this stuff. They're 
not going to cover this stuff, with the exception of Mr. Perry, who 
sees the niche being carved out 

Mr, Parker, we come fVom a State with a lot of sites that need 
to be redeveloped. 

Mr. Pahkbr. Yes, we do. From the perspective of an environ- 
mental agency, this is an issue I deal with every single day. And 
there's two levels of environmental liability. There's the State level, 
and there's the Federal level. And I think in Connecticut, we've ef- 
fectively dealt with the liability issue at the State level. That is, 
in our own uriian site pilot program and the expansion we hope to 
have this year, the State of Connecticut is taking the lead to do the 
studies ourselves, using our consultants, to do a thorough com- 
prehensive evaluation and identify what the problems are on that 
site, and what, if any, remedial measures have to go forward. 

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The question that we get most often is one of, define the problem. 
We wtint to play with a full deck, and understand what that prob- 
lem is, so we can gauge what that future liability might be. So the 
first step is to do the studies to define it. If we go through this 
clean-up pr<^am, and the State reviews it and approves it, and we 
review and approve and perhaps implement remedial measures, 
that gives the banks and private investors a high degree of con- 
fidence in what the State of Connecticut DEP has done. And they 
have indicated a willingness to go forward and invest money in a 

We are working with the governor's ofBce on just such a proposal 
in Bridgeport, Connecticut, in which investors would like bo invest 
millions of dollars to do tiiis. But they've asked the department, 
throu^ our urban site program, to deal with this. And th^ feel 
that if we do the comprehensive studies, and draw and identify the 
environmental baseline, that they are willing to go forward with 
what I call a future environmental risk assoaated with what they 
miE^t do on the site in the future, as long as we can fully define 
and characterize the historical problems that have been associated 
with 50. 60, 70, if not longer, years of industrial activity. 

The aiflicult problem, however, with the liability issue is at the 
Federal level. Aiid that's a very difficult issue to deal with because 
it's more comprehensive. And my own experiences in dealin|[ with 
U.S. EPA, you're not going to find anywhere there that's going to 
give anyone any sort of guarantee that there's not going to be fu- 
ture environmental liability for what happened in the past. I think 
the importance is to draw the line. What s past is past^ and what's 
future is future. 

Again, if that liability is defined, it goes a long way toward mak- 
ing people comfortable. And the product that Charlie Perry has to 
oner increases that level of comfort further still. 

Senator DoDD. 'That's a very |:ood point I presume vou draw the 
distinction, when you say past is past, and future is niture, in the 
case of the past, wnere there was just clear negligence or 

Mr. Parker. Correct. In a lot of these sites, we're dealine with 
30, 40 years of history. There have been spills, discharges, releases, 
in a lot of cases, before environmental laws were even on the books. 
And you're not going to go back and go after those particular par- 
ties, and in most instances, the current property owner may oe a 
bank, a municipality, a real estate company, or an individual. 
Those people do not have the resources. 

What we intend to do is use State money, and if this bill were 
to pass. Federal money to start that process and get a return on 
that investment in the future. 

Senator DoDD. It can even get more ridiculous than that. I mean, 
I don't want to get too anecdotal here, but there's a Connecticut 
company — I won't use their name here, but they are based in Hart- 
ford, Connecticut — that was dealing with some scrap metal, rare 
metal, a few years ago, a number of years ago, dealt with metals 
generally, ana (^d not quite know how to deal with this one. So it 
got in touch with the EPA at the time, and said, what do you rec- 
ommend we do with this. They recommended a site in Pennsylva- 
nia where, on that recommendation, they then sent the metel. The 
Pennsylvania company went belly up a few years ago, identified as 

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a Superfiind site. They asked for companies that had sent any ma- 
terials there to step forward. 

This company admitted that they had, and are now faced with 
a serious lawsuit, even though they sent the material there on the 
recommendation of the EP^ They did not do it on their own. I 
mean, it gets carried to the absurd. They were one of the few com- 
panies, by the way, that stepped forward and admitted that they 
in fact had sent down materials. 

Mr. Parker. Senator, I would also point out that one of the 
things we do is carefully look at the sites that we're going to use 
State money to fund. 

If we have a suspicion that that site might be eligible under the 
Federal program, we stay away from it to avoid those questions on 
liability, and stick to sites that have less contamination, that would 
not be eligible, and move forward with our State program. 

Senator Dodd. Mr. Peny, would you comment on this bill? I 
don't know if it's fair to ask you, whether you've had a chance to 
look at it But you've heard, certainly, the discussion here today. 
And we're interested in your general comments on where you think 
we're headed with this legislation. 

Mr. Perry. I think the biggest issue is, or several issues are: 

No. 1, I think it would be a shame to see this money appro- 
priated, and the have another 80 to 80 plus percent of it go toward 
defense costs or litigation, as opposed to clean-up or effecting clean- 

No. 2, 1 think the biggest question in front of everyone would be 
to see how much of this money could be leveraged, and how much 
could Uiis money be leveraged by. In other words, how many dol- 
lars could we multiply this % for effective use. 

Again, that second comment is not meant to be self-serving; it is 
because insurance does leverage the use of these kinds of funds by 
providing guarantees as opposed to absolute spending. But it also 
should be used as encouragement in, my guess is, in pilots, because 
I don't think with the kind of money that is probably to be appro- 
priated, that you're going to clean up the world, but it would be a 
shame not to start 

My guess is that the best way to start would be to focus. There's 
nothing that breeds success like success. And if you can point to 
a certain number of properties, and Ed and I have worked on a 
number of those together in Connecticut, that you can get back into 
off the dole, onto the tax rolls again, creating jobs, and we're doing 

It works. It does work. 

Senator Dodd. If 1 could, I'd like to have you maybe submit some 
ideas taking a look at this. It's the Chairman's bill, but I'm sure 
he'd second this request. 

Mr. Perry. I'd be glad to do that. 

[The following material was subsequently submitted for the 

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SuaoBsnoNS fob Lkvibaoino FtoiRAL ApniopRiATioNS AS A Part or 
Sknatb Bill 299— Abandoned Land Rkusx Act op 1903— SuBitnTSD by 
Char1£B L. Pkrkv, Jil, Hay 25, 1993; to testdiony qivkn May 6, 1993 

1. Focus proaram in ■ aniBl] number of State(B) ntea in order to achieve a b^in- 
ning aooDer, rather Uian later, by tadiling Ute whole countiy. 

2. Do not take on the moat difficult problems or problem areas where tlie dumce 
tor success is slim, or fi to 10 years away. Adiieve a goal now, not later, and use 
success to foiter ftirther success. 

3. Mandate that no fiinds are to be used for administration and/or litigation so 
that rSuperfiind IT doea not occur again with all funds going to stafT and lawyers 
and nothu^g to clean-up. 

4. The best tlMni^ as to 'leveraging' the Federal dollars appropriated would be 
to use them in an mdirect spending form audi as a "guarantee, aa opposed to out- 
rj^t spending therefore, muUiplying the effect of these dollars, tinws piAenUally 
100 tiroes: 

• either for a loan for reraediation; or 

• if remediation was completed by the buyer, then Insurance would be paid for by 
the program: or 

• the cost of lAe remediation and insurance would be financed by Federal dollars; 

Hie point is that these dollars should be used as vicouragement not to totally 
fund the sodal/enviromnental remediation, which wouldn't even put a dent in the 
national clean-up costs required. 

Senator DODD. Because there's no question, obviously, that the 
idea here is to have the dollars go toward clean-up, not to encour- 
age more litigation. 

The President had that line in his State of the Union address 
when he said the purpoBe of Superfund was to clean up the sites, 
not to subsidize the l%al profession. I think that got the biggest 
applause, as I recall, ofany line he used that night, and there were 
many applause lines. In fact, I heard more comments from folks 
back home about that line than anything else the President said 
that ni^t in his speech, 

Mr. Perky. If I could add a comment to the comment that you've 
just made. 

One example which results certainly in business to us, as a busi- 
ness, but hi^lights one of the problems that's out there, and that 
is that we have clients that come to us to place insurance on pieces 
of property, to verify the fact that there is no risk or to transfer 
the risk, simply because the cost of the insurance is less than hav- 
ing an attorney draw up an indemnification letter to assure them 
that the risk is not there. It's shameful. 

Senator DoDD. Yes, it is. Well, this has been verv veiy helpful. 

Mr. Peny, we didn't mean to sandbag you here out sitting out 
in the audience, thats a danger when you come to IJiese hearings, 
that youll be called upon. 

We thank all of our witnesses for your testimony this morning. 

Again, the Chairman, as you know, had to leave, but there may 
be some additional questions we'd have for you from the committee, 
and I think you got a good indication fVom people like Senator Ben- 
nett and Senator Domenici, that there is a strong desire to develop 
a bipartisan piece of legislation. 

While it may not eradicate all of the problems, there's a desire 
here to see us move far more intelligently and aggressively in these 
areas, and to get to the bottom line. And that isThow do you clean 

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up these sites? That^s really what motivates all of us. So we thank 
you all for coining this morning. 

The committee will stand adjourned until further call of Uie 

[Whereupon, the committee was adjourned, subject to call of iJie 

[Prepared statements, responses to written questions to wit- 
nesses, and additional material supplied for the record follow:] 

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May G. 1993 

Mr. Chairman, I appreciate the ooportunity to testily this momias on S. 299, the 
"Abandoned Land Reuse Act," a bill that you, several of your Banking Committee 
colleBgues, and I introduced early this Bession. 

The purpose of S. 299 is to promote the remediation and reuse of abandoned man- 
ufacturing facilities. The premises underlying the bill are as follows: 

Firat, substantial private and public capital has been invested in these sites al- 
ready. Second, these sites have infrastructure — water, gas, utUities, rail sidinga, and 
the like — alreac^ in place. Third, these sites — if left abandoned — may pose ttireatS 
to human health and the environment due to contamination. Fourth, they certainly 
contribute to blight and the deterioration of surrounding communities. Fifth, it 
makes more sense to redevelop these so-called "brown ricld' sites than to encourage 
urban sprawl and the destruction of ao<alled 'green field" sites — our agricultund 
lands and open spaces. And sixth, the redevelopment of these sites will offer impor- 
tant job, economic development, and tax base benefits to distressed local commu- 
nities. S. 299 represents a sort of expanded "bottle bill' ethic, the principle that it 
is better to recycle and reuse than to abandon and discard. 

S. 299 builds upon the pioneering work of the Northeast-Midwest Institute in tx- 
ploring the extent of the problem and possible solutions. The problem certainly is 
concentrated in the Northeast-Midwest region, our Nation's industrial heartland. 
We have abandoned machine tool shops up and down Precision Valley in my State, 
Vermont. We have shuttered steel mills in Pennsylvania's Monongahela Valley. 
Empty automobile assembly facilities, metal-plating factories, and chemical plants 
dot Michigan and the rest of the Midwest. 

Shifts in America's industrial base from predominantly heavy manufacturing to 
lig^t manufacturing, dependency on '^ust-in-time" specialty production and distribu- 
tion, and increasing reliance on highways, not waterways and railways, have ren- 
dered many of these manufacturing sites underutilized or even obsolete. 

But the problem, while concentrated in our region, is truly national in scope. 
Southern towns have empty textile mills. Western towns have abandoned mining 
and ore processing facilities. 

S. 299, whidi amends the Housing and Community Development Act of 1974, au- 
thorizes $100 million annually for fiscal years 1994, 1995, and 1996 for a nationwide 
site remediation and reuse demonstration program. The bill authorizes the Sec- 
retary of Housing and Urban Development (HUD) to select sites for assistance on 
a State-by-State oasis or to delegate site selection and related funding to a State's 
Governor where appropriate. 

Federal grants can cover up to 76 percent of the cost of an approved site remedi- 
ation and reuse plan. Grantees — general purpose local governments and non-profit 
community development organizations — are required to pay a minimum of 25 per- 
cent of the cost. f4on-Federal third parties may help grantees aatisfy this require- 
ment through rinancia] assistance or in-kind contributions. 

The bill contains avoidance of windfall and grant recapture provisions. Federal fa- 
cilities and National Priority List (NPL) — "Superfund" — sites are excluded. Criteria 
for site and plan selection include the foDowing: the project must be economically 
viable; that is, benefits must exceed costs. The project must leverage significant non- 
Federal investment. The site must be located in areas of economic and social dis- 
tress. The project must offer local job training and employment opportunities. 

Several States are moving ahead with their own programs, which is to be com- 
mended and encouraged. But States, local governments, non-profits, and the private 
sector cannot tackle this problem without Federal assistance. Our bill takes the first 
step toward providing that assistance. 

Mr. Chairman, abandoned manufacturing facilities represent an enormous waste 
of physical resources and capital. Their remediation poses a daunting challenge. En- 
tities traditionally antagonistic toward one another will have to worii together to 
meet the challenge. We need to address complicated liability concerns. We need to 
consider creative measures such as covenants not to sue, environmental receiver- 
ship, environmental warranties, tax increment financing, standardized and expe- 
dited processes for voluntai7 clean-ups, and tiered clean-up standards. It wilt be dif- 
f<n<1t to achieve nationwide remediation and reuse, but the costs of Dot making the 
< ft — in linanciol, physical, and human terms — are too great to bear. 

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Mr. Chunnaii, I commend you for convening today's hearins to dJacuBS the 'Aban- 
doned Land Reuae Act or 1993.* 1 look forward to hearing from today's witnesses 
about their efTorta to rehabilitate abandoned and underused sites as part of a com- 
munity development program. 

In particular, I am interested in hearing (mm one or my constituents, Mr. Scotto 
about the Gowanus Canal Community Development Corporation's progress in clean- 
ingup the canal. 

llie "Abandoned Land Reuse Act' raises the important issue of how to develop 
and rehabilitate properties that have been abandoned because they pose he^th or 
safety hazards, lliis Dill highlights the fact that contaminaled areas often surround 
abandoned properties and that developing the abandoned properties would have a 
positive economic effect on these communities. 

Currently, the potential enviroDmental hazards that may exist on a particular 
abandoned property have made it very difllcult for community development groups 
to attract developer* sod lenders to rehabilitate the sites. This is another example 
of how our eavironmental laws have an unintended economic impact. 

I am concerned that our environmental laws are exacerbating the credit crunch. 
Lenders are afraid to make loans to businesses that own property that may later 
prove to be contaminated. The lenders may face astronomical liability due to pollu- 
tion that they lUd not cause or contribute to. This situation doesn't btlp the tconomy 
and it dotsn^ htlp the environment. 

I plan to pursue legislation to remedy this problem of lender liability in the near 
liiture. Thank you, tar. Chairman. 


Bilr. Chairman, as an original co-sponsor of the Abandoned Land Reuse Act, I wel- 
come the opportunity to hear from the distinguished panels of public oflidals and 
non-proflt otTicials wfio are here today to olTer tneir views on this legislation. 

As I traveled acriMs the State of lUinois campaigning for this job, I saw too many 
desolated areas that were once booming industrialcentera — in many cases, the very 
Iwart" of a city or nei^boriiood. The tragedy lies in the fact that when this eco- 
nomic foundation is gone, jobs are lost, and communities collapse. 

Using a cost-eflectivc development strateKy. wc must start to attack these con- 
taminated areas where decent, usable public and private infrastructure is already 
in place. Based on current development incentives, capital and land resouroea flow 
to greener" areas that require new extenaiona of water and sewer tines, roadways, 
and telecommunications. We need to create jobs where people live, rather than 
where cotti lives. 

I am very happy to see that this committee has chosen Ted Wysocki to testify on 
this important issue. As the Executive Director of the Chicago Association of the 
Neirfiborhood Development Organizations, othenwise known as CAN-DO, Ted has 
worked on some of Chicago's most innovative programs in retaining industries and 
revitalization. I hope he wiU share with us some of the Chicago success stories, and 
I look forward to his, and the other panel members' suggestions, on how this legisla- 
tion can make abandoned lands prosper again. 

Mr. Chairman, we aU know that some of the most successful economic programs 
involve Public /Private Partnerships — a small amount of public funding can trigger 
private investment that creates jobs and restores coromumties. This Tegislation is 
a step in the ri^t direction. 


Mr. Chairman, I am pleased today to commend your efforts to encourage the 
reuse and redevebpment of abandoned property that has been contaminated. I 
ahare vour concern about the under-utilization of valuable industrial properties 
tbrougnout our country. 

Tlte moat recent economic reports are not encouraging, especially for States like 
ours that have sufTered signiricant^ from this, the longest recession since the Great 
Depression- Too many Americans are still without a job, and many have low hopes 
of finding employment in the near hiture. Our top pnarity must be to get our econ- 
omy going again, and we must be as creative as possible about adding and keeping 
the rasinesses and jobs we need. 

One creative approach, which 1 applaud you for promoting, would foster the clean- 
up of properties that have suflered minor environmental contamination so as to tree 

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those pnpertiM Tor eeonomie ndevdimmeiit and ioba creation. A> dudnnan of tbt 
Senate Superflind, RA^cUng, and Solid Waste Management Subcommittee, I have 
Been how even mliior oontaminaUon of property can diill economic development, 
aince lenders and pnqiective buyera are reluctant to enter Into tranaactiona that 
would lead to envlranmental tiabili^. There are aome 100,000 propertiefl In the 
country that have Buffered minor environmental pollution. Many of thoae properties 
if cleaned up, could provide the seeds for redevelopment and an economic noon for 
their surrounding cammunitiea. 

In my own State of New Jersey, a program to foster the voluntaiv deamip ei 
minor contaminated prtntertiea has yielded enormous economic as well as •nvmn* 
mental letums. Under uiat program, the owner of contaminated properW mMy if- 

6 roach the State and offer to clean up the site, under State standards asa overall 
lat is fully Ibnded by the proper^ ovmer. In return, after the alt« has been deaned 
up. the State provides a letter that aaaurea alt comers that the prooer^ has in flKt 
been cleaned up to the State's satisfaction. Such a letter can provide critical assur- 
ance to prospective buyers, lenders, and tenants that it is safe for them ba enter 
into a real eatate tranaaction vrith the property owner. 

This simple concept has already generated enormous returns. The State program, 
only 16 months old, has coat the State $3 million to start up, but has already gen- 
erated 3,000 jobs and several hundred million dollara wortli of economic redevelop- 
ment. It is expected to be largely self-sufBdent from hereon in, widi inccnning '^- 
enta* paying their way for any needed State overai^t activities and technical assist- 
ance. Aa you Icnow, many other States, induding Oregon, Illinois, Indiana, Min- 
nesota, Massadiusetts, and New Mexico have also begun similar voluntaiy cteannp 
programs. And I have introduced S. 773, the Voluntaiy Environmental Cleanup and 
Economic Redevelopment Act of 1993, with a bipartisan m^rity of the Senate En- 
vironment and Public Works Committee, to make audi a program pomflile in States 
across the country. 

Mr. Chairman, I believe that the legislation which you have introduced, S. 299, 
is fblW oonslstent with the approadt I have taken in S. 773 in seeking economic 
redevelopment of contaminated properties. I applaud vou, Mr. Chairman, on your 
creative initiatives in seeking to encourage the redeveiopinent of abandoned in<his- 
trial facilities. I look forward to woiking closely with you to refine a single legisla- 
tive approach that will maximite the goals of environmental deanup and econoindc 


First let me commend our Chairman for holding this hearing and for all of die 
hard work he has done on this legislation. I am ^ased to be a coaponsor of this 
biU, and I look forward to working with Chairman Riegte and Senators Boxer and 
Mosetey-Braun on this issue in the future. 

The Abandoned Land Reuse Act addresses a critical issue facing communities 
across our Nation: How to redevelop underutilized industrial sites. 

We all know the problem. Industrial facilities vfilh rusting beams and broken win- 
dows sit idle in our towns and dties. The legacy of an earlier industrial oeneration, 
these facilities arc usually contaminated with various pollutants. Residienta of wc^ 
home State of Connectioit are familiar with facilities sudi as Royal Business Ha- 
diinea in Hartford, Bryant Electric in Bridgeport, and the former Century Brass 
Site in Wateibury. "Hie restoration and reuse of sudi facilities would not only dean 
up the environmental problema but would also increase the tax base, uspnve dis- 
tressed neighborhoods, and create jobs. However, primarily because of environ- 
mental concema, it haa been very difficult for communities to find the investment 
camtol needed to revitalize these fadlities. 

The Abandoned Land Reuse Act would provide help. The legislation anthoriies 
grants by the Secretory of Housing and Urban Development to local governments 
or nonprofit community development corporations for the redevelopment of aban- 
doned industrial facilities that are located in economically diatresaed communities. 
To ensure that the local grantee has a sufficient stake m the project, the fam re- 
quires the local grantee to contribute 25% of the costs of the site restoration. 

It is inuwrtant to note that this is not a new superfiind program or an expendie 
new monoate. Ihia legislation would simply ofler a helinng hand to those comma- 
nities that are committed to the rehabilitation of their abandoned Industrial sites. 

I am particularly exdted about the potential benefits from this l^slation In tej 
home State of Connecticut, where the public and private sectors are woridng to- 
gether to r'^ "-'- ' "- ■■- — ..._ ■^-.- ^ ...J .___!_ ... 

program t 

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I am pleued that we h&ve Edward Parker fnm the Connecticut Department of 
Envlromnental Protection with na today. I am aura that he will provide insist into 
the wayi in whldi the Abandoned Land Rouae Act would complement State efTorta. 

In addition to the eSbrta of the Stale p)vernment, the buaineaa community in 
Connecticut haa alao become involved. A good example la the work of Environmental 

Warranty, a company baaad In Weat Hartford, Connecticut. It haa developed an en- 
vironmental aite aaMnment insurance policy that pi^ up to the value of the prop- 
er^ if environmental contamination la maoovered. By allowing inveators and lender* 

to tranaler the riak of undiacovered environmental contamination, this type of inaur- 
ance will make the financing of redevelonnent eflbrta much easier. 

Cleariy, the pisaent efforta being made by State and local govemmenta and the 
private aector would get a inud)>naeded booat Irom the Abandoned Land Reuae Act. 
by providing additional a^tal and ttrenathenintf the partnerahip between the Fed- 
eral Government and local communitieB, the l^islation would atimulate the redevel- 
opment proceaa. And aa the number of rehamlitated sites continuea to grow, tlw 
comJbrt Mvel of investon wiU incraaae. 

Of courve, the key benefit from thia legialation will be jobs. Initially, aa inihiatrial 
fadlities are restored, there wQl be new construction opportunities and environ- 
OMntal clean-np woik. After the sites are converted, the companies that move into 
the improved facilities will bring new manufacturing jobs. 

" — -.- r oui 

g to move this legis- 


1b» bill creates a program to facilitate the reuse of fonner industrial and commer- 
cial sites and facilities, when business operations have ceased, or only marginal op- 
erations continue, and redevebpment or reuse costs exceed the financial resources 
of site owners. 

Grant recitdeots most contribute at least 26 percent of the costs of making sites 
marketable. Eligible granteea are general purpose local govemments and local, non- 
profit commun% development corporations. Non-Fed^al third parties may help 
grantMS satisfy their contribution requirement. 

After the conduct of an open, competitive selection process, the Secretary or a 
State GovemtH- by delegation of authority would select demonstration sites based 
upon criteria that requiret 

— on economically viable redevelopment or reuse project; 
— significant leveraging of the Feoeivl grant with non-Federal (iinds; 
— site locatioa in anas sufiering economic and social distress; 

— ^intngovenunental agency cooperation and public/private partnership; commit- 
ment of State and local govemmenta to programs that fadlitate site redevelop- 
ment or reuse; 
^-consideration of need for aaaiatance to achieve site reuse; consideration of job 

training and employment opportunities generated by the project; and 
— timely site redevelopment or reuse. 

llie demonstration pragram applies to sites other than Federally-owned facilities. 

The bill alao providea that up to 6 percent of the funds appropriated to implement 

the program can be used for technical assistance grants to facilitate local grantees' 

liw bill providra n _. 

fiscal years, and requires the Secretaty to submit by December 31, 1996, an initial 
report evaluating the results of the demonstration program. 

llie bill requires the Secretary or State Governor to implement the program In 
a manner that does not relieve site owners from liability that m^ exist under Fed- 
eral, State, or local law relating to aite conditions. 

Grant rec^iienta also would be obligated to repay: 
— up to 86 percent of Federal grant fiinda, if grant-funded costs were recovered fnm 

parties reaponaible for remedying aite coni£tiona under applicable law or with an 

interest in a aite or adjacent property following aite redevelopment or reuse; or 
— the fUl grant amount ptua interest, if approved redevelopment or reuse of a site 

were not Initiated and implemented in a Umel;^ manner. In the latter event the 

Secretary or State Governor would have authority to waive repayment in limited 

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ChairmBD Riegle and Members or the Committee on Banking Housing and 
UibBD Affairs. I am Benjamin F. Chavin, Jr., Executive Director of^ie National Ai- 
sociation for tne Advancement of Colored People. I am indeed pleased to have this 
opportunity to present testimony on the "Abandoned L^nd Reuse Aet of 1993" (S. 
299). I wisn to express my appreciation to Mr. Rie^e for sponsoring tliis important 
legislation. In particular, 1 note that one of the co-iponsors of this legislation {• Sen- 
ator Carol Moaeley-Braun (D-IL), the first AtHcan-American woman to serve in the 
U.S. Senate, I also wish to express my appreciation to Mr. Charles Lee, Reaeardi 
Director, United Church of Ciirist Commission for Racial Justice, for his assistance 
iiparing this testimony. 

1 have often said before, I am no stranger to the "hood* and I hold a deep and 

abidins personal commitment to the revifjEuizstion of the nation's uiban areas. 
Therelore, I welcome every opportunity to explore ways bv which the resources resi- 
dent within our communities can be harnessed to fulflll tneir Breotest potentiaL In- 
deed, I believe that this ranks among our nation's greatest ehaUenges as we prepare 
for the 21st centuiy. 

I endorse the nulls of this legislation, i.e, "to establish a program to demonstrate 
the benefits bdii feasibility of redeveloping or reusing abandoned or Bubetantially 
underutilized land in economically and socially distressed communities.* These goab 
seem entirely consonant with President CUnton's remarks in his Earth Day 19113 
Speech, '^oor nei^borhoods in our cities suffer most oflen from toxic poUution. 
Cleaning up the toxic wastes will create new jobs in these neighborhoods fior those 
people and make them safer places to live, to work, and to do business." 

