[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
THE CONNECTICUT EXPERIENCE: WHAT CAN BE DONE TO SPUR BROWNFIELD
REDEVELOPMENT IN THE NEW ENGLAND CORRIDOR?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON FEDERALISM
AND THE CENSUS
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
MARCH 13, 2006
__________
Serial No. 109-163
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
29-333 WASHINGTON : 2006
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001
COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California
DAN BURTON, Indiana TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee DIANE E. WATSON, California
CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California LINDA T. SANCHEZ, California
JON C. PORTER, Nevada C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia ELEANOR HOLMES NORTON, District of
PATRICK T. McHENRY, North Carolina Columbia
CHARLES W. DENT, Pennsylvania ------
VIRGINIA FOXX, North Carolina BERNARD SANDERS, Vermont
JEAN SCHMIDT, Ohio (Independent)
------ ------
David Marin, Staff Director
Teresa Austin, Chief Clerk
Phil Barnett, Minority Chief of Staff/Chief Counsel
Subcommittee on Federalism and the Census
MICHAEL R. TURNER, Ohio, Chairman
CHARLES W. DENT, Pennsylvania WM. LACY CLAY, Missouri
CHRISTOPHER SHAYS, Connecticut PAUL E. KANJORSKI, Pennsylvania
VIRGINIA FOXX, North Carolina CAROLYN B. MALONEY, New York
------ ------
Ex Officio
TOM DAVIS, Virginia HENRY A. WAXMAN, California
John Cuaderes, Staff Director
Shannon Weinberg, Counsel
Juliana French, Clerk
C O N T E N T S
----------
Page
Hearing held on March 13, 2006................................... 1
Statement of:
Barton, Elizabeth, chair, Environmental and Land Use
Department, Day, Berry & Howard, LLP....................... 57
Carbone, Joseph, president/CEO, the Workplace, Inc........... 63
Fabrizi, John, mayor, city of Bridgeport, CT................. 10
Lauretti, Mark, mayor, city of Shelton, CT................... 35
McCarthy, Gina, commissioner, Connecticut Department of
Environmental Protection................................... 28
Sanderson, Mary, Chief, Remediation and Restoration II
Branch, Office of Site Remediation and Restoration, U.S.
Environmental Protection Agency............................ 16
Santy, Robert, president, Regional Growth Partnership........ 68
Soler, Stephen, president, Georgetown Land Development Co.... 75
Trilling, Barry, partner, Wiggin and Dana, LLP............... 82
Letters, statements, etc., submitted for the record by:
Barton, Elizabeth, chair, Environmental and Land Use
Department, Day, Berry & Howard, LLP, prepared statement of 59
Carbone, Joseph, president/CEO, the Workplace, Inc., prepared
statement of............................................... 65
Fabrizi, John, mayor, city of Bridgeport, CT, prepared
statement of............................................... 13
Lauretti, Mark, mayor, city of Shelton, CT, prepared
statement of............................................... 38
McCarthy, Gina, commissioner, Connecticut Department of
Environmental Protection, prepared statement of............ 31
Sanderson, Mary, Chief, Remediation and Restoration II
Branch, Office of Site Remediation and Restoration, U.S.
Environmental Protection Agency, prepared statement of..... 18
Santy, Robert, president, Regional Growth Partnership,
prepared statement of...................................... 71
Shays, Hon. Christopher, a Representative in Congress from
the State of Connecticut, prepared statement of............ 7
Soler, Stephen, president, Georgetown Land Development Co.,
prepared statement of...................................... 78
Trilling, Barry, partner, Wiggin and Dana, LLP, prepared
statement of............................................... 84
Turner, Hon. Michael R., a Representative in Congress from
the State of Ohio, briefing memo........................... 3
THE CONNECTICUT EXPERIENCE: WHAT CAN BE DONE TO SPUR BROWNFIELD
REDEVELOPMENT IN THE NEW ENGLAND CORRIDOR?
----------
MONDAY, MARCH 13, 2006
House of Representatives,
Subcommittee on Federalism and the Census,
Committee on Government Reform,
Bridgeport, CT.
The subcommittee met, pursuant to notice, at 1 p.m., at the
City Council Chambers of Bridgeport City Hall, 45 Lyon Terrace,
Bridgeport, CT, Hon. Michael Turner (chairman of the
subcommittee) presiding.
Present: Representatives Turner and Shays.
Staff present: John Cuaderes, staff director; Shannon
Weinberg, counsel; and Juliana French, clerk.
Mr. Turner. If everyone is ready, we will get started.
Please have a seat.
A quorum being present, this hearing of the Subcommittee on
Federalism and the Census will come to order.
Welcome to the Subcommittee on Federalism and the Census
field hearing entitled, ``The Connecticut Experience: What Can
be Done to Spur Brownfield Redevelopment in the New England
Corridor?''
This is the fifth in a series of hearings held on the
issues of brownfields and brownfield redevelopment.
Our hearings in D.C. are informative, but the field
hearings allow us to reach out to the public and interact with
individual communities on a more personal basis, and learn
firsthand of their concerns, and their successes and their
suggestions.
I'm very pleased with the response to this hearing from the
great number of witnesses and the public attendance today.
Before we begin, I want to express my appreciation to
Congressman Shays for having us here. As you know, Congressman
Shays chairs the National Security Subcommittee of Government
Reform, and is known as a leader in the field of homeland
security, the war on terror, and supporting our military and
men in uniform.
He has looked at issues, the impact on the men in uniform
and it's wonderful to have this hearing here, addressing the
issue of brownfields.
He has been a leader in the fight to maintain CDBG, and
insuring the development of funds and programs that support
urban America, and is a member of this committee as we have
tried to look at the issues of cities and urban Americans.
So I appreciate your having us here, and look forward to
the testimony from your community as to ways that we can
fashion national policy to address these important issues.
I would also express my great thanks to the mayor of the
city of Bridgeport, to Mayor Fabrizi, for hosting these
proceedings. We appreciate your accommodating efforts in
lending your facilities.
We have a great number of witnesses present, and we are
here to listen to you. In the interest of time, I will submit
my complete comments for the record, a copy of which is
available at the press table, and we will move to introducing
our witnesses and the testimony, and our opening statements
from Congressman Shays.
We have two panels of witnesses before us to help us
understand the ground rules we developed. We also hope to hear
your ideas for improving and complementing the EPA ground rules
program, in order to encourage more aggressive redevelopment.
Our first panel will have our host, Mayor John Fabrizi, of
the city of Bridgeport; Mary Sanderson, the Chief of
Remediation and Restoration II Branch of the Office of Site
Remediation & Restoration of the U.S. Environmental Protection
Agency, Region 1; Gina McCarthy, the Commissioner of the
Connecticut Department of Environmental Protection; and Mayor
Mark Lauretti of the city of Shelton.
On our second panel of witnesses, presenting testimony will
be Elizabeth Barton, partner and Chair of the Environmental &
Land Use Department, Day, Berry & Howard; Joseph Carbone,
president/CEO of the Workplace, Inc.; Robert Santy, president,
Regional Growth Partnership; Stephen Soler, president of the
Georgetown Land Development Co.; and Barry Trilling, partner in
Wiggin and Dana.
I look forward to the testimony of our distinguished panel
of leaders.
And I thank you all for your testimony in both preparing
for this written testimony and the oral testimony you give
today.
As I recognized before, Congressman Chris Shays is chairman
of the National Security Subcommittee and is a member of this
subcommittee.
We have oversight over EPA in areas of economic
development.
And Chairman Shays, I appreciate you having us here.
[The prepared statement of Hon. Michael Turner follows:]
[GRAPHIC] [TIFF OMITTED] T9333.001
[GRAPHIC] [TIFF OMITTED] T9333.002
[GRAPHIC] [TIFF OMITTED] T9333.003
Mr. Shays. Thank you, Mr. Chairman.
For those of you who are attending this hearing, I am a
huge fan of Mike Turner. He was the former Mayor of Dayton and
was my Vice Chairman on the subcommittee that I'm still
Chairman of.
And, he, when he got here, established the Save America's
Cities Working Group within the Republican Conference. And that
was huge because not many Republicans tend to represent urban
areas, so they don't really focus on them the way they need to.
And so what he's done is he's drawn the few that do and others
that care about our cities. He has been really a leader in
protecting the CDBG fund, and also spearheading brownfields
efforts.
Both our mayors know how important, and all our witnesses
know how important, brownfield redevelopment is.
But I want to state, once again, that I believe brownfield
aid is probably the best way to help cities of almost anything
the Federal Government does. And, obviously CDBG is important
as well, but brownfields can help rebuild our cities.
We were fortunate to get significant grants in the past, in
the Fourth District. We have about $6.4 million that has been
provided to the Fourth Congressional District. And I'm very
pleased with how private developers and the communities have
maximized this benefit.
