An Assessment of Brownfield Redevelopment Policies · 2020-05-05 · 4 An Assessment of Brownfield Redevelopment Policies Foreword November 1999 On behalf of The PricewaterhouseCoopers

G r a n t R e p o r t

November 1999

The PricewaterhouseCoopers Endowment for

The Business of Government

An Assessment of Brownfield

Redevelopment Policies:

The Michigan Experience

Richard C. HulaProfessor Department of Political Science and Urban AffairsMichigan State University

About The EndowmentThrough grants for Research, Thought Leadership Forums, andthe SES Leadership Program, The PricewaterhouseCoopersEndowment for The Business of Government stimulatesresearch and facilitates discussion on new approaches toimproving the effectiveness of government at the federal, state,local, and international levels. All grants are competitive.

Founded in 1998 by PricewaterhouseCoopers, The Endowmentis one of the ways that PricewaterhouseCoopers seeks toadvance knowledge on how to improve public sector effec-tiveness. The PricewaterhouseCoopers Endowment focuses on the future of the operation and management of the publicsector.



An Assessment of Brownfield Redevelopment Policies 1

An Assessment of Brownfield

Redevelopment Policies:


Richard C. HulaProfessor

Department of Political Science and Urban Affairs

Michigan State University

November 1999

2 An Assessment of Brownfield Redevelopment Policies


TABLE OF CONTENTS

Foreword ......................................................................................4

Executive Summary ......................................................................5

Introduction ................................................................................7

The Michigan Experience............................................................10Liability Protection ..............................................................10Private/Voluntary Action ......................................................12Flexible Cleanup Standards ..................................................12Public Funding ....................................................................12

Implementing Michigan’s Brownfield Program ..........................14The Role of State Bureaucracy ..............................................14The Role of Local Political Authorities ..................................16The Role of Private Actors ....................................................17

Recommendations ......................................................................19Recommendation 1: Restrict liability associated with potentially contaminated land parcels ..........................19Recommendation 2: Offer selective incentives toencourage the redevelopment of specificbrownfield sites ....................................................................20Recommendation 3: Allow local officials sufficientflexibility to respond to market-driven redevelopment opportunities ........................................................................20Recommendation 4: Allow the use of institutional controls as a means to mitigate health risks from existing contamination ......................................................................21Recommendation 5: Provide local jurisdictions withthe capacity to design and implement redevelopment plans that reflect the local conditions and political culture ..21

Continuing Policy Dilemmas ......................................................22Long-Term Empirical Questions............................................22Broad Policy Questions ........................................................23

Concluding Thoughts ..................................................................25

Bibliography ..............................................................................26

About the Author........................................................................27

Key Contact Information ............................................................28


Foreword

November 1999

On behalf of The PricewaterhouseCoopers Endowment for The Business of Government, we are pleased to present this report by Richard C. Hula, “An Assessment of Brownfield Redevelopment Policies: TheMichigan Experience.”

Professor Hula does an excellent job of describing Michigan’s experience with implementing brownfieldredevelopment policies. In this and other Endowment reports, we highlight state governments that are lead-ing the way with innovative approaches to public sector activities, ranging from the delivery of services toregulation. Instead of the traditional “command-and-control” approach to government regulation, Michiganis experimenting with techniques such as incentives, public-private partnerships, and new sources of publicfunding in their brownfield redevelopment policies.

In addition to presenting recommendations for implementing brownfield redevelopment policies, ProfessorHula’s report also contains a provocative section on “Continuing Policy Dilemmas.” Professor Hula wiselynotes that while one can make judgments about the relative success of an innovative policy, it is ultimatelythe responsibility of governmental policy-makers to make decisions that resolve policy dilemmas. It is gov-ernment policy-makers who must decide difficult questions of the public interest and the public good. Wetrust that both government executives (who implement public policy innovations) and government policy-makers (who make public policy) will find Professor Hula’s report informative and helpful.

Paul Lawrence Ian LittmanPartner, PricewaterhouseCoopers Partner, PricewaterhouseCoopersCo-Chair, Endowment Advisory Board Co-Chair, Endowment Advisory [email protected] [email protected]




Brownfield redevelopment has become an importanttheme in environmental policy as both federal andstate governments rush to implement new programsto redevelop land parcels that are abandoned, idled,or underused industrial and commercial facilitieswhere expansion or redevelopment is complicatedby a real or perceived environment contamination.Brownfield programs reflect a shift in the fundamen-tal assumptions driving the design and implementa-tion of American environmental policy since the1960s. It is a shift not only in substantive policy, butincludes a refocusing of authority.

Through brownfield redevelopment, a number ofstates are successfully challenging long establishedfederal dominance in environmental policy. Thisreport explores efforts by the state of Michigan tocraft one such brownfield initiative. Although theprimary focus here is the experience of a singlestate, the lessons learned from this case havenational implications. Michigan is a leader inbrownfield programs, but it is hardly unique. Manystates are designing and implementing aggressivebrownfield programs that challenge traditional fed-eral policy. The impact of such programs willalmost certainly have a profound impact on overallenvironmental policy in the coming years.

The brownfield initiative in Michigan has fourmajor legislative components. These include:

• Limited owner liability: Purchasers of propertythat may be contaminated are no longer liable

for cleanup costs if they did not contribute to theoriginal pollution on the site.

• Increased flexibility in cleanup standards: Proper-ty which is to be redeveloped for commercial orindustrial use is subject to less demandingcleanup standards than would be required forresidential development.

• Increased reliance on private/voluntary action:Developers have the primary responsibility toinvestigate contamination on their property.

• Increased public funding for site assessment andremediation: The state of Michigan has estab-lished a number of publicly funded programs tosupport brownfield redevelopment, including sig-nificant state bond funds, and the local captureof property tax increments resulting from success-ful redevelopment projects. Direct tax incentivesare also available to businesses willing to locateon brownfield sites.

A review of a number of local Michigan programssuggests that changes in the legal framework gov-erning brownfield cleanup and redevelopmenthave had a positive impact on a number of localeconomies. On the basis of these findings, five spe-cific recommendations are made. These include:

Recommendation 1: Restrict liability associatedwith potentially contaminated land parcels.

Recommendation 2: Offer selective incentives to encourage the redevelopment of specificbrownfield sites.

Executive Summary


Recommendation 3: Allow local officials sufficient flexibility to respond to market-drivenredevelopment opportunities.

Recommendation 4: Allow the use of institution-al controls as a means to mitigate health risksfrom existing contamination.

Recommendation 5: Provide local jurisdictionswith the flexibility to design and implement rede-velopment plans that reflect local conditions andpolitical culture.

The report concludes with a brief discussion ofunresolved issues raised by the Michigan brown-field initiative. One set of these issues primarilyfocuses on the long-term impact of the programand can be best answered with further evaluationresearch. A second set of issues explores a numberof broad policy choices presented by the initiative.These cannot be answered directly by furtherempirical work, but rather depend on the prefer-ence and vision of local political leaders. Specificquestions of long-term impact include:

• Are current cleanup standards sufficient toprotect public health?

• How stable are institutional property controls?

• Does brownfield development promote spontaneous economic expansion?

Broad policy questions include:

• What is the appropriate role of community preferences in selecting the use of a redevelop-ment site?

• How should policy-makers deal with demandsfor increased environmental justice?

• What is to be done with unsuccessful programs?


Brownfield redevelopment has become an impor-tant theme in environmental policy as both federaland state governments rush to implement new programs to redevelop land parcels that are “aban-doned, idled, or underused industrial and commer-cial facilities where expansion or redevelopment iscomplicated by a real or perceived environmentcontamination.”1 A number of characteristics ofthese efforts are intriguing. Perhaps most interestingis the diverse coalition supporting brownfield rede-velopment. It is a coalition that defies traditionalexpectation, cutting across political party, ideology,and region.