I wish to commend the foresight of the Committee for recognizins the tremendoas 
and shameful waste of industrial, commercial, educational and human resources 
that lie fallow in the abandoned lands in our nation's urban areas. We can ill afford 
the impact on our conununities of large scale abandonment of factories and other 
industrial sites, with its concomitant unemployment and loss of a manufacturing tax 
base for our cities. Environmental decay is an integral part of the downward spiral 
of inner-city deterioration. Given the concentration of African Americans and other 
people of color in urban areas, we know that the impact of sudi abandonment on 
our communities is oaiticularly egregious. 

Mr. Chairman, I nave spent much time in communities that are the object of this 
legislation. I have visitca with young men dying of cancer at the Alteeld Garden 
Housing Project in the predominantly Black ana Latino Soutiiside of Chicago, Illi- 
nois. This housing project is built on top of a landfill, and is charact«rizea by its 
residents as a "toxic doughnut." It is surrounded by seven landfills, a sewage-treat- 
ment plant, a paint factory, steel mills and numerous chemical companies, many^ 
which are closed and abandoned. Sadly, this housing project represents the norm, 
not the exception, in people of color inner-city and urban communities. 

In 1987, the United Church of Christ Commission for Racial Justice published the 
landmarii studv 'Toxic Wastes and Race in the United States. One of its most salient 
frndings was the high number of hazardous waste sites in urisan areas populated 
by Alrican Americans and Latino Americans. These communities sutler an 
unacceptance burden from multiple sources of toxic pollution. For this reason, I sup- 
port the reintroduction of the Environmental Justice Act, originally introduced last 
year by then Senator Albert Gore and Representative John Lewis. This legislation 
seeks to establish a program to study signijicant adverse impacts on human health 
and to ensure nondiscriminatory enforcement of and compliance with environ- 
mental, health, and safety laws. 

Equally pernicious and debilitating are the economic consequences of urban dec^r. 
The wholesale abandonment of entire communities, many of whose factories are oon- 
taminated, is misguided. Not only do many African Americans and Latino Ameri- 
cans live in communities targeted for the disposal of environmental toxins and hju- 
ardouB wastes, but in fact they live in fully disposable communities. I a^aud this 
committee for calling our attention to the cntical nexus between envtronroBntal 
cleanup and economic revitalization. 

In October 1991, the Commission for Racial Justice sponsored the Tint National 
Pa>ple of Color Environmental Leadership Summit. It adopted a set of seventeen 
Prindnles of Environmental Justice, one of which affirms the need for environ- 
mental policies to clean up and rebuild our cities. Clearly, we need to combine the 
goals 01 environmental reclamation and reuse with economic revitalization and job 
creation. 'This is a theme consonant with the present demand to choose poli^ vp- 

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tiooB which ensure both environmental protection with economic prosperity. How- 
ever, we want to reiterate our poattion that in no way should any elToit comproimBe 
the enforceinent or pertinent environmental regulationB and statutes. 

Tbe Drimary purpose of this testimony is to encourage a broad based exploration 
of the oevelopmient of the new partnerships which would be critical to ensuring suc- 
ceas in combining economic revitalization and environmental cleanup. Demonstra- 
tion prqecta are needed which can give visibility to creative attempts to overcome 
the oMtades of economic revitaliiation in urban America. We are therefore pleased 
that wudi partnerahipB are beginning to emerge. 

Take, for example, a recent partnership b^ween the Bethel New Life, a not-for- 
milfit community improvement corporation in the predominantly African American 
West Garfield nei^d)oriiood of Chicago, and Argonne National Laboratories to deter- 
mine how the expertise of a national reaeateh and development center can be ap- 
plied, for the self-help efTort of a community development corporation to improve the 
environment, economy and educational resources of the West Garfield area. The 
areas of focus include: Industrial Site Reclamation, Waste Recycling, Energy Effi- 
cient Housing, Business Development, and Education. 

We wish to note the full support of Congresswonian Cardisa Collins for this Chi- 
cago-based demonstration effort. 

Other partnerships and projects of note include the creation of a job training pro- 
gram at the New Jersey Institute of Technology for persons from inner-city Newaric 
nei^iboihoods. Training programs would range from lead paint assessment and 
abatentsnt to the handlmg ofnazardous materials. We are aware of the job training 
prtyect at Cuyaho^ Community College in Cleveland, Ohio, started with a grant 
mm the U.S. Environmental Protection Af^ncy. 

It ta critical that the benefits of these programs be retained within the commu- 
nltiea Quy are intended to serve. Hence, community participation in the design and 
implementatioii of models should be required. We would argue for the provision of 
tooinkal aasistauce toward this end. Lastly, we should examine the role of the edu- 
cational institutions — be Ihe^ community colleges or elementary and secondary 
adiools in elevating, transmitting and retaining within the community the level of 
tedmoloaical and enviionmental literaqr capable of supporting new enterOTises. It 
is helpful that the recent^ formed National Environmental Education and Training 
Foundation has diosen urban education as its primary focus. We would hope that 
an examination of the initiatives to combine jobs training, job croation, and environ- 
mental quality be part of this focus. 

In the past, the environmental movement has excluded our cities from its defini- 
tion of what constitutes the environment. Certainly the emergence of a movement 
for environmental justice has begun to correct this unfortunate perception, Mr. 
Chairman, we look fbrwanl to a productive and worthwhile examination of strate- 
gies that would link environmental and economic justice as the cornerstones of a 
rebirth of America's cities, 


May 6, 1993 

Mr. Chairman, Senators: It is my pleasure to introduce Salvatore "Buddy" Scotto. 
Buddy is one of the strongest community activists in my district, and has fou^t 
to improve some of the most disadvantaged neighborhoods in Brooklyn. 

Buddy was bom in Brooklyn in 1928, and attended St. Fronds College. Although 
he eventually finished his B.A. there, his studies were interrupted by the Korean 
War. During that war. Buddy became the youngest master sergeant in the Far East- 
em Command. During his active service, he rose to the rank of Captain. After S 
years active service, he did 8 years reserve service in the New York National Guard. 

Since 1964, Bud^ has been active in Brooklyn civic affairs. He was inBlrumental 
in Betting a new sewage treatment plant in the Brooklyn Navy Yard, and has been 
wonting hard to improve the Gowanus Canal area. He organized the Carrol Gardena 
nti^ibortiood — really, in many ways. Buddy created the sense of neighborhood in 
Carrol Gardens, uniting the community, and he remains "the man to talk to" about 
awthing involving that area. 

1 thank you for the opportunity to introduce Buddy Scotto to this committee. He 
has abown his devotion to his country, and to our community. I recommend that 
you give careful attention to his testimony today. 

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The Uonoribl* Dooald B. Kl*)!*, Jr., Chdnun 
SiBiLa Collect* on Banking 
Homing and Uibui Affaii* 

B>ltUll|tOD. D.C. 

Daar Ssiutoi; KI((l*i 

ThB Connacticut Dapatisaiic of EnTlconaancal Pcotaetion haa baan itkad Ci 
provid* our vleva coacamlD) $.299 'Tba Abandonad Land Kauta Act of 1991*. I' 
ii ay uadacatandlni chat tha purpoia of tbii bill ii to tatabllih a pcogcaa Ii 
daaoDitriCe che banaflti ud featlbllity of radavaloplng or rauiicg ■' 
01 unda [Utilized land in aconaBieilly and socially diitrai 
199Z. Connacticut paaaad lagiilation [P* 92-Z33) having Cba M 
data, va ban inplaaantad a pilot pcogru to undarttka 
aisasiBanti ac 2 iltai par jraar. Tha Coooacticut Ganacil Aiiaablf ia pcaaantlT 
cootdaTlni lagiilatlon to axpand th* pilot prograa into a fall urban lili 
ceaediition progria vich da die a tad itaff and additional bend fundi for lila 

1 lupport yonr lagldacios and vould lika to couand you foe jour coaaon 
■ana* approach and for racognlElng the ijaportanca of lita claan-upa aa an 
Inlairil part of tha work nactiaar^ to (chlavt our goal of ravitallilng oni 
diatraaiad coaounitia*. I tuv* attaebad additional infocaatlon far rour ravla* 
and eoniideratlon ragarding our azpecianeaa and iiiuaa ralatad to S.Z99. I la 
coBaitcad ts providing any ■■•iacanca I can at you contlnua In your vaA aa 
ehii iuitiativa. If you or your itaff hava any quaitioni concamlns tbii 
Itttar or tha ittacbaaDt, you uy contact Mc. Edvicd Farkar (t (203) 366>713Z. 

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GoMMissiONKit, CoNNBcmcuT DBPARTiiem' OF Envhionmkntal Pkotbction 


Throu^out Connecticut there are hundreds of urban indoBtrial rites that are va- 
cant or significantly underutilized. More than 100 of these sites are located in our 
moat distressed communities. Each site has an environmental problem associated 
with past waste disposal practices, discharoes, or apitla. The tMent and degree of 
the pollution on site bc^ in soil and groundwater is undefmed. This problem ia not 
unique to Connecticut but is a national problem, eapedatly in our industrialized 

The Abandoned Land Beuae Act of 1993 will eatabliah a pn^am to demonstrate 
the beneRts and feasibility of redevelopment and reuse ot^ abandoned or substan- 
tiall|y underutilized sites in economic and socially distressed oommunities. 

Cieariy there are many potential benefita aaaociated with the remediation of rites 
in distressed urban aiuas including: environmental, health, economic, social and em- 
ployment. Buaineaa and industry will return to our cities thereby Umiting the envi- 
ronmental impacts of sprawl into previouslv undeveloped areas. Contaminated sitM 
that otherwise would not be remediated for decades will be cleaned up. Risks to 
public health associated with direct exposure to wastes at these liteR can be mini- 
mized or eliminated. Sigmlicant employment opportunities including new, perma- 
nent manufacturing jobs as weU as short term construction jobs will be created. Dis- 
tressed oei^boriiooas will be rehabilitated. As such, the continuing deterioration of 
our innepcity environment and the associated abandonment of larae areas of our 
cities can be slowed or even reversed. 'Hie tax base of our most needy communities 
can be expanded and additional tax revenues fttim development of pronerties cur- 
rently idle will help alleviate financial constraints on both municijial and State gov- 
ernment. In general, this program can help provide a new start ior distressed com- 
munities that were once viDrant manufacturing centers. 

Based upon Connecticut's experience to date in developing and implementing an 
urban rit« remediation pilot program in 1992, we believe this initiative will dem- 
onstrate that redevriopment and reuse is fearible. However, the key to success is 
almost entirely depenoent on eUminating or thorou^ilv defining the single greatest 
impedimentr-on-SKe poUutJon and the environmental liability associated with it. 
Time after time business and industry have looked elsewhere rather than accept re- 
sponsibility for the cost of cleaning uji a rite contaminated by others. Private inves- 
tors and banks are unwilling to provide the capital necesaoiy for redevelopment un- 
less the environmental issues are addressed to the satisfsctbn of the Connecticut 
Department of Environmental Protection. 

'niis bill provides funding which is necessary to eliminate the environmental con- 
straints that predude reuse and redevelopment. In general, the legislation also pro- 
vides a strai^tforward common sense approach for administering uie program. 
Coimectieut'a Emparlance at Urban Site Remediation 

In 1992, the Connecticut Department of Economic Development undertook a 
m^jor initiative: to bring business and industry bade to Connecticut. To achieve this 
objective the State had to have available "clean" industrial sites. Rather than select 
sites in undeveloped aieas and promote potential environmental impacts, the State 
focused its site selection on urban areas. Two key advantages presented by urban 
sites ore the existence of the necessary infrastructure as well as a trained labor 

An evaluation of our mtyor urban areas, once vibrant manufacturing centers, 
identified scores of abandoned or underutilized rites. Most of these sites have been 
idle for years and in some instances a decade or more. Each of the sites is contami- 
nated to an unknown extent. However^ the threat posed to the environment and 
public health was not considered rignificant enough to address before cleaning up 
oilier rites which are contaminating water supplies. Consequently, the Department 
of Bnviroomental Protection focused its limitea resources to lemediate sites with the 
most serious problems located mostly in rural areas, and left urban sites alone to 
be addressed at some time in the future. 

We oui^ly discovered that to achieve our goal of rebuilding the State's economy 
a prion^ must be oiven to urban sites so clean rites could be available for reuse 
or redevelopment As sudi, the Department of Environmental Protection proposed 
legislation (known as the Urban Site Remediation Program whidi was passed by the 
Connecticut General Assembly in 1992 [PA 92-236J): This Act established a pro- 
gram to identic, prioritize and evaluate sites in our most distressed cities. The goal 
of our pmgram is the same as S. 299. Currently, the Connecticut General Asseimtly 

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has before it legislation introduced by Governor Weicker to expand the pilot pm- 
gTBin into a fiill program with an additional $20 million in bond funds for study and 
clean up and dMicated stafT to implement the program. Under the pilot program 
as well as pending legislation there is a provision for cost recovery. ITie Department 
of Economic Development ia authorized to approve the first uae of development of 
the site to ensure consistency with the State's plan for Econonuc Development. 

To date, one site has been selected for evaluation under the pilot program. Two 
additional sites are expected to be selected by June 30lh. 

The first site selected is a large (50t acre site) that has been in industrial use 
since the turn of the century. Tttere have been a variety of manufacturing processes 
on the site which resulted in the release of hazardous wastes contaminaung the soil 
and groundwater. The current property owner is not responsible for creatins the 
most significant contamination found on site and is unwilling to evaluate or clean- 
up and pollution created by previous occupants. Thus, no action has been taken to 
date to remediate the site by the property owner. The former occupant is out cj 
business. There have been several parties interested in redevelopment. However, no 
action will be taken until the extent and degree of contamination is determined. 

The Department of Environmental Protection has undertaken the necessanr stud- 
ies to establish the extent and degree of contamination and identify remedial meas- 
ures for cican-up to State standards. The study is expected to be completed in 6 to 
9 months. Once the study is complete the omperty owner. State and local economics 
development officials can actively maHtet tne site for redevelopment or reuse. 

Also, at the conclusion of the study, the Departments of Environmental Protection 
and E^conomic Development will negotiate with the current property owner an 
agreement to recover coats. Any recovered funds will go into a revolving fund to be 
utilized to fund additional iirojects. 

Tllere are hundreds of sites in Connecticut and no doubt thousands nationwide 
that are idle. Without funding from States or the Federal Government to inlUate 

Comments on B. 299 

The State of Connecticut supports S. 299. Clearly, it is good public policy to reme* 
diate sites so they can be returned to productive use. Tlie proposed legiuation rep- 
resents a common sense approach which also compliments and enhances Cooaecti- 
cut's Urban Site Remediation Program. 

There are several issues that we would like to raise for your consideration: 

1. The State rather than local government or other entities should be given the 
authority to implement the program. Ilicre are several reasons to support this poal- 
tion. The State regulatory program already has authority to regulate the clean-m) 
of contaminated sites under a variety of regulatory programs including TOSCA, 
RCRA, CERCLA, LUST not to mcntbn State Superiiind, Urban Site RemediatioD 
and Cormecticut's Property Transfer Act. These authorities have not been del^ated 
to local governments, if grants were provided directly to local governments or other 
entities, approval of studies and remediation plans would stiD require review and 
approval by the State regulatory agency. We suggest that flexibility be provided in 
the bill so a State can cnooae to mlly implement the program at the State level. 
With State's having the lead role, the consultant selection and plan review and ap- 
proval process can be expedited by drawing on the regulatory agencies greater ex- 
pertise in several specialized areas. Administrative and oversite coats would be 
minimized. Existing State capability would be enhanced rather than expending re- 
sources to develop a new capability at the local level tiiat in all likelihood would 
duplicate existing State programs. 

2. A iey role for local government, non-profit groups, etc. is the identificatiDa and 
prioritization of potential sites within the community. Local governments have far 
more knowledge on site location, historical use, site conditions, and building oondi- 
tions than State government. This knowledge is invaluable. We would recommend 
that the role of local entities be limited to site selection and prioritization within 
their community and in determining the reuse or redevelopment of the site. 

3. The grant application and competitive site selection procedure as proposed 
should be reconsidered. For example, under its urban site remediation program the 
DEP works closely with the State Department of Economic Development who in 
turn through their regional agents wont closely with local governments to identify 
and prioritize sites having significant economic development potential. The bill re- 
quires that local governments or other entities submit an application identifying po- 
tential sites to the State for review and consideration under a competitive site sewc- 
tion process. It is likely that hundreds of applications could be submitted to the 
State for evaluation with the possibility that only 1 or 2 sites may be wr'--'-' '-- 

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funding- With limited reaources, important aitea can be identilied for evaluation 
withmit icquiring local government or other enUties to mibmit a formal application 
to the State for conaideralion. I would therefore reconunend flexibility bo the State 
can adect aitea without an application and competitive review pnxxsB. 

4. For the purpoaea of the demonstration program State participation ahould be 
limited to ten or m> Statea with a primaiy focua on thoae States that have alreacly 
taken the initiative to implement aimilar programs. By caicfiilly aelecting partici- 
pating Statea the evahiatktn pioceu to determme the feasibility of this program can 
be ez]Kdited. Alao, bear in mind that a $100 million appropriation, allociried among 
many Statea will not go far. For otample, if $10 million were given to ten States 
that ahould be auflicient fiinding to evaluate and ctean-up approximately 6 sites per 
State at a coat of $2 million per aite. A focused effort in a sm^ nuo^r of Statea 
ahould be considemL 

DiBBCTDS OF PBUHirnNC, Enporcehbnt, and Remediation 
CoNNBcncuT Depabtmknt of Environmental PROTBonoN 
Good morning Chairman Riegle and other members of the U.S. Senate Committee 
on Banking Housiiig, and Urban Affairs. My name is Ed Pariier and I am Director 
of Permitting, Enforcement, and Remediation for the Connecticut Department of En- 
viron mental Protectio n . 

I am pleased to be here today to testify in support of Senate Bill 299, the Aban- 
doned I^d Renae Act of 1993. cosponaoied 1^ Chairman Riegle, Connecticut Sen- 
ator Dodd, and Senator* JefTonls, Symms, Levin, Boxer, and Moseley-Braun 
Hiia bill will eatabliah a program to demonstrate the benefits and feasibility of 

In Connecticat ainne more than 100 contaminated industrial sites have been iden- 
tified that are vacant or underutilized. Many of these are located in our most dis- 
trened cities. This situation is not unique to Connecticut but is a national problem. 

Onr cities have the labor foice and the water supply, sewer service, energy and 
tmnaportation infrastructure needed by business and industries. Unfortunately, the 
redevelopment and reuse of these properties is severely constrained by hazardous 
wastes mat have contaminated these sites. In most insLancea property owners do 
not have sufficient resources to undertake a baseline environmental assessment. 
Given the unknown environmental liability, business and industry has and will con- 
tinue to lock, elsewhere rather than accept responsibility for the cost of cleaning up 
■ site contaminated by a previous occupant. In addition, banks and private investors 
will not provide the necessarv capital for redevelopment unless at a minimum the 
extent ol contamination has been defined. In many instances lenders are also re- 
quiring that the contamination be cleaned up prior to granting loans. 

Utis pitipoaal will provide resources whiui are necessary to initiate remediation 
of contaminated sites and thereby eliminate the environmental constraints that pre- 
clude reuse or redevelopment. T^e availability of clean sites in urban areas will cre- 
ate many potential beneflta including environmental, health, economic, social and 
employment. Buainess and industry will return to our cities thereby limiting the en- 
vironmental impacts of sprawl into previously undeveloped areas. Contaminated 
sites that otherwise would not be remediated for decades will be cleaned up. Risks 
to public health associated with direct exposure to wastes at these sites can be mini- 
mized or eliminated. Significant employment opportunities including new, perma- 

... .._....■_.._._,._ -.1. .11 -t term construction jobs will be created. Dis- 

mized or eliminated, bignificant employmei; 
nent manufacturing ioba as well as short ten 
tressed nei^boihoooa will be rehabilitated. 

Aa a re^t, the continuing deterioration of our inner-city environment and the as- 

■ " " - '■ ' - 'eslc ■ 

ommunities car 
properties currently 
cial constraints on both municipal ana State government. 

sodated abandonment of large areas of our cities can be slowed or perhaps 
versed. The tax base of our most needy communities can be expanded and at 
tax revenues from development of properties currently idle will help alleviate finon- 

In general, this demonstration program can help provide a new start for coi 
nities that were once vibrant manufacturing centers and now are in distress due 
to economic decline and decay of their industrial base. 

"Hie bill B8 drafted will address the principal olgective of the legislation — restora- 
tion of the marketability of aban<k)ned land and the revival of the oommunity where 
tbe land is situated. I would like to commend your common-sense approach and for 
recognizing the importance of site clean-up as an integral part of the goal to revital- 
ize onr diatremed communities. 

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I have several recommeodationB that I believe will improve the likelihood of rao- 
ceasfully achieving the objectives of this propoaal. First, 1 would modlfr wctioii 
M4(d) to provide ute Governor of a delegated ^«te the authority to IbreffD the grant 
application process and the competitive site lelectioa procedure. The Connecocut 
Department of Environineatal Protection, in coqjuiKtioD with the Connecticut De- 
partment or Economic Development, already has a process in place to evahiate and 
prioritize urban sites for remedial action. This procedure is a requirenMnt of PA 92- 
236. This act whidi waa passed in 1992, created Connecticut's Urban St« Remedi- 
ation Program. I wotild also recommend that the State Governor have the flexibility 
of administering funds tUiecttjr rather than providing grants to local granteea. Itteae 
nimestions willhelp expedite the imnlementaUon of the program by mtnimiring ad- 
muistrative and oversi^t costs ana avoiding duplication of State environmental 

Lastly, bear in mind that the funding proposed for this program is sufBcient to 
address only a limited number of sites. It is conceivable that m Connecticut alone 
more than 100 applications would be received with the likelihood ofonly 1 or 2 sites 
beioK selected assuming the funds were equally distributed to 26 States (4 million 
per State}. The burden on local governments or other entities of preparing ^)pliea- 
tions, and on the State for review is not warranted under a dentonstratkin program. 

In doBing, I would like to State that this proposal compliments and enhanoes 
ConnedicuPs pilot Urban Site RemediaUon Programs and that Connectkut would 
be happv to provide additional assistance as you continue yonr work on (his initia- 
tive. [ auo would like to thank yon for the opportunity to testify. 

portuoily to testify before you on S, 299, the Al^andoned Land Rouse Act o 

.- .-iL-.- jTiv. n ;- n — '-^mcnt Committee of the Michigan H 

r the need for cooperation among F . ... _. 
promol« models for the timely redevelc^ 
imui. ui nuduuuuEu, iiuuDi-uiuuDuj ut uiotsminatMi commercial and industrial litei. 
My testimony will be presented m the following format. 

• A response to the issues jMsed by the Committee 

■ A' review of Midiigan's situation, and 

• Michigan's efToits to encourage the redevelopment of abandoned and under-uti- 
lized sites. 

(t) Potantlal BuMflts 

S. 299 would provide local nyermnents, on a demonstration basis, significant fi- 
nancial tools to reclaim, rahanilitate, and eventually reuse abandoned or under-uti- 
lized Gonunerda] and industrial sites in communities plagued by social and economic 
distress. This legislation would allow local government oflkials to "take contror of 
their community's destiny by aggressively spearheading eObrts to restore parceli of 
property with economic iMevekipment potential, with the goal of nmlcing those par- 
cels attractive to investors and developers. 

The thrust of the bill is empowering local oflirials to directly attack the financial 
impediments they face in rebuilding their communities. 

Other benefits indude: 

• Utilizing Existina Infrastructure — Instead of abandoning our older towns and 
dties in favor oiurban sprawl, we must place a priority on redeveloping areas 
that already have roads, sewers and other public improvements. 

■ Off-Site Economic Benefit — Once a site has been selected and redeveloped its 
reuse could spur economic development In the immediate vidnity. For eKanmle: 
The Michigan Site Reclamation Program (a deaeriptlon of this program will be 
provided later in my testimony) funded the re-opening of an old shipping canal 
through cleanup activities that included excavation of the contaminated fill mate- 
rials in the canal. The resulting economic benefit was the establishment oT com- 
ntereial businesses — oflicu, retail, and a restaurant — in buildinn near the canal. 

• District Wide /nccntives— The Mkhigan DNR Site Reelamatbn nogram providis 

B incentives are needed to create a mora compr^endve re&velopmeot 
ifiuBiBiu. Instead of redamation on a site-by-site basis, under the bill planned pro- 
grams for a variety of new economic developments could be encouraged for mul- 

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ttple inroMriiaa, aneampiiiilng many Uodu or MV«ral Kiuare milea, within local 
comnnuiftiM encompuaing many blodci or aevoral aquara milea. 
(S) Principal {M^MtivM 

Almoat without •zoapticm— from the largeat city to the amalkat village— Hidiigan 
communltiea have becMoe wardiouK* for abandoned and under-utllixed parcels of 
commercial and Indiiatrial proper^. For a varied of complex, iDt«n«latea raaaons, 
commoRial and indnatrial enteipriaea have engaged In a steady exodua from our 
State's nure eataUiabed towns and cities to "oreenfleld* aitea in Aslant suburban 
Gommnnmea. The job eeoking population has iolkwed, leaving behind thousands of 
attractive GonuDwdal and inaustrial sites— served by superb inlraBtni dure— that 
could be rehabilitated and redeveloped 

e greatest impediment to r^abilitation and redevelopment, from the local gov- 
lent level, ia ue la^ of adequate financial reaounes to benn and complete Uie 

rehabffltaMon process. Plagued hy depressed commercial and industrial economic 

tivity, Aarp rednditmB in private-sector employment and the resulting steep de- 
cdlnee in the munidpa] tax base, local aovermnents simi^ la^ the financial muscle 
to reclaim and rebaUlitate abandoned commercial and mdustrial sites, and make 
Qiem attractive fiir redevetopment. 

The principal objective of S. 299 would be to provide local governments with the 
financial means that will bring about renewal and reuee of these valuable pieces of 
(S) OpportunitlM in Hiehipn 

"niere are literally thousands of properties in hundreds of Michigan communities 
that could qualify for Rinding under the site redevelopment demonstralJon pnmram 
envisioned by the Honorable sponsor and co-sponson of this bill. S. 299 wouldgive 
local officials the means to: 

• inventory abandoned and under-utilized commercial and industrial sites in theirs 

• prioritice the local community's site inventory Uat according to reuse and redevel- 
opment potential; 

• assess costs fer removing unsafe structures, remediating environmental contami- 
nation and rebuilding dte infrastructure; and 

• develop the aitea attracUveneas to potential developers or investors. 
(4) SueMaafolly Aehieving The Legislation's ObJectivM 

It is critical to the success of this protfram that the determination and wei^t 
given to the factors for selecting these (femonstration projects be as apecific and 
atringent as poasible. In order for the selected prqects to adequately serve as mod- 
els oonrideraUe wei^ must be given to well documented commitment at the State 
and local conumini^ level. 