I'm hoping that Mike, with his good relationship with our
conference, and being such a good, outspoken member on urban
areas, will be able to continue to move this program forward.
I want to say to all our witnesses here, they are all
experts.
And to Mike Turner I want to say, we have two fantastic
panels. One's been mayor a little longer than the other, and
both have had major challenges, and they've done a tremendous
job. We appreciate the work of the EPA, and obviously, our head
of the Department of Environmental Protection in Connecticut.
So we're going to have a great hearing.
I would also want to say for the record that I could have
any hearing I want in Bridgeport, and I can go anywhere in the
district. I wanted it to be in Bridgeport, No. 1, mayor, and I
also wanted it to be about this issue, because I really believe
that this is a huge issue to which we can make a difference.
And your testimony today will be very valuable.
So thank you all very much for coming.
And, Mike Turner, I love you, and thank you for being here.
[The prepared statement of Hon. Christopher Shays follows:]
[GRAPHIC] [TIFF OMITTED] T9333.012
[GRAPHIC] [TIFF OMITTED] T9333.013
[GRAPHIC] [TIFF OMITTED] T9333.014
Mr. Turner. Mr. Chairman, I appreciate that.
Each witness has kindly prepared testimony which will be
included in the record of this hearing. Each witness has also
prepared an oral statement, summarizing their written
testimony.
There is a timer on the witness table. The green light
means you should begin, the red light indicates that your time
has expired. In order to be sensitive to everyone's time
schedule, we ask the witnesses to cooperate and limit their
remarks to a 5-minute time period.
It is the policy of this committee that witnesses are sworn
in before they testify. I will now swear in the witnesses. If
you will please rise and raise your right hands.
[Witnesses sworn.]
Mr. Turner. Let the record show that all witnesses have
responded in the affirmative.
We will begin with Mayor Fabrizi, of the city of
Bridgeport.
STATEMENT OF JOHN FABRIZI, MAYOR, CITY OF BRIDGEPORT, CT
Mr. Fabrizi. Good afternoon, Chairman Turner, and
Congressman Shays, and all of the other attendees this
afternoon. Welcome to the great city of Bridgeport.
Before I begin my remarks, Mr. Chairman, you described
Congressman Shays and the work that he does on the Federal
level. I want to say that every issue that you addressed,
Congressman Shays has assisted and supported the city of
Bridgeport in all of those assets, and he is a true, true
friend to the city of Bridgeport.
I want to thank you, Congressman, for hosting the meeting
here this afternoon.
I'm deeply appreciative, Mr. Chairman and Congressman
Shays, and others, of recognizing the importance of the
brownfields issue and having encouraged discussion on this
issue by organizing a public hearing here in the city of
Bridgeport.
We in Bridgeport have long felt that neither the State of
Connecticut nor the Federal Government dedicates enough
resources or attention in any form toward brownfield
redevelopment, but I have to say that we are extremely grateful
for the significant support we have received on both levels,
the Federal and State EPA, to date.
Brownfields that are not redeveloped are contributing
factors in many of the major problems that not only face
Bridgeport, but face Connecticut and the entire country--
immense pockets of poverty in our urban centers, highway
congestion, the accelerated pace of natural habitat destruction
in our suburbs and rural areas, alike, and the escalation of
property tax burdens in big cities and small towns.
If we do not keep our commitment to recycling brownfields,
I know that Connecticut will never enjoy all the economies and
benefits of smart growth, no matter what investments are made
elsewhere or laws are changed.
Please note that for Bridgeport specifically, brownfields
are the single greatest impediment to meaningful and
sustainable improvement of our local economy. This is part of
the lasting legacy of our proud industrial past and history, a
history in which we served America as an arsenal of democracy
through two world wars and provided a standard of excellence
for the world machine through industry.
The impact of brownfields was first identified in
Bridgeport about 15 years ago, as we saw many industrial
properties that had been a source of economic strength for
Bridgeport during the 20th century increasingly being vacated,
neglected, and abandoned.
While the city suspected for some time that contamination
problems could exist on many of these properties, the adoption
and enforcement of new environmental laws brought these
problems sharply into focus.
New companies were not moving into many of these
properties. Banks were not willing to lend money for the
purchase or improvement of these properties. Owners were
letting the properties deteriorate and fall into long-time tax
delinquency.
The city of Bridgeport has proactively attacked the
brownfields problem since the early nineties, a cause that I
championed as a city council member, and continue to champion
as mayor.
In the mid-nineties, Bridgeport successfully competed to
become a U.S. EPA Brownfields Pilot City, only the second in
the country to receive that designation. The additional EPA
grant allowed us to identify inventory and prioritize over 250
brownfield parcels in Bridgeport. Since conducting this
inventory, we have had numerous successes in brownfield
redevelopment, both large and small.
When funding has been hard to come by, we have a track
record of creativity and resourcefulness.
EPA has repeatedly recognized our need and performance by
funding site assessment grants, cleanup grants, and our
Brownfields Revolving Loan Fund.
With the limitations are our problems. Here are some.
Staffing. Brownfield projects are labor intensive and time-
consuming. We are currently contemplating the hiring of a full-
time Brownfields Coordinator.
Inadequate funding is available for site assessments and
remediation. The city can only afford to take on a certain
amount of this work every year. Inadequate funding is available
for demolition activities, often a necessary prerequisite for
assessment and remediation.
And liability concerns prevent the city from being more
aggressive in obtaining the site control.
What would we like to see the Federal Government do is
support Bridgeport's current funding applications to the EPA
for 2006. We've proven that we know what to do with the funding
when we get it.
Increase assessment grant size when the sites and projects
merits it.
Increase the size of cleanup grants.
Change the laws authorizing cleanup grants.
Continue to replenish Brownfields Cleanup Revolving Loan
funding for successful communities, and provide for funding for
management and monitoring of long-term institutional controls.
I do have much more to say, however, it is in my written
testimony.
And once again, on behalf of myself and the entire city of
Bridgeport, I offer my sincere thanks to you, Congressman
Shays, and especially to you, Chairman Turner, and all of those
who have organized today's hearings.
Thank you so much for considering Bridgeport.
[The prepared statement of Mr. Fabrizi follows:]
[GRAPHIC] [TIFF OMITTED] T9333.015
[GRAPHIC] [TIFF OMITTED] T9333.016
[GRAPHIC] [TIFF OMITTED] T9333.017
Mr. Turner. Thank you.
Ms. Sanderson.
STATEMENT OF MARY SANDERSON, CHIEF, REMEDIATION AND RESTORATION
II BRANCH, OFFICE OF SITE REMEDIATION AND RESTORATION, U.S.
ENVIRONMENTAL PROTECTION AGENCY
Ms. Sanderson. Good afternoon, Mr. Chairman, Congressman
Shays, members of the subcommittee.
My name is Mary Sanderson, and I direct the Remediation &
Restoration Branch in the new England Region 1 Boston office.
I'm here to talk with you a little bit about EPA's
Brownfields Program, with which you're all very familiar.
And we are very pleased with what Bridgeport is beginning
for us here in the New England office, which began over a
decade ago, with Bridgeport, CT, being one of the earliest
entrants in tackling these issues.
Nationwide, EPA initially provided seed money to
communities to inventory brownfields and assess contamination
of brownfields properties. In response to community requests,
additional tools were added to the effort. Congress enacted
legislation and provided tax incentives to promote cleanup and
development of brownfields. Over the years an additional tool
has been added. EPA has grants to capitalize revolving loan
funds for cleanup. The job training grants were added to
promote employment opportunities in brownfields communities--
I'll talk more about that shortly. Local governments and non-
governmental organizations began to focus on brownfields,
looking at local and regional approaches.
The Small Business Liability Relief and Brownfields
Revitalization Act--we will call it the Brownfields Law--
provided EPA with a clear congressional mandate on brownfields.
The law expanded the program, boosted funding levels, expanded
the entities, properties and activities eligible for the
funding, clarified and strengthened liability protection for
certain properties, and provided increased support to State and
tribal response programs.
Here in New England, since the start of the EPA brownfields
program, $75 million in EPA brownfield grants has been awarded
to numerous communities.
For the past 3 years, EPA has awarded approximately $1
million annually to the Connecticut Department of Environmental
Protection, to further advance their brownfields program.
As a whole, the State of Connecticut and its communities
and nonprofit organizations have received over $24 million in
EPA brownfields funding to date.
Bridgeport, one of our first grantees, has a proven track
record with all types of brownfields funding, not only for the
EPA, but other public and private sources, to deal with
brownfields through redevelopment.
EPA invested $1 million to date in assessment grants for
the city of Bridgeport to conduct extensive environmental
assessment work and inventory sites in their community.
EPA has also invested over $2 million in targeted
brownfields assessments throughout Connecticut, as well. These
are the single-property assessments that are designed to help
communities on a more direct basis, especially when they do not
have EPA assessment grants.