The problem set which brownfield redevelopmentis thought to address is equally diverse. Obviouslyit includes site remediation, but also incorporatesother important goals. For urban policy makers, thededication of contaminated sites to future industrialand commercial use transforms brownfield redevel-opment into an economic development tool. To theextent that brownfield redevelopment reducesdevelopment pressure on rural and agricultural

land, it serves as a greenspace preservation effort.Indeed, brownfields are seen by some as a meansto achieve key elements of comprehensive land usepolicy without the need to actually impose directregulation.

Brownfield programs reflect a shift in the fun-damental assumptions driving the design and

Introduction*

1 This is the definition of brownfields commonly cited by the fed-eral Environmental Protection Agency (EPA). See Kaiser (1998).

WHAT IS A BROWNFIELD?

The federal Environmental Protection Agencydefines a brownfield as “abandoned, idled, orunderused industrial and commercial facilitieswhere expansion or redevelopment is compli-cated by a real or perceived environment contamination.”

Contamination at a brownfield site is insuffi-cient to place the site in the federal Superfundprogram.

The actual level of contamination at brownfieldsites is often unknown since the property hasoften been abandoned because of a fear aboutwhat “might” be on the site.

Estimates of the number of brownfield sites inthe United States vary from 50,000 to over onemillion.

Brownfield sites are typically the responsibilityof state environmental agencies.

* This project would not have been possible without the generoussupport of The PricewaterhouseCoopers Endowment for TheBusiness of Government. Preliminary funding was provided bythe Michigan Applied Public Policy Fund. A special thanks isdue to the many practitioners who graciously gave their timeand insights to make this report possible. Thanks also to BrianMcGrain for his able research assistance, and to Mark A.Abramson of The PricewaterhouseCoopers Endowment for TheBusiness of Government for a careful reading of an earlier draft.Of course, any errors of fact or interpretation remain my own.


implementation of American environmental policysince the 1960s. It is a shift not only in substantive policy, but includes a refocusing of authority.Through brownfield redevelopment, a number ofstates are successfully challenging long establishedfederal dominance in environmental policy. Thisreport explores efforts by the state of Michigan tocraft one such brownfield initiative. Although theprimary focus here is the experience of a singlestate, the lessons to be learned from this case havenational implications. Michigan is a leader inbrownfield programs, but it is hardly unique. Manystates are designing and implementing aggressivebrownfield programs that challenge traditional fed-eral policy (Consumers Renaissance Redevelop-ment Corporation, 1998). The impact of such programs will almost certainly have a profoundimpact on overall environmental policy in the coming years.

More than two dozen pieces of federal legislationregulate toxic materials in the United States. Ofthese, three define the broad regulatory frameworkthat has controlled toxic substances for the past 20years. They are the Toxic Substance Control Act of1976 (TSCA), the Resource Conservation andRecovery Act of 1976 (RCRA), and the Compre-hensive Response, Compensation and Liability Actof 1980 (CERCLA). Each is targeted to a differentperiod in the life cycle of hazardous material. TSCAattempts to set out rules for the review and analysisof new chemicals. The goal is to identify dangerouschemicals as they are developed so that appropri-ate control strategies can be devised before theycause human harm. RCRA charges the EPA todevelop standards for current waste management.CERCLA is targeted to the cleaning of existingtoxic-waste sites. Together these laws create a com-plex network of regulations that attempt to controltoxic materials from inception to disposal.2

The largest and most controversial of these efforts is CERCLA. Generally known as Superfund, CERCLA (and its 1986 reauthorization, SuperfundAmendments and Reauthorization Act, SARA) outlines the general parameters of toxic-waste-cleanup policy in the United States. Key to under-standing CERCLA is its focus on central (federal)

decision making, the legislative commitment torestoring sites to a “natural” condition, and theassumption that those responsible for pollution areresponsible for all costs associated with cleanup.CERCLA has been mired in controversy since itspassage. Currently debates are occurring withinthe EPA, in Congress, and in various state housesacross the country as to how toxic-waste policymight be revised.

At the federal level there are efforts within bothEPA and Congress to restructure important elementsof toxic-waste policy. Policy entrepreneurs withinEPA have sought to mute public criticism of CER-CLA through a number of administrative reformsand public relations initiatives. For example, inde-pendent of legislative mandates, the EPA has soughtto soften some elements of the CERCLA liabilitystandards. Beyond efforts to improve the agency’sprocessing of Superfund sites, the EPA has alsobegun to implement an interesting shift (or least an expansion) in CERCLA goals by initiating anumber of pilot efforts to encourage the redevelop-

2 For a more complete discussion of RCRA and TSCA see Rosen-baum (1995, p. 232-262).

KEY ADMINISTRATIVE CHARACTERISTICS OF SUPERFUND (CERCLA)

Goals Land-based toxic contamina-tion is defined as a publichealth issue.

Responsibility Federal authorities are assignedto lead efforts to clean toxic-waste sites.

Response The EPA is given authority toModel act quickly in cases where the

public health is threatened. Insuch cases the initial cleanupcan draw on interim publicfunding.

Liability Places responsibility for payingcleanup costs squarely on thosewho caused the contamination

Bureaucratic Regulations are framed withinOrganization a traditional command and

control structure.


ment of less contaminated sites that do not qualifyfor CERCLA intervention.

Federal brownfield initiatives modify past toxic-waste policy in a number of important ways.Unlike Superfund sites, brownfields are seen inmuch more instrumental terms. That is, decisionsto invest in a brownfield cleanup are driven not somuch by the level of on-site contamination, but bythe economic potential of the site. Thus, estimatedeconomic viability of the redevelopment plan is akey factor in evaluating applications for EPAbrownfield pilot programs.

Unlike much of the history of Superfund, thedesign of the EPA brownfield initiative is based oncooperation, consensus, and self-interest. The com-mand-control logic that drives Superfund cleanupshas largely been replaced in the brownfield initia-tive by voluntary agreements backed by grants andtax credits. Funding is based on incentives ratherthan a punitive liability scheme.3 A striking aspectof the Brownfield initiative is the explicit acknowl-edgment of the leading role of state and local offi-cials in cleanup efforts. Some regional EPA officeshave been particularly aggressive in allowing stateauthorities to take a leading role on specific sites.This increased federal flexibility has been instru-mental in promoting state-level innovation inbrownfield policy.

Congressional dissatisfaction with CERCLA is dramatically revealed in its repeated failure to reauthorize the legislation. The taxing authority that financed the Superfund expired in 1995, andno one has yet been able to form a coalition capa-ble of passing a revised CERCLA. Currently thefuture of reauthorization remains unclear. However,the concept of brownfield redevelopment clearlyenjoys strong support in Congress. A good deal ofadditional legislation to support brownfield pro-grams has recently been introduced. However,

most has been stalled by the continuing debate on CERCLA reauthorization.

In spite of announced EPA policy changes, manystate and local policy makers remain skeptical.They see the federal program as continuing to betoo rigid and overly adversarial. They remain criti-cal of CERCLA’s history of huge administrative andlegal costs and very modest record of completedcleanups. Recent federal initiatives are seen as inef-fective and half-hearted efforts targeted to the mar-gins of toxic cleanup policy. As a result, many stateauthorities have initiated brownfield programs atthe state-level. A recent review of such efforts identified 41 states that had significant voluntarycleanup/brownfield redevelopment programs (Consumers Renaissance Redevelopment Corpora-tion, 1998). Eleven of these states have signedmemoranda of agreements with the federal EPA inwhich federal authorities essentially agree to grantthe state full authority over all non-Superfund sitesthat enter state-run programs. These state programsprovide an important laboratory for future environ-mental policy in the United States.