We beUeve Mfdiigan has superb legal and pinarammatic tools in place to take full 
advantage of the opportunities inoposed in the bill before this committee. Michigan 
is poised today to utilise these linancial resources, in the exact manner spelled-out 
in the legislation, to work with local p>vemments who wish to rehabilitate and 
reuse commercial and industrial properties. 

(1) Contaminated EUtaa 

Each year, pursuant to the Michigan Environmental Responee Act (PA 307 of 
1982, as amended) or MBRA, a liat ia prepared ot Michigan Siles of Enoironmenbd 
ContantiaaOm. The Fiscal Year 1994 Tist has been recently issued. The list identi- 
fies environmental contamination locations and ranks these sites under a scoring 
system that reflects the site's risk to public health and the environment. Scores 
range from 1-48, with 48 posing the greatest risk. 

1^ Fiscal Year 1994 Ust identifies 8,757 sites. 

Allow me to outline the problems local communities in Michigan are facing with 
'abandoned sites" as defined hy S. 299 and listed by Michigan as a site of environ- 
mental contamination. 

There are 83 counties in Michigan. Every one of these counties has a site of envi- 
ronmental contamination. As defined by MERA. environmental contamination 
means the release of a hazardous substance, or the potential relesse of a discarded 
haiardous substance, in a quantity which is or may become injurious to the environ- 
ment or to the public health, safety, or welfare. 

Of the 8,767 aitea, 1,036 are listed as inactive. Inactive sites are defined as sites 
where a remedial action plan haa not been approved by the Michigan Department 

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of Natural Resources (DNR) and where evaluation, interim respoose activity, reme- 
dial actions, and/or operation and maintenance have not been undertaken. Every 
county hii3 une of these inactive sites. 

The Michigan DNR Environ mental Response Division is administered throu^ 
three regions. Region I includes the IS counties in the Upper Peninsula (UP). Re- 
gion 11 includes the 34 counties located from the middle to Northern Lower Michi- 
Gn, and Region III includes the 34 counties located from the middle to Southern 
wer Michigan. In Region I there are 77 inactive sites and 41 inactive leaking un- 
derground storage tank (LUST) sites. In Region 111 there are 251 inactive sites and 
84 inactive LUST sites. In Region III there are 411 inactive sites and 154 in&ctive 
LUST sites. 

(2) Economic and Social Diatreaa 

Section 907(aX4) or S. 299 discusses the degree of economic and social diatreas of 
the local community in which the sites are located. The degree is determined by con- 
sidering industrial employment loss, relative income of local communis reaidents, 
decline in eoonomic activity> population loss or growth disproportionate to local eco- 
nomic opportunity, and other factors as deUrmined by the Secretaiy of Housing and 
Urban Development. 

(3) Local Communities 

Local communities which contain abandoned, under-utilized or inactive contami- 
nated sites and are facing severe economic and social distress are located in eadi 
of the three Regions. Some examples for each Region are: 
Region I — Upper Peninsula 
Ontonagon County: 

• has 19 inactive contaminated sites; 

• in 1980 the population was 9,861. In 1990, it was 8.854, a decrease of 10.21 peiN 

• the economically dlaadvantaged population is deftned aa individuals who receive 
welfare, have incomes below the current poverty level, receive food stamps, or are 
handicapped adults whose own income is oelow poverty. In the Western Upper Pe- 
ninsula where Ontonagon County is tocaled, the 1990 economicaUy disadvantaged 
population was 13,219. In 1991 it was 13,357, an increase of 1 percent. 

Region II — Middle to Northern Lower Michigan 
Alpena County: 

»ntaminat«d sites; 

s 30,605, a decrease of 5.29 per- 

• the economically disadvantaged papulation in Northeast Michigan where Alpena 
County is located was 17,451 in 1990. In 1991, it was 17,563, and increase ol S 

Manistee County: 

• has 21 Inactive contaminated sites; 

• in 1980, the population was 23,019. In 1990, it was 21,266, a decrease of 7.62 per- 

• the economically disadvantaged papulation in Northeast Michigan where 
Manistee County is located was 17,451 in 1990. In 1991, it was 17,663, and in- 
crease of .6 percent. 

Region III — Middle to Lower Michigan 
Berrien County: 

• has 23 inactive contaminated sites 

• in 1980, the population was 171,276. In 1990, it was 161,378, a decrease of 6.78 

• the economically disadvantaged population in the Berrien-Cass-Van-Buren area 
was 41,650 in 1990. In 1991, it was 43,810, a 6.4 percent increase. 

Wayne County: 

• has 49 inactive contaminated sites; 

• in 1980, the population was 2,337,843. In 1990, it was 2,111,687, a 9.67 percent 

• the economically disadvantaged population in Wayne County was 341,172 in 1990. 
In 1991, it was 379,842, a 10.2 percent increase. 

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lation was ZBS^lin 1990. In 1991, it was 320,167, a 12.7 pMi:ent increaae. 

In Detroit, a spedfic i»vbleni vrhidi ii shared with other Midiigan towns and 
dttos located aear riven and the Great Lakes is that much of the waterfront prop- 
erties were eoataminated as swamp areas were filled with industrial fUl material 
like fly aah, whidi contains hi^ levels of metals. 


(1) Pollut«i« Pay PoUcy 

PA 233 and 234, amending MERA were adopted i 
mental enforeement mechanism and settlement prot 

ielation. the State is able to more successfully pursue uie responsioie panies lor 
their share of the cleanup costs. These acts set up a mechanism which will increase 
voluntaiy settlementa and decrease the amount of money spent on litigation coat*. 

PA 233 and 234 outline the basic enforcement tools of the State and uabihfy pro- 
viskma for contaminated sites. They also outline an allocation process whidt can be 
uaed for negotiating a aettlement reganting responaibility for response costs. These 
public acts were designed to be a "polluters pay* policy and encourage settlements. 
The allocation proceas gives parties an avenue to avoid joint and 'several* liability 
thruu^ agreement on remedial action and clean up procedure*. 

(2) She Reclamatian Prognm 

This program acknowledges that throu^out the State of Michigan there is an 
aJarming trend in the growth of older towns and cities. As people move away fVom 
cities and into Hie surrounding suburbs, industry follow*. This shift of job centers 
tVom cities to ouUvJng commumlies leaves abandoned industrial and manufacturing 
facilities idle, while "greenspaces" and wetlands are lost to new development. 

In November of 19o8 Michigan voter* approved an (800 million Envimnmtntal 
PnUctitm Bond. Of that bond, $426 million was targeted toward cleanup and rec- 
lamation of site* contaminated with haEardous aubstancea. The goal of the Sil« Rec- 
lamation Ingram is to fadlitate environmental cleanups and promote reuse of con- 
taminated sites. The program's objectives are to: 

• characterize and clean up-sites of environmental contamination; 

• reduce the loss of "peenspaces" and wetlands tiy redeveloping and reusing sites 
in older towns and cities; 

• support projects whidi will provide permanent jobs and an increased tax base for 
communities; and 

• utilize areas with existing infrastrocture. 

• facilitate use of a variety of funding sources, including private investment, to 
clean up sites with economic development potential. 

(3) Revitalizing Our Michigan Cues 

In April 1992, the former Speaker of the Michigan House of Representatives, 
Lewis Dodak, appointed a special ad hoc committee and citizen adviaoiy group to: 
Examine the impacts of State environmental laws and poUdes on uiban sprawl, 
review current progress in developing approaches for reuse of contaminated prop- 
erties and make fmdings and recommenoations to the Spedat Ad Hoc Committee 
on Revitalizing Our Michigan Cities that encourage private reinvestment in older 
towns and dtiea without sacrifidng environmental protect! on or public health. 
On April 29, 1993, a legislative package was presented to address the rec- 
ommendations from the citizen's advisory group. The legislation will: 

• provide increased incentives for lenders to provide loans to businesses for redevel- 
opment of contaminated uiban sites; 

• increase liability protection to lenders in order to encourage the marketing of con- 
taminated property after foreclosure; 

• expand the kinds of conunerdal lenders that will receive the protection to indude 
larae insurance companies, regulated foreign banks, laige retirement funds. State 
and Federal agencies and car tinance corporaUona; 

• allow a govermnentat agency to transfer its liabUity exemption on contaminated 
property to new owners if certain conditions are met; and 

• clanfy the piocssa for compensating an owner for contaminated property that is 


Mr. Chairman, members of the Senate Banking Committee, the vitality of ma^r 

industrial centers in this country, such as my district, relies heavily on a raundatwn 

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of industrial jobs. With the decline of industrial jobs, the problema m are fadiu 
todajr seem monumental and, certainly, no one single pit^ram can address ttwm^ 
or reindustrialize America. However, a part of our industrial policy, must be to in- 
sist that fonoer industrial and commercial areas are giver-equal consideration for 
investment as are new "greenspace' aieaa. 

This legislation will help promote this policy and assure a strong environmental 

ExKcunvB DisBCTOR, Chicago Asscx:iation of Nbiohborhood DKVBLOE>HBtn 

Okganizations [CANDOJ 
I offer m;^ testimony teday in support of S. 299 on behalf of CANDO's iiieinber» 
who are actively confronting this problem in their conununities. For exan^le: 

• Greater North Polasld Devalopment Corporation is woridng with the Ci^- 
of ChicaEO to devebp a 9-acre site to capture industrial growth while replacing 
a block oT ruin [See atUched Chicago Sun-Times, March 14, 1993J; and 

• Bethiol New Life has entered into a partnership with Ar^nne National Labora- 
tory to clean up abandoned (>roperties on Chica^'s west side as a job strategy it — 
self [See attached Grain's Chicago Business, February S, 1993J. 

The provision in S. 299 that includes non-profit community development corpora- 
tions (CDCs) as eligible grantees is a key component to encourage local initiatiou- 
and involvement. 

I also offer mv testimony as a Steering Committee member of the Coalition tor- 
Low-Income Conununity Developmant, a national group focused on ensurinc 
local benefit from Federal programs. They too support non-profita as eligible grant- 
ees in order to assure more connections to employment opportunities generated by 
DTOiecta funded, "nw O>alition is pleased that 6 percent of iunds appropriated untkv* 
9 may be used for technical assistance grants to determine appropriate meana 

of Planning A Development, which ia currently pursuing the development of 
seven industrial parks writhin the city. A 1991 study b^ Chicago's Economic Develop- 
ment Commission documented the demand for 4E nullion square feet of industrial 
space in the city, with only 16 million square feet available (some of it obsolete for 
modem manufacturing). 

Commissioner Valerie Jarrett testified on January 29 of this vear at a Northeast 
Mid-West Congressional Coalition Hearing in Chicago. She noted: 

"^e estimate that there are over 200 acres of moderately to severely contami- 
nated sites within Chicago. Even if the cost of remediation may be omy a small 
percentage of the land's value, it is extremely diflicult to package a redevelopment 
project for the property given laws which expose prospective puichaserv and lend- 
en with risk or liability. Past environmental contamination may become their fii- 
tura liability even thou^ they did not contribute to the prior contaminatkin. In 
many cases this risk is too high, especially in li^t of the availability of so called 
'green graaa' environmentally clean sites.* 

We continue to build roads to where It's "greener," while sites with good transpor- 
tation have been left to decay. We continue to condemn our woridbrce to kmg com- 
mutes, while thev live surrounded by abandoned land. That ia not envlromnentalty- 
sound or family-Mendly public poUcy. It is not ptofltable public investment. 

I would also like to testi^ on behalf of small businesMa who run into this road* 
block to their expansion plans. Trendler Metal Producta, Inc. is a family-owned com- 
pany that has been leasmg its building on Chicago's west side for 7-8 years. Thn 
arranged to buy it from the landlord; but Phase I and Phase 11 invesUgatioos turned 
up the presence of various paint-related dtemicala. Ihe coat to remove the contami- 
nants was estimated to be as high as $200,000. 

But this price is hi^Iy variable. It depends primarily on how the contaminated 
dirt is claBsified by the disposal site willing to aocejit it. The cost of disposal per 
yard of dirt varies in direct proportion to the containi nation of the dirt. More con- 
tamination equals nwre cost. Vet, there are no standards hy which levels of contami- 
nation are claasified. Each disposal site has ita own definition of oontaminatuD. 
Moreover, the definitions vaiv not just from dump site to dump site but, depending 
on demand and a host of other factors, the definition can vary considerably from 
day to day at the same dump. Yet, the dump sites have a clear self-interest in 
ctiaaifyiag ditt as more, rather than leaa, contaminated. 

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the purdiase price by the cort of the clean-up. But 

site (that is even if they remain within the law and have the contaminated dirt 
hauled away) they will stilt retain ownership of the dirt and the contaminants in 
it. Ihey will remain liable if someone files flult against the landfill where the dirt 
i« deposited. 

The end result: Trendler has not boudit the site. The clock ia ticking on 
ture expansion and they may be forced u leave the city wlUi their 100 ^bs. 

In cbsinA, 1 would bike to acknowledge the collaboration of the Nartheaat-Hid- 
^fett InatltuW. We co-sponsored with tnem a conference in Chicago two years ago 
that brou^t much attention to this issue of confronting environmental and eco- 
nomic iuues to industrial reuse. In a 1992 collection of case studies, Uie Institute 

"Achievenient of industrial reuse on a lar^ scale will involve the Federal 
emment in formulating a strategy that addresses concerns of developers ani 
vestors in a way that ia environmentally responsible. . . . Financial incentives are 
Deeded to eDctnirase private companies to clean up contaminated buildings and 
Invest new ca^tal. 

Finally, let me emphasize that S. 299 ofTers a new direction for the U.S. Depart- 
ment ofHousing & Urban Development to pursue jobs by encouraging local initia- 
tives to reuse a nindamental resource: land. 

Let me assure you that the principal obiectiveH of this legislation, to restore the 
mailcetability of abandoned land, is veiy feasible. In fact, the funding proposed is 
exactly the kind of upfront public investment required to leverage maximum private 
capital in redeveloping abandoned sites. 

Chicago would welcome this new Federal funding. We will invest it wiseljr. And 
you will see a return in more Americans working. Blodts of ruble and debris can 
again ;>raduce Uveable wages but the land must flrst be cultivated. 

Again thank you [or your initiative. I look forward to monitoring the legislation's 
progress. Projects are waiting to be done in Chicago neighboihoods. 

Mr. Chidrman, 1 appreciate that you have given me the opportunity to testify be- 
fore your committee today on a bill that could jirove to be of immeasurable value 
to my community's 20 year long struggle to rehabilitate Brooklyn's historic Gowanus 
Canal area. 

Hie Abandoned Land Reuse Act of 1993 represents an important step in the rec- 
ognition of the importance of the rehabilitation and development of industrial land 
to the economic condition of America's inner citv. 

Before addressing some of the questions you nave raised about the proposed legis- 
lation, I'd like to give you some background on our efTorta to clean-up the Gowanus 

The Gowanus Canal, once a creek that was widened in 1774 by the Colonial As- 
sembly of New Yorii, was one of the busiest commercial-industrial waterways in the 
world and was the heartbeat of Brooklyn's industrial area. Over the veara the 
Gowanus Canal became polluted, and the lack of any way to flush it out nampered 
efforts to clean it up. 

A tunnel was constructed in the early 1900's that extended out to the channel 
near Governor's Island which allowed fresh water from the Bay to be ^mped into 
the head of the canal to fhish out the pollutants. The tunnel remained in operation 
until the mid-1960'B, when a propel ler-ah aft on the pump broke. An inadequate 
pumping station and broken propeller-shaft returned the canal to its previous stag- 
nant state. The unai^tlineas, stench, and disease ridden canal contributed to a de- 
cline of industiy in the area as about 60 percent of the commerdal space became 
unused and derelkl. 

The Gowanus Canal Community Devebpment Corporation in the 1970's began to 
focus on the enviroiunenta) degradation of the Gowanus Canal and its environs. The 
Gowanus Canal CDC has been struagling with this issue and is committed to deal 
with the problem of the abandonea and contaminated sites along the Gowanus 
Canal. The contamination of land in the area has clearly been a barrier to private 
investment. Our concern over adaptive reuse cannot be addressed until the clean- 
up of the waterw^ and underutilized industrial land is accomplished. 

The Oowanua Canal CDC has completed the first stage of the rehabilitation prac- 
eas by spearheading an aggressive campaign in the eimy 1970's to leverage public 
liinda. Nearly (480 million was allocated to build the Red Hocdc Interceptor Sewer 

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Treatment Plant and to repair and replace the mechanical nratema of the Fhuhiiig 
Tunnel and Pumping Station of the Gowanua Canal and to (U«dfle the canal. In re- 
cent years the community has had New York Cit^a coaunitroent for clean-up eflbiti. 
The municipal government has already committed funds to fiilly reactivate the 
Flushing Tunnel that has been inoperable for over 40 years. New York City's De- 
partment of Environmental Protection (DEP) is required to dredge the canal &om 
time to time as necessai^. DEP has the money secured to dredge the canal. How- 
ever, the Army Corps of Engineer's Federal guideUnes have precluded the oppor- 
tunity of ocean dumping whim leaves the city to deal with this material. lUs deau- 
up is necesaai7 to aaaptively reuse the land bordering the canal that the Abandonad 
Land Reuse Act of 1993 addresses. 

Our communi^-based, housing, economic and envinnmental ormmiiatiDn, 
Gowanus Canal CDC, has reached out to a group in PennHylyania that nas devel- 
oped the highly innovative application of ancient technobgy, the piDcess of vitrifica- 
tion, that would allow for the possibility of dredging the canal and dealing with the 
material at the bottom of the canal. A Federal investment could help with the clean- 
up and be instrumental in providing new markets. An environmental technology 
corporation, Global Inner-Harbor Remediation, Inc., is developing new approaches 
that could not only prove to be highly effective in dealing with the Gowanus Gtmal 
but could be a technology that America could export. 

Much of the property on both sides of the canal is underutilized and abandoned 
dumping grounds. The possibilities of contamination of many of the sites and the 
secretion of gas and oils from abandoned automobiles and trucks on properties adja- 
cent In the canal need bi be addressed. 

Significant opjportunities for new investment in the aroa haa been lost in recent 
years because at the problem of "possible" site contamination. TTie existing state of 
derelict land ia what helps isolate the redeveloping areas from the areas that con- 
tinue to sufTer. Being able to overcome that problem of contamination or otherwise 
blighted sites could make a real contribution to the re-weaving of the fabric of South 

There is a vibrant demand for housing in these communities. Iliis demand took 
the form of The New York City Housing Partnership's interest to develop a des- 
perately needed affordable housing project on a six-and-a-half acre site alongside of 
the canal. This area, known as Public Place Site was to have been devebped 'ti 
the community saw fit' had it not been for the cloud of contamination on that site. 
The Gowanus Canal CDC has effected the necessary borings and soil analysis at a 

As we can best determine, the Public Place site was taken off the contaminated 
list but it was suggested that the site mi^t be put back on the list if Federal goide- 
lines dianged. Tms has paralyzed the possibilities of any devebpment coming onto 
this site. 

Southwest of the canal is an area called Red Hook which is among the pooreat 

communities in the nation. Red Hook is geop-aphicalW isolated by water on thie* 
sides and an elevated highway. Red Hoofs isolation from the rest of tl _ 

n less critical in the decades when the community was sustained ly its oi 

waterfront industrial economy. The crime and drug proolems that plague the na- 
tion's Tirat Federal housing project were tragically manifested in December, 1993 by 
the killing of public school principal Patrick Daly. The impact of the highway and 
the post-industrial shift in the urban economy have contributed to the sociu and 
economic isolation of low income areas and other parts of South Brooklyn. 

Making that derelict land reusable is part of what is needed to net (he isolated 
communities of South Brooklyn back toother again. The process of rditdailitatian 
and redevelopment can contribute to overconung tne problems of drugs and ifolfltiw 
in the poor communities of Red Hook, to the South, snd Gowanus HOUHB, to the 
immediate north. 

To the East and West of the Canal are brownstnne revival areas. Ulere an 
enou^ resources in the indigenous community that if interlocked properly has nal 
opportunity to stabilize and integrate the area. The stable conununities of Puk 
Slope on the East and Carroll Gardens and Cobble Hill on the West have already 
demonstrated a tremendous interest on the part of the private sector to undratake 

The Gowanus Canal CDC was instrumental in the conversion of several obaolats 

multi-stoiy industrial buildings to residential use. But we should not go on thia way 
one parcel at a time. What the area criea for is an overall plan: A possible Urban 
Renewal designation which would be a logical way to assemble necessary paicds. 
We feel sure of the success of such an effort by virtue of our past experience woiUng 
writh the stable communities, Park Slope on the East, and Cobble HiU-CamU Gtf 

Digitized by L.iOOQIC 


dens Weat, uid the low-iacom« conunuiiity, Red Hook on the South, Gowaoua- 
Wyooff Gvdena to the North. 

TtAt would be a great, lodal experiment brining the people into sd integrated 
■odal and econondc development opportunity. Some 250,000 people are within walk- 
ing -tiTtflh™ of the Gowanua Canal. Two subway lines servicins the eaat/weBt bound- 
•nea of the canal puta the area within a 12 minute subway ri& to Manhattan. 

^w benelita to the community of a national demonatrBtion praject are to have a 
bomMTOwn, tedinically trained woric force that is employed in the clean-up and is 
available to Jnduatty after the clean-up. 

tol n^jtoy aftt 

Diniu^ tHSfSik, a Northeast Partnership for Eoviiunmental and Technical 
= ^___^ ,. L ,.^_ ^tion^ PET" -A-^ -^.- .... .,..-- 

_, -iid> is sponi , , „ 

the Ifepartment of Defenae, NEWTREAC (Northeast Waste Technology Research, 

^. I ihip Tl. 

Bdncation and branoi of the national PETE (Partnerahip for Environmental Tech- 
nokwy Education) coalition whidi is sponaoied by the Department of Energy and 

Education, and Applications Center) ia the Rensaelaer-Brookhaven lab-industry 
partnenhip involved in environmental ^ro^ms like education, remediation, and 
applied teomology, we hare a partnership in place to cany out the technical, edu- 
cational and training aspects of the clean-up. The economic and social benefits go 
hiuid In hand vrith creatine a woik force that industry can use. 

Gowanus Canal CDC a»«ady has roechaoisnu in place and does not have to in- 
vent them just to satisfy legislation. Gowanua Canal CDC recogniiea that the prob- 
lem ia multi-disciplinaiy and that the solution requires a coordinated elTort among 
and between several govemmeDt agenciea, educational and research institutions 
and industiy. the proposed legislation can take advantage of the pre-ensting enti- 
tles. A Federal investment could draw additional commitmenta from New Yorit 
State and New York City and one of our nuyor private sponsors, Brooklyn Union 

Hunk you for the opportunity to appear before you today. 

DisBCTOR OF Economic Development, Southeaot Communhy Organization 

CSiairman lUe^, Senator D'Amato and distinguished members of the committee, 
thank you for the opportunity to appear before you today. I speak to you today not 
onjjr as the Director of Ek»nonuc Development lor Southeast Development Inc., but 
alao as one who has spent numerous years working toward the stabilization and re- 
vitaliutionof many of our aging commercial and industrial communities. 

Once a leader in the rise of American industry through the first half of this cen- 
tal. Southeast Baltimore has also shared in the decline this nation has suffered 
In mdustiy over the last several decades. 

Southeast Baltimore has its economic roots embedded deeply in "heavy" industiy. 
Firms such as the Bethlehem Steel Corporation's Sparrows Point Plant and the 
Broening Highway plant of General Motors Corporation still function in this capac- 

llovever, with the loss of such flrma as Western Electric and American Smelting 
and Refining Company, Esskay Meat Products, accompanied by the downsizing ttf 
firms such as Eastern Stainless Steel and Annco Steel, this area has been impacted 
by overall chants occurring at both intemational and national levels. Stability in 
the manufacturmg sector has decUned. Companies often find that relocation is nwre 
deairable than renovation and automation is more coat effective by decreasing em- 
ployee levels. 

Even with the problem of son^ employment losses, the area is still Baltimore 
Ci^a largest and moat concentrated industrial area. Ita importance is reflected by 
bout tlw number of people employed here and in the amount of tax revenue gen- 
er^ed. Estimates indicate that about 8,660 people work in the Canton Industrial 
area alone, with other scattered sites throu^out the Southeast community. 

Continuing decline in this area could seriously jeopardize Southeast's standing as 
a leader of industry. During the course of 1980-87 alone, 48percent of the total jobs 
of Uie industrial area were lost. The closing of the Western Electric Plant eliminated 
6,000 Jobs at one time. 

Hie loaa of jobs is but only a part of this problem. There is also the loss of vast 
amouata of revenues. Only vacant sites remain where once productive industiy pro- 
vided moneys for Southeast Baltimore. 

The potential benefits to the community and the economy throudi legislation are 
far readiing. This could begin to stimulate the economic activity within communities 
that now stand dormant. Increases in local tax revenues, the conservation of capital 
reoouicee and the employment opportunities would stana to benefit us all. Job train- 
ing {mgrams to equip our work force and make It second to none. 

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Wittt the redevebprneot of now vacant induatrial dt«s and the emidavmeiit oppn^ 
tuDities that would arise, the dtizeni of our area would directly benefit thrao^ >n 
increaae in per capita income. Buying power would be increased, home ownerdi^ 
would once again return to our cammunitiea, along with a rise in the poputaticm m 
people return to the areaa of their emplojrment. Southeast Baltimare has m popu* 
latioD of 78,000 people, a Hubstantial loss in population from year* gone by. nluy 
have been lost to other jurisdictions as they folbw their enqiloyera or aeardi out 
a job. According to the 1990 census, 23 percent of the Southeast residents have an 
income below the Federal poverty line compared to 22 percent in 1980. Redevelop- 
ment and employment opportunities are not the only answer, but its ■ good place 
to start. 

With such an emphasis on the environment, many of the contaminated properties 
are overlooked for a "clean" location. Thus leaving many of our om» viable aites imd 
the ai^Bcent properties to sit until someone will take a chance. The State of Han- 
land is currently considering a voluntary clean-up program to aid in fimdiDg of ad- 
nunia^ative expenses of State staff in reviewing and mtplementing snd) p rogr am s. 
The State has also exercised discretion in entering into suit cases agaUut pur- 
chasers of contaminated sites where it was the prior owner and not the purdiaser 
responsible for the condition. Maryland has also, occasionally extended credit to site 
purchasers, where part of the loan funds were used for clean-up. These Initial pro- 
grams are a step in the right direction, making these abandoned sites more accept- 
able for redevelopment and less risky. With imtiatives nich as these, accompwued 
by legislation the potential for redevelopment of our abandoned industrial sites be- 
comes more real. 