One example that I was fortunate to be able to see this
morning is in Shelton, where the EPA's TBA resources were used
to assess a portion of Canal Street. This helped to support the
cleanup demand to the town of Shelton. This area will soon
become part of the Farm and Public Market along the riverfront
area.
EPA provides direct cleanup grants of up to $200,000 per
site to public sector and nonprofit property owners, to carry
out cleanup activities.
Here in New England we are extremely proud of the 50
cleanup grants that have been awarded to date, to the value of
$8.4 million, which demonstrates the maturation of the
Brownfields cleanup program here in New England, as work moves
from assessment to more cleanups. In Connecticut, two of our
cleanup grant recipients are nonprofit organizations, Habitat
for Humanity and Georgetown Redevelopment Corp., and we look
forward to continuing our partnership with the nonprofit
community.
The revolving loan fund grants provide State and local
governments with capital to make grants for low or no-interest
loans to finance brownfields cleanup. The brownfields law
provided flexibility in the program, in that it expands
properties and activities that are eligible for funding,
provided the capability to make sub-grants, as well as loans
for cleanup, and streamlined technical requirements, while
still ensuring public health and environmental protection.
A number of loans have been made here in Connecticut and
several more are being planned.
In addition to assessment cleanup funding, EPA also funds
brownfields training, research, and technical assistance.
As communities are cleaning up brownfields, EPA recognizes
the need for a work force with environmental cleanup skills.
You will hear shortly of the great work that the Workplace has
been conducting under this job training program.
The development of successful State programs is essential
to ensuring the successful implementation of the brownfields
program, since they truly are a funding regulated support
group.
This funding is helping States and tribes to develop or
enhance their response program, and for structure and
capabilities.
Here in Region 1, we work very hard to retain close
relationships with our State, since the inception of the
brownfields program, and these partnerships are an integral
part of our success.
Continuing our success will require ever more interaction
and collaboration among all members of the government, the
private sector and nongovernmental working organizations.
EPA is dedicated to continuing our efforts to reach out to
our partners and build safe and sustainable communities through
public and private partnerships.
And one thing that's clear, that notwithstanding all those
great efforts, we will never be able to make the program as
successful as we can without the funding and know-how of our
private sector.
[The prepared statement of Ms. Sanderson follows:]
[GRAPHIC] [TIFF OMITTED] T9333.018
[GRAPHIC] [TIFF OMITTED] T9333.019
[GRAPHIC] [TIFF OMITTED] T9333.020
[GRAPHIC] [TIFF OMITTED] T9333.021
[GRAPHIC] [TIFF OMITTED] T9333.022
[GRAPHIC] [TIFF OMITTED] T9333.023
[GRAPHIC] [TIFF OMITTED] T9333.024
[GRAPHIC] [TIFF OMITTED] T9333.025
[GRAPHIC] [TIFF OMITTED] T9333.026
[GRAPHIC] [TIFF OMITTED] T9333.027
Mr. Turner. Thank you.
Ms. McCarthy.
Mr. Shays. I just have to warn you, she has a little bit of
a Boston accent.
STATEMENT OF GINA McCARTHY, COMMISSIONER, CONNECTICUT
DEPARTMENT OF ENVIRONMENTAL PROTECTION
Ms. McCarthy. Come on. We won't talk about the past.
I appreciate very much the opportunity to be here Mr.
Chairman, and members of the subcommittee, and I want to thank
you for inviting me to testify today.
I also want to thank Chairman Turner, and also, Congressman
Shays, as well as Congresswoman Johnson, for all of their
efforts to help focus attention on brownfields redevelopment.
We consider brownfields redevelopment to be a critical
component of our efforts to address environmental threats in
concert with our efforts to stimulate economic growth, and
revitalize the State's urban communities.
Connecticut, like all of New England, has a
disproportionate number of contaminated properties that results
from our past success as the birthplace of the industrial
revolution. There are many under-utilized commercial sites with
significant redevelopment potential. At the same time we are
facing tremendous growth pressures that are threatening to
consume our precious open space.
It is our hope that by working together, we can redirect
the development pressures to focus growth where it is most
beneficial, and where it is sustainable--in the State's urban
areas, where infrastructure exists, where transit is
accessible, and where these brownfields sites offer truly a
prospect of both environmental and economic success.
Mr. Chairman, I also want to commend your efforts to pass
legislation known as the America's Brownfield Cleanup Act.
The creation of a Federal business tax credit for
expenditures related to remediation and redevelopment of
contaminated properties that bridges some of the gaps in the
existing funding. Particularly, I would highlight what Mayor
Fabrizi has indicated concerning demolition cost is extremely
important. It's the sort of comprehensive approach that we
believe could truly remove obstacles to brownfields cleanup.
Today, I would like to give you a thumbnail sketch of what
Connecticut does on the brownfield side, and also provide a few
recommendations, like the passage of the America's Brownfields
Cleanup Act, that we think can really spur brownfields
redevelopment along.
In 1985, Connecticut passed the Property Transfer Act,
which was a law that brings sellers and buyers together, to
disclose, to discuss, and apportion cleanup liability at the
time that it makes the most sense--before the transaction is
initiated, and provides DEP with a cleanup commitment. The
Property Transfer Act helps stimulate brownfields redevelopment
by ensuring that buyers are given a full opportunity to take
environmental considerations into the cost of the transaction
negotiations. It reduces financial uncertainties that can
hinder reuse opportunities.
More than 4,300 property transactions have occurred under
this program over the past 20 years. This demonstrates that
contamination, in and of itself, doesn't prevent the sale or
reuse of properties. However, we have a long way to go of it.
There are at least 7,000 properties that have been, or are
currently being, remediated through Federal and State programs
in Connecticut, and we anticipate that thousands more will come
up as redevelopment is sparked.
Ten years ago, we also put into place additional tools the
Remediation Standard Regulations that provide scientifically
sound performance standards to define cleanup end points. It's
a flexible approach, a risk-based approach, that allows
flexibility, and it provides environmental standards that take
into consideration human exposures, and addresses cost
effective and safe cleanup end points.
Ten years ago, Connecticut also began licensing
environmental professionals--those are LEPs--to oversee
environmental investigations and cleanups, and ultimately, to
verify that cleanups are accomplished.
More than 300 environmental professionals are now licensed
to conduct this activity. Through rigorous education,
experience and testing requirements, we believe they are
providing high quality service to our communities and to the
State.
We would hope that any Federal legislation would treat the
expenditures resulting from their remediation work, which is
conducted in accordance with the DEP-approved plan, in a
similar fashion to any work that the Department undertakes
itself.
We believe that Connecticut is in the forefront of using
State land restrictions also as a tool to minimize--to
eliminate the potential of people in the environment to be
exposed to contamination.
Here in Bridgeport, for example, the former Jenkins Valve
manufacturing plant was converted into a baseball park, a
skating rink, and a museum.
The ballpark was built with $11 million in private
investment, $1 million of local funding, and $2 million in
State funding.
The project has added 68 jobs to the local economy.
Connecticut DEP and its partners, the Department of
Economics and Community Development, and the Connecticut
Brownfields Redevelopment Authority, will continue to buildupon
these successes, but we need continued support from both
private and public investments if we are to speed up the rate
of brownfields redevelopment.
We appreciate all of the Federal funding that has been
afforded to us. In recent years, the U.S. EPA has awarded over
$20 million directly to municipalities and regional
organizations. EPA has provided approximately $1 million a year
for the last 3 years for Connecticut to support the
Department's brownfields work.
Federal tax credits that are being considered, such as
those proposed by Chairman Turner, and streamlined Federal
grants and loans, are tools that can help leverage these
existing resources, and really move brownfields redevelopment
along in the State.
We understand the value of the Federal partnerships. We
need to continue that and move that forward. We need to invest
in our village centers to bring us closer to achieving our
goals of environmental restoration, revitalized communities,
preservation of open space and farmlands, and sustainable
economic growth.
Thank you very much.
[The prepared statement of Ms. McCarthy follows:]
[GRAPHIC] [TIFF OMITTED] T9333.028
[GRAPHIC] [TIFF OMITTED] T9333.029
[GRAPHIC] [TIFF OMITTED] T9333.030
[GRAPHIC] [TIFF OMITTED] T9333.031
Mr. Turner. The Honorable Mark Lauretti.
STATEMENT OF MARK LAURETTI, MAYOR, CITY OF SHELTON, CT
Mr. Lauretti. Good afternoon, Mr. Chairman, Congressman
Shays, members of the subcommittee.
Thank you for your invitation to testify this afternoon on
the critical issue of brownfield redevelopment, and to provide
local officials with an opportunity to discuss impediments
which affect our ability to address brownfield-related issues.
I'm going to also echo the same comments and sentiments of
the speakers before me, because I think that once you work in
this area and spend a significant amount of time trying to
affect a brownfields remediation project, you tend to
experience the same types of things.