3 Congress has observed this shifting set of goals with someambivalence. On one hand, there is wide support for the over-all concept and direction the EPA has taken. However, someconcern has been expressed that EPA has moved beyond itsstatutory authority in using CERCLA trust funds to implementcertain aspects of the brownfield effort. For example, Congressexpressly prohibited the EPA from using any of its resources tounderwrite local and state revolving loan funds to financeactual cleanup on brownfield sites. See United States GeneralAccounting Office (1998), and Reisch (1998) .

STUDY OBJECTIVES AND METHODS

This report is primarily based on 24 semi-struc-tured field interviews of practitioners active inbrownfield redevelopment.

Four general groups were sampled: local-levelofficials (some were sponsors of BrownfieldRedevelopment Authorities, others were activein the authorities themselves), legislative actorswho crafted the legal framework for the brown-field program, state-level officials in the Mich-igan Department of Environmental Qualitycharged with state-level program implementa-tion, and private developers active in specificredevelopment projects.

Although the interview schedule was modifiedfor particular groups of respondents, a number of issues were discussed with all. These include;(1) a general sense of how the state brownfieldprogram operates; (2) an evaluation of how wellthe program works (including a review of specif-ic projects), and; (3) thoughts about how the program might be improved.


In contrast to the deadlock in Washington overbroad toxic-waste policy, the state of Michigan hasimplemented one of the most comprehensive state-level programs to encourage brownfield redevelop-ment. The policy has been created through newlaws passed by the state legislature as well as anumber of executive actions taken by the governor.While these changes were justified, in part, as aneffort to improve the cleanup capacity of the state,there is little doubt that the changes also reflect anew political agenda. No longer would cleanupsbe the unitary variable driving environmental poli-cy. The connection of environmental and economicdevelopment goals has been made quite explicit byMichigan’s Governor John Engler:

The cornerstone of any urban revitaliza-tion strategy must be an aggressive brown-field redevelopment program. We havemade brownfields attractive by reformingthe cleanup laws and offering tax creditsand low interest loans to our communi-ties. More than anything, our successcomes from making brownfield redevelop-ment a top economic and environmentalpriority in the state of Michigan. (Con-sumers Renaissance Redevelopment Cor-poration, 1998).

Although the changes in Michigan environmentalpolicy are broadly consistent with new federal ini-tiatives, the magnitude of the state changes is muchgreater. Each of these policy innovations is a fairly

direct effort to respond to long-standing criticismsof federal policy.

Liability ProtectionThe most fundamental contrast between Michiganand federal policy is that of liability. Basically, thestate has incorporated the key features of past convenants not to sue into a relatively automaticframework. If a landowner is not responsible forsite contamination, then he or she is not liable for a cleanup.4 For parties responsible for the originalcontamination, liability remains in force. Indeed,current law has created a new affirmative responsi-bility of landowners to identify and remediate contaminated sites. The Michigan Department ofEnvironmental Quality (MDEQ) is empowered toseek penalties and fines of up to $10,000 a dayfrom any responsible party if they have not “dili-gently pursued” the cleanup of contaminated siteswhich they own.5


4 Michigan actors note that there are two major elements of liability that continue to retard redevelopment of brownfieldsites. Both are associated with CERCLA liability. Obviously thestate cannot grant immunity from federal action against prop-erty owners. As noted above, the EPA has reduced these con-cerns by entering a set of agreements not to sue based on alack of responsibility for on-site contamination. A second con-cern is the potential of responsible parties to bring suit againstnew owners under CERCLA liability. Interestingly, while thisconcern is widely cited as a block to redevelopment, thereseems to be no reported instance of such suits actually beingfiled. See Environmental Financial Advisory Board(1998).

5 Such penalties can also be assessed to new landowners if thenew owners do not takes steps to identify and report currentlevels of site contamination. See Woodruff et. al.(1998).


Prior to the 1996 Natural Resources and Environmental Pro-tection Act (NREPA) amendments, Michigan statutes followedthe federal lead in imposing a strict liability framework for sitecontamination. This essentially held that ownership of a prop-erty carried with it the liability for cleaning that site. Changesin the law now allow purchasers to escape liability for conta-mination for which they are not directly responsible.

New owners of potentially contaminated property can secureexemption from cleanup liability by filing a Baseline Environ-ment Assessment (BEA) with the Michigan Department ofEnvironmental Quality. This baseline data is to serve as a basisfrom which to evaluate state claims against the landowner.The completion of the BEA is largely a private action, withlimited state oversight.

Brownfield redevelopment rests on the assumption that conta-minated properties ought to be cleaned to levels appropriatefor future use. Industrial properties need not be cleaned to residential levels. This introduction of differential cleanupstandards represents a significant departure from earlier environmental regulations, which demanded a total removalof all contaminants.

The Brownfield Financing Act (1996) permits municipalities tocreate Brownfield Redevelopment Authorities. These authori-ties are allowed to dedicate state and local taxes generated bythe redevelopment into financing remedial cleanup action onthe site. Developers are also granted a tax credit on their single business tax. In addition, the state has dedicated a totalof $335 million in bond funds for brownfield redevelopment.

Liability protection

Increased reliance onprivate/voluntary action

Flexible cleanup standards

Public funding

KEY ELEMENTS OF MICHIGAN BROWNFIELD POLICY

Innovation Description


Private/Voluntary ActionTo avoid liability, new owners of potentially conta-minated property are required to perform a Base-line Environmental Assessment (BEA) on their property. The BEA is an assessment of existing contamination levels on the property. The result ofthis assessment must be filed with the MDEQ with-in 45 days of the purchase, occupancy, or foreclo-sure, whichever comes first.

New owners have full liability for contaminationbeyond that reported in the baseline assessment.6

Owners have the option of filing a petition withMDEQ requesting written documentation that theyqualify for the liability exemption. This petition mayalso request a determination that the owners’ pro-posed use of the facility is consistent with statuarydemands that land-use not exacerbate contamina-tion at the site.7

Flexible Cleanup StandardsThe state has also reconfigured cleanup standards.A key element of this change is tying the level of cleanup to the proposed use of the land. Thus,MDEQ has created separate standards for residen-tial, commercial, or industrial properties. Not surprisingly, the commercial and industrial stan-dards are less demanding than those for residentialdevelopment.

In an effort to simplify the requirements for redevel-opment, the new standards are general for thestate, rather than being tied to a site-specific riskanalysis. As part of the reconfiguration, overall risk

standards were reduced. For example, the cleanuplevels for known carcinogens have been set at arisk level of 1:100,000 rather than the earlier standard of 1:1,000,000. Groundwater cleanupstandards have also been revised to what are generally less stringent levels. Finally, the state has recognized institutional controls on land use as an acceptable alternative to cleaning a site tothe highest possible standard.

Public FundingThe state has also developed a number of alterna-tive sources of financing for local brownfield projects. Although Michigan law has increasedpublic resources for site redevelopment, funding istypically not from general funds; rather, specificrevenue streams have been directed to redevelop-ment efforts. Two revenue sources are of particularimportance: Brownfield redevelopment authorities,and the Clean Michigan bond issue.

