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Y ^.62Si/3--SHR6./^3-/5y
S. Him. lOS-lM
THE ABANDONED LAND REUSE ACT
OF1993-S.299
STANFORD
UBRARIES
HEAEING p,o.8i
BEFORE IHE
COMMITTEE ON
BANKING, HOUSING, AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED THIRD CONGRESS
FDIST SESSION
ON
S.299
TO AMEND THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF
1974 TO ESTABUai A PROGRAM TO DEMONSTRATE THE BENEFITS
AND FEASIBILITY OF REDEVELOPING OR REUSING ABANDONED OR
SUBSTANTIALLY UNDERUTIL IZED LAND IN ECONOMICALLY AND SO-
CIALLY DISTRESSED COMMUNITIES, AND FOR OTHER PURPOSES
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
THE ABANDONED LAND REUSE ACT
OF1993-S.299
STANFORD
LIBRARIES
HEARING ,,0.81
BEFORE THE
COMMITTEE ON
BANKING, HOUSING, AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED THIRD CONGRESS
FmST SESSION
S.299
TO AMEND THE HOUSING AND COMMUNTTY DEVELOPMENT ACT OF
1974 TO ESTABUSH A PROGRAM TO DEMONSTRATE THE BENEFITS
AND FEASIBIUTY OF REDEVELOPING OR REUSING ABANDONED OR
SUBSTANTL4.LLY UNDERUTIUZED LAND IN ECONOMICALLY AND SO.
ClALLY DISTRESSED COMMUNITIES, AND FOR OTHER PURPOSES
MAY 6, 1993
Printed for the use of the Conunittee on Banking, Housing, and Urban Affairs
U.S. GOVERNMENT PI
WASfflNCTON
^■PM C ^h:'--az
a^-
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
DONALD W. RIEGLE, JR., Mkhigui, Chairman
PAUL S. SAHBANBS, Maiyland ALFON8B M. D'AMATO, New York
CHRISTOPHER J. DODD, Connecticut PHIL GRAMM, Texas
JIM SASSER, Tenneuee CHRISTOPHER S. BOND, Miuouri
RICHARD C. SHELBY, Alabanu CONNIE MACK, norida
lOtW P. KERRY, Masuchiuetta LAUCH FAIRCLOTH, North CBTolina
RICHARD H. BRYAN, Nevada ROBERT F. BENNETT, Utah
BARBARA BOXER, CaliTaniia WILLIAM V. ROTH, Jr., Delaware
BEN NIGHTHORSE CAMPBELL, Colorado PETE V. DOMENICI, New Mexico
CAROL MOSELBY-BRAUN, niinoia
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
01)
Digitized by L.iOOQIC
CONTENTS
WEDNESDAY, HAY G, 1993
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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IV
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
BloKBofRuin'
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 ;
Digitized by L.iOOQIC
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^ ..
Digitized by L.iOOQIC
THE ABANDONED LAND REUSE ACT
OF 1993— S. 299
WEDNESDAY. MAY 5> 19B8
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.
OPENING STATEMENT OF CHAIRMAN DONALD W. RIEGLE. JR
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
shortly.
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
(1)
Digitized by L.iOOQIC
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-
ers;
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-
Digitized by L.iOOQIC
3
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.
OPENING STATEMENT OF SENATOR JAMES M. JEFFORDS
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
Digitized by L.iOOQIC
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
opportunities.
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-
ards.
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-
plemented.
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
Digitized by L.iOOQIC
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?
OPEMNG STATEMENT OF SENATOR ALFONSE H. D'AMATO
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?
OPENING COMMENT OP SENATOR CAROL MOSELEY-BRAUN
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
Digitized by L.iOOQIC
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.
STATEMENT OP GREGORY PITONIAK. MICHIGAN HOUSE OF
REPRESENTATIVES, LANSING, MI
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-
fare.
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
sites.
Examples of communities which contained abandoned,
underutihzed, or inactive contaminated sites and are facing severe
Digitized by L.iOOQIC
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
metals.
MichigEin has at the State level undertaken some efforts that at-
tempt to deal with this problem. Let me briefly outline some of our
efforts.
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.
Digitized by L.iOOQIC
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-
munities.
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-
provements.
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
communities.
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-
structure.
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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STATEMENT OF EDWARD PARKER, CONNECTICUT DEPART-
MENT OF ENVIRONMENTAL PROTECTION, HARTFORD. CT
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
testimony,
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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11
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.
OPENING STATEMENT OF SENATOR CHRISTOPHER J. 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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12
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-
necticut.
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.
STATEMENT OF TED WTSOCKI, CHICAGO ASSOCIATION OF
NEIGHBORHOOD DEVELOPMENT ORGANIZATIONS, COALI-
TION FOR LOW INCOME COMMUNITY DEVELOPMENT, CHI-
CAGO, IL
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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14
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 —
OPENING COMMENTS OF SENATOR PETE V. DOMENICI
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
feasible.
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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IS
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.