In the city of Shelton, which is located in Fairfield
County, we are a community which has made the transition to a
21st century economy, but one that still has remaining
brownfield issues, which are remnants of a heavy industrial
use, which were prevalent along our Housatonic River and
Naugatuck River Valley.
Beginning in 1991, the city of Shelton embarked on an
ambitious program of downtown revitalization and we have made
significant strides in working in partnerships with the U.S.
Department of Environmental Protection, the Connecticut
Department of Environmental Protection, and the Connecticut
Department of Economic and Community Development.
Our efforts have embraced the concept of a public and
private participation, and a meaningful citizens'
participation. Our efforts involve local and regional
officials, and have made important strides toward cementing
ongoing relationships. I would add that the Federal Government
has made important strides as well. However, several issues
still persist which require your attention.
Given our commitment to smart growth and the desire to put
abandoned properties back to work, it is inconceivable that
brownfields redevelopment is not a national priority. Funding
levels are meager at best and communities without experienced
staff have little opportunity to access the current programs of
the U.S. EPA. While some meaningful regional collaboration has
been fostered, such as our own Naugatuck Valley pilot, funding
remains a major impediment to timely progress.
The newer funding initiatives that have been offered by the
U.S. EPA are excellent in the ability of communities to access
remediation funding; however, these programs are also
underfunded and offered only once annually.
Programs that have developed experience and capacity are
hampered by the lengthy application and review process. We
applaud our own Region 1 officials for their efforts to provide
excellent technical assistance and timely responses to every
request we make. They are hampered, however, by limits of
funding and processes which are not conducive to fast track.
One program that stands out as being user-friendly is the
EPA Targeted Assessment Site program. This program combines a
simple, user-friendly application with timely decisions, and
very meaningful technical assistance to local and regional site
evaluations.
It is difficult to conceive that there is no comprehensive
registry of brownfield sites after all the time and investments
that have been made to launch national brownfields awareness.
This should be made an immediate priority. Congress should
consider a requirement that the U.S. EPA create this program,
fund it properly, and implement it over the next several years.
Considerable field work has been accomplished which could
immediately be folded into this program, and speaking for our
community, our information is ready to be shared with Federal,
State, and regional officials.
In respect to the committee's interest in obtaining input
concerning House bill 4480, our community's position is as
follows: Every tool possible should be employed to attack the
issue of sites that are dormant due to historical
contamination.
The proposal included in this legislation to offer tax
credits is appropriate and should prove to be a valuable weapon
in the arsenal of tools which will be needed to make real
progress in addressing the estimated number of sites needing
attention in Connecticut and nationally.
This is not the only approach to be used. Government needs
to find ways to lower the costs associated with brownfield
remediation. This will create the truest form of incentive for
private entrepreneurial expertise to effect a positive change,
and one that will benefit all. I would respectfully suggest,
however, that the offering needs to be user-friendly to both
large and small developments, and to communities that have
institutionalized programs, and those that lack staff capacity.
The private businessman is the best vehicle to use in
trying to expand the tax base through brownfield remediation
and we must allow them to do that.
The extent of brownfield problems has been described as a
federally created problem due to the Superfund law that was
passed in 1980. This is true in some respects. As a result of
that law, an environment has been created that discourages
owners to find out if their property is contaminated. This has
promoted owners of such property to abandon them, along with
general reluctance to sell properties, for fear of liability
and the associated cost.
Brownfields are defined as an abandoned or under-utilized
property that is not redeveloped due to the fear of real or
perceived environmental contamination.
The current brownfields law, the Small Business Liability
Relief and Brownfields Revitalization Act of 2002, provides
some protection against liability but does not address the high
redevelopment costs associated with redeveloping brownfield
sites and does not provide enough of an incentive for voluntary
action.
The current brownfield program has done a good job of
redeveloping what someone described as less problematic sites
that are either not that contaminated or in places that are
highly desirable. However, with the current level of resources,
the overall magnitude of this important issue can never be
resolved.
Let's mention something about how sprawl has affected many
States and how brownfield remediation can help reduce sprawl.
There is no question that new private investment is
naturally inclined to seek out opportunities that will allow
them to realize a reasonable return on their investment and to
minimize their risk. Brownfields should become the preferred
area for new private investment using financial incentives such
as tax credits to reawakening these forgotten neighborhoods.
Once this has started, pressure can be reduced to develop
pristine open spaces and our valuable farmlands for new private
investments.
Current EPA programs are a step in the right direction but
additional tools are sorely needed to foster more development
outside the U.S. EPA, particularly private sector funding.
Incentives included in legislation similar to House bill 4480
can certainly improve the climate for attracting new and
private investments in our urban centers, or to sites
possessing urban characteristics.
While we share the hope to use these financial incentives,
we also hope that the Federal Government recognizes that their
non-economic development activities, such as parks and public
spaces, also contribute greatly to community rebuilding and
that programs and financial assistance should be tailored for
those sites, which contribute indirectly to the economic
development as well.
We hope that the additional legislation which complements
House bill 4480 would be the motivation for owners of cold
storage sites--sites that are held onto by the current owners
with no intention of selling or redeveloping the land--to start
cleaning up the properties and eventually sell or redevelop the
site for themselves.
Again, on behalf of the city of Shelton, please accept our
thanks for providing us with the opportunity to support
national initiatives which will truly lead to smart growth.
[The prepared statement of Mr. Lauretti follows:]
[GRAPHIC] [TIFF OMITTED] T9333.032
[GRAPHIC] [TIFF OMITTED] T9333.033
[GRAPHIC] [TIFF OMITTED] T9333.034
[GRAPHIC] [TIFF OMITTED] T9333.035
[GRAPHIC] [TIFF OMITTED] T9333.036
[GRAPHIC] [TIFF OMITTED] T9333.037
Mr. Shays. Thank you.
Mr. Turner. Thank you very much for your preparation, and
the insight that you gave us today.
I will begin a round of questions, starting with Mr. Shays.
Mr. Shays. I understand, Mr. Chairman, that the mayor needs
to leave, at the very latest, by 2 p.m., so we'll get you out
of here.
Mr. Fabrizi. I called the office so I have as much time as
you want now.
Mr. Shays. To make it simpler, with the mic, I'll just go
down and you can answer down the line.
Bridgeport got the first grant, assessment grant. I think
there were two in New England for $250,000. It was an
assessment grant. I am interested to know--one of the good
things about that assessment grant was that--assessing the
properties--was that we realized that some properties weren't
as dirty as we thought they were, so then people actually came
in and started to develop these properties. Others had some
costs in cleaning up. So the question I have is basically, has
Bridgeport assessed most of its properties and now are we at
the point where we need to be doing more on the cleanup of
them? And I would like to ask each of you, Mayor Lauretti, as
well, but also, our two experts from the Federal and State
government to speak to the issue of assessment versus cleanup.
And I'll just throw out another one, since you will pass
the mics back. I'm hearing Connecticut has 700 sites. How many
are we actually able to assess and how many are we able to
clean up? In the New England area, about how many sites do you
think there might be and are we able to clean them up?
So let me throw all those questions out to the panel.
Mr. Fabrizi. Thank you.
The initial EPA agreement allowed us, the city of
Bridgeport, to identify, inventory, and prioritize over 250
brownfield parcels just in the city of Bridgeport alone.
And since conducting that inventory, we've had numerous
successes in brownfield redevelopment, both large and small, by
expanding parks, recycling industrial properties, modernizing
larger portions of Bridgeport to the waterfront.
But again, in response to the question, the successes to
date are not enough and brownfields continue to impact the
quality of life in the neighborhoods, the employment prospects
of our residents, and threaten public health in ways that we
are only starting to quantify.
But the financial impact of the brownfields is
significant--and our examination is based on our current zoning
and real estate investment trends. We've estimated that the
city foregos somewhere between $25 and $50 million in property
tax revenues every year because more than 400 acres of
brownfield sites are not realizing their economic potential.
Mr. Shays. So is the issue there that you need more money
to clean up, to help developers clean up? Is the city taking
ownership of some of these properties?
Mr. Fabrizi. The city has taken ownership to some
properties.
I have to tell you that we can't afford to continue to
allow our real estate to sit idle.
One thing that we did just recently that was--in some
folks' mind--termed controversial, per se, we used a State
statute that's 5 or 6 years old to allow a private developer to
use his own funds to clean up property at the tune--I
understand that 7 or 8 years ago, the city could have bought
this property for next to nothing, or foreclosed on it, we
would have assumed back then, a $7 or $8 million liability
cleanup, where somebody else had purchased the property and has
done $4 million worth of cleanup and has $1 million more to go
that the city has forgiven through council resolution to
forgive some of those past property taxes. That's very similar
in nature to the property tax credit that the mayor of Shelton
mentioned before, and so did Ms. Sanderson, I believe, and
also, Commissioner McCarthy.
That's one way to help with private developers as far as
the Federal tax income credit is concerned--takes away the
controversy of having people make bold decisions here. But we
will continue to make them as we go along.