Michigan law permits municipalities to create abrownfield redevelopment authority (BRA). Theseauthorities create a specialized institutional struc-ture to promote local planning and implementationof brownfield redevelopment. The BrownfieldRedevelopment Financing Act grants authorities anumber of fiduciary powers including paying orreimbursing private or public parties for cleanupactivities; leasing, purchasing, or conveying proper-ty; accepting grants and donations of property,labor or “other things of value” from public orprivate sources; investing the authority’s money;borrowing money; and engaging in lending andmortgage activities associated with property itacquires (Davis and Margolis, 1997). Authoritiesmay also create revolving loan funds to financeprojects.

Each authority must develop a plan for redevelop-ing eligible properties within its jurisdiction. Ele-ments of this plan include the identification of spe-cific target parcels in the district, a comprehensivefinancial plan, and strategies for dealing with possi-ble citizen displacement resulting from redevelop-ment efforts. The brownfield plan must be approvedby the chartering municipality before tax incrementfinancing is available to the authority. School taxincrements become available only after the Michi-

6 The BEA filing essentially replaces a much more complexprocess in which a developer might escape liability. Prior tothe amendments to Part 201 the only way to relieve a develop-er/purchaser from liability from existing contamination was a“covenant not to sue.” This was almost always a very slow andcomplicated process. For example, between 1991 and 1995,only 37 such covenants were implemented. See MichiganDepartment of Environmental Quality(1996).

7 Note that while new owners are no longer responsible for sitecleanup they are required to meet the "do-care” requirementsthat the public be protected from contamination. Indeed, such“do-care” requirements have been extended to all owners ofcontaminated sites. This actually represents an extension ofpast liability in that potentially responsible parties now havean affirmative responsibility to show “due care” whether ornot the site has been identified as a potential public healththreat by some public agency.


gan Department of Environmental Quality hasapproved the plan.8

Brownfield redevelopment authorities have thelegal capacity to raise revenue in several ways.They are permitted to capture increases in state andlocal (including school) taxes that result from theredevelopment of a brownfield. These tax incre-ment funds can be used for evaluation and feasibil-ity studies of specific sites, on-site demolition ofbuildings, necessary on-site construction, and forthe combining of contaminated property with adja-cent parcels. The existence of an authority allows adeveloper/taxpayer a tax credit on Michigan’s sin-gle business tax (limited to 10 percent of capitalinvestment or an absolute cap of $1million).9

A recent state bond issue provides a second impor-tant funding source for brownfield work. In 1998Michigan voters approved a $675 million environ-mental bond issue, Clean Michigan. The bondissued included $335 million that was targeteddirectly to brownfield remediation. There will be a number of ways in which local authorities will be able to access these funds. Some projects willbe directly funded by the state. These sites will beselected from a set nominated by local authori-ties.10 Other funds will be allocated through severalremediation and assessment programs administeredby the Michigan Department of EnvironmentalQuality. In addition, grant funds from a number of other state agencies have often been used tosupport specific projects.

8 Unfortunately, these plans reveal less than might be expected.A number of jurisdictions have adopted a strategy of includinga parcel into their brownfield plan only after they have identi-fied a developer interested in the property.

9 Woodruff et. al.(1998) suggest that even if the municipality isunable or does not want to capture tax increments, the singlebusiness tax credit is cause enough for the municipality toform a Brownfield Redevelopment Authority. Field interviewsshow that some BRAs have been formed primarily to havelocal business qualify for the single business tax.

10 MDEQ accepts local nominations, develops a ranking, andsubmits a priority list to the state legislature. The legislatureeither modifies or accepts DEC recommendations. Respon-dents at MDEQ report that they could not remember when thelegislature had not followed departmental recommendationsunder an earlier bond issue. Some concern was expressed thatthis pattern might change as the brownfield initiative has sig-nificantly expanded the criteria for project selection. Thus cre-ating a basis for political disputes.


The design of the Michigan brownfield initiativerequires the cooperation state government, localgovernment, and private developers. Thus, the sub-stantive impact of changes in Michigan toxic-wastepolicy depends on three broad implementationissues. First, do state policy makers have the capac-ity to reorient key state bureaucracies to supportrevised programmatic goals? Since the brownfieldprogram does not require local action but onlyencourages it, program outcomes also depend onlocal interest and capacity to implement a redevel-opment effort. The willingness of the private sectorto invest in brownfield properties defines the finaland key link to program success.

The Role of State BureaucracyMichigan’s brownfield initiative challenges responsi-ble state administrators in a number of importantways. First is the clear shift in the focus of toxic-waste policy. As noted above, the introduction ofeconomic development as an important componentof toxic-waste policy represents an expansion of for-mal agency goals. Related to this change in substan-tive focus is a shift in role. Prior to the brownfieldinitiative, state environmental staff was largely seenas an enforcement agency. More recently, state staffhas been defined as facilitators promoting economicdevelopment. Rather than imposing solutions ontarget communities, state environmental actors arenow expected to nurture cooperative links acrossthe public and private sector.

A key issue is whether there has been a real changein the behavior of state-level bureaucrats chargedwith implementing toxic-waste policy. Certainly thenotion of mission or agency culture is, at best, diffi-cult to define and measure. Yet, speaking to individ-uals working in and with the Michigan Departmentof Environmental Quality (MDEQ), it is difficult notto feel that a mission shift has occurred. Askedabout how the department achieved this culturechange, a senior administrator in MDEQ remarked:

A really good word would be “challeng-ing.” We are on this payroll to implementlaws passed by the legislature. The newlaw required us to take a new approach.Our focus is still getting property cleanedup so that it is safe for the people that useit. But because the law is aimed at a landuse...we’ve had to start retraining ourselvesto consider a developer view.

Elected state political authorities, particularly thosein the governors’ office, put a good deal of pressureon agency staff to change environmental enforce-ment procedures. Pressures were also quite explicitin the department:

If you feel that as an employee of thedepartment that there are certain thingsthat need to be done to protect the envi-ronment, including cleaning up a propertyor groundwater, to the point where it can

Implementing Michigan’sBrownfield Program


be put to use because that’s the way itshould be, you are in the wrong depart-ment. You don’t fit in anymore. And, infact, if you maintain that outlook, somesort of action will be taken to either moveyou to a less sensitive job, or some encour-agement to change your outlook of oneform or another, because it doesn’t work inthis program. And I would say, that it isbetter now than it was. We are gettingmore done and providing as much protec-tion. The difference is that if you have aview that contamination that we put therehas to come out in order to make it right,that viewpoint doesn’t work anymore.

Compliance was enhanced by two rather dramaticadministrative strategies. In an effort to reduce thestate workforce, employees were offered an attrac-tive early retirement package. Not surprisingly,observers report many of those who were mostopposed to the governors policy initiatives chose toleave state government. In addition, the governorreorganized executive departments so that environ-mental regulation would be centered in a newMichigan Department of Environmental Quality.Obviously the new department had many workersquite familiar with traditional environmental regu-lation. However, these workers were joined by aset of state workers more focused on communitydevelopment:

This happened at the same time that therewere changes in other Michigan depart-ments. As you know, the Michigan Depart-ment of Commerce used to handle bothindustrial and community developmentissues. When the Department of Com-merce split, the majority of the peoplewent to the Jobs Commission to focus onindustrial development and not communitydevelopment, not retail, not downtownactivities, not tourism and such. And sothere was a concern about communitydevelopment at the same time there was aswitch in the environmental law thatallowed individuals to look at communitydevelopment sites. Almost by default…theDepartment of Environmental Qualitybecame the Community Development

branch of the State of Michigan, becausenobody else was doing that. It actually wasa good fit because we were now looking atthe cleanup based on what the land usewas going to be.