It is all too apparent that these idled sites are costing this nation with ea^ pass- 
ing day. Infrastructures that were built to service the industrial regions, not to men- 
tion sewage, utilities, and the list goes on. However the cost doesnt stop, mainte- 
nance continues. But at whose expense? 

Unfortunately there are no cpiick fixes to a problem that has been growing over 
the years. But there are steps m the ri^t direction. Senate Bill 299 is one ofthem, 
coo[>eration between the prublic and private sector is another. Communities need to 
get involved and urge their public oflidals to begin taking the initiative toward re- 

Southeast Development Inc., alons with several other local communi^ based 

Cups, some public oflicials and stafihave begun this process. By identifying piob- 
latic areas and addressing each individually, with research, and recommenda- 
tiona, the "^South East Plan' will come together in the fall of tUs year. One specific 
agenda item has been the industrial and port areas of Southeast Baltimore. Vast 
amounts of vacant land sites and underutilized properties have been identified. Op- 
portunities such as combining several parcels and developing an industrialpark, see- 
ing how the city owned Holabird Industry Park has been a success and more busi- 
nesses are interested in locating in the Southeast area. 

Opportunity . . . the opportunities are there however what we need now are the 
incentives, accessibility to once taboo sites, and the alriUty to fiind these underti^- 
ings. Senate Bill 299 ma^ be the be^nning to a resurgence of development in our 
industrial areas and a brighter future for many of our communities. 

liiank you. 


First let me commend our Chairman for holding this hearing and for all of the 
hard woric he has done on this legislation. I am pleased to be a coaponsor of this 
bill, and I look forward to working with Chairman Riegle and Senators Boxer and 
Moseley-Braun on this issue in the future. 

'Hie Abandoned Land Reuse Act addresses a critical issue facing communities 
across our Natbn: How to redevelop underutilized industrial sites. 

We an know the problem. Industrial facilities with rusting beams and broken win- 
dows sit idle in our towns and cities. The l^^aqr of an earlier industrial generation, 
these facilities are usually contaminated with various pollutants. Residents of my 
home State of Connecticut are familiar with facUitleB sudi as Reyal Business Ma- 
chines in Hartfoni, Bryant Electric in Bridgeport, and the former Century Brass alte 
in Waterbury. 

The restoration and reuse of such facilities would not only clean up the environ- 
mental problems but would also increase the tax base, improve distressed neighbor- 
hoods, and create jobs. However, primariW because of environmental coaeems, it 
has been very difficult for communities to find the investment capital needed to re- 
vitalize these facilities. 



luld DRivii 

granta by the Secretary of HouBmg and Urban Development to local govemcneiita 
or local nonprofit community developmeDt corporationa for the redevelopment of 
aliandoned industrial fadUtiea that are located in economically difltressed conunu- 
nttiea. To ensure that the local grantee has a Buflicient (take in the project, the BQl 
requires the local grantee to contribute 25 percent of the coats of tlie site restora- 

It ia important to note that this i* not a new superfiind pn>gram or an expensive 
new oianaate. 'Diia legislation would aimphr offer a helping hand to those commu- 
nitiei that are committed to the idiabilltBtion of their abandoned industrial sites. 

I am particularly exdled about the potential benefits from this legislation in my 
htOBB State of Connecticut, where the public sector and the private sector are woik- 
iaa togsther to address this issue. For its part, the State has recently developed a 
pOot progran ' "" — '' " ""~ " * ---'-' -'^- j---j jj- -.-.-> 

t program to aaaess environmental conditions at certain abandoned industrial 

I am plaaaed that we have Edward Parker thtm the Connecticut Department of 
EDViromnental Protection with ua today. I am sure that he will provide insist into 
tba ways in which the Abandoned Land Reuse Act would oomplement State efforts. 

In addition to the eObrts of the State government, the bunness coaununity in 
Connecticut has alao become involved. A good example is the work of Environmental 

eriy if environmental contamination is cuscovered. By allowing investors and lendera 
to transfer the risk of undiscovered environmental contamination, this type of inaur- 
aooe will make the flnandng of redevelopment efforts mudi easier. 

Cleaiiy, Uie present efToits being made by State and local governments and the 
Mivate sector would get a much-needed boost from the Abandoned Land Reuse Act. 
By providing additional capital and strengthening the partnership between the Fed- 
enlGovomment and local communities, the legislation would stimulate the redevel- 
opment process. And as the number of rehabiUtated sites continues to grow, the 
comibrt level of investors will Increase. 

Of course, the key benefit from this legislation wiU be jobs. Initially, as industrial 
facilities are restored, there will be new construction opportunities and environ- 
mental cleon-up woric. After the sites are converted, the companies that move Into 
the bnproved fadlities wiU bring new manufacturing joba. 

CSearly, this legislation offers exciting ojjportumtiea for our distressed commu- 
ntttea. I locdt fowud to hearing today's testimony and in helping to move this legis- 
lation forward. 


Digitized by L.iOOQIC 

Q.I. To what extent are the contaminated sites that you referred 
to in your testimony economically abandoned, as defined in S. 299? 
A.1. Contaminated sites have historically been abandoned without 
any prospect of environmental cleanup, let alone economic develop- 
ment. Instead of cleaning up and utilizing contaminated sit^ 
abandonment has been the easy way out. Rather than rdbuild and 
rehabilitate our cities and townships, State and local economic de- 
velopment policy has been encouraging greenfield grovrth whid) 
has devastated dozens of communities. Frankly there has been lit- 
tle incentive to rehabilitate contaminated and abandoned sites. 

Michigan's data base for the sites referred to in my testimony 
provides information to the level of identifying the site as "inac- 
tive." As mentioned in my testimony, of the 8,757 sites, 1,035 are 
listed as inactive. Inactive sites are defined as sites where a reme- 
dial action plem has not been approved by the Michigan Depart- 
ment of Natural Resources (DNR) and where evaluation, interini 
response activity, remedial actions, and/or operation and mainte- 
nance have not been undertaken. Every county in the State has one 
of these inactive sites. 

All of these sites, at a minimum, meet the definition of "economi- 
cally abandoned" as defined in S. 299 Sec. 903 (C) "that has one 
or more conditions, constraints, or characteristics (other than onh 
being a type of facility with respect to which market suppV exceeds 
demand) that are detrimental to the public health, sEoety, or wel- 
fare £ind, in the absence of assistance under this title, prevent or 
materially discourage the timely redevelopment or reuse of a facil- 
ity or real property immediately adjacent to the facility for a use 
or uses that include the provision of employment opportunities in 
accordance with applicable community development strategies.* 

Information beyond identifying the site as "inactive" is limited. 
Observations made by the staff responsible for gathering the data 

• Financing for redevelopment of an "inactive" contaminated site is 
almost impossible to obtain. Lenders are leerv of providing loans 
to redevelop a property without fiill knowlet^e of the fiitiure h- 
ability that might be incurred. 

• Many of these sites are located in communities that suffer from 
economic and social distress as defined by S. 299. 

The Michigan Department of Commerce has compiled a list of in- 
dustrial and commercial sites that are avfiilable for sale or lease. 
This list is utilized in providing assistance to businesses interested 
in purchasing property for a new business or expansion of an exist- 
ing business. These properties are either empfy or partially empty. 
There are 1,425 sites listed. These sites are located throughout the 
State and are clearly underutilized. There has not been a crosi- 
check with the DNR data to identify whetiier any of these sites are 

Q^. Do you have any question that the roads, railroads, water- 
ways, water, sewer, gas, electric, and other public or private utali* 
ties and infrastructure that serve abandoned industrial and com- 
mercial facilities or sites continue to be economically useful assets? 

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A^. See attachment, House Democratic Economic Reinvestment 

Q^. If we do not detennine ways to reuse abandoned industrial 
and commercial sites: (a) Can business expansion and credit needs 
of persons wanting to operate businesses in distressed commu- 
nities — particularly small businesses — be met? (b) What will hap- 
pen to the financial condition of local communities? (c) What are 
the economic consequences for the residents of our distressed com- 

A^.(a) Failing to recycle or reuse abandoned and underutilized in- 
dustrial and commercial sites would have an adverse effect on busi- 
ness expansion within a given community. Small businesses, in 
particular need the credit assistance and opportunities that the 
reuse of abandoned industrial and commercial sites would provide. 
Many small businesses are a part of local programs that use aban- 
doned and underutilized infrastructure as incubator buildings to 
help foster the infancy of these businesses. Businesses pay a start- 
up fee, while the rest is subsidized by the local government. This 
pro^m has successfully fostered numerous viable community 
businesses. Thus, it is clear that adopting a pohcy that works witn 
businesses in reusing abandoned industrial and commercial sites 
would be very advantageous for small businesses. 
A.3.(b) The financial condition of local communities is directly and 
indirectly affected by the reuse of abandoned industrial and com- 
mercial sites. Without a policy that advocates and encourages rede- 
veloping and reusing commercial and industrial sites, many com- 
munities will continue to face a deteriorating tax base and subse- 
quent financial hardship. Recycling these sites provides job oppor- 
tunities^ a stronger tax base, local business growth ana develop- 
ment of^the community. 

A.3.(c) The lack of an abandonment reuse development policy has 
numerous effects on the residents of these distressed communities. 
Jobs that would be created with such a policy would not exist 
Without jobs these communities would subsequently suffer the so- 
cial conmtions that often follow a lack of opportunity, i.e., crime, 
housing depreciation, a decreased standard of living, etc. 
Q.4. Is it feasible to incorporate job training opportunities into the 
projects te be assisted under S. 299? 

A.4. Yes. The prospect of utilizing abandoned buildings provides a 
unique opportumty in the job training arena. A prime example of 
this can be seen in Detroit where old warehouses and factories 
have been rehabilitated to provide hi|^-tech job training to inner- 
city residents. Called "Focus Hope" by its founder, Father William 
Cunningham, hundreds of inner-city men and women have been 
provided job training opportunities in hi^-tech industrial machin- 
ing. Duplicating this approach in the inner city will not only allow 
for easy access training, but also allow for comprehensive day care 
and health care for those who participate. 

Q.5. Is it feasible to increase the non-Federal share of financing 
reuse projects above the 25 percent S. 299 requires? 
A.5. Michigan is poised to face its obligation in dealing with this 
critical issue. As a recognized leader in this arena, we are willing 

Digitized by L.iOOQIC 

to listen to any and all proposed options that can better farilitate 
the reuse and redevelopment of commercial and industrial sitei. 
However, the feasibility of increasing the non-Federal share of fi- 
nancing reuse projects would greatly depend on other funding 
sources to finance these projects. 

Q^. Are commercial lender likely to participate in the financing of 
the reuse projects S. 299 contemplates? 

A^ Commercial lenders would participate in the financing of reuse 
projects. Adequate capitalization and security from other sources 
would need to be present and, obviously, a reasonable expectation 
of a fair return on investment. Commercial lenders mig^t have 
some concern over the extent of liabiliW for the condition of the 
project that resulted from previous use. Beyond that, however, indi- 
cations are that financing from the private sector would be 
ayailable in Michigan. 

Q.I. As you know, California is going through a painful period of 
conversion away from military and to civilian industries. Althou^ 
S. 299 does not allow funding for government facilities, there are 
private industrial sites which have been in defense production in 
California that will need to be cleaned up to be converted to civil- 
ian piuposes. Do you see a role for the State government to coordi- 
nate with Federal efforts to help ensure that these sites are 
cleaned up? 

A.1. Local, State and Federal governments all need to play a role 
in cleaning up sites that can and should be reused for economic de- 
velopment. The efforts to clean up are fundamentally crucial to 
each level of government. Failure to conduct a coordinated effort 
would neglect the potential of too many of our resources that m^ 
otherwise go unutilized. 

Right now, the most fundamental problem regarding abandon- 
ment is the problem of deterioration and liability. By the time the 
government gets to the abandoned site, deterioration has affected 
the building too heavily for efficient rehabilitation. To further exac- 
erbate the problem, many businesses do not want to assume liabil- 
ity associated with taking over a contaminated site. Government 
must provide the security to individual businesses that liability will 
not be incurred. A coordinated effort and commitment would go a 
long way in relieving these fears and many other concerns and 

Digitized by L.iOOQIC 

House Democratic Economic 
Reinvestment Strategy 

Tim ii 4 nvoluilao occuniin throuibout du wortd. Todqr, nun Hub ever, there 
Mnt cnmp ti i iion Gar nufcMi ikibilly. Niw admolec; ii tho pprnftni moit npidly 
1 «w. lb* privM NOor ii mkini ndteil cliiD|a in id orpBiaiiaail ind deeiiion 
teg ittneniiti. Tbt ob^Kitn ii to mxlmia praductiiiiwi n du chief nedwU' of 
rioiig 1 co ffiprti tyi idvwm^ ia thii glotnl cotppi ti iio o - 

Tli* poblie nen ii aot ImmaM tiram ibeM dnnwic dtngcs. Sack efatnie ii 
linUs. TIm tanduDcaal qoMion ii: What (bra dnU lint ehtoiealMiT InoOcrwndi, 
in ill compniitvi advuB|g7* 

Tl» iiifii ii Invwtmwi - not dlaawtmnt - u uwn onr looi-iam pmqwhty. 
a, «• ^M Bite IB liiiliiiiiil in phjiied e^iitil, boh pobUc and privis. And lecond, 
MM BBS OMka an ia«MDiuDi in iha labor tbtca. h «OQld b« a sdflaka » anpttuize the 

■B It w BBBdMlabto oaueitn bacwen iha iavaatBHott that te puUk itctDr makes 
■ li fr ii n i M ir mi wodtan aid tt« opitdrf of a aaii » oaaaa joba. Q ii tha ildlli of 
■r* wskten aid (h« t/mUj of m iaftMnoBn itiai aaba it «aaedv« to privue 

- ItoaMftadHMBUldMlkBiacoaftqnincMkbipa it bow ba« 10 gaoanie private 
Bf woMflis £fowdL Labor tect iidlli and uftaanctuo an cnnvHCiors i wwm y 

71-592 0-93-3 


Digitized by L.iOOQIC 

IPunrinlly, dURmBCM inoni iueonm fnwpt bxm oiytd birlr coaam - bu aU of thu 
dunged in tha ISIOi. 

Tlie nandud of living for Mkhigu'i middle clui ii ra^ndly dediniBg. Even tbougli 
tool Mkhigin per capin inconi* inoeued 6.S percent after inflatioa between 1973 and 
1990, that portioa of total pcnonal income derived fiotn wages ai^ ulariei - the major 
Kwicei of incaoe fat Midugan'i middle dan - declined. At ihe now time, interest, 
dividends aad otbcr noa-aalary and wage iocome naiad fbr the ■laUliiiil five percent of the 

Dm 4fdinf of our middle daaa hutti Mkbigan'i immwniff bcaUh. Mor of tNir 
cooaumptioa ^ goods and services comes ftwn adaiica and wagea. WhM ihU source of 
inctune decliaea, our capacity to sfut economic growih thiougb consomer qicnding aUo 
declines. It ia a patten that feeds oo itself and, over time, the sale's ecoooray is less able 

TIm -t"^*" ef iniridhi flats living standards in Wchigan must be ad dres sed — and 

Tha poverty laaa brail kCdiigaiiiana i acwas ed iba ooat among theia duwia l states 
boa 1979— jumping 40.2 paraeBtcoa^aredwiib 19.4 parens far tha indnaltial sBias and 
11.6pa(GaMfaraIimea. However, even more dlstinbiai is what is bappeaing la our labor 
force of Iha fbturn - our ddldraa. Poverty among Ifidtigaa's cbildiw bas gtown by over 
80 perceat telng lUa period - to the point that apprtatimaleir ooa out of flwy bur of out 
state's dnldnBcunenity Uvea in poverty. Among bladi diildRa, tfaadtuaiion is br wane - 
- widi over 30 percoit now living in poverty. If indeed our cfaUdrea an dM Aibnc, dui 
ng very biightly. 

Digitized by L.iOOQIC 

(M Chut H - The Viri«.. rin-l« rnnfrniiriii. Ih> Mi^jm FfrnifHTITT 

Dcclinini publv iafimnicniit ud workforce iavestmai are imponini (acton 
expUiflini thne seodi in Michipa'i economy. The puttm in Michi|in is a viciout dfcle 
of decline whete iiuufficieu public invejtneai ladi u lower ptoductivity - and tower 
productivity le>di to tower wa|es. 

Ai I icailt, economic snwth ii ■"!"■"' and we aie coobaued wiib a population that 
ii poorer and more dependent, while ecoaomic powth ii iniufBdcat to provide for adequate 
invcttmeai, and lo the aide ooniinua. Michipa'i fbtura ecenomie vitality dependi on 
btoUag Hda vidoni Click! How do we do thiti 

(MO dttlt IS - ^»«f«./ii...h Inftagfuctura ni«inv*gmMrt 

We muit i^ect the Re^an-Buth dlanvestniBit siate(y . Tax cua for ilie wetlthy and 
dw ttfultiai mustve tWenl budsci deficit have ruined our ability to invett in our fuDne. 

tjndv Seefao'Buali, tUcnl pana to nm and local pivBniiwota for iobasructuie 
tnvesment fell by S5.6 UlUaa, oc 30.3 percent laftaMiuctuw investment as a percentaf e 
of the Uenl budget fell ftooi 4 peneat to 1978 to 2.1 percent fix 1990 - down neuly SO 
percesL lododed in ttai rati are sianci fbr out higlmya, aiipocti, eonununity 

tJafbitiinuely, Ibe fbdoil (ovemntcnt ii «p— 'ti»n Don lodqr than in 1980. But 
ntbK than invfstini in au infiuinictue, our tax doUan |o to pif i^nw om the debt This 
lUft 1m^ a^laia (he itmcDdoua powih in inteieit incooe br ibB wntty nd die |iDwin| 

lAd^BB'l htftifl p y *"* investzncnt lais bfhind aQ indtmial ilMci — "^ fan* well 
below the nmfe far dta United States. Michipn actniUy inveattd leal per capita in 1989 
than it did in 197S. 

(Me Chan fl - Inftagmcnm fnv«mjigit rnmpmil to Ecfwnir Wrtl.lMn|\ 

Thit paHeni of diiiiivcstnient has devastated out state'i econamic fiowih. When 
corapaiing the kvd of infiastructure investment with the level of economic well betn| - 


Digitized by L.iOOQIC 

at, and poverty teveb - the panem ii dor: die hi(her Uie 
investneat, tbe higher the economic well being. Tile lower the investment, the lower the 
cEonomic well bein|. 

Michipn lad New Jeney provide the most revealini contrut. Kew Jeney canki 
higben amoai the nates ia both inveKtnent uid economic well bein|. Michigan ranla Uit 

fma ehMt n - MiehigM Firmi Reponini Shomtei of Skjjlfd Wffllcer^^ 

lovcstment in onr worUbrce ii alio cniciaL The moden iBdutttial economy ncedi 
(killed, educated wocken. Wu^ipn flmn rr^nn thnrfg^ ifttiiwkm »^^^l^h1! i ppnrpfiaff 
ikilh. In one wivcy, tlnni teponinf ihonagea of sUlkd wodcEn laagcd from 43 petccni 
for lain co m paniea w S3 pf n'lni for wmii bunncaaea. HfTHfTrrb fr, wwjII busioeaaea create 
moat of our new joba. If small businesses cannot find caoagb trained woricen, then thoie 

(see chart I 

How do WB meet lUa chalktigaT By educaang and training our workfbra. But from 
1990tol991,OovBiiacEn|liKcutjobiiainingby lS.3percent Under Reagan-Bush in the 
t980s, job training tdl by 21 percent 

We need a plan that leatorci hope. House Democrats are proposing a cooprdieasive 
I strategy that will do just ibat, sid man. Ttis House Democratic 

by 23 percent, creaiiag 100,000 new jobs by Dm dot ti 

job tnimng strategy with Ae infiastrucon investment 

* Commit m dm ocatiaa of Michigan job ncyk"*** in the fiscal 1993 budget, 
dedicated to improving the skills of all woiken aged 16-34. 

■ Seduce dependency and poveity duough infrastncturB inveatmaat, providing 
worimi ikilli and ml •caoomic growth - JOBSt 

The message of the House Democratic economic reinvestment strategy ii 
fundamental: A prosperous ftiture R^uiies a teal commitment to that future. There are no 
ihoitcuts or simple solutions. Oui future depends on diis new commitment of reinvestment. 
Together, we can teinven in Michigan and nscn our proqwtiiy. 

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Q.1, To what extent are the contaminated sites in your State eco- 
nomically abandoned, as defined in S. 299? 

A.1. Many of the contaminated sites in Connecticut are economi- 
cally abandoned, as defined in S. 299. Connecticut has 29 munici- 
palities that are defined as "distressed" under Section 32-9p Con- 
necticut General Statutes (copy attached). The criteria in Section 
32-9p is similar to that in Section 907(a)(4) of S. 299. Most of om' 
abandoned or underutilized sites are located in these 29 distressed 
communities. For example, there are 325 contaminated sites await- 
ing an environmental review in our property transfer program. Of 
these 154 are located in distressed communities and 104 of the 154 
are located in our 4 largest cities (Bridgeport, Hartford, New 
Haven and Waterbury). Each of these cities were once vibrant 
manufacturing centers. Today these communities experience con- 
tinuing economic decline which is attributable in part to the aban- 
donment or undenitilization of many industrial/commercial sites. 

Q^. If we do not determine ways to reuse abandoned industrial 
and commercial sites: 

Q^.(a) What are the consequences upon the ability of local com- 
munities to fund their compliance obligations under the State 
Drinking Water Act, the Clean Water Act, and other Federal and 
State environmental statutes? 

Q^.(b) To what extent would infrastructure investments that 
have already been made to improve the environment be ineffi- 
ciently utilized? 

A^.(a) In general, if abandoned industrial and commercial sites 
are not reutilized, municipalities may have more difficulty in 
achieving their obligations under Federal and State environmental 
statutes. However, it is difficult to quantify any impact. 

For example, under the Federal Clean Water Act many munici- 
pal governments have in place a user fee system that generates 
revenue to fund operation and maintenance coste of the sewage 
treatment plant (STP). With an increasing number of underutilized 
or abandoned industrial/commercial sites the cost to operate and 
maintain the STP is borne by the remaining users, in particular 
residential. Residential and remaining businesses will bear an in- 
creased cost as businesses move away and industrial sites remain 
vacant. It is possible that sufficient revenue may not be generated 
to cover all operation/maintenance expenses although I am not 
aware of any such instances. The reuse of these abandoned/ 
underutilized sites will generate additional revenue to help ensure 
that all operation/maintonance costs are covered. 
AJ!.(b} In general, infrastructure improvements would not be effi- 
ciently utilized. However, it is difficult to quantify any inefficien- 
cies. For example, many wastewater collection and treatment facili- 
ties in our major urban areas have excess design capadfy and 
could easily accept additional discharges. However, with the contin- 
ued abandonment and underutilization of industrial/commerdal 
sites the infrastructure improvements already made wiUi Federal 

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and State funds to upgrade treatment plants and wastewater col- 
lection systems will be underutilized. 

Moreover, there is pressure to extend infrastructure to outlying 
areas, because businesses prefer a suburban location. A m^jor ef- 
fort ^ould be undertaken to utilize the infrastructure improve- 
ments alrea(^ made in our urbui areas and avoid unnecessary ex- 
pansion when sufficient design capacity is already in place. 
Q.3. It is feasible to incorporate job training opportunities in envi- 
ronmental restoration/technology into the projects to be assisted 
under S. 299? 

A.3. It will be very difficult to incorporate job training opportuni- 
ties in environmental restoration/technology into projects assisted 
under S. 299. There are many environmental firms that already 
have adequate staff that are not fully utilized due to the economic 
slow down. Consequently, there is not a large demand for these 
jobs and they would tend to be short term. 

I would recommend that job training initiatives be considered 
after a site is remediated. If sites are reused skilled imd unskilled 
labor will be needed for the new or expanded businesses. A job 
training program especially for the unemployed in urban areas 
could be incorporated in this way. 

Q.4. It is feasible to increase the non-Federal share of financing 
reuse projects above the 25 percent S. 299 requires? 
A.4. An increase in the non-Federal share of financing reuse 
projects above 25 percent is likely to be feasible for the State of 
Connecticut as we already have Irnnd funds in place to undertake 
site assessment and remediation projects. However, it is likely that 
a match exceeding 25 percent for other States, local governments 
and other entities may not be feasible. Any increase in match could 
significantly limit the number Bind type of projects to be under- 
taKen. I would recommend that the match requirement be left at 
25 percent. 

Q.5. Are commercial lenders likely to participate in the financing 
of the reuse projects S. 299 contemplates? 

A.6. Yes, commercial lenders are likely to participate. The key im- 
pediment to financing business development has and continues to 
be the concern that financial-institutions have regarding "un- 
known" environmental issues. Once the environmental problems at 
a site are defined and/or remediated, lenders can evaluate a financ- 
ing request based upon the merit of the project and the financial 
strength of the applicant. 

Q.l. Do you see a role for the State government to coordinate with 
Federal efforts to help ensure that these sites (private industrial 
sites formerly used for defense production) are cleaned up? 
A.1. Yes, I do see a role for State participation. On the most basic 
level, the State is the primary custodian of the environment and 
the public health at ana in the areas around these sites. Similarly, 
the State has a significant interest in the economic impacts assoi 

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ated with either the abandonment or productive reuse of these 

In addition, the State has a regulatory role in overseeing the 
clean-up of these sites. Under the Connecticut Clean Water Act, in 
particular Sec. 22a-432 and Sec. 22a~433 of the Connecticut Gen- 
eral Statutes, the Commissioner of Environmental Protection has 
the authority, and therefore the responsibility, to require the inves- 
tigation and remediation of sites which are a potential or actual 
source of pollution to the waters of the State. Similarly, under Con- 
necticut's Property Transfer Law, Sec. 22a- 134 of the Connecticut 
General Statutes, hiizardous waste establishments which undergo 
a transfer of ownership must be cleaned up in a manner approved 
by the Commissioner of Environmental Protection. 

Connecticut has and will continue to coordinate remedial activi- 
ties with our Federal counterpart USEPA as necessary to ensure 
that private industrial sites formerly used for defense production 
are cleimed up in a timely manner and in accordance with both 
Federal and State clean-up requirements. 