We have identified, thanks to EPA and the State, we have
identified an inventory of properties. Now it's money to clean
them up. But here in Bridgeport, we can use a person full-time
to do that and we're strapped under our budget. That's how much
of a focus needs to be put right here at home, in the city of
Bridgeport.
You're talking 400 acres.
Mr. Shays. Thank you very much.
Mr. Fabrizi. Thank you.
Mr. Shays. Ms. Sanderson.
Ms. Sanderson. A couple of points. One is a great number of
cleanup grant applications to see the program ensure that it is
moving from assessments toward cleanup. We have seen that scale
start to tip.
With regard to the number of sites, I wish I had an answer
to that. I don't so we'll just keep looking. The nationwide
estimates are about half a million to a million brownfield
sites. We probably have more than our 10 percent share, given
the history of the area, so there are potentially 100,000 sites
out there to be assessed.
One statistic I think is interesting is the assessment
program finds one-third of the sites are not contaminated. So
it very much does look at that perceived contamination, as well
as actual. On the other hand, we certainly may find some very
contaminated sites as well.
In terms of inventories, we do give funding to our States,
and to our communities, to develop those inventories. And I
think, in the spirit of local solutions and regional solutions
to things, I don't know that EPA is trying to drive that so
much as give the tools to the communities looking at those
inventories and prioritizing those.
Mr. Shays. Could you put the mic a little closer to you.
Ms. Sanderson. My last thought is, it is seed funding. We
do realize that there could be an easy answer, sure, you know,
more money for cleanup. But, as you realize, certainly, to
balance the whole thing in terms of how much do you fund. And
so, we work very hard on the partnerships. But you heard our
seed funding, you heard our targeted brownfield assessment. To
jump start that--or givebacks. And partnerships with
developers----
Mr. Shays. Let me just interrupt you. Our time is very
precious here. I'll just ask you a followup question.
Can you think of a more important program, or would you put
this under EPA's, one of it's more important programs? How
would you rate this program?
Ms. Sanderson. Top priority, unequivocally.
Mr. Shays. It gets a good return on the dollar, correct?
Ms. Sanderson. Absolutely.
Mr. Shays. Let me ask you to pass it on.
Ms. McCarthy. Let me just advise you that under the
Property Transfer Act, we have already looked at 4,300
properties. So we already know that those properties are moving
forward. There is potentially, at this point, 7,000 in the
system.
Mr. Shays. 7,000, not 700.
Ms. McCarthy. Yes. We have focused--and we have funding
available at the State level that focuses--on assessments. We
believe that it's extremely important to try to provide
certainty to developers who are looking to redevelop these
properties. That is absolutely key.
Right now, I think we are also falling short on the actual
cleanups. I think that on the State level, municipalities are
struggling to move properties forward that have economic
potential, but the demolition costs can really get in the way.
There are certain costs that are always associated with the
redevelopment of these projects that, simply, there is no
funding source to turn to.
Mr. Shays. Do we have a lot of different gradations for
describing the brownfield site? And first, do we rate them
under certain categories?
Ms. McCarthy. No, we don't differentiate them.
We know that they're either mildly contaminated or heavily
contaminated. The assessment provides an opportunity to get a
sort of a feel for what it is.
Mr. Shays. So we basically categorize it by the dollars and
cents--it's going to cost so much to clean up.
Ms. McCarthy. I think if you're in Connecticut and you're
looking at a piece of property in an urban area, whether it's
been looked at or not, you put it into the brownfield site, you
put it in the contaminated site, because you're concerned about
the history in the State.
Mr. Shays. The assumption is it's a brownfield site, a
dirty site, but clearly, not a Superfund site.
Let me just, I want to make sure that the chairman has a
chance to talk to the mayors before they go.
Yes.
Mr. Lauretti. Any specific area that you want me to touch
on? I've got several questions with respect to sites, and the
number of sites. So any specific areas?
Mr. Shays. Tell me, from your standpoint, anything you
would want to qualify from what you've heard so far, or
emphasize on the answers so far?
Mr. Lauretti. We have done to completion--and to the point
where a property becomes productive--several sites in our
community, particularly in the downtown area. You have to do
multiple things--not just focus onsite assessments--to be
successful, and we have an ongoing program.
Mr. Shays. Do you spend a lot of your own city dollars to
do this?
Mr. Lauretti. We have. We have put some city money into the
equation.
Mr. Shays. You have almost 4 million square feet of office
space, correct? Close to that?
Mr. Lauretti. Correct.
Mr. Shays. It's huge. It's very much a suburban community
city, but you have a lot of residential areas. Those are clean.
So was your emphasis at the beginning to deal with the
clean sites? Are you taking the clean site dollars to help fund
the dirty site areas?
Mr. Lauretti. Actually, it's a combination of things. You
try to leverage every dollar that you can from every area that
you can, not only from some of your tax revenue, but try to get
private developers into the equation, to fund some of the
remediation, in particular.
I think that as the approval process becomes more
streamlined, and there is clarity as to what needs to be done
with the site, you will get that outside interest.
I mean, obviously, it has to be monitored--you can't give
them a free hand--but there has to be an incentive for people.
We, in government, have to be a catalyst to making that happen.
Mr. Shays. The bottom line is--and this is my last point--
you are not going to get this done without the third party, the
developer, actually--the individual owning the property
ultimately is going to have to bear a lot of the cost, but they
know what it costs, because you had an assessment, they know
the risks. But the market must then be able to support it; is
that a pretty fair assumption?
Mr. Lauretti. That's a pretty fair assumption.
Mr. Shays. Thank you very much.
Thank you, Mr. Chairman.
Mr. Turner. Mayor Fabrizi, first, I'll tell you why I'm
going to ask you the questions that I'm going to ask you. I'm
going to give you an opportunity for a commercial in the middle
of our hearing.
Mr. Shays. Good man.
Mr. Turner. In addition to the opportunity to learn about
the differences between the various programs that occur in each
State and the effectiveness of our Federal programs--how they
are working, how they can be improved--what comes out of a
hearing like this, in addition to where it is locally, your
words are taken down, as you can see, and transcribed, and
become part of the Federal record.
It's we, as a committee, who help form policy on the
Federal level, and to help advance legislation.
On the CDBG issue, we had six hearings. From those
hearings, we heard from representatives from all over the
country. We took their testimony and we put together a 75-page
report that passed over our full Committee on Government Reform
on a bipartisan basis that listed some of the problems of CDBG,
but also, some of the great things about CDBG.
On the issue of ground use, we are also going to be doing
the same. In addition to your testimony today, we will be doing
a report of the subcommittee that will go to the full
committee. And, hopefully, we will have some insights as to
framing the issue, some of the successes that we are having,
and then some of the solutions that are going on in various
communities. And I tell you that, because the next questions
that I'm going to ask you will seem like you've already
addressed them, but again, I want to give you an opportunity to
give us a commercial that we can use in this record to put in
our report as to why brownfields are important.
So with that, the two mayors can do this, I'll start with
you, Mayor Lauretti, since you have the microphone.
If you can talk about the issue of economic development in
urban areas, because almost all of the literature that we have,
everybody who testifies, everyone agrees that the largest
impediment to economic development in urban areas, areas that
have been developed where you're doing redevelopment, is the
issue of the availability of land.
Because you have the availability of land, and then
brownfield as an opportunity, it would seem to lend itself
that, if you had the proper tools, and the proper funding, that
brownfields could be an excellent fuel for economic development
in the community.
If you can tell us about that, it will be an opportunity to
see what can happen if you had the resources for development in
your community.
Mr. Lauretti. I don't think there is any question about it,
that brownfields redevelopment is an excellent economic
opportunity for any municipality and State. And I think we're
proving that in Shelton.
But, as I said earlier, you have to do several things that
run parallel with one another, it can't just be one thing,
because once the clock keeps ticking, you lose your economic
cycles, and then investment opportunities are not conducive to
get the other part of the equation in motion.
What we did many years ago, probably going back 12, 13
years ago, was establish a master plan for our downtown area
that borders the Housatonic River, and we are now 10, 12 years
later, starting to see the fruits of everyone's efforts, both
the Federal Government, and the State's participation
financially, as well as the taxpayers in the city of Shelton,
because now we've got private development at the table in a big
way that is just incredible.
In the next 3 to 5 years, people are going to be in awe of
what goes on along the Housatonic river and the city of Shelton
from an economic development standpoint. And we are that far
along because we had a plan, and we made commitments, and we
fulfilled our commitments, and we're continuing to drive the
issue.
So I think that, from an economic standpoint, you've got to
look at that and make that part of what drives your economic
engine for your municipality.
Mr. Turner. Before our recess, I'll ask the second part of
the question, and that is, once we establish that funds, once
available to you, would result--funds available to you for
demolition, cleanup would result in land development, and
therefore, economic growth, the sources of those funds become
an issue. And I think many times there is pressure on local
governments to participate at a higher level of economic
development when your tax structures are not set up for
economic development purposes, and the basic functions, the
services that you have to provide to your residents at the
local level are just so important.