The result has been, at least, a formal compliancewith the new environmental policy. For manyemployees of the MDEQ there seems to be a gen-uine commitment to the new departmental goals:

I think there’s no question there’s been amajor culture change. When it first cameabout, there wasn’t unity in the way wewere heading. I think it’s an evolutionaryprocess. Once you see what you can doand see the rewards of what you’ve creat-ed, it becomes a hell of a lot more palat-able to follow that same path. We’veevolved to the point where we are becausewe’ve had a lot of success stories.

Both central and regional office personnel are anx-ious to frame their actions both in terms of eco-nomic development and environmental protection.There is no question that environmental protectionremains a key value for MDEQ. It clearly is. But itis also clear that other values are also now impor-tant. A number of observers across the stateacknowledged this. One local development spe-cialist captured this view when he tried to summa-rize how MDEQ has changed:

They realized that for whatever reasons,they really stood in the way of economicdevelopment for years and there were waysthat they could partner with business andindustry and still achieve their initial goalsof protecting the environment and humanhealth and safety without being a burdenand a hindrance to business. And so a lotof people call the Department of Environ-mental Quality today the “Department ofEconomic Development,” because theywholly, at least at the upper administrativelevels, totally embraced the idea of doingwhatever it takes to encourage businesswhile still protecting the environment.


The Role of Local Political AuthoritiesLocal political leaders have been important sup-porters of the Michigan brownfield initiative. Amayor of one of Michigan’s older industrial citiesdescribed the important role that the state mayorsplayed in supporting the effort.

The urban-core mayors were the key alliesof the governor in changing Public Act305. We carried the water for him. So wesaw ourselves as key players. It was impor-tant for him, it was important for us. Heneeded something for the environment,and it was a safe environmental issue forhim, because he had all these urbanDemocrat mayors carrying the water. I con-sidered the state on this issue to be an ally,and this is a tool that they have helped cre-ate. And it is an important tool and it hasbeen helpful.

We (the mayors) supported the CleanMichigan Initiative. I went out there andcut TV ads; all of the urban mayors did thatin the regions. So we wanted to put ourimprimatur on it.

Data collected from local government authoritiespicture an enthusiastic response to opportunities cre-ated by state brownfield statutes. In July of 1996, theMDEQ published an initial one-year evaluation ofthe new redevelopment policies based on an infor-mal telephone survey of 40 municipalities (MichiganDepartment of Environmental Quality, 1996). Of the33 responding cities, 29 claimed an increased inter-est in redeveloping contaminated properties in theircities. Twenty municipalities reported a total of$221,573,000 in private investment and the creationof 2,379 new jobs.

In a follow-up survey in June of 1999, 23 authorities(out of a total of 115) reported $93,100,000 in newindustrial investment, $149,600,000 in new com-mercial investment, and $106,750,000 in new residential investment (Michigan Department ofEnvironmental Quality 1999). Municipal spokesmenattribute this increased investment to the new liabili-ty protection and revised land-use-based cleanupstandards. One local official noted that the program

had changed how the city viewed brownfields: “We now have this ethos where we believe that ourbrownfields are assets.”

Further evidence of local enthusiasm for brownfieldredevelopment is provided by the speed at whicheligible local government units have created Brown-field Redevelopment Authorities. As of January 30,1998, 59 municipalities had created authorities. ByJune of 1999, 121 authorities were operating in thestate. While the creation of a BRA is only a first stepin creating an active local program, it does stronglysuggest that municipal authorities are anxious tobegin the process.

Even more than their state counterparts, local offi-cials have accepted the important role of privateinvestment in brownfield redevelopment. One official described the planning process for the city’s brownfield program as follows:

One of the first things that came out ofthose meetings was everybody agreed thatthe economic development part of the pro-gram is going to drive the environmentalcleanup. Everybody realized that wecouldn’t just go and pick a site and startcleaning up for no reason if the site doesn’thave any basis for development or anybusiness interest.

Although there is broad agreement on the generalassumptions of the program, there is significantvariation in how the program was administered. Areview of local programs shows that local jurisdic-tions have used the program’s flexibility to con-struct a number of alternative implementationstrategies. Significant structural variation existsacross the state on at least two important dimen-sions: implementation agencies and programscope.

Municipalities have assigned brownfield redevelop-ment to a variety of agencies. Some jurisdictionshave centered their efforts in established linedepartments, usually planning or economic devel-opment offices. Others have experimented with aremarkable degree of privatization. In one case, thelocal brownfield authority is staffed completely byprivate employees of the local Chamber of Com-merce. Specific programs also vary in geographic


scope. Some cities focus their efforts within cityboundaries. Others see redevelopment as more of a regional issue, and therefore focus their effortsthrough regional-level organizations.

There are two important points to be made aboutthese implementation strategies. First, the distinc-tions are not simply theoretical. There are examplesof active programs in each cell. Even more impor-tant is the finding that local officials report successusing each type of model. Thus, “best practice”varies from site to site. Such findings do not suggestthat state and federal officials should give up over-sight efforts in the name of local autonomy, butthey do argue for an increased reliance on out-come assessment and greater tolerance of alterna-tive implementation strategies.

The Role of Private ActorsA final assumption embedded within the Michiganbrownfield effort is that, given the right set ofincentives and protections, private sector actorswill become active in brownfield redevelopment.Note this expectation is not based on any appeal tocivic obligation or good citizenship, but simply onthe claim that brownfields are sound businessinvestments. Once again, there is some modest evi-dence that the effort has been successful. Forexample, the relatively high rate of Baseline Envi-ronmental Assessment (BEA) filings gives clear evi-dence that there is significant economic demandfor some potentially contaminated properties. ByJuly 1996 the MDEQ reported that 425 Baseline

Environmental Assessments had been received. Thiswas 10 times the total number of property transfersbrought about by negotiated covenants not to suefor the previous five years. Moreover, BEA filingscontinue to increase. By April 1999 MDEQ hadreceived a total of 2,635 applications (Kummlerand Card, 1999).

Not surprisingly, the willingness of private develop-ers to become involved in brownfield projects is very much tied to the perceived economicopportunities that specific projects present. A number of redevelopment officials observed thatdevelopers in general are very sensitive to newinvestment opportunities. Following the passage of legislation promoting brownfield work, somedevelopers independently sought out city officialsto identify brownfield opportunities. When askedhow the city identified potential developers, oneeconomic development specialist admitted:

We haven’t really had to do any formalmarketing yet. It is interesting that as state-issued environmental cleanup guidelineshave changed, and their various programshave come to be, the state goes to a lot ofconferences around the state invitingdevelopers, environmental consultants, andattorneys and so forth. The state runs con-ferences, private sector consultants runsome, attorneys sponsor some, and we’vegone to a fair amount of those, spoken to afair amount of them, and we’ve gotten a lotof attention that way.

ALTERNATIVE LOCAL IMPLEMENTATION STRATEGIES

Implementation Agent

Focus Public Private

Local

Regional

Administered by standing city agency. Focus within city boundaries.

Administered by standing city agency.Regional focus.

Administered by private sector(or public-private partnership).Focus within city boundaries.

Administered by private sector(or public-private partnership).Regional focus.


In areas where the local economy is particularlyrobust, brownfield specialists report that redevelop-ment is occurring with relatively little public inter-vention. Revised liability and cleanup standardshave apparently promoted a sharp increase inentirely private redevelopment projects. One cityredevelopment official expressed frank surprise atthe willingness of private developers to take advan-tage of the new regulatory climate independent ofcity assistance:

With the publicity associated with the cre-ation of the authority, we thought thatthere was going to be more interest bycompanies wanting to utilize the authorityin one way or another. That has not provento be the case. The real estate developmentcommunity comes across stuff. They justsay…we’ll deal with it. We don’t need you.It’s reassuring …I think, of the free enter-prise system, where they say we will dealwith it, …thanks for the offer. We’ll dealwith it. We’ll take care of it, and the costassociated with the baseline work, and theremedial efforts that need to be done theyjust do it and pass the cost on. They absorbthe cost. It’s a transactional cost associatedwith the development or redevelopment ofa piece of property. It’s very gratifying inmost instances. In spite of what we havedone, they just plod ahead. “Thanks but nothanks. We’ll take care of it.”