STATEMENT OF SALVATORE SCOTTO, GOWANUS CANAL
COMMUNITY DEVELOPMENT CORPORATION, BROOKLYN, NY
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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16
about 50 percent of the commercial space became unused and dere-
lict
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-
complished.
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
canal.
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-
port.
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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17
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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18
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
industry.
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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19
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-
utes?
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-
cern.
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-
one.
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
it.
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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21
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
redevelopment
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
OPENING COMMENTS OF SENATOR ROBERT F. 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?
[laughter.]
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-
lution.
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
one.
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.
BRIDGEPORT
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.
HARTFORD
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.
HERIDEN
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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NEW BRITAIN
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.
WATERBURY
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
quicker.
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-
tenth.
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
It.
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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26
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.
STATEMENT OF SANDY McCOLLUM, DIRECTOR OF ECONOMIC
DEVELOPMENT FOR SOUTHEAST COMMUNITY ORGANIZA-
TION, BALTIMORE, MD
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
communities.
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-
mant.
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-
tion.
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
area.
Opportunity. The opportunities are there. However, what we
neea now are the incentives, accessibility to once taboo sites and
Digitized by L.iOOQIC
27
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
Dodd.
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
Digitized by L.iOOQIC
29
again, it may help us break the logjam in committees outside our
jurisdiction.
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-
ing.
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-
lem.
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-
lowed.
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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30
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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31
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.
[Laughter.]
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-
ity."
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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34
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
site.
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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35
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-
up.
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
that.
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
record.]
Digitized by L.iOOQIC
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
Digitized by L.iOOQIC
37
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
Chair.
[Whereupon, the committee was adjourned, subject to call of iJie
chair.l
[Prepared statements, responses to written questions to wit-
nesses, and additional material supplied for the record follow:]
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TESTIMONY OF SENATOR JAMES M. JEFFORDS (R-VT)
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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PREPARED STATEMENT OF SENATOR AUONSE M. D'AMATO
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.
PREPARED STATEMENT OF SENATOR CAROL MOSELEY-BRAUN
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.
PREPARED STATEMENT OF SENATOR FRANK LAUTENBERG
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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40
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
progress.
niBPARED STATEMENT OF SENATOR CHRISTOPHER J. DODD
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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41
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-
SUMMARY OF ABANDONED LAND REUSE ACT OP 1993
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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'"jCTha
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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43
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,
INTRODUCTION OP SALVATORE "BUDDY" SCOTTO
BY REPRESENTATIVE EDOLPHUS TOWNS
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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m.
STATE OF CONNECTICUT
DEPARTMENT OF ENVTKOSMEXTAL PROTECTION
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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TESTIMONY BY TIMOTHY KH. KEENEY
GoMMissiONKit, CoNNBcmcuT DBPARTiiem' OF Envhionmkntal Pkotbction
INTRODUCTION
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
SUtes.
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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46
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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47
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
TESTIMONY BY EDWARD PARKER
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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48
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
agencfea.
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.
BESPOSSE TO ISSUES RAISED BY THE COMMITTEE
(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
property.
(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
communltiea;
• 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.
MICHIGAN'S SITUATION
(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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60
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
cent;
• 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.
Digitized by L.iOOQIC
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.
MICHIGAN^ EFFORTS
(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
condemned.
CLOSING STATEMENT
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
stewardship.
TESTIMONY BY TED WYSOCKI
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.
Digitized by L.iOOQIC
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
Canal.
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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54
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
Brooklyn.
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
costof$lBO,000.
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
development.
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
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55
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
Gaa.
Hunk you for the opportunity to appear before you today.
TESTIMONY OF SANDY McCOLLUM
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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66
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-
mediation.
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.
PREPAHED STATEMENT OF SENATOR CHRISTOPHER J. DODD
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.
db,Googli
57
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-
tion.
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.
lluuikyou.
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RESPONSE TO WRTITEN QUESTIONS OF SENATOR RIEGLE
FROM GREGORY PITONIAK
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
include:
• 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
contaminated.
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
StTxUegy.
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-
miuiities?
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
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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.
RESPONSE TO WKITTEN QUESTIONS OF SENATOR BOXER
FROM GREGORY PITONIAK
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
needs.
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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
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71-592 0-93-3
r
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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.
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(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| -
(more)
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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
ywill:
by 23 percent, creaiiag 100,000 new jobs by Dm dot ti
job tnimng strategy with Ae infiastrucon investment
program,
* 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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RESPONSE TO WRITTEN QUESTIONS OF SENATOR RIEGLE
FROM EDWARD PARKER
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
Digitized by L.iOOQIC
79
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.
RESPONSE TO WRTITEN QUESTIONS OP ^NATOR BOXER
FROM EDWARD PARKER
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
properties.
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
AUKTORE -BUDDY- SCOTTO
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.
Sincerely,
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RESPONSE TO WRITTEN QUESTIONS OF SENATOB RIEGLE
FROM SALVATORE •VUDDT" SCOTTO
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-
omy.
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
economy.
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
1
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83
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
purpose.
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
Digitized by L.iOOQIC
84
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-
ing.