You talked a minute ago about the financial squeeze that
the cities have, the decisions that you have to make, and
making certain that you fund the services in the community.
Mr. Lauretti. Well, that's the balancing act that every
local official has to do. And the process is ongoing.
As an example, many years ago, we invested a lot of city
money into open space purposes. But we've also, at the same
time, invested our resources into the infrastructure of our
downtown, where all the brownfields are located.
And I keep going back to the point that you've got to give
the private entrepreneur the opportunity to fit into the
equation. And a lot of it has to do with the process, and how
long the process takes, and is it reasonable, and is it cost
effective.
As an example, we have several locations right now in the
downtown area that have had ongoing contamination, and to sit
there and do nothing allows that contamination to keep
affecting the environment. But when you have someone that wants
to invest in that property, now you say to them, OK, you can do
that, but you're going to have to do many, many things that are
just cost ineffective, so that person goes away.
And it's almost kind of like a defeated logic that you have
here, because it's OK to let the property sit there and
contaminate a river, but when someone wants to come in and do
something, you tell them ``well, listen, you've got to monitor
it for 30 years, so do that, and we'll give you the
approvals.''
And I've got to be very frank about this, because this is
the real life that we experience, and it is about the
environment, it's about people's health, but it's also about
the money. And you can't lose sight of that. So we've got to
find a happy medium where everything can coexist.
Other things that we've done and established in our master
plan is we've adopted an anti-blight ordinance that allowed us
to take down properties that could become firetraps and
locations for illegal activity, for drug transactions, places
for homeless, and you name it, it occurs there. So the anti-
blight program that we have has served us well and we've done
that in conjunction with brownfields remediation.
That's where we've had a real strong advantage in being
able to move it along a lot quicker than a lot of people
anticipated.
Mr. Turner. Mayor Fabrizi, the first issue, the issue of
the availability of land being restricted, for economic
development for your city, have value for brownfields
redevelopment, and make a difference in making productive land
available, utilized.
And then also you talk about the funding pressures that you
have as a city, the competing interests providing basic
services, and also, trying to fund some of these great
opportunities.
Mr. Fabrizi. Those are all the right questions to ask, as
far as frustrations and issues and concerns go.
Bridgeport is made up of 17 square miles, 16 square miles
are built out on, there is not much available land at all.
With the other part of the chemistry, you have over 250
parcels identified as brownfields sites, totaling almost 400
acres, with lost revenues, lost job potential, and everything
that goes along with that, it gets seemingly more frustrating
each and every day.
When developers are knocking on your door to either build
or rebuild, or redevelop or invest, and you just don't have the
property to identify, to put these parcels together, mainly
because of the cost to clean up and remediate these
properties--that's where it's come up time and time again,
regarding remediation, regarding developers, regarding what can
we do as far as tax credits, or an invite to those who are
investing their money, or who are going to.
And we took a page out of Shelton's book and New Haven's
book as far as anti-blight is concerned. And we know that these
properties also invite detractors to the quality of life--
regardless if it's homelessness, if it's blight, if it's
illegal activities.
But also, in addition, you talk about balancing the budget.
Every year we are faced with increasing costs--if it's health
costs that are spiraling out of control, if it's utility costs,
but now, we have to take into consideration what senior center
do we close, what firehouse do we close, how many police and
fire recruitment classes do you hold off. So the impact is
severe.
Mr. Turner. My next question is, in 2002, the Brownfield
Remediation Act that was passed, providing opportunity for some
liability relief for potential purchasers who were looking to
redevelop property.
It also changed some of the tax treatment of the
expenditures and provided for some relatively small grant
programs that you both discussed today.
Many critics of those programs--they are not critics in
terms of saying that this should not have been done, but they
are critics in terms of the volume of commitment that has been
involved--say that the new tax treatments and the small grants
have allowed people to invest in those pieces of property that
have the least amount of contamination.
We are finding in the assessments grants, when the
assessment was done, others have not been contaminated, but
some we all know are, and they remain there, abandoned, and
robbing the economic potential, and also are a blighting
influence on the properties around them. We've all invested in
infrastructure, and we continue to invest in infrastructure to
support them, and our school systems, our police and fire is
lost.
Would you please talk for a moment about the need for
additional funding, because we hear many times of the sites
that are worse. There is an understanding of the extent of the
contamination exceeding the value of the property. Even when
it's cleaned it will be a negative.
Since, it's a federally created issue, really, you have
this issue of this negative dollar being invested.
Can you speak about that for a moment?
Mr. Fabrizi. I certainly can, because we've experienced it
in the city of Bridgeport each and every day.
And we have what I term as active and inactive brownfields.
An active brownfield, GE corporation, which is a big plant
has 60 some-odd acres. However, by law, they have to have 142
buildings to house 12,000, I believe, during the war time. And
they were big manufacturing here in Bridgeport. And I truly
believe they keep their property up. But to demolish those
buildings, the environmental concerns, I know will be in the
hundreds of million of dollars, I think. I'm not an expert
there.
So why does a big company, with a great asset, just
continue to maintain the status quo? But by maintaining the
status quo, this allows the city of Bridgeport, or other active
economic development, to come in and revitalize the property,
and expand our tax base.
I think on the Federal level, especially with companies in
that respect, something needs to be done as far as pushing them
along, and just maintaining property for 30, 40, 50 years,
inactive where a company has gone out of business, like
Remington, owed $7 million of back taxes, and transfers the
property to an LLC, and other places like that. Those are the
frustrations that we see all the time.
Mr. Turner. Mayor Lauretti, if you can just talk about the
issue of--a lot of the properties, at this point, are
properties that do not have excessive contamination, many of
them have light contamination. Speak for a moment, if you will,
about those properties, and you don't have to be specific if
you don't want to, but of the need of the properties that exist
in your community, where you know there is real--not a
Superfund site--but there is real contamination. The cost of
decontamination exceeds the value of the property once it's
cleaned, but if that property is available, it would be a great
economic opportunity.
Mr. Lauretti. I actually believe we have gotten to the
point where we have been able to reverse that negative trend
just through the site assessment program that we have received
through the EPA and Region 1. I made in my comments earlier how
helpful those were.
When you are able to demonstrate to the private
entrepreneur that the costs associated with bringing a property
back, to produce an economic benefit, both for the tax rolls,
and for the entrepreneur, that serves as a great stimulus to
get people interested. And we are actually seeing that happen
now in an area that is historic, like many cities along the
east coast that have been old industrial hubs for hundreds of
years, and 100 years ago, that have laid fallow over the last
40, 50 years, just because of the contamination.
So I think that things like that--and I again need to
emphasize how important it is to clarify the regulatory
process, because we don't want to regulate any property out of
the equation--we want to make sure that there are opportunities
to be able to understand just what it is that we can do, and if
there are other uses, if they are not economic, but are there
other uses that these properties could contribute to the
surrounding area that will help reduce the economics of an
area.
And I mentioned in my opening comments about how it's
important to establish walking areas, and green belts, and
public gathering places that could serve those uses. They do
provide a real benefit to the vitality of any strong economic
area.
So I think that we can't focus on just one thing, we have
to focus on multiple issues, when you're looking at an area,
particularly from an economic standpoint, if the site has
strong economic potential, then that means that the surrounding
sites around it have the same type of potential, as well.
So it's the big picture that we have to try and see when we
are drafting legislation to help get past this brownfield
remediation issue. So I've become a big fan of the site
assessment program, that's yielding big benefits for us.
Mr. Turner. Ms. McCarthy, Connecticut has a tax credit
program--we are going to let both mayors to exit. I appreciate
your time.
Mr. Lauretti. I have a little bit more time. I can stay.
Mr. Turner. Thank you.
The taxpayer program, you mentioned this, bill 4480, which
is the brownfields bill that is proposed. In that tax credit
bill, we have a requirement that for taxpayers to be eligible
for the tax credit, they must go through the voluntary action
program. Is there such a requirement under Connecticut's tax
credit program? And how does the Department of Economic
Development work in conjunction with you on making certain that
the extent of the cleanup and the remediation works?
Ms. McCarthy. Again, our hope is that we could look at the
language of the legislation, make sure that it recognizes the
full range of cleanups that are ongoing--both at the Federal
and State level--because we have something in our system. We
allow both publicly funded cleanups as well as private cleanups
that are overseen by licensed environmental professionals. So
it's not completely clear to us that the bill as it's currently
crafted would allow a tax credit to the full range of cleanup
activities that are being done on properties in Connecticut.
So that's one of the things that we would like to make sure
that it happens, because we do believe that tax credits are a
terrific opportunity to bring the brownfields redevelopment to
happen.
Mr. Turner. My question is the Connecticut Tax Credit
Program.