More often, however, local authorities activelyrecruit developers. One developer commented:

I’ve got a dozen proposals sitting backhere; the city of this, the city of that — try-ing to contact developers to get them tocome in and build something in andaround vacant land, old, deserted, demol-ished or, empty buildings from downtown.We’ve got the city of…after us because wejust bought a building down there, andthey want us to look at some other oppor-tunities. The economic development peo-ple are trying to get people into their area,and they latch onto developers all thetime. We get proposal after proposal. “Wewant to build a shopping center, we wantto build an outlet center, we want to build

this, we want to build that, would you beinterested,” that type of thing.

Asked whether he would be willing to becomeinvolved in a brownfield project, a developer wasclear about the decision rule for his company:

Depends on the piece. If we think it’s agood location — and that’s the beauty ofthe brownfield areas, is that they are ingood locations — if it’s a good location andwe can fill a need of the city, why not? Itjust depends on how much you’re going toput into it. We’ll look at any opportunities.

The strong interest in brownfields expressed bydevelopers, combined with the relatively high rateof BEA filings, suggests that a significant number ofsites are being redeveloped independent of publicsector intervention. This would seem most likely forthose sites where the actual level of contaminationturned out to be modest. Unfortunately, there is noreliable data available to either conform or discon-firm this hypothesis.

It is clear that where the local economy is weak,there is relatively little interest on the part of devel-opers to invest in brownfield property.11 Currentincentives are simply insufficient to attract suchinterest. At a minimum, these communities willrequire a deeper public subsidy to entice privatesector investment.12

11 There is an interesting exception in some very depressed communities. Some large corporations that have in the pastengaged in significant disinvestment in the community, butretain a presence, are sometimes willing to make communityinvestment beyond what one would expect from straightfor-ward market calculations. Note that such corporate “citizen-ship” is both limited and relatively rare.

12 In some of Michigan’s poorest communities there remains astrong emphasis on more traditional federal aid programs topromote economic redevelopment. Relatively large federalinvestment can be seen as a means to secure these relativelylarge subsidies.


Recommendations

Policy evaluation seldom offers definitive results.The world is simply too complex to identify strongand unambiguous causal linkages. Nevertheless,the Michigan brownfield initiative does offer someimportant insights about the impact of specifictoxic-waste policies on redevelopment efforts. Suchinsights do lead to a set of concrete recommenda-tions as to how state and local officials can encour-age the redevelopment of brownfield sites.

However, decisions to implement such recommen-dations will inevitably lead to tradeoffs with respectto other reasonable policy goals. It is essential thatpolicy evaluation not only specifies positive policyoutcomes, but also illuminates these tradeoffs.

Recommendation 1Restrict liability associated with potentially contaminated land parcels.

The notion that those who pollute a site should beresponsible for cleaning it has served as a key ele-ment of national toxic-waste policy for almost 20years. It is an intuitively appealing approach thatattempts to tie liability with responsibility. How-ever, in practice the application of such strict liabil-ity has raised a number of questions. Some centeron the practical difficulties of implementation. Forexample, most sites had multiple sources of pollu-tion. In such cases, how does one allocate respon-sibility for cleanup costs? Indeed, it is often difficultto even know who contributed to the pollution of a

site. It is also impossible to sanction responsibleparties that no longer exist. The fairness of strict lia-bility has also been questioned. Many argue that ifactions were legal when they were performed, it isunreasonable to declare them illegal at some laterpoint. Critics also argue that it is unreasonable toassess the full cost of a cleanup to what is almostalways a subset of guilty parties. Finally, manyquestion whether ownership alone should create aliability for the actions of others.

A less discussed critique of strict liability is the factthat it creates a set of severe negative externalitiesthat impose significant but unintended social costson the community in which the property is found.This claim is based on the view that strict liabilitycreates a negative incentive structure that virtuallyforce developers to not even consider siting pro-jects on older industrial or commercial sites.Rather, projects are targeted to previously undevel-oped properties.

The argument as to why this occurs is straightfor-ward. It is simply not rational to site a project onproperty that may carry a significant liability whenother available properties have no such risk. Indeed,even if a developer had an interest in a potentialbrownfield site, owners of that property may beunwilling to sell the property since liability for sitecleanup remains with past owners even after theproperty is sold. As long as there is a possibility thata major cleanup will be required, economic ratio-nality demands that the property simply be left


unused. Note that this logic would apply not simplyto sites with known significant contamination, butto all sites with possible contamination. Essentiallythis predicts the collapse of the commercial andindustrial real estate market in older industrial cities.

The Michigan brownfield initiative provides con-vincing evidence that such externalities do exist.Certainly providing liability protection for newproperty owners has had the effect of revitalizing along dormant urban real estate market. The largenumber of Baseline Environmental Assessmentsfiled with the Michigan Department of Environ-mental Quality documents a sharp increase in mar-ket exchanges. Interestingly, the BEA statementsreveal many of these properties had only modestenvironmental problems. This gives further supportto the notion that strict liability depresses the entiremarket for older industrial and commercial proper-ties, including many parcels without significantenvironmental problems.

It is important to stress that this finding does notlead unambiguously to a recommendation forrelaxed liability in toxic-waste cleanups. As noted,important tradeoffs often cannot be avoided. TheMichigan Brownfield initiative illustrates that thesetradeoffs may be quite complex. A decision toimpose cleanup costs on “guilty parties” alsoimposes a set of broad social and economic costs toa much wider population in terms of a collapsedreal estate market and forgone economic opportuni-ties. Whether that cost is justified remains a politicaldecision to be made by responsible policy makers.

Recommendation 2Offer selective incentives to encourage the redevelopment of specific brownfield sites.

Michigan’s financial commitment to its brownfieldinitiative makes it stand out from efforts of otherstates. Financial incentives included substantialbond funds targeted to assessment and remedia-tion, authorization for local governments to useincrement tax financing to support remediation,and direct tax incentives for businesses willing todevelop brownfield sites. There is a widespreadperception at the local level that if such fundingwere not available, a significant number of brown-

field sites that have been redeveloped would haveremained derelict. A number of localities have par-ticularly promoted the reduction in the state’s sin-gle property tax in seeking to persuade businessesto explore the potential of brownfield locations.

Recommendation 3Allow local officials sufficient flexibility to respondto market-driven redevelopment opportunities.

Federal and state environmental officials oftenmaintain that the design and implementation of siteredevelopment projects should occur within theframework of an overall development plan. TheMichigan brownfield initiative provides a contrastto this public rhetoric. With its focus on privatesector investment, the initiative gives little encour-agement to comprehensive community planning.Projects are typically designed and implementedon a parcel-by-parcel basis. Project selection is dri-ven more by developer preferences than localstrategic objectives.

Indeed, this focus is institutionalized in a number ofstate brownfield assessment and cleanup programsthat require local authorities to identify an interesteddeveloper before funds can be allocated to a pro-posed project. There is no empirical evidence thatthe parcels most attractive to that private sector arethose of greatest concern to the community. More-over, given that the proposed end use is driven byeconomic return, there is little reason to assumethat such a use would be consistent with the overallpreferences of the community.