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-
nities?
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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86
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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86
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-
age.
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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OCAnONKUP
NEW JERSEY
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NEIGHBORHOOD MAP
THE GOWANUS CANAL DEVELOPMENT STUDY
X.OOg
I
DOWNTOWN
^
^
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■^r^
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91
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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RESPOK8C TO WniTEN QueSTIONI OF SENATOR RIEGLE PHOU
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
raaadtation.
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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
Hayor.
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RESPONSE TO WRtTTEN QUESnONS OP SEMATOH BOXER FROM
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.
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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.
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THE BUILDING BLOCKS OP RUIN
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
nnna.
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
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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.
X-:
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.
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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.
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£' iMf4i \ N/mONAL CONGRESS FOR COMMUNrTY ECONOMIC DEVELOPMENT
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
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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^
FYM
FY OS
0- |»^
4W
4T1
cs
QPP
U
Tom
4sa
471
Digitized by L.iOOQIC
*W<TUOVAFPHO*CHTOW<«TBTgCMWCXX>(irBXjeATK>M*TTWO.Yft>ftCO
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|!
TheBiookfynBaper
Push Gowanus cleanup
■yMwvratOMT
,^^_^ -n.^
Digitized by L.iOOQIC
444 NdMi OpM OraM. HJK. Si«* «t
ASTSU/ "
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"'
Digitized by L.iOOQIC
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
■atlafaotioB.
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
eapabllitlaa
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*.
SlnearolYi
>aid«n^%'
Digitized by L.iOOQIC
109
CLIPBOARD n.N».Y«kT
Connecticut Seeks a Return
Of Jobs as Well as Nature
■y KIM JOHNSON
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 —
Digitized by L.iOOQIC
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
•AUtol
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
AU^cyoll'MtiNIMi
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
Digitized by L.iOOQIC
-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-
Digitized by L.iOOQIC
ENVIRONMENT
& LENDING
1
I
'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,
the
iieUJNUMH'r MAHKCTINU cAliOjriVli
Digitized by L.iOOQIC
-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
against
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.
REOndJlagt
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. ^
Digitized by L.iOOQIC
114
NATIONAL
ASSOCIATION
COUNTIES
STATEMENT OF THE
NATIONAL ASSOCIATION OF COUNTIES
ON
S. 299,
THE ABANDONED LAND KEUSE ACT
OF 1993
BEFORE THE
COMMTTTEE ON BANKING, HOUSING, AND URBAN
AFFAIRS
MAY 5, 1993
WASHINGTON, D.C
Digitized by ^^lOO^IC
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
L NACoU
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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S.299
To antad th* Hombv wd Copu—iiitj' Dcnlopncnt Act of IBT4 to mabt^
IN THE SENATE OP THE UNITED STATES
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
A BILL
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,
3 SECTION. 1. ABANDONED LAND REUSE ACT OF 1993.
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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1 **TrrLE IX— REDEVELOPMENT OR
2 REUSE OF ABANDONED LAND
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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3
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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130
4
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.
8 "SEC. SOa. DEFINinONS.
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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1 "(11) UXIT OP GENERAL LOCAL GO^'ERN-
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).
5 -SSa M4. DEHONSTEATION PBOGRANL
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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126
9
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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10
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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U7
11
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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12
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).
IS -SEC. 806. DEIAGATION OF IHPI^HBNTATION TO OTATE
19 DEHONSTRATIONFROGBAH.
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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129
13
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.
5 "SECMLFUNDINa.
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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ISO
14
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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131
IS
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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16
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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133
17
1 without regard to the requirement for preapproval by the
2 Secretary onder section 905,
3 -SEC. WT.CRrrSBIA FOR SITS SELECTION.
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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134
IS
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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136
19
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).
16 -SBC Ml. VEDEHALrACIUTIES EXCLUDED.
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,
21 -SEC MM. EUGIBLE COnU
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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20
1 demonstration program uiuler section 905 shall constitute
2 eligible costs.
3 "(b) NONADMINISTRATIVE COSTS DEFINED. — For
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.
18 -SEC. 910. LUBIUTY UNDEB OTHER LAW; AVOIDANCE OF
19 WINDFAIX.
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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187
21
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.
15 -SEC. »1. EVALUATION AND REPORT.
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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198
22
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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1S9
23
1 "SCCaU. TECHNICAL ASaVTANCB.
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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24
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.
12 "SEC. 913. BEGULATIONS.
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.
16 -SEC. 914. AUTHORIZATION OF APPROPBIATIONS.
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.".
O
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RESPONSE TO WRITI^N QUESTIONS OF SENATOR RIEGLE
FROM SANDY AfeCOLLUM
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-
nities?
(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
all.
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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142
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.
REWONSE TO WRTTTEN QUESTIONS OF ^NATOB BOXER
PROM SAM)V McCOLLUM
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
President?
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.
RESPONSE TO WKTITEN QUESTIONS OF SENATOR BOXER
PROM SALVATOBE SCOTTO
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
loans.
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
President?
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
prosperity."
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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