Ms. McCarthy. Oh, I'm sorry.
Mr. Turner. I was asking how is your experience in the
coordination between the Department of Economic Community
Development and its tax credit program and your voluntary
action program.
Ms. McCarthy. My apologies.
Actually, we have a very good team that meets on our
brownfield development efforts. I would say that the
coordination is very good. Part of the challenge that we face,
I think, is that it's often reactionary.
If someone comes into the system and wants to clean up a
brownfield, it's an opportunity for us to get together and
marry the various tools, including tax increment financing,
which I think holds a lot of promise for urban brownfields
redevelopment.
And I guess the problem that we have is that there are many
sites out there that just are not on the radar screen, for a
variety of reasons. And we have not put together a proactive
team that would be working with local communities to try to key
those up for redevelopment opportunity.
That's the next discussion for us.
Mr. Shays. Can I ask you a question for a second?
Just talking about the proactive team--is the success or
failure basically dependent on the approach of the communities,
the mayors who run them? Are some towns really quite aggressive
and doing particularly well, and others just simply are not
aware of what they could be doing?
Ms. McCarthy. I think that it's fair to say that's one of
the factors.
There are some Mayors, obviously, some that are with us
today, that are very aggressive and understanding all of the
benefits that are out there that they can take advantage of.
But there are others that are not.
But when you're looking at brownfields redevelopment in an
urban area, there are two things that need to be done. One is
you have to keep the obstacles, or the costs, to develop any
open spaces very high.
In an area like this, every piece of property is very
valuable, and you're trying to drive development in the urban
areas. So if you're zoning, and if you're conservation
development plans in this community are strong, you will take
some of the open spaces off the list of development.
And the second thing you need to do is really work hard to
make it attractive to develop in the urban areas. And I think
you need to understand, and I'm sure we all do, that's not just
about the contamination issue, you know.
A city--there are many cities that do very well in
brownfields redevelopment. They address the security issues,
the lighting issues, the transportation issues, the transit
issues, the education issues, because it's all about whether or
not that site is marketable, what is its economic potential.
Then the brownfields--the contamination area--is manageable and
you can put together the right tools to make that happen.
But I think you're absolutely right when you raise the
issue that many of the crew is gone, and we are at the next
level of development where we really need to put our heads
together, because it's not clear that they have the kind of
economic strength they need to get over the contamination part
without additional incentives from the public sector.
Mr. Shays. One of the points, you're really suggesting that
from the EPA standpoint, there is really two benefits here.
One benefit is cleaning up a dirty site. The other one is a
policy that I think is inherent to both the State and Federal
Government, and that is that we are looking to see the
development back in our urban areas, so we are not continuing
to sprawl, make things work better, and so on.
Mr. Lauretti. If I may, I'd just like to expand on the
Commissioner's point. I think it's a good one, because we've
been able to do that in our community by leveraging the CDBG
block grants program that you have to do public infrastructure
improvements, which eventually foster economic development. You
send a signal to private development that, you know, you've
made a commitment, and that certain things are going to happen,
and that's why it's important for government to be the
catalyst. I really believe that this is the role that we need
to play.
So while there may be an indirect approach, it still gives
you the same net result.
Mr. Shays. Thank you for that.
I would like the EPA to just respond to the added incentive
of wanting to get people back into urban areas.
Is that a policy that is intuitive on the part of both the
Environmental Protection Department, or agencies, or am I
thinking it should be, but it isn't part of the policy?
Ms. Sanderson. We have a very active, strong program that
is growing. We are doing more and more as we have more success.
A key partner for us is our smart growth office, and the
investment in the resources that they also have. We have to
really take a hard look at those development opportunities.
So that has been more mainstream for us.
Mr. Shays. So is that a ``yes.''
Ms. Sanderson. Yes.
Ms. McCarthy. Yes.
Mr. Shays. Thank you.
Mr. Turner. Ms. Sanderson, concerning Connecticut's
Department of Environmental Protection programs, under the
voluntary mediation program, I have two questions for you.
One, it says that the responsible parties may not be a
party to the covenant not to sue.
And I'm not certain that is unique in Connecticut, or is
that something that you see region-wide?
The second thing is that Pennsylvania has just entered into
an agreement with EPA. What is your experience in looking to
providing States with a broader program?
Ms. Sanderson. It does vary. I'm familiar with the program
in Massachusetts. They have a program that----
Mr. Turner. It varies.
Ms. Sanderson. I believe that is very much driven by State
law.
Mr. Turner. Concerning the responsible parties.
Ms. Sanderson. Yes.
I'm sorry, your second question was?
Yes, Pennsylvania, exactly.
We do not have formal memorandums of agreements with our
States. What we have, and what we found has worked in New
England so far--and we are always looking for new ideas--is we
have cooperative agreements with our States that have the
conditions of what they use their funding for, and how they
work together. That has worked for us well here in New England.
We have the advantage of proximity, and being familiar with
each other from other programs. So we do depend very heavily
upon our State voluntary cleanup programs, and that is a term
and condition of our cleanup grants. We feel so secure in our
State cleanup programs, we actually defer that piece to them as
a condition of those cleanup grants.
Mr. Turner. Ms. McCarthy.
Ms. McCarthy. I actually worked in Massachusetts before
Connecticut. Both of them are the same.
Mr. Turner. What about grants.
Ms. McCarthy. We actually have an agreement with EPA Region
1 on our corrective actionsites, where we work in alignment
with one another, in which we coordinate the cleanup of those
sites. It's a fairly new program, but so far, it seems to be
working very well.
It's very clear that the regulated community appreciates
the fact that we are trying to standardize from the cleanup
levels and the process to get there, and our reviews, so that
it's conducted in a timely way.
I raised the issue of certainty before as being critical.
This increases the certainty, so that if you're expending
funds, you're getting to a finish line that is recognized at
both the Federal and State levels.
The more we can coordinate that, the better off we're going
to be.
Mr. Shays. I would like to know the best thing about this
program and the worst.
Ms. McCarthy. Start with me.
Mr. Shays. Yes.
Ms. McCarthy. The best thing about the brownfields program
is I think it's gotten a lot of visibility at the Federal
level.
The cleanup of brownfields, to me, is absolutely vital if
you're going to maintain urban areas that people want to live
in. You're going to be able to protect the open spaces, and the
farmlands that we all want to protect. I think it's absolutely
vital for quality of life that we move forward on this.
I believe the money toward assessments has been very
valuable. I totally agree that brownfields inventories is
probably one of the weak links, is that it would be great to
have a much better understanding, so that you actually have
sites up there that developers can come and choose from and
understand.
Mr. Shays. I'm going to come back to that.
So the worst is the inventories?
Ms. McCarthy. And the simple fact that we have this many
sites, and so few staff to oversee them in moving forward, is a
significant problem.
We have to generate that kind of enthusiasm in the private
sector. We have to expand our ability to oversee these sites.
Mr. Shays. I want to know the best and the worst from your
understanding.
Then I want to come back to what that tells us.
Ms. Sanderson. I would say the best is it forges
partnerships, and it is not top down. It really tries to
provide grant funding to communities without dictates and
allows regional solutions, which is somewhat different from
other programs.
Mr. Shays. And worst.
Ms. Sanderson. The Federal process of getting Federal
funding can be cumbersome, and we have tried to chip away at
that process, and we can probably continue to do more.
Mr. Shays. I'm going to just come back and react to what
you said, but I'd like the mayor to respond.
Mr. Lauretti. The best is the final remediation of the site
and the worst is getting there.
Mr. Shays. That's really helpful.
Staff of Bridgeport had a huge benefit in that there were
some sites that nobody wanted to touch, and just having an
assessment, the developers, the owners of the property, in some
cases, realized that it wasn't as heavy lifting as they
thought. So I felt like the assessment was, we got a big
payback in some cases, because some properties started to move
just by the assessment, and nothing else.
So what I'm wrestling with is whatever dollars you have, it
is better to do more assessments of more properties, given that
logic; or now that we've identified so many sites, is the
problem that we've identified, thanks a lot, but we need help
in cleaning it up?
Maybe you can respond to that.
Mr. Lauretti. I think a little common sense needs to be
employed with respect to that.
Site assessments are essential and necessary in
understanding the nature and the cost associated with the
nature of the remediation. And the ones that make sense, you
should absolutely do.
Ms. McCarthy. I think, given the age of some of these
programs, the assessment has been very useful, but right now we
have to go to cleanup.
Mr. Shays. OK, but what you said, though, is that the
inventory isn't there, which tells me that the assessment
hasn't been as good as I thought it was.
Ms. McCarthy. I think the assessments have been done, but
we haven't found a great way of developing a list and getting
that available.
Mr. Shays. It's not that the assessments haven't been done.
Ms. McCarthy. Many have been done. We don't do a great job
in organizing those.
Mr. Shays. Who should be doing that, the State or the
Federal Government?