The Michigan brownfield initiative has created, orin some cases reinforced, a set of cooperative link-ages between state and local development andenvironmental officials. In some communities it hasalso reinforced ties between political decision-mak-ers and private sector developers. These linkagesexpand the capacity of local government to pro-mote the sort of public-private ventures that drivethe brownfield initiative. However, they tend to de-emphasize the traditional planning function withinlocal government. In addition, efforts to promotecommunity engagement in brownfield redevelop-ment are quite modest, most often taking the formof “informational” community meetings.


Recommendation 4Allow the use of institutional controls as a means to mitigate health risks from existing contamination.

The amount of actual cleanup work at most pro-jects generated by the Michigan brownfield initia-tive has been actually quite modest. This is due to aset of three interrelated factors. First is the some-what surprising finding that a relatively large pro-portion of the brownfield sites actually have hadless contamination than expected. A second impor-tant factor is that new state standards require lessrigorous cleaning. Finally, where contaminationdoes exist, developers almost always rely on insti-tutional controls rather than actual site cleanups tomeet state environmental standards.

The logic of this process is clear. As private eco-nomic actors, developers seek to minimize costswhenever possible. Direct costs generated by insti-tutional controls are almost always less than actualsite cleanups. Thus, it is logical to use such controlseven if there might be a significant long-term socialcost in doing so. This is not to suggest that develop-ers act headless of community interest and the com-mon good. Rather, they are responding to strongstructural pressures to minimize their own costs.

The reliance on institutional controls reveals sometension between a brownfield program that empha-sizes public health and one that focuses on eco-nomic development. Institutional controls doreduce short-term costs, and they seem to promoteeconomic development. Less clear are the long-term public health implications of such controls.This policy dilemma raises an important set ofunresolved issues that are discussed further in thenext section.

Recommendation 5Provide local jurisdictions with the capacity todesign and implement redevelopment plans thatreflect local conditions and political culture.

Local governments have adopted a wide variety ofimplementation strategies in their redevelopmentefforts. For example, in traditionally conservativeareas of the state, an effort has been made to notonly engage the private sector, but to have privateactors assume strong leadership roles in the pro-

gram. In other cities, public officials have taken keyleaderships roles. Sometimes leadership is providedby the traditional planning or economic develop-ment department. At other times it is located inother city agencies. Where regional cooperation iscommon, brownfield programs are often regionalin scope. Where regional cooperation is less com-mon, programs are more likely to focus on a singlejurisdiction. An important finding of this review isthat no single approach stands out as most effec-tive. The best programs are those designed with aneye to local conditions and preferences.

The ability and willingness of local jurisdictions todesign their brownfield programs lends support tothe general decentralization assumptions built intothe state initiative. It suggests that future state policyshould continue to be directed to desired outcomes,without an exact specification of how local govern-ments are to reach these goals. These findings alsosupport similar federal decentralization efforts.However, state and federal officials must continueto have an oversight role since not all local pro-grams are successful. Indeed, the development ofeffective oversight and evaluation tools is a criticaltask if policy decentralization is to continue.


Long-Term Empirical QuestionsThe Michigan brownfield initiative raises a numberof unresolved policy questions. First, there remain anumber of empirical questions about the long-termeffectiveness of specific policies. These issues canbe clarified by a continued monitoring of effortslike the Michigan initiative. Three important evalua-tion issues are listed below:

Are current contamination standards sufficient toprotect public health?The key to spurring economic development projectshas been cutting developers’ costs in meeting stateenvironmental standards. These cost reductionshave been achieved through an overall lowering of standards and an increased use of institutionalcontrols as an alternative to actual site cleanup.There is little question that these changes havereduced developer costs. Less clear, however, is theadequacy of the new standards to protect publichealth. While most public and private officialsmaintain that existing standards will protect humanhealth, this view is not universally shared. A fewofficials noted with concern that standards hadbeen lowered with relatively little scientific evi-dence to support such changes.

How stable are institutional property controls?Institutional controls through land-use, zoning, andon-site construction (such as parking lots) providean important means to reduce the cost of redevel-opment. Currently neither the federal government

nor the state government has much experience inmaintaining such controls over long periods of time.As a result, it is impossible to know how stable suchcontrols are. Although institutional controls doappear to meet short-run public health concerns,their long-term viability is more problematic. At aminimum, it is essential that state and local govern-ments create more capacity to monitor the long-term stability of these institutional controls.

Does targeted publicly supported brownfield redevelopment promote spontaneous economicexpansion?There is little doubt that the Michigan brownfieldinitiative has been instrumental in generating anumber of redevelopment projects across the stateof Michigan. Long-vacant properties are being tar-geted for development projects. Informed observersagree that state policy has been successful inincreasing developer interest in brownfield projectsthrough a net reduction of private sector costs asso-ciated with such projects. Nor is there much dis-pute that these projects have had a generally posi-tive impact in their community. At a minimum, siteredevelopment means that a community is able torid itself of a nonproductive eyesore. There are usu-ally economic advantages as well. For example,some modest employment growth often followsredevelopment.

However, no case was found where an initialbrownfield investment plausibly led to a significantsecondary development as predicted by brownfield

Continuing Policy Dilemmas


renewal enthusiasts. Of course, linkages betweeneconomic development efforts and general growthare notoriously difficult to demonstrate. In additionto the complexity of the causal linkages involved ineconomic development policies, the modest eco-nomic impact of the Michigan brownfield initiativemay also be a function of the relatively short timethe initiative has been in existence. For example, anumber of municipalities report that they have justbegun their efforts, and it is unlikely that long-termimpacts would be observable.

It is important to remember that a number of theMichigan reforms also promoted private develop-ment as well as public projects. Thus, it might bethe case that while publicly supported projectshave only a modest impact on overall economicexpansion, the reforms that drive the public proj-ects also promote a significant investment in theprivate sector. For example, limiting liability mayhave the effect of reintegrating properties oncethought to be contaminated, but in fact were not,into a viable real estate market. Strictly speaking,such an outcome would not be public brownfieldredevelopment. Nevertheless, the local economicadvantage of such a reintegration is obvious. There-fore, any future attempts to measure the economicimpact of the Michigan program will need toexplicitly consider the impact of such private mar-ket transactions.

Broad Policy QuestionsIn addition to these empirical questions, the brown-field program presents a set of issues that pose fun-damental policy choices. While further evaluationcan certainly help identify options, it cannot specifya “best option.” Ultimately these issues can only beresolved in the political process. Three examples ofsuch issues are given below. The first two explorespecific elements of the brownfield initiative. Thefinal example raises a more general issue of stateand federal policy decentralization.

What is the appropriate role of community preferences?There is little formal requirement for community orneighborhood involvement in brownfield projectplanning. Most communities have, nevertheless,attempted to create a forum for some neighbor-hood-level participation. Usually this participation

provides for neighborhood review rather than initi-ation of projects. This finding raises the question ofthe appropriate role of citizens most directlyimpacted by brownfield projects. To what extentshould local communities be involved in a localredevelopment effort, and how does one bringabout the desired level? Note that there is an inher-ent tension between efforts to promote private sec-tor investment based on the market potential ofspecific parcels and efforts to design and imple-ment an overall community plan. In a number ofcities it was found that developers were unwillingto invest in specific facilities that were most desiredby community residents.

How should policy makers deal with demands forincreased environmental justice? Brownfield sites are most likely to be in low andmoderate income, and minority neighborhoods.Critics of the Michigan brownfield initiative see theimplementation of reduced contamination stan-dards and institutional controls as creating patternsof environmental injustice. That is, minority andlow-income citizens are put at greater health riskssimply because of their proximity to sites to beredeveloped. Others — very often local electedofficials — stress the critical need for economicdevelopment within these communities. For exam-ple, recently the mayors in Michigan’s core citiesled the fight against federal environmental justicestandards that would have reduced the capacity ofcities to promote redevelopment projects.