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iomanus Canal Cimmunity 
Uevelopinent Uotpoiation 


July 11, 1993 

ttnltcd Stata* Sanator 

Ttia Bonarabla Donald W. Riagia, Jr., 

ciialnHin, Th* CoHiittaa on Banking, 

Bousing and Urban affairs 
Haablngton, DC aosiO-6075 

Daar Honorabla Donald w. Riagla, Jr.,: 

I am ancloslng answers to tlia quastlons that you bava askad 
rsgarding th* Abandonad Land Rausa Act of 1993. I want to taks 
this oiqiortunlty again to thank you and your Majority staff 
Counaal Kr. Cls*ant Dlnsaora who haa baan axtraordlnarily 
haipful, inspiring and knowladgaabla. 

Tha Inforaatlon that I hava gatharad to anawar your 
questions ara attrlbutabla to Profaaaor Philip Kaalniti, author 
of a book aoon to b« published on Rad Hook, and Kaw York 
Univarslty's Urban Raaaarch Csntar'a aaaoclatas Hugh O'Halll and 
Roily Haff. Profaaaor KaainitE'B aarly research which has proved 

lender class . HYU'a Urban Raaearch Center's publication Is called 
riaxlbla Econonic Davelopaent! ^^ Haw tooroach to tha South 
Brooklyn Hntarfront, 

Thank you vary such for the opportunity to partlcipata In 
the process of your SMerglng new legislation froM the Coaaittaa 
on Banking, Housing and Urban Affairs. 


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Q.l. To what extent are the contaminated sites in the Gowanus 

Canal/Carroll Gardens/Red Hook areas of Brooklyn economically 

abandoned, as defined in S. 299? 

A.1. The Gowanus Canal area, Red Hook and Carroll Gardens are 
loosely referred to as South Brooklyn. (See Exhibits I Location 
Map, Neighborhood Map, and Study areas.) Over the past forty 
years the Gowanus Canal area and the waterfront communitv of 
Red Hook underwent vast changes from once thriving neighbor- 
hoods of wharfs, homes, and and water dependent industnes to 
acutely marginal enclaves of the very poor. The people of Soutii 
Brooklyn once played a central role in New York's industrial econ- 
omy and shared a dependence on the waterfront industries. 
Containerization and automation had decreased the industrial eco- 
nomic viability of South Brooklyn. The Port of New Jersey where 
larger facilities in Newark and Elizabeth that were better suited to 
container handling benefited from the new shipping technologies 
and the dependence on trucking for the transporting of goods. 

Influenced by global changes in transportation technology, manu- 
facturing processes, business location, and shifts in the economy 
has virtually diminished Brooklyn's great maritime history. 
Deindustrialization, racial transformation, and shifts in the urban 
economy clearly all contributed to the economic and social and geo- 
graphic isolation of the people of Red Hook. As a result. Red Hook 
has become a reservation of those outside the mainstream econ- 

Surrounded by water on three sides and cut off from the rest of 
Brooklyn by an elevated highway, "Red Hook is perhaps America's 
clearest manifestation of socially isolated urban povertv." Red 
Hook's isolation from the rest of the city was less critical in the 
decades when the community was sustained by its own industrial 

The departure of so much of Red Hook's population, reduced from 
22,060 in 1950 to 11,676 in 1980, has negatively impacted (mi the 
neighborhood. The working class residents who left also took with 
them many of the neighborhood's churches, stores and other com- 
munity institutions. The housing became increasit^ly dilapidated 
and the waterfront area became increasingly desolate and ravaged 
by drugs and violence. The crime and drug problems that plague 
the nation's first federal housing project were tragically manifested 
in December 1992 by the killing of public school principal Patridi 
Daly. The fear of crime also seems to have become a paralyzing 
and isolating factor in the lives of many residents. 

The problems of Red Hook are stagnation, isolation and despair. 
More tnan 40 percent of the Red Hook residents of the latest 
housing project in New York City have incomes below tjie povertv 
level, and most live in 2,500 units of public housing in 25 briot 
buildings on 67 acres. About 46 percent of the area receives piilic 
assistance. The ethnic composition from in the Red Hook projects 
are 67 percent African American, 31 percent Hispanic and less 
than 2 percent white. Unemplovment and labor force 
nonparticipation remain chronic problems. Social isolation botii 


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contributes to, and is reinforced by, the low education levels and 
sporadic work histories of mEiny Red Hook residents. 

The waterfront of South Brooklyn has vast publicly held acreage 
that is vacant, deteriorated, and underutilized, (see Exhibits 2) Use 
of Waterfront Lots and Gowanus Caned area. Privately held lots ac- 
count for 46 percent of the total number of lots in the South Brook- 
lyn Waterfront. Lots that are held by public asencies, are in 
rem, or are bein^ taken by the city account for 45 percent. 
As Exhibit n indicates 36 percent of the land is vacant. This 
statistic, moreover does not convey the extent to which 
properties identified as being used for such purposes as ma- 
rine terminals or warehousing may be significantly 
underutilized. The innsequences of not getting vacant pub- 
lic land back into productive use are iwgravated by the fail- 
ure to maintain it proper^. As a result, some wiU require 
substantial reinvestment before they can be reused for any 

The Gowanus Canal is surrounded by largely residential and 
abandoned and underutilized manufacturing properties. Some of 
the lots are junk yards for abandoned automobiles and New York 
telephone. Con Edison and Department of Simitation vehicles. 
North of the underutilized, low-income potential, and low-level 
valuation for industrial properties abutting the canal is a housing 
project called the Gowanus Houses. The Gowanus Houses which in- 
clude 16 buildings and 1,139 total units are just one mile east of 
the Red Hook Houses. The average annual income at Gowanus 
Houses 18 $11,633 whereby 53 percent of the residents are receiv- 
ing public assistance. The ethnic composition is 37.7 percent His- 
panic origin and 60.9 percent African-American. 

The decline in both manufacturing and maritime employment 
contributes to the decline of the surrounding neighborhoods. Al- 
though, Red Hook Houses and Gowanus Houses contrast sharply 
with that of the adjacent neighborhood of Carroll Gardens. Once 
considered part of Red Hook, out was separated by highway con- 
struction in the 1950's, Carroll Gardens received a large influx of 
new middle class residents since the late 1960*8. This has stdmu- 
lated retail activity and in some cases the conversion of industrial 
spaces to residential use. The side by side coexistence, however 
unacknowledged, throws into sharp relief the patterns of daily life 
in an increasingly polarized urban America. 

The legacy of changes over the past fortv years is a waterfront 
and Canal that suffers some of New York s most daunting social 
and economic problems, but that still retains many strengths on 
which a promising future might be built. 

Q.2. If we do not determine ways to reuse abandoned industrial 
and commercial sites: 

Q.2.a. Can the business expansion and credit needs of persons 
wanting to operate businesses in distressed communities — particu- 
larly small businesses — be met? 

A.2.{a) The need to create a new waterfront and develop other in- 
dustries is evident The old industrial waterfr^int cannot be 
recreated. The entrepreneurial energy of local business people is 
one of the Brooklyn waterfronts most important assets. One of the 

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most notable examples of this energy has been the acquiBition and 
redevelopment of em old brick warehouse structure on Pier 41 in 
Red Hook by a local businessman. This previously derelict atruc- 
ture was recycled without public subsidies or support It now 
houses a variety of commercial and industrial enterprises, and 
could serve as an important catalyst for further redevelopment. 

New environmental processing technolc^es that are engaged in 
taking what is now a waste product eind putting it to beneficial use 
could create businesses. Wast« management activities are new eco- 
nomic development opportunities with spinoff industries that 
boosts the economy. The benefits of merging job development and 
environmental engineering, and education application puts to- 
gether an industrial, education, and environmental alliance. 

A small industry augmenting a business that has developed al- 
ternative technologies to landfilling and ocean dumping of harbor 
sediment in the Gowanus Canal is part of a consortium that in- 
cludes the Gowanus Canal Community Development Corporation 
and other community groups, government university labs and gov- 
ernmental agencies. Gowanus Canal Community Development Cor- 
poration is embarking on this pilot project sampling and vitrifying 
S gallons of the sediment at the bottom of the Gowanus Canal for 
beneficial remediation and job creation by converting the sediment 
to construction products such as tiles. 

The Gowanus Canal clean-up has enormous economic possibili- 
ties for making products from waste management activitieB and 
technologies. New York City's Department of Environmental Pro- 
tection is a potential obstacle to such an environmental/economic 
beneficial remediation project if it doesn't begin to look at dred^g 
in otiier than the traditional ways of landfilling and ocean dump- 

The Abandoned Land Reuse Act of 1993 could address these very 
serious economic development and environmental issues. 

Without some inducement of activity from the national govern' 
ment, what could happen might never happen. The primary oenefit 
of zone designation is funding priority for various Federal grant 
programs. The Enterprise Zone has attained a certain l^timaOTas 
a cost-effective job-generation economic development tool. T%e 
Abandoned Land Reuse Act of 1993 addresses the impacts of eco- 
nomic development policy, urbein housing dynamics, and urban 
land use. 

Q^.(b) What will happen to the financial condition of local commu- 

A^.(b) If there is no reuse of the abandoned industrial and com- 
mercial sites, anarchy will continue to flourish in these very poor, 
despairing and under-used areas. It will only be a matter of time 
before areas like Red Hook and Gowanus Houses ignite in the face 
of no leadership or activity to resurrect them. 

Q^.(c) What are the economic consequences for tile residents of 
our distressed communities? 

A^.(c) A continued downward mobility in our poorer secttoiu of 
uii>an America. 

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Q^. Is it feasible to increase Uie non-Federal share of financing 

reuse projects above the 25 percent S. 299 contemplates? 
A^. What is needed is a serious commitment on the part of New 
York State and City to look at these very serious reclamation is- 
sues and adaptive reuse of land. A rational, bueineM and eco- 
nomic approach to redevelopment issueB is needed. 
Q.4. Are commercial lenders likely to participate in the financing 
of the reuse projects S. 299 contemplates? 

A.4. The Abandoned Land Reuse Act of 1993 allows for an oppor- 
tunity for the Gowanus Canal Community Development Corpora- 
tion to continue its efforts in the redevelopment of abandoned lands 
surrounding the Gowanus Canal. In the past, The Gowanus CDC 
has successfully been able to structure several conversions of old 
manufacturing industrial buildings into adaptive reuse. One such 
ten story factory called the Doehler Dye Factory Building was con- 
verted into a 126 unit moderate income cooperative housing com- 
plex. The Gowanus Canal CDC has been able to accomplish adapt- 
ive reuse and demonstrate our ability to develop the gradually but 
definitely derelict sites by securing a 1.6 million dollar participa- 
tion loan from the city of New York. The Gowanus Canal CDC 
launched this successful effort and effected the necessary zoning 
changes and zoning variances. 

The Gowanus Canal CDC was also instrumental in leveraging 
funding for 101 units of senior citizens housing only one block from 
the Gowanus Canal. This location formerly housed a multi story 
ribbon manufacturing factory that was abandoned. The Site was 
placed on the commercial market and had no takers for years. The 
Gowanus Canal CDC was able to integrate redevelopment efforts 
to improve the communit/s quality of life. 

We constantly see the inability of human service agencies, eco- 
nomic development organizations, the education bureaucracy, real 
estate developers to communicate and work with each other. Local 
Development Corporations are dirt cheap investments and cost-ef- 
fective investments. Most of the people who staff these organiza- 
tions pay no attention to the clock. They work overtime in order 
to achieve neighborhood revitalization. 

Funding local groups is a precondition for the stability and 
growth of the city s neighborhoods — of the ci^ itself LDC's are the 
repositories of teaching the skills to fend on neighborhood decay 
and local ownership is at the heart of community stability and 
growth. LDC's are the only institutions able to strengthen local 
economies, promote local ownership and demand the proper respect 
for public property. 

Local Development Corporations are the natural intermediaries 
to channel and assemble outside funding. The key point is that 
LDC's are now the logical and incontrovertible bridge between 
nei^borhood opportunities and funding sources. Equity money is 
a necessary element to create mechanisms whereby they become 
consequential players. LDC's can recycle the funds for projects and 
program expansion taking an unusable site and turning into a de- 
velopable piece of property. As the case cited above indicate, our 
Community Development Corporation has documentable evidence 

71-592 - 93 - 

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taking a piece of property that had n^ative value and wound up 
getting major investment backing for housing and job creation. 
Q^. Do local governments have sufficient jurisdiction over commu- 
nity redevelopment activities to be assured that proiects under- 
taken by non-profit community development corporations will be 
consistent with local public development strategies? 
A.6. In the specific case of New York, there are well established re- 
quirements for community board reviews to participate in the envi- 
ronmental and planning reviews. The emerging partnerships of the 
private sector and quasi public community development organiza- 
tions gives the community a certain amount of protection and guar- 
antee that a community's interest will be served. 

Zoning policies that the city of New York instituted in the early 
sixties contributed to the decline in industry. The idea of creating 
a zoning framework where everything has to be a rigorous separa- 
tion of residential and industrial uses wherebv existing small man- 
ufacturing firms have to be grandfathered in being faced with hav- 
ing to move in order to expand all create unnecessary problems for 
those businesses to survive. The loss of manufacturii^ jobs since 
the late 1960's was inevitable. The idea that the decline of the 
manufacturing economy is a result of the failures of government is 
misguided. But the city government by commission and omission 
have made it worse. Property tax structures is biased against big 
industry and should be reassessed. 

Accommodating new residential and commercial development on 
the "redeveloping waterfront" is now being recomized by New York 
City's planning department. New York City's Department of City 
Planning is responsible for the overall planning, direction and co- 
ordination of policv related to land use and development in the dty. 
However, in its Comprehensive Waterfront Plan, released in Au- 
gust, 1992 the city is now considering zoning that is aimed at en- 
couraging and enabling development of the area — zoning ihat is 
flexible and permissive rather tnan restrictive. The result in many 
areas is likely to be an ad hoc intermixing of residential, commer- 
cial, industrial and public development. The city may not see ^is 
as a disaster to be averted but as an outcome it wants to encour- 

Flexible, incremental development would build on existing areas 
of strength. It would be driven by the entrepreneurial energies c^ 
small businesses and community groups. It would provide employ- 
ment and housing opportunities. Aiid it would help re-establish tjte 
organic relationship Detween these communities and the water's 
edge that the economic changes of the last decades have done so 
much to disrupt. 

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Rgur* II 

Use of Waterfront Lots 
South Brooklyn Waterlront 

iQduitTlal 17X 

WatBhoutlng 15X 

ReildsQtlal 4% 

Mlicsllanfloot 9% 

P19TI, Tsrmlnali. «tc. 13% 

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ChiciH Aiiicilliii il 
Hiighbirbiii Dfliilinnint Orgiiizitiiit 

Diraotor, CMIDO 

All Thar* ar* humtoub contaBinatad litaa In Oiicoqa that would ■••£ 
tha datlnltlon of ■•conoaiically abandonwl" aa dafinad In Sac. 901(1) 
ot S. 2991 

* 'no loitgar oparacing or ao ■ubaConCially undarutllliad ■■ 
to provida only nacQlnal a>ploy>ant opportunitiaa i ' 

* 'locatad vithln a eoBninlcy that auffara froB aconoalc and 
■oclal diatrauC 

* ■conditiona. . . datrisancal Co public haaltb, aataty ar 
walfara and, in abaanoa of tha aaalstanoa undar thla tltla, 
pravant or aatarially diacouraga tha Glaaly radavalopnant 
or rauaa of a facility;' and 

t (B davalopar vould ba) 'unahla to fund or financa tlia full 
a>ount of tha coat of a raoaa action.* 

i Davalopaant haa raquaaead 
aant craata an invantocy of 
aia atudy Hill ba eoaplatad 

Do yon hava any qiwatlon tbafc tba roada, railroada, watamaya, 
uatac, aawac. gaa, •laetrie and otbar public oir privata 
utilitiaa and infraatructura that aarva abandonad induatrlal and 

A3: Any oidar infraatructura raquitaa aaincananca and attention. 
But I hava no doubt that vith rainvastnant auch Infraatructura 
raaaina aconoMlcaily uaaful. Tha City of Chicago ia invaating thla 
yaar: $10.9 Billion In IZ induatrial atraat pro]acta: t6.3 ■illion 
Cor 9 viaduct claarancaa: and $10.2 aillion for 32 spaciCic bridga 
iaprovaaanCa . In addition. $41 ailllon la BaraarKad for tha 
davalopBant of 7 industrial parka. Thia public invaataant can 
lavaraga aigniCicanC privata Invaataant and buainaaa axpanaion but 
tha critical raaalning iaaua ia financing tha coat of anvironaantal 

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: of spaea. Ttiat cosC Involvas not only acquisition but tha 
raliabllltation oC apaca to saat tha oparatlng racpiiraaanta of 
that bualnaaa. Liability that ia attachad to pravioiu 
contaaination dlaoonraqaa acquiaitlon. ttia hiqh coat of 
raaadlatlon akawa tha rahabilltation proj actions for any 
davalopaant pro foraa. 

(b) nwC will bappm «o tba flnannlal 

and prcpartiaa. inair financial haalth hI 

axistlna flxaa looking to axpand will ba tanaa t^a 

tVXXbmtini tba naqativa daclina of tliat local ■eonoay. 

.1 for tha raaidants 
of our diat raa aad oo^unitiaa? 

A3 (c) : If thoos raaidanta ara tortunata anougta to hava ]oba, 
ralocation of ficaa will now eandaan thaa to long eoanutas that 
do not contributa to haaltliy faaily davalapaant. If thoaa 
raaidanta ara minor It iaa uich aufflciant incoaa and can find 
■ffordabla housing In a suburb coaaittad to span housing, thay 
thaaaalvaa aay aova out furthar contributing to tha aconoaic 
daclina of tha coaaunlty and danylnq youth in tba coaaunlty 
■pprapclata rola aodals of working paranta. If raaidanta aca 
alraady unaaployad, thalE ehancaa foE futura aaployaant will 
continuo to ba shattarad by our country's tsilura to addrasa 
this iSBua at financinq anvitonBantal raaadlatlon and rauslng 

X4I It aay ba, but thla will ba dapandant upon apaelfic davalopaant 
pro toEBaa on a projaot by pEojact basis. I think tha 'avoidanea of 
windfall* provisions In Sac. SOS ara atlll tha baat aachaniaa for 
addrasaing Eacaptura of fadsEal funda. 

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1 Crop Twl wynckl, Examitlv* Dlractor, OUIsa 

liability concama. obviously, loan e 

CinBBcial sCran^Ui ot tha ownar and banlubla t 

laaaad apaca to aaiura suffielant eaah flow for loan rapayvant. 

QS: DO local gvnnnaata ban aii££iclaiit: jurladletiafi ovair ea^ninitv 
radavalopaant aotivltias to ba aaaurad that projacta undartaJcao 
by non-profit covunity davalo^ant corpoeaciona vill ba 
eanaiatanC with local public davalopaant atratagiaa? 

k6: Yaa. In Chicago, Boat induatrlal davalopBanC orqanizationa 
alraady ara dalaqaca aqanclaa of tha Cl-ty'a Dapartaant ot Planning t 
Davalopaant and ara undar contract uith tha City to undartako sucti 
daVBlopaant atrataglaa. In addition, auch rauaa projacta Hill 
probably involva othar local public Invaataant for Infraatructura or 
projaet financing chat will raquira city approval, xany projacta say 
ba Isrga anough to ba traatad aa plannad unit davalapaanta and vlll 
raquira raviaw and approval by Chicago 'a coaaaroial Davalopaant 
Coniaaion. It la unllkaly Chat any pro j act propoaad by a non- 
profit CDC would go forvard without Cha approval of tha COHBiaalanar 
of Planning C Davalopaant and Charaby tha inharant aupport of tha 

Digitized by L.iOOQIC 


Cbicig* Atsiciitiin s( 
Hiiibborliiii Deiilapmiil Drgmiiitians 

Q3: Do«« thiM praqzu < 

!«>■ or kqcnclaa am. . 

■o, ban Hoold th— eon<liota ba r*aolnd? 

&3 : On tha contrary , I tliinfc S . 299 craataa tha opportunity for 
col lab a rat ion faatvaan anviEonaantaL agancla* and radavaloi^ant 
agwiciaa. Ibandonad Land witbout S. 199 vill contlnua to lia falloH 
In iCa currant eontaalnatad atata. S. 299 provldaa Uia public 
invaataant nacaaaary to anvlronaantally raaadlata tlila land and 
raatora to aoonoaic productlva uaa, ganarating joba and Inccaaaad tax 
ravanua to all lavala of qovarnaant. Durlnq tha davaloi^ant procaaa, 
•nvlEOnaantal approval a vill ba raquirad that raaadiatlon plana ara 
accaptabla and In coa^lianca. S. 299 providaa tha fundinq nacaaaary 
for davalopaant to comply with atata anvlronMantal lawa. 

03 1 Mwt haa baan your axparlanca in daallng with bankara wbo ara 
baaitant to partioipat* in land r*-davalapaant dua to tba rlaka 
aaaociatad vith havlnq a alta da a» ad to raqulra coatly claan-up? 

A3: raar of landar Liability acuttlad a f3 adlllon loan raquaat that 
our orqanitation packaqad Cor a privata davalopar ovar vary ainor 
Phaaa I flndinqa. Tba landar rafuaad to saka thalr own judgaant on 
tha apaclfie anbatanea of tha Phaaa I audit baeauaa of Landar 
liability. Hitbout aucb an Infonad daclalon, tha ganaral findlnga 
of thla Ruiaa I Hould laad ■ landar to rafuaa to Land on any 
induatrial proparty In Chicago bulLt bafora L975. 

aatiafy tha financial 
L not ba panalliad Cor taking a riak on a 
sally avoid bw»uaa of thla liability? 

A4: Lagal clarification auat ba providad that it a naw otmar foLloua 
anvironaantBlly approvad procaducaa for anvlronoantal ranadlation, 
thay and conaaquantly thair landar can not ba hald liabla for tha 
contaalnation of pravioua partiaa. [3aa ay wrlttan taatiBony ragatding 
Trandlar Hatala; . such pravioua partiaa originally raaponalbla for 
Cha contaalnation ahould continua to ba hald liabla and lagal actlona 
purauad. But nau partiaa should net ba hald liabla for trying to 
correct tha problaa. 

lAndara ahouLd ba ancouragad to tlnanca such aequialtion and 
raaadiation of anvlronaantally contaainatsd propartiaa, not panalizad. 
Spaclflcally rallnqulablng landara who foraclcaa on aortgagaa Croa 
raaponalbility (but not rallnquiahlng paat ownars) for contamlnatad 
propartiaa alao would halp. Dlatinquiahing Lagialativaly batwaan 
raaponalbla and not- raaponalbla partiaa la laportant for landara. 

Digitized by L.iOOQIC 

QS: MiaC la yoor r«» e tlc>i to tha plan [a 
■lUKMiDoad by tba Praaldait? 

kS: Aa I naCad In ay taatlaony I had tha profaaalonal privlla^a to 
diacuaa ehta plan with tha Pcaaldaot on hla Kay *th confaranca call. 
I told hla that Cliicaga waleoaaa this draaatlc nav dlraction by tha 
tadaral govamaant. I ceaaantad duclnq ay raaarka, and fnrthar 
■nalyala of tha propoaad laqlalatlon has rainCarcad ay opinion, UurC 
thla plan would banaflG froa tax cradita for non-raaldantlal raal 
aataCa davalopaant. 

Savltallilnq aapowaraant lonaa and antarprlaa aoBBunltlaa will 
Involve daralBpaant of Industrial (aototias, catail apaca, alxad-uaa 
pr^Mrttas, offleaa for aaall aarvlca buainaaaaa, day oara cantari, 
job training altoa and cultural facllitiaa. Tbaaa raal aaCata 
projaota raqulra aqulty financing to provlda aftordabla apaoa for and 
uaara and Co attract buainaaaaa to locaCa in dlatraasad araaa. 

A tax eradlt for co^unlty aconoalc davalopaant raal aatata 
would provlda a naw f inane Inq tool for coaaunity davalopaant 
corporatlona (CDCa) . It could ba aora aodast Chan tha lott-lacoaa 
honalng tax crodlt and dooa not naad to ba daalgnad for ayndicatlon 
to indlvtduala. Thar a ahould ba aufficiont corporata Intaraat In 
partnarinq with CDCi. In addition, it could ba ■ daciaiva factor in 
a coapany dacldlnq to locata In a diatcaaaad conninlty. 

QSi How doaa it fit in with tha laglslation wa ara ravlawlng today? 

I ba uaad in aal acting such lonaa, 
thara la llkaly to ba a high concantratlon of abandonad land. 9. 33) 
would dlraccly iapact tha ability to davalop auch proparty within 
aapowanunt lonaa. If this plan ia to auecaad, tha laaua of 
anvlronaantal raaadistion auat ba addraaaad. 

Digitized by L.iOOQIC 

CmcAoo Sun-Tdibs, Mabch U, 1993 

Chicago's abaadoned factoriei cost a king shadow. 

" lufacturing dtea here are the induatrial equivalent of Ronte'a daaaical 

lauEKturing sector as it 

, iictures, and acare a 

inveatora who dont want to b«oome liable for uoknovra underground waste on lana 
uaed for industry long before environmental RSulaUona w«re in tarn. 

New government initiatives are aimed at helping to clean and reuae the altea. 
HwoT Daley has made demolition of derelict buildinn a priority. 

But community-development activists aay that uie complex problem won't be 
solved until reindustrialization receives the kind of no-bolda-baTTed polttical atten- 
tion usually reserved for convention centers, airports and casinos. 

Statistics tell part of the story: Twenty years ago, according to the Illinois Manu- 
facturers Directory, there were 7,330 manufacturing operations in Chicago. Today 
there are 4,711. 

Many of the plants that closed in the meantime were among the city** biggest, 
most pnminent employers: Wisconsin Steel, the South Works, Stewart-Warner, and, 
in the most recent announcement, the Lakeside Press. 

Iltere currently is no compr^ensive citywide list of empty industrial sitea and 
their likely environmental ^blema, althou^ one is now being put together t^ the 
d^ and the Army Corpa of EiuineerB. 

But a 6.S-acre site at 1826 N. Laramie, uaed in the past for food procesaing and 
paint-industiy operations, provides a classic illustration of empty factories' social 
coat to Oiicago nei^borhoods. 