What is to be done with unsuccessful programs?Although the long-term impact of the brownfieldinitiative remains problematic, there is evidencethat it has spurred redevelopment projects acrossthe state. Obviously this success has not been uni-versal. Failures do occur. Indeed, failures can occurat both the site and community level. Site-level fail-ures occur when local jurisdictions are unable toattract investment to specific parcels. Such problemparcels may suffer from relatively high levels ofcontamination or may be undesirable for develop-ment because of location, size, or other factors.

Failure can also be community-wide. In this case acommunity is unable to attract significant privateinvestment in any local brownfield sites. Com-munity failure can also be traced to a variety of


factors. Some communities simply do not have thecapacity or the political will to implement brown-field programs. In other communities the availableeconomic incentives are not sufficient to attractdevelopers to local projects.

Such local policy failures pose important issues forstate policy makers. For example, should moreincentives be made available for so called “prob-lem sites”? If so, how can one identify these sites?The issue of community program failure is evenmore complex. How, for example, can one differ-entiate city needs? Should the state take a moredirect lead in redevelopment efforts in such juris-dictions, or should the state focus on those jurisdic-tions capable of generating private investment?


This case study of the Michigan brownfield initiativereminds us of how complex the policy process actually is. Although formally a state program, theheart of the initiative is a set of over 100 local pro-grams, many having multiple projects. Each projecttypically involves an array of local officials, devel-opers, and community members. Moreover, projectsand local programs have complex and overlappingties with a variety of state officials.

Unfortunately, it is impossible to understand theimpact of the brownfield initiative without relative-ly detailed analysis of these specific local projects.It is the impact of such projects that must ultimate-ly drive the evaluation of the overall brownfieldprogram. While the number and value of local ini-tiatives can — and certainly will — be reported ina variety of aggregate statistics, the central evalua-tion issue is the return that specific redevelopmentprojects bring to the communities in which theyoccur. To monitor such local impacts requires anextraordinary effort, and often a rather messy andunsystematic research design. However, there is noalternative if we are serious in our efforts to learnfrom current policy initiatives.

This report illustrates the importance of such local-level analysis. It shows that within a single legisla-tive framework, municipalities have constructed avariety of implementation strategies. Students oforganizations sometimes decry such complexity,arguing that this variation introduces inefficiencyinto the policy system. A review of program out-comes suggests that such a fear may not be war-

ranted. There is little evidence that there exists asingle best municipal strategy. There was, in fact,substantial evidence that the initiative has had apositive impact in a number of Michigan citiesacross a variety of implementation strategies. How-ever, this success carries two important qualifications.

First, it is clear that the program in its present formintroduces some policy tradeoffs that may not beacceptable to some communities. Specifically, areliance on private developers almost automaticallyreduces opportunities for inclusive community par-ticipation and planning. It is also clear that pro-gram outcomes are modest. While it is certainlypossible to identify specific sites that have beenredeveloped through the program, there is no evi-dence of a broader pattern of redevelopment.

Second, certainly there is little to suggest that current brownfield programs can meet the veryambitious goals articulated by the programs moreoptimistic supporters. The initiative is neither revi-talizing older industrial cities nor halting urbansprawl. Whether the program can evolve towardmeeting these more ambitious goals will dependin part on the willingness of policy officials to sub-ject their efforts to a careful assessment and thenapply gained knowledge to the design of futureredevelopment programs. Given this effort, brown-field redevelopment can become an even moreeffective economic development tool for Michigancities in the future.

Concluding Thoughts


Consumers Renaissance Redevelopment Corporation(1998). Michigan’s Brownfield Redevelopment Pro-gram: First in the Nation, Consumers RenaissanceRedevelopment Corporation.

Consumers Renaissance Redevelopment Corporation(1998). National Comparative Analysis of BrownfieldRedevelopment Programs, Consumers RenaissanceRedevelopment Corporation.

Davis, T. S. and K. D. Margolis (1997). Brownfields:A Comprehensive Guide to Redeveloping Contami-nated Property. Chicago, American Bar Association.

Environmental Financial Advisory Board (1998).Expediting Clean-Up and Redevelopment of Brown-fields: Addressing Major Barriers to Private SectorInvolvement — Real or Perceived. Washington D.C.,United States Environmental Protection Agency.

Kaiser, S.E. (1998). “Brownfields National Partner-ship: The Federal Role in Brownfield Redevelop-ment.” Public Works Managementand Policy 2(3): 196-201.

Kummler, R. H. and D. S. Card (1999). BrownfieldRedevelopment: The Michigan Strategy, College ofUrban, Labor & Metropolitan Affairs, Wayne StateUniversity.

Michigan Department of Environmental Quality(1996). The Part 201 Amendments: One Year Later.

Michigan Department of Environmental Quality

(1999). Brownfield Redeveloping Financing Acts:Three Years Later.

Reisch, M. (1998). Superfund Reauthorization Issuesin the 105th Congress, Congressional Research Ser-vice.

Rosenbaum, W. A. (1995). Environmental Politicsand Policy. Washington D.C., Congressional Quar-terly.

United States General Accounting Office (1998).Superfund: EPA’s Use of Funds for Brownfield Revi-talization.

Woodruff, F. M., C. M. Denton, et al. (1998). Michi-gan’s Brownfield Redevelopment Initiative: A Primer on How to Make the Most of It. GrandRapids, Varun, Riddering, Schmidt and Howlett.

Bibliography


Richard C. Hula is professor of political science and urban affairs at Michigan State University. He is cur-rently a co-director of MSU’s Program in Urban Politics and Policy. He served as the director of MichiganState’s Program in Public Policy and Administration from 1991 to 1996, and as an associate director in theInstitute of Public Policy and Social Research from 1991 to 1998. Prior to joining the faculty at MichiganState, Hula held faculty appointments at the University of Maryland and the University of Texas-Dallas.

Dr. Hula received his B.A. from Michigan State University, and his Ph.D. from Northwestern University.While at Northwestern, Hula was a National Science Foundation Trainee (1969-72) and a Woodrow WilsonDissertation Fellow (1972-73). He was named a distinguished scholar-teacher at the University of Marylandfor 1986-1987.

Dr. Hula has been involved in a number of university programs to link university scholarship to the work ofpractice. These include a biannual policy institute for new Michigan legislators, a training program for citi-zens interested in political office, and numerous special workshops and symposia.

Dr. Hula is of author The Politics of Crime and Conflict with Ted Robert Gurr and Peter N. Grabosky(1977), Market-Based Public Policy (1988), The Reconstruction of Family Policy with Elaine A. Anderson(1991), and The Color of School Reform with Jeffrey Henig, Marion Orr and Desiree Pediscleaux (1999).Hula has published numerous articles on issues of housing policy, school reform, home credit, and envi-ronmental policy.

Dr. Hula teaches courses on urban politics and public policy.

About the Author


To contact the author:Richard C. HulaProfessorDepartment of Political Science and Urban AffairsMichigan State University347 South Kedzie HallEast Lansing, MI 48824(517) 353-1686

e-mail: [email protected]

To contact the Michigan Department of Environmental Quality:Robert TerryCommunity Redevelopment SpecialistMichigan Department of Environmental QualityP.O. Box 30457Lansing, MI 48909-7957(517) 335-2109

e-mail: [email protected]

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An Assessment of Brownfield Redevelopment Policies · 2020-05-05 · 4 An Assessment of Brownfield Redevelopment Policies Foreword November 1999 On behalf of The PricewaterhouseCoopers

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