Ardier-Daniels-Midlend shut down operations there in 19S6 and sold the rite, 
whidi two years later was donated to the Northeast Austin Organization, "nie ccnn- 
munity group planned to reuse the parcel as a nei^borhood center but lacked the 
reaourcea to do ao. 
A Hngnet for Crime 

nee BTOund the site was stolen, the Dmnerty was o 
m that a 
a raped there. Buildings are only partly 
„__ about asbestos. Scavengers have ren- 
dered intact structures unusable. Underground diemical storage tanks, left behind 
by previous owners, add to potential cleanup costs. 

Debris titters the ground and illegally dumped trash has spilled Bcreas the alley 
and blocked garsBes of adjoining lumes. Fires oreak out on the site. Nei^borshave 
had difTicultv refinancing mortgage* because of its condition, and Aid. Corele 
Bialczak (30tn) said it hurts insurance rstos and property values. 

1 don't think you can fmd anywhere in town a more graphic representation of 
the decline of industry than that site," said James Lemomdes, executive director of 
the Greater North Pulaski Development Corp., a local nonproflt industrial-supoort 
group that coordinated an environmental Bssessment of the site in 1991. "^t's s daily 
reminder of urban failures," 

He and local manufacturers say the ruins help deter expansion of manufacturing 
on the a4ioining Armitege industrial corridor. The site is on the east boundary of 
the 7S-acre Gslewood Yard area, which centera on an old raitread yard that the d^ 
has identified as a potential industrial pork. 

llie development of such industrial parks, according to a 1991 Economic Develop- 
ment Commission stud^, will be key te retaining or creatiiig as many as 200,000 
jobs in Chicago in coming years, by accommodating expansion needs of industrial 

But Heniy Rade, vice president of the Alenlte Corp., a manufacturer of trophy 
componente on the Armitage Corridor, said abandoned structures such as those on 
the Laramie site breed crime and are one more reason why factories choose to leave 
Chicago's old walk-to-work induatrial nei^borhoods. 

Feara among lendera and busiaeases about potential environmental coste of sudi 

car thms, bieak-ins. . . . Until the government and the city and developen fl 

Digitized by L.iOOQIC 

that this is KoiiiK to be a viable manfiiBcturing area (in the long term), you^ flatt- 
ing a losing DBttle.' 

City oflicials say they have taken steps to support manufacturing in the area in 
recent years as part of new citywide industrial initiatives. 

In 1991, the city spent (20,000 to iund an environmental assessment of the site 
conducted for Lemonides' group by Warzyn Inc. consultants. The precise cost oTrs- 
moving asbestos from the structures is stiU unknown, but demolition and cleanop 
costH are estimated at (1 million. 

In late 1991, the entire Galewood Yard area was included in a State Eater]»iie 
Zone, with special tax breaks far business invertnwnt. Around the same time the 
Galewood Yard area was also identified aa a potential industrial park site in the 
" 's West Side industrial plan. 


lontha, the city moved ahead with plans to create a tax-increment fi- 
nance district on the block that includes the 1826 N. Laramie site. 

Officials say they plan to devote $1 million from a new city general-obligation 
bond issue to clean and raze the site. It's hoped that those funds would then be re- 
plenished by taxes on new industrial development in the TIP district. 

City lawyers also say they are looking at the fxwsibility ofsoing alter former own- 
ers in court to recover some cleanup and demolition coats, Tn^ note that the legal 
and regulatory issues involved in such issues are complex. 

But activists with the Northeast Austin Organization and the Greater Ncrth Pu- 
laski Development Corp., who are pursuing separate efforts ts redevebp the site, 
say the public sector has been slow to step in. 

^onuis and months ago we were supposed to know what the d^s position on 
(liability) was, end it has taken all this time to get to the point where the city is 
willingto front-end the demolition and then wony about the liabili^,' Lemonides 
said. TTie neighborhood was suffering." 
Gravity of Situation Varies 

Similar problems are found in varying degrees at sites around the city, many of 
which are not believed to be serioualy contaminated. 

In the IW-aqu are-mile West Garfield Park neighboihood, the Bethel New Ijfe 
community organization has counted about 40 former industrial sites now emp^. 

I'd call it almost an environmental red-lining that is going on in Chicago and 
many other industrial areas," said RusseU Selman, an environmental attorney with 
Bell Boyd and Lloyd in Chic^. "Ihere are certain parts of town that lenders know 
are polluted and won't touch. 

While Selman said lenders are getting more savvy in realizing that many indus- 
trial sites are not badly contaminated, he said the situation is mrther complicated 
by the lack of clear Feoeral guidelines on what type of cleanuo is sufficient to avmd 
future liability. 

Tollowing (Environmental Protection Agenn) approaches you could ring up a bill 
of $100,000 or $200,000 for studies. . . . Most mdustries are unwilling to make thst 
kind of investment only to find out the property is polluted, at whicn point if yon 
own it EPA can tag ^u with the bill,' he said. 

J.C. Gfesser, president of Trendler Metal Products Inc., said that, when his com- 
pany tried to buy industrial property across the street from its metal-stamping plant 
around 16th and Kilboum, it ran into such a problem. 

Gfesser said the company needed expansion room to stay in the city. But he said 
it backed out of its plan to buy the site when it found out that, even after paying 
an estimated $100,000 to $200,000 for cleanup, it would remain liable for contami- 
nated soil removed from the land and deposited in a landfill. 

That, he said, could mean unknown fmancial headaches for the compaiiy if regu- 
lations on landfills were tightened at some future date. 

The contamination was created by previous owners of the property,' he said. 
"But now because we want to buy the building, we own it (the contamination). . . . 
(jovemment is putting all this burden on inwistiy's back without trying to work 
with us as partners to solve the problem." 

The (wasibility of a more aggressive VS. industrial policy leaves some officials 
and academics hoping that sucn a partnership is starting to emerge. 

City Environment Commissioner Henry Henderson calls it the ultimate in rav- 
eling: reusing public investment in transit, roads, power, sewers, water, and hounng 
in old industrial areas, instead of abandoning it to build anew. 

Rutgers University uiban studies Professor Michael Greenbeig has even dubbed 
vacated industrial sites "TOADS'— Temporarily Obsolete Abandoned Derelict 
^tes — because, he says, they have a future. 

Digitized by L.iOOQIC 

l^or, trauBportation, and in&aaUucture alreuly io place. 

AAit: Building Commiariooer Dan Weil (left), Ala. Lemuel Austin Jr. and city at- 
tomey Susan Herdina inspect point Btonige areas in front of the old Dutch Boy 
paint factoty near 120th and Peoria. The city filed suit in 1991 against former own- 
ers of the polluted site, and says it readied an agreement in the last week with NL 
industries for a joint environmental study of the property, l^e abandoned United 
SUtea Steel South Woika factoiy at 86th and Brandon was one of the cit^s main 
employers. Twenty years ago, according to the Dlinois Manufacturers Inrectory, 
there were 7,330 manufactunng operations in Chicago. Today there are 4,711. 

Digitized by L.iOOQIC 


HCCED rapraaants ovar 400 organiiatlona that or* craatlnq ]ob« and 
houaiiif in low and aodarata Incoaa cosBunitias serosa tha country. 
Many at Chasa groupa ara aparaCing in oldar urban naiqhborbooda 
uhara abandonad land la all too coBBon. 

S. 199 aakaa non-profit coBaunity davalopaanC eorporatlona aligibla 
to racalva funda (or claanup actlvlciaa. Thla lagialatlon would 
add an additional Vourca of ravanua toi our Bambara. Obtaining 
lunda for sita claan-up ia oftan difficult., aa many funding aourcaa 
do not want to provida aupport for thia aapact of tha davalopsant 
procaaa. Bacausa of that fact, S. 399 ia all tha aora inportant. 
It will allow Bany davalopaant projacta to ba coBplatad that would 
not otharwiaa taka placa . 

! you naad any furthar inforaation for tha 

Panny / 
.dant ' 

Acting Praaidant 

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yoiuanus Canal Community 
Wevelopmeni Cotpoiatton 

SMMDOW -Buoov tcono 

Daac Homrabla &lCoiis« D'hHtBi 

I wane to Uwnk you Car having tha opportunity to taatlfy baCoEa 
tba a.S. fanaca Co^ilecaa on BanJcinq, Houainq and nrtwn Affairs on 
b^alf of Uia Abandonad Eiand Rauaa Act of 1993 (I.3»). 

TtM nav fadaral laqialatlon ia ■ aiqnitlcane atap in tba 
racaqnieion of tba iaporcanc* of tlia rabalillitaclon and davalopaanC of 
induaerial land to t)» aconoslc condition of Aaarica'a Lnnar city. 

Tba Abandonad land Rauaa Act of 1991 alao addraaaa* tba preblatu 
of aocial and aeonoaie iaolacion of urban coawinltiaa auch aa Bad Hook 
and eovanua. tha iaolation of thaa* e 
critical in Cha daeadaa uhan tha eoaau 
Haearfronc induatrlal aoonoay. 

Tba procaaa ol rataabilitation raf 

unaaployMnt, dnqa and i 

■ployad in tba c 

lorporation raeo^izaa that tha 
tha aoLution raquiraa a 
mnant aqanciai, adueational and 

Our partnarahip vlth Ranaaalaar PeLyCachnie Initltuta'i (RPI) 
BreoUiavan Lab-lnduaCry Partnarihip la critical to carrying out tba 
tachnical, adueational and training aipacta of tha claan-up. Tha 
•eonoBlc and aocial banaflta go hand in hand with craating a vorK fore* 

nK you, ansa again, for tha opportunity t 
■DluCiona propoaad to tha laaiiaa that ara 

Mtu.'AAa-v\ .'-'C '■Va. rJ 

Digitized by L.iOOQIC 

HMdquantn Prggram Minagir 
Hwdquarm Rnancial Officer 
TKhruoH Piogiam Offlctr: 

M Stnpaon, (301) 903-7961 

SUM w«b«ur. (Toq :a^2e22 

Kai1J.8<ii>y«*r. (11S}2S 

PMW Colombo, (S16) 21200*8 

Joiriuy F«ic»d ProgntK 

integratM Oamonstraiion or Program: 

Phmacy TacnnoMgy Ana: 

Wofk BfMttdown SttuctiM Numbor: I.SJ.l^ 

HRCode: EW404010 

iTNttid* (tporworad by UMMnty cf Ml 
DanMry of ^4«lr Jara^ (UMONJ) ana n 
Tht Sue UrtfvMtty o( Nn« Janay) 

Task Sutnmary: 

•n miiianca o&tn—n BrooKnaMn Naiwntf LaDonRwy; Bronx Commurwy CoiMga: nm t M iaar Polytactvilo 
Initnuia: Enviionmamal and OccupiHonal Haatth ScrtncM MKitMa (COMSQ (Spontond by UnvKflty ol 
MMDcina and Danilauy of Nnn Jaraay (UMOMJ) and nwgan; Tlw Stss UnMrMty of N«w Janari; 

Digitized by L.iOOQIC 

Iw Ensnrenmaiatl Taotnatogr EducMon p>CTS) aid tt« M Gitf u Wt PCIS ^(^ 
M tfw ffiMi iroOM pni*cM «■ iMd to rmr way* to Mng aOM « 

■rd MMNTt cf ind poiMntig in cMdrwi ghwi In ooMMratan <•« TIM UMMMy 

xd DwMinv « N«w MTMy «aM « UntwMV HaipM in HMMt MndptW Of Htk 
<«■ Ba «ppl«] to b)m an undarMndng o( th* «(Uni Of tfM naBwA IncutM b)p VM ganwM 

OrQMilM and haatv fnatala M in ifnpen>« oenvenan e( warn In M Oo-Mnul CarM cMarwp 
pi«f«cilii Itaaldyn. Naw VortL ThahKardafromtNatypaelwaaiaaraantiratr dMneiiremiiwpreMm 
tH iMd loxlcalesr. For nitnpM^ v «rtte1 qn matnoda may ba uaaM M dhpoaMg cf Mima d tha 
aenuminaiadaoBKeunOinthacan*. "maappraaeniadMncilramnMnyoflhamoMinipanwaMpacM 
ol araaa tubfact 10 Mgn <Md conunwiaUon. TTm pun la » imeM Mudans n ina ai^iwNlMn ^ fw 

■etMUaa can cMjaa prablama riWad to tnaaa apadlle MIMIta. TliapraHamalwMrquiMy Mtnow 
a maiot thama ■ MvanI eommunly colagM tooaad doaa to nn. Wl haa mmM laMlad (aaaaMt 
pratacn now In oparauon. liinMunlihanlouaalliaMpanlMakaatfyinmmnoaainPttanalpouKIa 

A mafor pan ly tha ifork wW irmiM IM irtagntion M ralMWil aiom Ol Ifta pcofaa maniMf^ 6NL 
RPl Id aommun^y e oi»B M Wo comniunlty «duoatton Id el Mnup ■aM>«a. For aiampM. M radudng 
afficta of chaohood Mad poiaorang it it ai tha uimoat Mipoitanea te h«va oomminly aducMMnand 
cofnmunity action *o M to minimiM tna lrr>p*ct of laad paint on ina cMklran Thttpanoltnapragnm 
li ra ga idad at imponar* in a vtiy ganaral way to iha inMng of nazarooui maMMi taetwiie ia na. TIM 
conanunty Mlagaa wi itao ba a kay to iniprovino oommunKy aducMlon and giving accuraa Inl 

Hi«aiipacttdinMinvofatnMi»o(aava<aieon¥n u ni(yeeiaflat jnaachgaoQrapWcalafBawWbauaaM. 
Snm Communtty Collaga tMf in* ba ratpontibta lor racrUbng aoditionil con¥TKjn«y ooiagaa and In 
>-«ralaffon. Stvaral coSaga* haua baan idanufiad )i aacn irM w topropcMU 

Tha worii propotad In itiii tatk tummaiY '•^ ba linkad to tha anorti al tnt BNI. Oflloa of EOuoatlonal 
Progranti (OEP). This linnaga wiH halp 10 further Oevalop and axpand aflon* of tna OEP In a numbar ol 
waya by adding foDcnr-on opportunitita for stuoams wfio aia curranOy parUctpnng in BNL'i Env ir ontnantal 

Digitized by L.iOOQIC 

60H8ll»atrMdyinyoli.«>i»»*»*iMp>oMo(iMdtorieologytdu cM) on w idiM*ir*h»i»M»»MrK. 

""Mlndurtngeoo«nunlt)foutfMeti,« ■ ' ■" "■ ^- 

TTw partlcipani in Th* cofact wi woK m tht ttMt ai 
Cana(clwnup,ir)dwawqu«lllylnitNup«awN«wVa1(WMIo; tj D«««iopiTiodncaiwwlottitZiFMr 
euneiia lakig inau topM m mfnplii. 3) D«w«Mp eonmun'ty ImvaMrMni omign tt m t tOcuwiB 
aOMM*. 3t Um mouarUI pvtIcipMlcin to aOOnH (mprevvnwK ot MOirMin HMig for IndunM 
pouioni. 4)Con»txya(aDnpi«nningt<yoroOuc»ona(vMwuowwni<AevbadhMbuMdtt«miglitft 
GObr«rv u a ganaril cMMrogni toM. TTm RPI group k ab 
ptanring pnaia. 5) AaatannaauccaMofUMoaat Kutfy a( 

guOgw Summafy: (doUan in tnemand^ 



0- |»^ 









Digitized by L.iOOQIC 


gh Mustrtd rtcnAnani and mduMry input to courM riNMriil 

rnnanot Md Minina br Mudanu. 

^ » dVMtap (WW tiaMrWk Mr coww hduaim 

gki worn to (Ml dMcrfptfon of v4dao program fat Mdt prebiwn 

irt to wtH Mimnwy rtpon for MCti probl«fnirM. 

Ma MMMnMnt of mMt ol th* can wpRM 

Digitized by L.iOOQIC 

!i mU l .l."l.,» I . II . P .t... 'TBi|! 


Push Gowanus cleanup 


,^^_^ -n.^ 

Digitized by L.iOOQIC 

444 NdMi OpM OraM. HJK. Si«* «t 


acH WMi MangmM OfBcMi 

April 3B, 1*93 

1h« loiiambls Donald «. Uagla, JT. . OiaixaMi 

MBBt* niMl" I on Buking, nwlag and ttotaw Utslrt 

V.t. MMU 

nuuBftcB, D.e. aoBio 

Dm«t ■wiator magi* I 

Sh« JUMoslatlan «£ Itata and Tarrlterlal ■olid Nast« ■uwgvBMtt 
Mfleial« (urrnoni twa b«an adcad to prevlda our vl«m eoncMmlng 
year propoaaa l«gi«l«tien tltlad, 'AbaBdoMd liUMt nmtam Aot of 
Ut3", I. a9». MTMH9 nprvvmiu Stata tnwt* Mnagan dlraotlng 
tb* Bolld waatai haaardovs «««M, riiilatloa, andargxamd tank, 
■ad ^ucf of tlia radnotlon and noyollng progvaM af tlia atataa and 
VaxTlterlaa s£ ttaa O.d. 

JkS wa undarataad It, tb* broad pur poaaa oC thla bill ara to bring 
•baMdmMd land buk Into prodnotiva «■•. ntta appzoaA foaa 
■c— Mbat bayend oar taoAnloal viaiM of olaaaup of oontaalnatad 
waata aitaa. eiaarly. It 1> (rood publlo pelloy to raatera 
indnatrlal altaa and ratom tbagi to tba nation'* prodootlv* 
ospaolty. Bowarar, wa ballara wa abould laava oeaaantary on 
davalagiant pelloiaa for ttataa and eltiiana to our govamora. 

(Mr partioular Intaraat la in laglalatlon vtaioh oan aaalat In tba 
vaat task of anvLronnantal raaadlatloa of oontaainatad aitaa. Oar 
. a» laada oa to ballava that thla laglalatlon haa tba 
so aaalat aany leoalltlaa and auiy or t aotlva Stata 
wimcaxy olaanup prograna by Ita grant funding provlslona. nia 
natlon'a laadara ^and a graat daal of tiaa eonoantratlng on tba 
evar 1,300 altaa on tha auparfnnd national priority Llat (hfli , aa 
wait thay ahould. Hoimvsx, froa our parapaotlva, too littla 
afetantion la glvan to tba vaat Invantozy of non-HPL oontaainatad 
•Itaa Mticta will narar raoalva Inpaxfund raaouroaa, and mat ba 
olaanad na by dtataa, lecalltiaa, and raaponalbla partlaa. So»a 
ballava tbla Invantary aay ooatain up to aa aany as 39,000 altaa 
ratinlrlng aoaa foxa of aotlon, and altnougb aany Stataa bava 
davalopad aggraaalTa dtata elaamqi prograaa to addraas tStaaa non- 
KPL altaa, raaourcaa ara alvaya a pcoblaa. "^ — " — — - 
aeuroa of aa«a of tboaa naai"' 

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ol«anup pragr«a> tas Bon-MPL aifcaa (i<s<i ttat* sltaa). Kuiy 
atacss bmva sIxmUV Omnlopma voittntasy oMuwp prograMi KtMrAy 
private partlaa partora ait* alaamp* vltk Itata ovaraiglit. n* 
privat* partlM ax« octaa Mqulrad to par for all Rata ooata 
aaaoelatad with tb« daaitup and In ratum raealva Stata 
oartlficatlon that tna alawiup tiaa b*aa partoraad to t&alr 

tha iiat ■liHiliawit of Eola* and g— ponalbllltiea tOK 
Fadaral and ttata Aganclaa at non-lVL Stat* altaa tharaby 
•lunufing cba aoat affaotlva via of gavarnaant vaaeareaa 

tha rurtbar davalinumit and anhanoaaant of Ctafca 

CenaoqiMfitlyi «* appcaalata tbla blll'a approadh of alloKUig Stataa 
tha authority to ovaraaa alaamipa undartakan vndar ita praviaiona 
without undu* taohnloal raatrlotlena, uaing finaitaiWL 
aaaMmtahi]i,lty aa tha pxlaary fadaral control aaohuilBa. Na oenwnd 
your coBBon-aonaa approach Aloh rvcognliva Stataa aa ocapatant 
partnara in aaating national olaanup naada. 

Wa also not* that laiiater Lautanbarg haa racantly introdooad 
laqialation ralatlng to voluntary anvlnnaantal claanupa to toatar 
aeeoaale radavaloyant (I. 7T3>, and it la our undaratandlng that 
Nr. HydiMi la eoBaidarlng lagialatlon along thaaa linaa ut tba 
Houa*. N* hopa that •• all thaaa parallal l*9lalatlv* affwfcs 
BAtura, w* oan worK with your ataff to anaur* that Stata y-^- 
- * Iblli- - . - 

prograa naoda fee oo^atiblll^ can b« acDlavad. 

on bahalf of tha Aaaootatlon of Stata and Tarritorlal Solid Vaat* 
Xaaagaaant Oftloiala, we oommmA you tor raoognliing the iaportano* 
of alt* olaanup aa an intagral part of your largar goal of 
xavltalliing aoonaaloaiiy dapraaaad aroaa. M would ha h^ijnr to 
provlda any taotanioal aaalaCanoa w« oan aa you eontinua your work 
en this inltlstiv*. 



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Connecticut Seeks a Return 
Of Jobs as Well as Nature 


NORWICH. Cdm. - Th. fak.k .nd ... „,cf,h, » 

CMt indutinil landiupc ihii tirMclm riwni 
•lOBi iht ShMuckM Hlvrr wMI Mv*r b* -nm <i lom- ion dI i ihifi laini on." 

iMIurmonaSkmCtubcalcfKUr.andrau utd loii Epiiein. an cnimrcr ii ihe Envi- 

ara mora likely i« b« inn Ihui tpMitd ranRMniil Dclrni* Fund. ■ t««P b»»«« "■ 

«,I,« '^'!!!i:r^ 'r* 'J±:^ " N« YsHl -Whtw Bn«M»y Hxn «M • 

^™-i^. ^ "* "P«»«« " tat of cMWwm tboM IM hc>W> haunlt <rf 

. Th. «... -.mV ireiw up ih. *»«M SSTSS EST^'JT.r''^ '■ "*" 

g/nn ol Kcumijlii.d polhujKM h*n, Md i!l^.™' ^^ 

la llw preccM It cn|.|.d In wt ununul 
iMBinpl* ol induun.l irehntacy. But itw 
'^rtwnj rwce ii om httiwy or cntofy ; ii i« 

wiih ihii f 

emmip pra|Kti!'ATilMU|thTlw'bi 
(len ol proiKiina public Iw.Jih It mh 
dtmnfta. ihe ntm pari(ti|m laelort In Uw 
prapcrty'i KonomiE poi.mi.L Th. drum 
(•Ml Isr ■ rnurn to n.iure, b-.i ;x ]obt and 

IdMtllylai SIM Wlih pMMirlal 

"Our loal It la iry and rwiialiu Ih* 

cUlciL" Hid Cormtcdmi't Enviranmtntii by nwirQnnwmalni|liM*rtwor1iint under 

PrwcctlM CDmnniitonar. Tlmoihy R C conlraei with Ih. Drpartimnt .( Envtron- 

XMtwy. -Th* key here ii Mleniilylni ttm meniil PrMMtMn. then markeiad by ih. 

fll.s wiih economic pmeniiat." Departmeni ol Ecanoniw Oevelopnwni. 

TTm ycir-oid proirim. Introduced by Th. ti.i. wmM prabaWy be.r tome ol Ih* 

Gov. Lowell P. Weicker Jr. at pan a! an <m> ^ l>i* cleanup, but in return would 

urban iilmuhit pickafe. mirron wfial ca- have a lay In developmenl on ihe land. At 

vlrenmeflial iroupt uy It a trend (round much It 190 reillion in UKpayer money 

(he niiion. Fueled by the argumenlt ol would b. coiamillcd ihli yrar under an 

advocain for "cnvironmenul luiiic*." tupandcd verlMn ol Ihe proiram now be- 

whoconiendihai pour u man neifliborhDodt '.'• '•>. L*|ulamre. 

ar«o<ienihcliniiobepoiiuiedandthelaM How ti would .11 In lofdher m ihit pilot 

M Riv.r. however — 

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M« to im I ihrwt lo On pubUe, tor 

cnoufh lor uwdier faciary? And bnw, 
eueUy. wtU onrtrannMnul offldali 
appsnMn ih* com bnwcm Um suu 
■nd «ii owiwr whs nuy not have 
uuMd Um polluilMf 


lltlnoii-tMMd conninwr credll ' 
pany ttioi owni Uw 5S-«en Narwtdi 
Ule. "Bui Ihera irc a lot o( unknowna 
1 loi o( quesiloni remain u> bo 


Velvet was manu(acium) here by a 
French company umll Ihe I9U hunv 
cane apparenily brew the company 
out ol bututesa. Durint v/orld War II. 
■ shop maliint airplane propellen 
WB« Id up •> pan ol the war effort. In 
the early HSO'i. ■ company ined to 
weave synihetx cloth out ol com by- 
pnducis. nwn a company moved la 
that made iicky-iacky wire omamen- 
latKHi lor clocfei and curios. Vacinim 
boillei were made here, too, for the 
naiwn'i lunch-tna army of blue<al- 
lar worlier3. unitl thai mamei. I0«. 
began lo dry up m the 1970'!. 

erty iince the first mill bulMInt waa 
erected aitmnd the turn of the centu- 
ry, and all left a lart of vapor trail of, 
man-madt abuaea, Irom cleanlnB aol- 

And each o( Uioia uaca and a 
muai be tradted. a* much ai poaslbte, 
lo determine not only what the pollut- 
anis arc. but where, and bow ihey 
may have combined over time. For- 
mer employeea have been found and 
Interviewed. lomc even brou^t to 
the Stic to try to recall who did what 
to the land, and when. 

•The hluortcal Information will 
help lead ui to Idenilfy not only what 
■houtd be Mmpled, but where the 
Mmples should be collected." said 
Edward Parker, who oversees the 
program ai the Dcpanmeni of Envl> 
ronmenial Proieetion. Sometimes, he 
said. Ihe (oik hiitory of a factory can 
show the cavalier attitudes about dis- 
posal that werv common. 

"A lot ol limn what old business 
artd Industry uud lo do Is ihai (he guy 
used to lake il out the back door and 
dump tt." Mr. Parker said. 

land hard a 
leasi 41 barrelt of liquid Mustrtal 
wattes were found burled In im. has 
shown that H waa an Imprampiu 
scrap yard. The metal detectors hivt 
alio fiNind a mast that, may be the 
remams of a l.M3-tallon under- 
ground Oil tank aMailad by iba Unti- 
ed Aircraft Company between 1942 
and 1944 and ainea lost from the maps 
and believed to have been crushed by 
later constnictnL 

TIM tiaie plans to spend 1660.000 on 
research and planning for the cleait- 
up proieei h~ 

SiUl. lonH 

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-n*i ti ilM ttmt ptehi — l*v« Mm «mr, ihM he Mwts Utc forca iMi 

i«« fed qI Om wiivr In ilw bawmm ana iMds the SwiucliM Rlwcr tat 

o( llM brnding,** Mid Robert H. Kel> •llracttve will tnwrgc tglin when 

logg Jr^ who wu cntmcenni mtn- the lind ts |ivcn ■ ckan bill of health. 

agcr lor the wii« product* company Anyway, he added. Uw pncns hu lo 

In lb* toll M*! and early lO't. Mr. nan (omrwhcre. 

Xetlott, win tt C said tw bellevei "We've (oi oM raciones gone, va- 

Uw whole preien Is telty. "Tltey'rc cam, abandoned." he said. "We need 

itirewing money down a lewcr to to do ionieihm(." 
cleon op a somt," he said In an 
iMorview m hU home in Nlamic 

Mr. Porfcor M the Deponmem ol 
CnvtroMimial PniKliM said, how- 

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'Transaction Grease' 
Can Ease Liability 

You may not need it, but insurance 
covering poterUial environmental 
liability - and staggering legal fees - can 
bring peace of mind ... even profits. 

By Rutth Guiuet Fieuds 

The word 'Superfund' makes 
commercial real esuie in- 
vesiors sit up mnd uke no- 

PresKleru CUnum. in his State o( the 
Union address, touched on Ihe sutyeCL 
He said ihol Superfund money should 
\x u.'ied u> pay for environmenial deut- 
ups. not attameys' Tees (as abots 85% 
now a), and warned that paOauts will 
be made to pay for Che cnviRnunental 
damage they cause. 

For investors. It was a call for 
gri^tcr due diligence. 

When invesun purchase commcr- 
ciaJ properly, an environmental sile 
t CESA) is conducted. Its 

An (ipuim i 
Miy an added layer i>f pruieruun called 
irancc. hi fact, al 
le laiTJe lender • Fleet ■ requires 

There is also availstde iitsurance to 
pay the sUBSCrinS les*' coats In- 
vohfed in fighting environmenial lia- 

'Tronaocllan gnoMe' 

'Transaction grease* Is what 
Charles L. Perry Jr., president and 
chief executive officer of 
Environmentai Warranty, Inc.. West 
Hartford. Conn., calls environmenial 
insurance. Environmental concerns 
can bog down a deal, he says, eaus- 
inK thousands of doUais in lost uner- 

Perr>'. who has more than 20 
years' lending experience, says that 
in all his yews as a banker, "I never 
losi a dime related to fire, vandalism 
or thefl. hul I lost my shirt a couple 
uf times because of environmental 

He often thouKhi. 'As apposed to 
beinc surprised by environmental 
risk, wouldn't it be nice to have insur- 

And so, a company was bom. 

The insurance works [ike this: An 
ESA is cortOucied. IT pollution is dis- 
i-overed. the lender can decide 
whether to clean il up. Once thai is 
completed, or if no pollution Is found, 


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-What w( 
round •nd Ifcici u»>.u>ci>n., ....j 
npiaint. 'If pniblMns ire found, wc 
will write the policy, then orr«r ■ 
deui-up and Uter rcnwve ezccixlora 
to thff poUo'-' 

SMWdarv UatMUu 

Similar insurance ia available from 
American Buiineii Insurance 
Broken of Lo9 Angelct, Inc. tiead- 
quartered in Encino. 

There are almoA 200 federal and 
stale lawi that can Impact the buyer, 
operator and lender and can even 
lend secondair Uabilicy,' wyi John J. 
Them, vice preaidenc 

ThciSB says the lending community • 
has been slow to rccogniM the im- 
portance of environmenial incurance. 
while the secondary market is sun- 
ing to take notice. 

Some lenders and investors just 
think the cost is prohibitive, Theiss 
says, but if yoii lend money for or in- 
' vest in a commercial properly that 
becomes a designated polluter, can 
you afford not to have insurance? he 

Theias says each policy is site-spe- 
cUlc; thai is, the policy is underwrit- 
ten based on each property's specific 
circumstances. Policies can protect 

contamination a 

against contamination caused by the 
bwTower after the loan is made. It al- 
so can protect in default situations. 

-Anyone buying (or investing in) 
commercial property should protect 
themselves with this form of insur- 
ance.* Theiss says -f environmental 
liabiliiy coverage. 


Foreclosed properties pose special 

BEO (real estate owned) environ- 
mental legal liability insurance is 
available through Rollins Hudig Hall 
of Florida, Inc., Coral Gobies. Ha. 

The InaurMC*. undarwriuan by 
Lloyd's of London, is bcK-sutiad for 
landvs or invotois with pottfaUos of 
foreclosed properties, accortUng to 
jMeph VJttBo. pra»d«» of the eomp^ 
rv's IkwnM mauanoeaovlees dhWon. 
In mosl esaa, il a property H fort- 
dooed on, the lenderAmrcKor is not 
liable for pollution problems. But if 
the lender/Investor lakes possession 
of the property, there may be an im- 
plied iiabiUty. Viiello explains. 

The legal liability insurance does 
not pay for an environmental clean- 
up, but tor the defense of proving 
that the lender/Investor did not have 
contnd or use of the property. 

It's "contingent liability' that can 
supplement other insurances, VlteUo 

-1 don't think every BEO property 
has to be included. If you have a port- 
folio of commercial property - indus- 
trial-warehouses, msnufacturers, lUl- 
ing stations - that type of business, 
It's advisable: I tliink apartment build- 
ing are less likely to pose a risk.' 

Like other promoters of environ- 
mental-related insurance, Vhallo says 
that while the cu.hi cif such policies 
may seem high, each lender and in- 
vestor must weiyh the cost agamsi 
the potential liability. 

Perry, of Environmental Warranty, 
knows or a recent commercial prop- 
erty sale m which the S15.5 million 
sale price dropped to S13.1 million 
because a suspicion or perception of 
environmental concerns was raised at 
the closing (able. 

The seller could have put an extra 
S3.< million in his pocket if he had 
jiBt thought about purchasing a poll* 
cy that would have cost him a small 
percentage of his profit. 

The kicker 

-The property was as clean as a 
whistle,' Perry says. ^ 

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S. 299, 


OF 1993 



MAY 5, 1993 

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Tbe Nstiood Aaodatioa of Countiet (NACo)'. loeetber with its ■ffiliite organizaticm, tbe 
NatiocttI JbMKtatkM for Countf Commnnity and Economic Developmeoi (NACCED), 
appredaiM tbe opportunit]' to expren in luppon for S. 299, tbe Abaodoaed Land Reme 
Act of 19(0. 

S. 299, fntrodiiced by Senuon Rie^ Dodd, Baxer, Moteley-Bnun, Simon, Levin, iDd 
JcfEordi, it intended to utiti itatea, local govemmenti, and iKNi-|HX>Bt enttiiet in their eCFiarts 
to tedlitate tbe redevelopment or leuM of abandoned indiMnal and commercial lites and 
bdlitiet. The remediation of these sites and tficir reuse in tbe economic development of 
both uitan and raral ueas is properij' recognned by the legislation ai a national problem 
requiring federal involvement, in pannenhip with other levels of government and the non- 
pmBt and private teoon. 

Tbe """"w ot these sites is a serious impediment to county community and economic 
development In both urban and rural areas. With eoaatj budgets stretched to the limit a* 
Ibe teoesiion continue* its grip on tbem fiar the foreseeable future, there is no room for 
countiet to remediate these sites without federal, and hopefully nate, finanda! assistance. 
Because of the nature of the "Superfund' remediation program, these sites will not make it 
onto tbe list of priority tiles eligible for Superfund cleanup. Thus, it is wholly appropriate 
Aat a new federal program be created for this purpose. 

Tbe prevalence of abandoned industrial sites in counties througboul tbe VS. ts a fact of life 
as America makes tbe forced shift from heavy industry to cleaner ones requiting expeitsive 
new forms of technology. From tbe outmoded steel mills of Penti^lvania, Maryland, Ohio, 

West Virginia and Indiana to the dinosaur defense plants of Texas and Cslifoniia, counties 
are faced with promising expanses of land «4iich may be profitably reused if only they can 

BlDlaaca.aBS.J99. NACaita ■ ■ — 

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Natioaal AuoJcmtioa of Countiet Statemeni on S. 2 
Miy S, 1993 
Page 2 

Moreover, tbe reuie of former indiutrial tiiei such u tboie contemplated for awlMance 
under S. 299 bu beeo *hown to be an effective eccmomic and communii]' development BX>1 
at tbe count]' leveL Miuing have been tbe fundi to make ibete utet tafe for reuse on a 
more frequent baiii. Nevertheleai, what tbe efEorti of a few cntreprCDeun have done in 
showing that dean industrial site* can be usefully retTcled, S. 299 would do for damaged 
industrial liiei that can be remediated. It would dcmoDsmtc how a limited but significant 
amount of (iinds, iudiciotist)> applied to a problem with a flareseesble solution, can 
substantially increase community and economic developmeDt benefiB. Because these sites 
are often located in or near the ne^borhoods where low- and moderate-income persons 
live, the urgeiKy of making these funds available i* obvious. 

NACo wouM. however, urge that S.299 be modiGed to: 

• Eliminate the dlscretjonaiy authority for tbe program to be delegated to tbe states. 
This program should be a federal-local pattsership. This irnot to s^, however, that there 
is no role for tbe states. States should participate as financial, policy, and plaimiiig partners, 
but should not administer the program nor have veto power. 

• Eliminate the non-fedeial matdiing requirement. This program is focused on 
distressed communities and neighborhoods which are least able to provide a match. 
However, leveraging incentives might be appropriate If structured birty. 

• Nonprofit organizations should not be eligible for direct funding, but should be 
required to work through their local govemmenu to receive program assistance. This wiU 
ensure that their proposed activities are consistent with local community and economic 
development plans. 

• Exempt local govemmeats from contingent liability. Under no drcumttance sboukl 
a local goverrunent participating in tbe program became liable for the site, its difficulties, 
nor their effects as a consequence of applying for or receiving assistance under S. 299. 

• Require that local governments seeking to participate in a remediation program 
authorized by S.299 have the abili^ to assist private property owners and establish liens up 
to the cost c^ rehabilitatian. 

Thank you for the opportunity to present tbe views of the nation's counties. 

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To antad th* Hombv wd Copu—iiitj' Dcnlopncnt Act of IBT4 to mabt^ 

Fkbrduet 3 (iBfulAtiTe d>v. Jakuabt 5). 1993 
Ifr. RiEOLE (for hiniidt Hr. JEFFORDS, Mr. SniOK. Mr. Levin, iin. 
BOXEB, Ms. HoeELET-BKAUK. ud Mr. Dodd) inlrodDod the Mtrmnf 
bill: which wu md Cwice ud referral to the Committee on Btnlnnti 
Hooting, and Drfaan Aflkin 


To amend the Hou^g and Commnnity Development Act 
of 1974 to establish a pn^ram to denmnstrate the bene- 
fits and feasibility of redeveloping or reusii;g abandoned 
or substantially underutilized land in economically and 
socially distressed communities, and for other purposes. 

1 Be it enacted by the Senate and House of RepTesenta- 

2 tives of the United States of America in Congress assembled, 


4 The Housing and Community Development Act of 

5 1974 (42 U.S.C. 5301 et seq.) is amended by adding at 

6 the end the following new title: 

71-592 O - 93 - 

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3 -SBOOLsaoBT-rrnA 

4 "This title may be cited as the 'Abandoned Land 

5 Beose Act of 1993'. 

6 "SBC. am. FINDINGS. 

7 "The Congress finds that — 

8 "(1) past uses of land in the United States tor 

9 industrial and commercial purposes or the conduct 

10 of other economic activities have created many sites 

11 throu^out the United States that are now aban- 

12 doned or substantially underutilized; 

13 "(2) the abandonment or substantial under- 

14 utilization of the dtes referred to in paragraph (1) 

15 contribute substantially to the economic and social 

16 distress of communities in large portions of the pop- 

17 ulation, including poor and unemployed individuals 

18 and disadvantaged population groups, have con- 

19 centrated; 

20 "(3) the abandonment or substantial under- 

21 utilization of the abandoned sites impairs the ability 

22 of the Federal Government and the governments of 

23 States and political subdivisions of States to provide 

24 employment opportunities for, and improve the eco- 

25 nomic welfare of, the people of the United States 

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t and the poor, nnanpli^'ed, and disadvantaged, in 

2 particolar, 

3 "(4) the abandonment or substantial nndn^ 

4 ntilization of the abandoned sites results in the inef* 

5 fident use of communify development facilities and 

6 . related public services, and extends conditioas of 

7 blight in local communities; 

8 "(5) the manner in irtiicb — 

9 "(A) the population of the United States is 

10 distributed; and 

11 "(B) communities accommodat£ the 

12 growth of the national economj^ 

13 affects the employment opportunities, availabili^ of 

14 capital to provide economic opportunities, social con- 

15 ditions, and other important conditions of each such 

16 communis 

17 "(6) the private market demand for abandoned 

18 sites has been reduced or eliminated; 

19 "(7) the capital available for the redevelopment 

20 or reuse of abandoned sites may be limited; 

21 "(8) cooperation among Federal agencies and 

22 the departments and agencies of States and political 

23 subdivisions of States is necessary to accomplish 

24 timely redevelopment or reuse of abandoned sites; 

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1 "(9) in addition, cooperation between the de- 

2 partments and agencies referred to in paragraph (8) 

3 and private parties is necessary to accomplish the 

4 objective referred to in paragraph (8); and 

3 "(10) there is a need for a program to dem- 

6 onstrate the public purposes and benefits of the re- 

7 development or reuse of abandoned sites. 


9 "As used in this title: 

10 "(1) Abandoned site. — The term 'abandoned 

1 1 site' means a facility or a combination of geographic 

12 cally or economically related facilities within the 

13 same unit or immediately contiguous units of gen- 

14 eral local govenunent — 

15 "(A) that is no longer operating or is so 

16 substantially underutilized as to provide only 

17 mai^nal employment opportunities; 

18 "(B) that is located ivithin a community 

19 that suffers from economic and social distress 

20 measured by factors referred to in section 

21 907(a)(4); 

22 "(C) that has one or more conditions, con- 

23 straints, or characteristics (other than only 

24 being a type of facility mth respect to which 

25 market supply exceeds demand) that are det- 

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1 rimental to the pablic health, safety, or wetflu« 

2 and, in the absence of the assistance under this 

3 title, prevent or materially discoorage the timely 

4 redevelopment or reuse of a facility or real 

5 property immediate at^acent to the facility fbr 

6 a use or uses that include the provision of em- 

7 ployment opportonities in accordance with ap- 

8 pUcable community development strategies; and 

9 "(D) with respect to which a person re- 

10 ferred to in section 910(a) is unable to hind or 

1 1 finance the fiill amount of the cost of a reuse 

12 action. 

13 "(2) Facility. — The tenn 'facility" means an 

14 improved or previously improved site or area, or a 

15 surface or subsurface improvement to a site or area, 

16 including a building, structure, installation, Sxture, 

17 or equipment on or within the site, tliat has been 

18 used primarily for an industrial or commercial use. 

19 "(3) Governor. — The term 'Governor' means 

20 the Governor of a State, or the Governor's designee. 

21 "(4) Local coMiiUNTn' dextlopment oroa- 

22 NIZATION. — Tlie term 'local community development 

23 organization' means a nonprofit organization (as de- 

24 fined in paragraph (7)) that — 

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1 "(A) has a history of serving the needs of 

2 residents of the local conununify affected 1^ an 

3 abandoned sit^ 

4 "(B) maintains accountability to persons 

5 of low-income in a local community through ng- 

6 niGcant representation on the governing board 

7 of the oiganization, and such other means aa 

8 are appropriate; and 

9 "(C) has the institutional and administra- 

10 tive capadty for canying out activities as^sted 

11 under this title (as determined by the Sec* 

12 retaiy). 

13 "(5) Local grantee. — The term 'local grant- 

14 ee' means a local conununity development oi^aniza- 

15 tion or unit of general local government. 

16 "(6) Persons of low income. — The term 

17 'persons of low income' has the meaning provided 

18 the term utider section 102(20). 

19 "(7) Nonprofit organization. — The term 

20 'nonprofit organization' means any private, nonprofit 

21 oi^nization (including a State or locally chartered, 

22 nonprofit organization) — 

23 "(A) tliat is organized under State or local 

24 laws; 

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t "(B) with respect to which no portion of 

2 the net earnings innre to the benefit of a mem- 

3 ber, fbunder, contribntor, or individual associ- 

4 ated with the organization; 

5 "(C) that comi^lies with standards of fi- 

6 nandal accountabiUty that the Secretaiy deter- 

7 mines to be acceptable; and 

8 "(D) that carries out activities related to 

9 the retention or expansion of employment op- 

10 portunities for, and improvement of economic 

1 1 and social conditions of, persons of low income. 

12 "(8) Reuse action.— The term 'reuse action' 

13 means an action that makes such physical changes 

14 in, or improvements or additions to, an abandoned 

15 site so as to enable the timely redevelopment or 

16 reuse of the site or real property immediately a^ja- 

17 cent to the site. Such term shall include the clear- 

18 ance, demolition, or rehabilitation of the site. Such 

19 term shall not include the construction of new build- 

20 ings on the site. 

21 "(9) Secbetary. — The term 'Secretaiy means 

22 the Secretary of Housing and Urban Development. 

23 "(10) State.— The t«rm 'State' has the mean- 

24 ing provided the term under section 102(a)(2). 

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2 ^lEKT. — The term "unit of general local government' 

3 has the meaning provided the term in the first sen- 

4 tence of section 102(a)(1). 


6 "(a) In General. — ^The Secretary shall select appro- 

7 priate States in which to establish and carry out either — 

8 "(1) a pK^ram to provide grants to States to 

9 establish a State program to provide grants to local 

10 grantees; or 

11 "(2) a direct grant program to provide grants 

12 to local grantees, 

13 for the purpose of canning out the demonstrations de- 

14 scribed in subsection (b). 

15 "(b) Purpose. — The purpose of the programs au- 

16 thorized by subsection (a) is to demonstrate — 

17 "(1) the economic feasibility of redevelopment 

18 or rense of abandoned sites; 

19 "(2) the employment benefits, economic bene- 

20 fits, social benefits, and such other benefits to dis- 

21 tressed communities that may occur as a result of 

22 focusing financial resources and cooperative action 

23 on the redevelopment or i-cnso of abandoned sites; 

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1 "(3) the beneficial impacts on patterns of coro> 

2 munity development and use of public resources of 

3 redevelopment or reuse of abandoned sites; and 

4 "(4) the feasibility of timely, cooperativB 
3 action — 

6 "(A) among Federal agencies and depart- 

7 ments and agencies of States and political sub- 

8 divisions of States that have jurisdiction over 

9 the redevelopment or reuse of abandoned sites; 

10 and 

11 "(B) between the agencies and depart- 

12 ments referred to in subparagraph (A) and pri- 

13 vate parties. 

14 "(e) AUOCATION OP Funds. — The Secretary shall 
13 allocate funds made available pursuant to this title among 

16 the States or to local grantees. In allocating the ftinds, 

17 the Secretary shall take into account — 

18 "(1) the relative commitment of a State and 

19 local grantees to aehievii^ successfully the dem- 

20 onstrations described in subsection (b) measured l^ 

21 factors that include that referred to in section 

22 907(a)(7); 

23 "(2) the relative number of abandoned sites in 

24 the State; 

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1 "(3) the need to allocate ftinds in amounts that 

2 will contribute to achieving suecessftilly the dem- 

3 onstrationB described in subsection (b); and 

4 "(4) the desirability of carrying out a variety of 

5 demonstration projects with respect to the location, 

6 characteristics, and issues addressed by the projects, 

7 and the types of participants associated with the 

8 pn^ects. 

9 "(d) Scope op Prooraji. — 

10 "(1) In OENERAL. — In carrying out the dem- 
it onstration program established under subsection (a), 

12 the Secretaiy may award a grant to a State pursu- 

13 ant to section 905 or to a local grantee that submits 

14 an approved application to the Secretary pursuant to 

15 paragraph (2). 

16 "(2) Grant application. — An application for 

17 a grant under this section shall include a proposal 

18 for a reuse action for the redevelopment or reuse of 

19 an abandoned site, and shall be in such form as the 

20 Secretaiy determines to be appropriate. 

21 "(3) Competitive selection pboceduhe. — 

22 Bach grant made under this title by the Secretary 

23 or a Governor to a State or local grantee shall be 

24 made on the basis of an open and competitive selec- 

25 tion procedure approved by the Secretaiy. In making 

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1 a emit to a loeal grantM, tbe Secretaiy shall «»• 

2 doet a adeetkiD pnoedure oo a Stato-by^State basis. 

3 "(4) Sei^ction op sttbs bt ootbrnor — If a 

4 State wifaHiihfa a State demonstration pro^ma 

5 that is approrcd in •eundanec with section 905, tbe 

6 GovenMR' shaO adeet tbe abandoned sites to receive 

7 asnstanee under the grant program. In eanying out 

8 the demonstration program, the Governor may act 

9 throogh a^ypnqiriate officials of the State. 

10 "(5) Grant awards. — Except as provided in 

11 paragraph (6), tbe aggregate amount of grants 

12 awarded tor reuse actioas at an abandoned site shall 

13 not exceed an amount equal to 75 percent of the 

14 total eligible eosts of carrying out a reuse action at 

15 the abandoned site. Each local grantee that receives 

16 a grant award under this title shall be required to 

17 p^ a non-Federal share in an amount equal to 25 

18 percent of tbe total el^ble costs of carrying out the 

19 reuse action at the id^andoned dte that is the sub- 

20 ject of the grant award. 

21 "(6) Exception. — Subject to sections 906 and 

22 909, tiie Secretary (or in tiie case of a State dem- 

23 onstration program under section 905, the Gov- 

24 emor) may fund np to 100 percent of the total eligi- 

25 ble costs of carrying out a reuse action at an aban- 

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1 doned site if the Secretary (or the Governor) obtains 

2 satisfactoiy assurances from the grant recipient 

3 that— 

4 "(A) a traasfer of the abandoned site will 

5 occur as part of the redevelopment or reose of 

6 the site; 

7 "(B) the net proceeds realized from the 

8 transfer of the site will reasonably approximate 

9 at least 25 percent of the eli^ble costs of cany- 

10 ing out a reuse action at the site; and 

11 "(C) an amount reasonably approximating 

12 25 percent of the eligible costs referred to in 

13 subparagraph (B) from the net proceeds re- 

14 ferred to in subparagraph (B), will be paid 

15 promptly upon receipt of the proceeds by or on 

16 behalf of the gnuit recipient to die Secretary 

17 (or the Governor). 



20 "On a State-by-State basis, the Secretary may, in Uen 

21 of awarding grants to individual local grantees, award a 

22 grant to a State that submits an approved application to 

23 the Secretaiy to conduct a State demonstration program 

24 to cany out the demonstrations described in section 

25 904(b). Sulgect to the limitations referred to in sectum 

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1 904(d), ander a State demonstration program, the Qov- 

2 ernor of a State shall have the autborify to select aban- 

3 doned sites and allocate assistance btmi amounts awarded 

4 to the State pursoant to this section. 


6 "(a) In Genbral.— Payment of the non-Federal 

7 share nnder section 904(d)(5) may be made from funds 

8 firom any non-Fedenl aoorce, and ma^ inchuk serviees or 

9 equipment necessai7 to cany out the reuse action. 

10 "(b) AvoiDANCB OP Windfall Fbom Grant 

U Award.— 

12 "(1) In qenesal.— a local grantee, shall, as a 

13 condition to receiving a grant award, enter into an 

14 agreement with the Secretary (or in the case of a 

15 State demonstration program under section 905, the 

16 (Governor) that requires the payment of an amount 

17 specified in paragraph (2) to the Secretary (or the 

18 Qovemor) by the local grantee of any amount of 

19 compensation that the local grantee m4y recover 

20 from another peiwn as compensation' for the cost of 

21 carrying out a reuse action at the abandoned site 

22 that is the sutgect of the grant award. 

23 "(2) Amount of payment. — ^The amount of 

24 payment described in this paragraph shall be — 

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1 "(A) in adtUtion to the sroount reqoiivd to 

2 be pEid puisaant to section 904(d)(6); and 

3 "(B) an omonnt eqoal to 85 percent of any 

4 amount by irtiich the amoont recovered (net of 

5 recoreiy costs) exceeds the non-Federal share of 

6 the local grantee. 

7 "(c) AvoiDANCB OP WiNDPALL Whbbe Local 

8 Grantee Is Not Site Owner. — In the event that — 

9 "(1) an abandoned site that is the sabjeet of a 

10 grant award under this titie is not owned t^ the 

1 1 local grantee that receives the award, or 

12 "(2) an action is taken with respect to an aban- 

13 doned site to enable the reuse or redevelopnient of 

14 real property immediately adjacent to the abandoned^ 

15 site, and the local grantee does not own the actjaeent 

16 site, 

17 the local grantee shall be required, as a condition of receiv- 

18 ing the grant award, to enter into an agreement that is 

19 satisfiutoiy to the Secretaiy with the owner of the site 

20 or adjacent site. The agreement shall ensure that the 

21 owner of the site or adjacent site will not realize a windfall 

22 &om the assistance provided under the grant, and the 

23 local grantee will be able to meet the requirements of this 

24 title. 

25 "(d) Otber Recovery of Federal Assistance. — 

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1 "(1) In qsnkkal.— 

2 "{At Amount. — ^An agreement referred U> 

3 in sobmction (b)(1) shall qpecify that as a con* 

4 dition of receiviiig a grant award under this 

5 title, the grant radpient shall be tequired to 

6 p^ to the Secretaiy (or the Ctovemor) the sam 

7 of— 

8 "(i) the amount of the grant award; 

9 and 

10 "(ii) the amount of interest accrued 

11 on the amount referred to in clause (i) 

12 from the date of the awarding of the grant 

13 (at a rate determined by the Secretaiy) 

14 if a condition described in clause (i) or (ii) of 
13 subparagraph (B) is met. 

16 "(B) Failukb to iNmATS. — If, with re- 

17 spect to the abandoned site that is the sutiQect 

18 of the grant — 

19 "(i) a reuse action has not been initi- 

20 ated by 1 year after the date that the 

21 grant is awarded; or 

22 "(ii) the redevelopment or reuse has not 

23 been completed in a time^ manner (as de- 

24 termined by the Secretary, or, in the case 

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1 of a State demonstration program under 

2 section 905, the Governor), 

3 the grant recipient shall be required to make a 

4 p^ment pursuant tO suhparagraph (A). 

5 "(2) Timing op repayment. — A repayment re- 

6 ferred to In paragraph (1) shall be due upon notice 

7 to the grant recipient by the Secretaiy (or the Gov- 

8 emor) that a condition described in clause (i) or (ii) 

9 of paragraph (1)(B) has been met. 

10 "(3) Waiver.— The Secretary (or the Qav- 

11 emor) may waive the requirement for repayment 

12 under paragraph (1) or may require only partial 

13 payment of the amount specified in paragraph (1) if 

14 the Secretary, (or the Governor) determines that — 

15 "(A) the grant recipient acted in a manner 

16 consistent with the requirements of section 

17 904(b); and 

18 "(B) exigent circumstances contributed to 

19 the delay. 

20 "(e) Use op Recovehed Funds. — The Secretaiy 

21 (or the Governor) may use fiinds recovered pursuant to 

22 this section to make additional grant awards in accordance 

23 with this title. The Governor may issue an additional 

24 grant award with fands recovered pursuant to this section 

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1 without regard to the requirement for preapproval by the 

2 Secretary onder section 905, 


4 "(a) In Qeneral. — The Secretai? (or in the case of 

5 a State demonstration program under section 905, the 

6 Governor), after receiving completed applications for grant 

7 awards under this title, shall select abandoned sites and 

8 allocate awards. In making the grant awards, the Sec- 

9 retaiy (or the Governor) shall take into account the follow- 

10 ing criteria: 

11 "(1) The extent to which economic, social, and 

12 such other beneGts of the redevelopment or reuse of 

13 the site as the Secretary (or the Governor) deter- 

14 mines to be appropriate, includii^ the employment 

15 and job training opportunities, and other relat«d 

16 beneSts to persons of low income who are residents 

17 of the local community in which the site is locat«d, 

18 are likely to exceed the costs of the redevelopment 

19 or reuse of the site. In determining the benefits, the 

20 Secretary (or the Governor) shall consider the 

21 amount of job opportunities to be retained or cre- 

22 ated, expected increases in economic activity within 

23 the communis, expected increases in local tax reve- 

24 nue, capital resources to be conserved, and such 

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1 other public resources as the Secretaiy (or the Oov- 

2 emor) determines will be conserved. 

3 "(2) The extent of need for assistance under 

4 this title to fond a reuse action. 

5 "(3) The extent of contribution tmm non-Fed- 

6 eral sources, including capital mvestment by private 

7 partaes, expected to occur in connection with the re- 

8 development or reuse of the site. 

9 "(4) The degree of economic and social distress 

10 of the local communis in which the site is located, 

11 determined by considering the amount of loss of 

12 community employment in the industrial sector, the 

13 rate and period of unemployment, the relative per 

14 capita income of local community residents, any de- 

15 dine in economic activity, any population loss or 

16 growth that is disproportionate to local economic op- 

17 portiinity, and anch other related factors as the Sec- 

18 retary determines to be appropriate. 

19 "(5) The degree of cooperation among appro- 

20 priate Federal agencies and departments and agen- 

21 eies of relevant States and political subdivisions of 

22 the States, as well as between the departments and 

23 agencies and private parties. 

24 "(6) Whether the redevelopment or reuse of the 

25 site will be achieved in a timely manner. 

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1 "(7) Whetho- and to what extent the State or 

2 unit or units of general local government in which 

3 the site is located have established an ongoii^ pro- 

4 gram or programs to fudlitate the redevelopment or 

5 reuse of abandoned sites. 

6 "(8) Such other factors aa the Secretaiy conmd- 

7 era relevant to the purposes of the program author- 

8 ized hy this title. 

9 "(b) PRiOBirr. — The Secretary (or in the case of a 

10 State demonstration program under section 905, the Qov- 

11 emor) shall give the greatest priority to the criteria re< 

12 furred to in paragraphs (1) throu^^ (7) of snbsection (a), 

13 and shall give an equal degree of priority to each criterion 

14 referred to in paragraphs (1) throng (7) of subsection 

15 (a). 


17 "The Secretary (or in the case of a State demonstra- 

18 tion program under section 905, the Giovemor) may not 

19 award a grant imder this title for a reuse action on a site 

20 controlled by the Federal Govemment, 


22 "(a) In Qeneral. — ^Administrative and 

23 nonadministrative costs for a reuse action carried out pur- 

24 suant to a grant program under section 904 or a State 

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1 demonstration program uiuler section 905 shall constitute 

2 eligible costs. 


4 the purposes of this section, the term 'nonadministrative 

5 costs' shall include the cost of — 

6 "(1) identifying the probable extent and nature 

7 of, and preferred manner of carrying out, a reuse 

8 action at an abandoned site; 

9 "(2) fees relating to at^ apphcation for ap- 

10 proval by a Federal agency or a department or agen- 

11 cy of a State or a political subdivision of a State, 

12 that is required and necessaiy to carry oat a reuse 

13 action at an abandoned site; and 

14 "(3) implementing a reuse action. 

15 "(c) Administrattve Cost Limitation. — Not more 

16 than 10 percent of the amount of a grant award under 

17 this tide mf^ be used for administrative costs. 



20 "(a) LiABiUTY Under Other Law. — Nothing in 

2 1 this title is intended to relieve any person who had an in- 

22 terest in an abandoned site prior to the initiation of a 

23 reuse action that is the subject of grant award under this 

24 title from Uability under, or other requirements of, any 

25 other provision of law. 

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1 "(b) AvoiDAKCE OP Windfall.— The Secretary (or 

2 in the case of a State demonstration program under sec- 

3 tion 905, the Governor) shall implement a grant program 

4 under this title in a manner that does not — 

5 "(1) relieve from liability under any other law 

6 any person referred to in subsection (a); and 

7 "(2) reduce the incentive of any such person to 

8 participate in fWiding the non-Federal share re- 

9 qnired under section 906. 

10 "(c) Statutory Intebpretation. — Notiiing in 

11 subsection (b) is intended to prevent a local grantee who 

12 acquires an abandoned site solely for the purpose of cany- 

13 ing out a proposal to redevelop or reuse the site from ob- 

14 taining assistance under tliis title. 


16 "(a) Evaluation. — 

17 "(1) In general. — Not later than December 

18 31, 1995, the Secretaiy shall conduct an initial eval- 

19 uation of the grant program established under sec- 

20 tion 904 and any State demonstration program es- 

21 tablished under section 905. The evaluation shall be 

22 based on information that is available at the time of 

23 the evaluation. 

24 "(2) Data collection. — The Secretary {or in 

25 the case of a State demonstration pr(^ram under 

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1 section 905, the Qovemor} shall require that as a 

2 condition to receiving; a grant under this titie, each 

3 grant recipient shall submit to the Secretaiy' data 

4 that indicate the actual coats, benefits, sources and 

5 uses of Ainds, the results of an assisted redevelop- 

6 ment or reuse project, and such other data as the 

7 Secretaiy determines to be necessary for the evalua- 

8 tion referred to in paragraph (1). 

9 "(b) Confidentiality op Data Collected. — The 
10 Secretaiy shall maintain eonCdentJality of data collected 
It from grant recipients in accordance with any applicable 

12 law. 

13 "(c) Report. — Upon completion of the evaluation re- 

14 ferred to in subsection (a), but not later than December 

15 31, 1995, the Secretaiy shall submit a report to the Con- 

16 gress containing the findings and recommendations of the 

17 Secretary. 

18 "(d) Use op Contractors. — The Secretaiy may, in 

19 accordance with any applicable law, enter into agreements 

20 with such private contractors (including institutions of 

21 higher education), as the Secretaiy determines necessary 

22 for the preparation of the report referred to in subsection 

23 (0. 

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2 "(a) In General. — The Secretary may use up to 5 

3 percent of any amount appropriated to implement this 

4 title to Kind technical assistance g^^ants by the Secretaiy 

5 (or in the case of a State demonstration pn^pmm under 

6 section 905, the Goremor) to local grantees to facilitate 

7 their participation in the demonstration program estab- 

8 Ushed by this title and their successAil achievement of the 

9 purposes of this title. 

10 "(b) Purposes. — ^A local grantee may use a grant 

1 1 tinder this section to pay for np to the fiiU amount of its 

12 costs- 
IB "(1) to identify the probable extent and nature 

14 of, and preferred manner of carrying out, a reuse 

15 action at an abandoned site; 

16 "(2) to identify potential non-Federal sources of 

17 capital for the redevelopment or reuse of an aban- 
IS doned site; 

19 "(3) to determine the means of implementing in 

20 connection with a reuse action a job training pro- 

21 gram that benefits persons of low-income who are 

22 residents of the local community in which an aban- 

23 doned site is located; 

24 "(4) to identify public agencies cooperation with 

25 which would be necessary to cany out a reuse ac- 

26 tion; or 

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1 "(5) for such other purposes approved t^ the 

2 Secretaiy as direcdy relate to the local grantee's 

3 successfully organizing the human and other re- 

4 sources and cooperative action necessary to carrying 

5 out a reuse action. 

6 "(c) Repayment Obligation. — If a local grantee 

7 obtains a technical assistance grant purauant to this sec- 

8 tion and subsequently obtains a grant to carry out a rense 

9 action under this title, the grant recipient's payment obli- 

10 gation under section 906(d) shall include the amount of 

11 the technical assistance grant. 


13 "Not later than ISO days after the date of enactment 

14 of this titJe, the Secretaiy shall issue such rules and regu- 

15 lations as are necessaiy to cany out this title. 


17 "There are authorized to be appropriated to the De- 

18 partment of Housing and Urban Development for the pur- 

19 poses of carrying out this title $100,000,000 for each of 

20 the fiscal years 1994, 1995, and 1996. Such sums shall 

21 remain available until depended.". 


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Q.I. To what extent are the contfiminated sites in the southeast 
Baltimore community that SECO serves economically abandoned, 
as defined in S. 299? 

A.1. Acres of land stand dormant within the southeast community 
due to the abandonment of several large parcels of contaminated 
properties. New industry, unwilling to take on the responsibihty of 
a potential environment hazard, passes up some of the most valu- 
able industrial property Baltimore has to offer. However this bli^t 
does not stop with only the contaminated properties, but inches its 
way to adjoining properties. With industry vacating properties for 
reasons of relocation, expansion, or closure, often the property they 
leave behind is overlooked due to its neighboring contaminated 
site. Unfortunately, this is become more the rule than a mere ex- 
ception, leaving vast wastelands in some of southeast's once highly 
concentrated industrial areas. 

Q^. If we do not determine ways to reuse abandoned industrial 
and commercial sites: 

(a) Can the business expansion and credit needs of persons 
wanting to operate businesses in distressed communities — particu- 
lariy small businesses — be met? 

(b) What will happen to the financial condition of local commu- 

(c) What are the economic consequences for the residents of our 
distressed communitdes? 

AJt. (a) In answering this question, you can only but look around 
in much of the fdianaoned areas of southeast Baltimore to under- 
stand that it is not a prediction as to the future but a testimony 
of the past and present. Already many smaller industrial concerns, 
experiencing growing piiins have looked to neighboring vacant 
properties on^ to find the risk too high or the funding unob- 
tainable through traditional resources, for them to remain in the 
industrial district. Their choice oflen becomes one of necessity, to 
grow and prosper they must relocate, often to the open spaces of 
one of the counties. In many cases their cost of doing business in- 
creases due to location, shipping, and access. However, if there 
would be a way in which these companies could remain in their 
present location and grow, offering new employment opportunities, 
most would decide to stay. A means of making the abandoned prop- 
erties once again attractive must be addressed for the viabibty of 

Q>) The financial condition of the local communities surrounding 
the industrial district will suffer dramatically. Loss of jobs to those 
who have no transportation to the new locabon or who ceinnot relo- 
cate their homes and families; loss of business to those small sup- 
fiort businesses that depend on many of the larger firms for their 
ivelihood; unemployment rates soar; loss of homes and in some ex- 
treme cases the actual loss of family. A "domino effect" that no 
community wants to experience, is unfortunately being experienced 
in southeast Baltimore today. 

(c) As I discussed in part "b" of this question the economic con- 
sequences can be and are dramatic. Increased unemployment lead- 

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ing to less disposable income, families forced to deplete the family 
savings accounts, loss of property, the lucky unemployed find iobs 
at on^ a fraction of their past wages. For mfiny the loss of me<uca) 
coverage puts an even greater buraen on some families that suffer 
firom an illness or injury. Loss of business can and is devastating 
to any community, unfortunately we have already witnessed the ef- 
fects and can only hope Uiat a way to turn things around will come 
from our leaders in Washington. 

Q^. Is it feasible to increase the non-Federal share of financing 
reuse projects about the 25 percent S. 299 requires? 
A.3. Perhaps in the future an increase could be addressed, however 
due to the state of the economy find the urgency and expediency 
which is necessary to save many of our communities, a 25 percent 
share will be manageable for most interested parties, a larger 
share may only prove to deter some from participating. 
Q.4. Are commercial lenders likely to participate in the financing 
of the reuse projects S. 299 contemplates? 

A.4. Lending tike any other business looks for the potential return 
on the dollar. If they feel that the risk factor has been reduced they 
may possibly be enticed into participation. Given the current rigid 
baiwmg regnil&tions, it may prove to be more difficult. However if 
the industry is to also erow they may have to address current r^u- 
lations and begin to relax them in order to experience this growth. 
The bottom line being if it will be able to experience growth and 
a sizable return they will be interested. 

Q,6. Do local governments have sufficient jurisdiction over commu- 
nity redevelopment activities to be assured that projects under- 
taken by non-profit community development corporations will be 
consistent with local public development strategies? 
A.5. If a local jurisdiction is to maintain a certain sense of control 
of situations within its communities, checks and balances must be 
built in. We in Baltimore are very fortunate to have a check and 
balance svstem that protects not only the city but also the commu- 
nities alike. A sense of "partnership" is experienced when both 
planning and implementing projects, be they large or small. We are 
fortunate in that we share ideas and resources so the partnership's 
endeavors are realized and can benefit us all. 


Re-development agencies place a priority on putting abiindoned 
sites to productive uses. In contrast, environmental agencies place 
a priority on ensuring that the sites do not pose a health hazard. 
Q^ Does this program create conflicts between State environ- 
mental laws or agencies and the mission of re-development agen- 
cies? If so, how would these conflicts be resolved? 
A^ Granted in the past conflicts did occur frequently concemine 
remediation and re-development. However, the State of Marjrland 
if currently considering a voluntary cleanup program to aid in 
fiuHling of administrative expenses of State staff in reviewing and 
implementing such programs. The State has also exercised uscre- 

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tion in entering into suit cases against ptirchasers of contaminated 
sites where it was the prior owner and not the purchaser respon- 
sible for the condition. Maryland hfis also, occasionally extended 
credit to site purchasers, where part of the loan funds were used 
for cleanup. With initiatives such as these, accompanied by legisla- 
tion the potential for re-development of our abandoned industrial 
sites becomes more real. 

Q^. What has been your experience in dealing with bankers who 
are hesitant to participate in lemd re-development due to the risks 
associated with naving a site deemed to require costly cleanup? 
AJ3. My personal experience in this matter is timited, however 
when I posed a hypothetical situation to some bankers their re- 
spouses were similar. They explained that each case must be ad- 
dressed on its own merit, the rate of return must be addressed, 
what the potential risk factor of unforeseen hazauxls would be, and 
of course, the history and plan of the potential client. They all 
showed some interest to various degrees, however the unforeseen 
risk player an important part in any decision, but they did not rule 
out Uie potential completely. 

Q.4. What kind of mechanism is needed to satisfy the 6nancial 
community that they will not be penalized for takin|; a risk on site 
that they would normally avoid because of this liabihty? 
A.4. As I stated in "A2" the cooperation of the State and pending 
legislation could help in reducing the risk factor. Lending institu- 
tions are businesses, they need to know that their liabilities are re- 
duced and their potential payback is secured. 

Yesterday, President Clinton proposed a new grant program to 
help distresses areas. As I understand the proposal, local leaders 
would compete for grants to create 110 enterprise zones and 10 
empowerment zones. 

Q.6. What is your reaction to the plan recentiy announced by the 

A^. We are very excited by President Clinton's proposal. The cre- 
ation of these zones, with the generous package accompanying 
them, along with the passage of S. 299 would make the dormant 
industrial areas viable and productive parcels once again. The two 
proposal jointly would add a generous incentive to industry to once 
again look to the older industrial EU'eas for their locations. 
Q^. How does it fit in with the legislation we are reviewing today? 
A.6. President Clinton's proposal would be the "icing on the cake." 
Now interested parties would not only have the opportunily to piu-- 
chase, remediate, and locate in our older abandoned industrial 
areas, but they would also be given numerous credits for doing so. 


Q^. Redevelopment agencies place a priority on cutting abandoned 
sites to productive uses. In contrast, environmental agencies place 
a prioribr on ensuring that the sites do not pose a health hazard. 
Does this program create conflicts between State environmental 

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laws or agencies and the mission of redevelopment agencies? If so, 
how would these conflicts be resolved? 

A2. Under this program, the mission of redevelopment etgendes 
complements that of environmental agencies in that both seek the 
cleanup of abandoned land. For many years, the mission of redevel- 
opment agencies, to utilize abandoned land, has been thwarted by 
the cost, confusion and time associated witii the environmental re- 
view, analysis, and remediation process. 

This program would help bridge that gap by providing the re- 
sources necessary to overcome these obstacles and reclaim the land. 
The panoply of environmental laws and relations at the local. 
State, and Federal level that assign far-reaching responsibility, and 
civil and criminal liability to owners and operators of redevelop- 
ment sites with environmental conditions ensures that those in- 
volved with redeveloping the land also place a very high priority 
on ensuring tiiat redevelopment sites do not pose a health hazard. 
In the past, the hi^ cost of the cleanup of abandoned sites has re- 
sulted in legal battles over who has the legal responsibility to pay 
for the cleanup. Rather than getting tied up in court, with no one 
winning but uie lawyers, whi5i has been the result of Superfund/ 
CERCLA, this program sets aside the question of who is respon- 
sible for the condition of the site and moves forward by providing 
the resources necessary to get started on the cleanup. 

There is always tiie potential for conflict between agencies that 
have different objectives and that define "risk" in different ways. 
It may be necessary to arrive at a compromise within which me 
health risks of remediation are minimized rather then brought to 
zero. Agencies have to look more realistically at risk/beneflte and 
in minimizing the adverse effects and maximizing benefits. A zero 
risk solution doesn't exist. An independent group of experts such 
as assembled with Brookhaven-Gowanus^Kensselaer Environ- 
mental Education & Employment Program (BGREEEP) can orches- 
trate the dialogue needed to resolve the conflicts should they de- 
velop. BGREEEP would produce a 'prototype' model of technical so- 
lutions with the specific intent on "making the process work." 

In cleaning up abandoned sites, the mission of redevelopment 
agencies and environmental agencies do not conflict. Moreover, 
under this program, the tools necessary to accomplish their parallel 
missions will be provided. 

Q^. What has been your experience in dealing with bankers who 
are hesitant to participate in land redevelopment due to the risks 
associated with having a site deemed to require costly cleanup? 
A^. The banking community as well as industry will require that 
the interpretation that says that a new user will inherit the sins 
of the former owner must be adjusted. The remediation undertaken 
under any original agreement should be the financial burden as- 
sumed. Snoula new and unknown heizards be uncovered during re- 
mediation, neither the fintmcial institutions or the industrial part- 
ner should shoulder the financial burden without additional nind- 
ing from a government. 

Similarly, once a remediation project is approved and begun, the 
regulatory agencies should be obliged to NOT change the radia- 
tions or the contaminant levels required of remediation. That is, 

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once the cleanup levels and procedures are accepted, they should 
not be changed during the life of the project. 

In New York Cit^ virtually all development involves the redevel- 
opment of land which had previous uses. And, all bankers are hesi- 
tant to participate in land redevelopment which might require a 
costly cleanup. In the lEist few years, banks have been requiring a 
growing amount of expensive and ' extensive site analysis and as- 
sessment prior to getting involved in redevelopment projects. This 
is a result of recent court decisions which have reduced uie exemp- 
tion of secured creditors. All buiks require some measure of envi- 
ronmental review over and above any analysis conducted by gov- 
ernmental agencies or within a governmental framework (e.g., 
NEPA or the New York City or State Environmental Quality Re- 
view Acts known respectively as CEQR and SEQRA). However, 
there is a wide divergence on what that review entails among 
banks. Even on redevelopment sites that are not likely to have a 
costly cleanup based on previous uses, some banks may require 
costly and time-consuming analysis. Banks differ only in the extent 
of their requirements, and in their level of sophistication to ade- 
quately quantify and qualify the risks associated with environ- 
mental conditions and their ability to interpret liie ramifications of 
an environmental Eissessment. 

On sites where a "Phase I Assessment" shows the possibility of 
contamination which mi^t require a costly cleanup, the banks 
have been unwilling to get involved in projects until the contamina- 
tion has been fully remediated. This is especially a problem on af- 
fordable housing sites which involve fixed costs and limited sub- 
sidies and where ihe meirket cannot bear the burden of this expen- 
sive and lengthy testing process. Due to the lack of guidance on the 
question of TIow Clean is Clean?", it is virtually impossible to esti- 
mate the accurate cost of cleaning up a site. Banks are unwilline 
to provide construction financing for sites with these conditions and 
redevelopment agencies cannot enter into serious discussions with 
them until there is no longer asiy contamination. This requires a 
significant expenditure either by the City or by the private devel- 
oper who, if the site assessment reveals the need for a costk clean- 
up which makes infeasible the economics of developine affordable 
housing, has no way to recoup the cost. (Hopefully, the recent — 
M^ 1993 — issuance of the ASTM American Society for Testing and 
Materials — standards for screening and Phase I analysis, willhelp 
to standardize banks* requirements.) 

In recognition of the potential exposure that banks have under 
the law, on February 25, 1993, the FDIC issued guidelines strongly 
recommending that banks set up environmental risk prcffirams in 
an attempt to limit their exposure to liability. The PDIC's eig^t 
component program, which requires the involvement of senior bank 
personnel and the bank's board of directors in the risk mani^e- 
ment program, requires that banks conduct an environmental nsk 
analysis and further inquiry where warranted, prior to making 

Recent court decisions and these new FDIC requirements for en- 
vironmental risk management programs are likely to result in 
bankers requiring ever more up front expensive environmental as- 
sessments to ensure that banks understand the extent of the eoit 

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of the cleanup, and take appropriate steps to protect their invest- 
ment and protect against lizibility. 

Q^. What kind of mechanism is needed to satisfy the financial 
community that Ihey will not be penalized for taking a risk on a 
site that tney would normally avoid because of this liability? 
A.4. A mechanism that reduces the bank's exposure to liability is 
needed to satis^ the financial community that thev will not be pe- 
nalized for taki^ a risk on a site that they would normally avoid 
because of this humility. 

At best, this mechanism would be an expanded exemption for 
banks from liability which has been eroded by recent court deci- 
sions. While the ^rit 24, 1992 EPA rule on lender liability under 
CERCLA offers substantial protections to lenders a^nst lidsility 
for contamination they are innocent of causing, judicial interpreta- 
tion of the secured creditor exemption is far from settled and there 
are situations where banks may not be protected by the EPA rule. 
In addition, under the innocent landowner defense against liability, 
banks still nave the responsibility to make an "appropriate" inquiry 
into previous uses of the property to ensure that no environmental 
condition exists. In addition, there are those who are seeking to 
overturn the secured creditor exemption as CERCLA comes up for 
reauthorization in 1994. 

An alternative mechanism to reduce banks' liabihty would be for 
the government to indemnify against environmental risk. Munici- 
palities are either unwilling ancPor unable to do this due to the tre- 
mendous potential cost Significant financial help from the Federal 
Government would be required for this alternative. A third an 
more likely alternative is for banks to purchase an insurance policy 
to cover potential costs. However, existing private insurance cov- 
erage is insufficient and an insurance policy which adequately cov- 
ers banks' involvement in a redevelopment site that requires a 
costly cleanup is likely to be very expensive. Federal funding to 
provide an insurance vehicle or enhance existing private risk insur- 
ance would be required. 

A written expression of interest would be helpful in order to start 
the process of structuring a new form of insurance for such 
projects — preferably from an authoritative source such as the Sen- 
ate Banking Committee or the House equivalent. To pay the con- 
sultants to actually write up the new 'land reclamation" or "S. 299" 
insurance methodology formally, some sort of budget will have to 
be in place. 

Q.5. What is your reaction to the plan recently announced 1^ the 

A.5. The concept of competition for grant aid assumes that there 
is no mechanism for ranking the importance and significance of a 
remediation effort. Sites should be ranked. The competition for 
funds should then be among and between projects of equal rank. 
For example, a remediation effort that will affect 260,000 individ- 
uals in a deprived area should not compete for funds where a major 
cleanup effort effects a wilderness area or where the cause of con- 
tamination is the proximity or existence of a DOO site. 

Why would the President propose that we "compete" for the 
grants? This would introduce pobtics into the process, so thi^ the 

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merits of the program wilt plav only a minor role. Was this not the 
reason that tne stimulus package failed, because too much *pork 
barrel' found its way into the program? If there is to be "competi- 
tion" it should be on the qualitative and "need' aspects of the pro- 
gram — how well was it conceived, how qualified and motivated are 
the "managers" who would make it a success. And most impor- 
tantly, an economic stimulus package should create jobs. The oig- 
gest problem in the highly distressed and socially isolated places of 
urban poverty is that there is no income earning potential. 

As best put in liie testimony of Dr. Benjamin F. Chavis, Jr., 
"Clearly, we need to combine the goals of environmental reclama- 
tion and reuse with economic revitalization and job creation. Ihis 
is the theme consonant with the present demand to choose poliqr 
options which ensure both environmental protection with economic 

Q.6. How does it fit in with the legislation we are reviewing today? 
A.6. The proposed le^slation has no mechanism for priority rank- 
ing of remeaiation sites. This may be a point of contention and 
undue politicizing of the Eireas targeted for support 

The funding mechanism would have to be separated for the two 
programs; otherwise, urban renewal projects involving environ- 
mental cleanup could not compete with projects that are easy, re- 
quire no cleanup, and can be done right away. We would end up 
having more parks and bicycle paths — and the challenging projects 
mi^t never see the light of day. The 'fit' stems fiY>m the creation 
of many layers of jobs that produce incremental income for the 
community. For example, San Antonio enjoys an income of $2 bil- 
lion per annum just from recreational income from the "River 
Walk canal system. 

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