Ms. McCarthy. I think it's done at different levels but it
would be very useful if we could coordinate it.
Mr. Shays. If this committee were to make a
recommendation--that's one of the things that this committee
does, it basically attempts to determine what the problem is,
and what are the solutions recommended to a variety of
municipalities--so who should be doing that coordination?
Ms. McCarthy. Well, if you're offering the Federal
Government, it would be a great place to coordinate that
activity.
Mr. Shays. It mandates the States or local governments.
Ms. McCarthy. Well, I know EPA has given grants to have
this happen at the local level, and I know they've tried to
spur the State to get involved in these activities. We agreed
that it needs to be done.
Mr. Shays. It needs the coordination.
Ms. Sanderson.
Ms. Sanderson. We have seen many more applications for
cleanup grants and for revolving loan grants. So one thought
would be looking at some of the fixtures made to the loan
program, and to reward successful grantees who have gotten
revolving loan grants. You made a loan, you certainly have the
opportunity ahead of you to have supplemental funding for the
application process, and reward high performance.
Mr. Shays. I just want to thank our witnesses for your
comments. I appreciate it a lot. It's great to have you here.
I appreciate you coming from Boston and Hartford.
Mr. Turner. I thank all of you for participating, for your
insights today.
I want to give you one last opportunity, if something
occurred that you want to respond to. We are finished with our
questioning, if you have some statement that you want to make,
this is your opportunity.
Ms. McCarthy. Could I just make one final pitch for the
bill, actually, that is proposing to look at this in a
comprehensive way?
I'm serious. The world doesn't dissect things the way
Government does. To go into a brownfields site and say the only
thing we can deal with is the hazardous waste component, but we
can't deal with the demolition, of the asbestos, of the lead,
of the pesticides--that's not how the real life works. So if we
could really look at this as a more comprehensive approach, it
really makes ultimate sense I think to all of us, even us
bureaucrats.
Mr. Turner. Thank you for that.
Anything else? If not, we will turn to our second panel.
Our second panel includes Elizabeth Barton, Joseph Carbone,
Robert Santy, Stephen Soler, and Barry Trilling.
We are now on our second panel of witnesses.
Before you begin your prepared remarks, the red lights
indicates your time has expired, the yellow light indicates
when you have 1 minute left to conclude your remarks.
It is the policy of this committee that all witnesses be
sworn in before they testify.
Will you please rise and raise your right hands.
[Witnesses sworn.]
Mr. Turner. Let the record show that all witnesses have
responded in the affirmative.
We will begin with Ms. Barton, partner of Day, Berry &
Howard. Ms. Barton.
STATEMENT OF ELIZABETH BARTON, CHAIR, ENVIRONMENTAL AND LAND
USE DEPARTMENT, DAY, BERRY & HOWARD, LLP
Ms. Barton. Thank you.
Mr. Chairman, Congressman Shays, members of the
subcommittee, I thank you for the opportunity to appear before
you today on the topic of brownfields redevelopment in
Connecticut and the new England region.
My name is Elizabeth Barton. I am a partner with Day, Berry
& Howard, Connecticut's largest law firm.
In addition to our five Connecticut offices, Day, Berry &
Howard has offices in New York City and Boston.
I chair the Environmental and Land Use Development at Day,
Berry & Howard and have been practicing in the environmental
and land use area for over 20 years.
I am resident in Day, Berry & Howard's Hartford office.
I am presently the Secretary of the Connecticut Chapter of
the National Brownfield Association, a member of the National
Brownfield Association's Advisory Board, and a Co-Chair of the
Government Affairs Task Force of the Connecticut Business and
Industry Association's Environmental Policies Council. I have
been a member of the Board of Directors of the New England
Council and also the International Council of Shopping Centers
for many years. My experience in the brownfield arena is as
counsel to the universe of stakeholders, including owners,
developers, lenders, and governmental entities.
I have been extremely fortunate in that my experiences in
the brownfields arena span the full spectrum, from the very
large urban properties--specifically, to Brass Mills Shopping
Center Mall, in Waterbury, CT--to the small parcels being
developed by nonprofit organizations.
I also am working on a true public-private partnership with
the Fairfield Metro Center, in Fairfield.
Brownfields redevelopment, as I think many of the people
have spoken to it today, have acknowledged is a win-win for all
State owners.
I applaud the efforts of this subcommittee. The emphasis
today is on job creation, job retention, both of which directly
rely on economic health and more progress.
I would like to touch on several points. It is real estate
development, with unique challenges, that carry additional
budget line items. Brownfield projects are real estate
projects. There is a need to make it economically viable to
pursue the brownfield redevelopment completion. There are
direct economic incentives such as grants, loans, and tax
credits, but also, the lack of predictability translate into
additional project costs.
These are three significant impediments, the lack of
coordination, the continuing liability, and the lack of
finality to the plan.
A second point, unfortunately, for all of us trying to
address these issues, it is not a one size fits all situation.
A specific brownfields property where it might cost more for
remediation than the value--some might benefit most from either
tax credit measures such as that provided in H.R. 4480 or
incentives that encourage and facilitate the assemblage of
clean and not so clean properties. The latter, however, may
require greater employment of resources to better address
concerns about the predictability and finality of the process
and any residual liability for the owner or developer of the
site. Development actually requires us to look again into very
hard public policy. We need to address those.
We need to get more properties to the market, and we need
to get more developers interested.
We need to realize from the Connecticut transfer experience
that we need a clear and reasonable end point.
Thank you again for the invitation to be here today, for
your continued support for the brownfields redevelopment.
Thank you.
[The prepared statement of Ms. Barton follows:]
[GRAPHIC] [TIFF OMITTED] T9333.038
[GRAPHIC] [TIFF OMITTED] T9333.039
[GRAPHIC] [TIFF OMITTED] T9333.040
[GRAPHIC] [TIFF OMITTED] T9333.041
Mr. Turner. Mr. Carbone.
STATEMENT OF JOSEPH CARBONE, PRESIDENT/CEO, THE WORKPLACE, INC.
Mr. Carbone. Thank you, Mr. Chairman, Congressman Shays.
I'm Joe Carbone. I am president of the Workplace, Inc. We
act as the regional work force in southwestern Connecticut.
From the standpoint of work force development, we cover the
town of Beacon Falls, CT.
I get the opportunity here today to not get into kind of
the fine print of brownfield sites, but sort of a nice
ancillary kind of a program.
The Workplace has received two Federal competitive grants,
and participated in a third one that provides occupational
skills. It is actually a program that began about 5 years ago.
We have two completed projects. I have a third project under
way right now in Stamford, CT.
As part of my testimony, I have given you information and
reports really breaking down all the work that has been done in
the two areas and also work that has been under way so far at
the Stamford region.
From the standpoint of jobs--and that is what our business
is all about--there is a very, very clear distinction between
both the nature of the jobs that are being marketed in the
environmental health area in this region and the wages that
comes with them.
We are talking very clearly about jobs, jobs that are
really at the point of a career and can grow as years go on,
and opportunity for further education that can lead to
increasingly better real kinds of opportunities, careers for
people.
I am here today to say that we are offering our continued
support for jobs. About $2 million a year has been allocated in
the bill, and there have been anywhere from 10 to 12 sites each
year that have been designated to receive it.
In our region of Connecticut--I just want to give you an
idea, I just took some numbers here from the completed sites,
which is the Bridgeport project and the Valley project, and we
are looking at the cost here of the combined sites, a $400,000
grant; and they were entered into the program; 103 people
entered, actually were trained; 19 of them did complete. These
numbers are much greater than the usual trend in the American
work force--90 percent completion. And in terms of the number
of people that entered employment, we are looking at 87
percent, an average wage of $13.81 per hour.
It is not just a case of something that can lead to a
career track. For a very small part of the package, there is a
great return. These opportunities for training, these are
people who reside in the designated areas that are brownfields.
Sometimes it appears to be something negative. By the way, a
number of them became misplaced, because they worked in
factories that were vacated and they are picking up an
opportunity which would result from the cleanup that is going
on, or has been going on, and will go on in the future.
In terms of opportunity, it is great; good for our region.
And I guess the important point that I want to at this point
leave you with is that most people really didn't recognize the
opportunities, the field of environmental opportunites that is
out there. We don't have difficulty taking people from training
to employment and to employment again in these higher wage kind
of jobs.
To the extent that you can either continue or increase
that, the opportunities are greater. I think we are feeding
into a sector of the workforce where there is clearly a growing
need, not just here in our region, but across the State, and
certainly, across the northeast, as well.
The last point I want to make here is that as hard as we
worked in the field of brownfields redevelopment, our job is to
bring that work with us.
I would really be remiss in sitting here today if I didn't
thank you. The gentleman in front of me, seated to your left,
he has been a great friend of workforce development in
southwestern Connecticut.
I have been here at the Workplace now for 10 years,
actually 10 years as of next week, and I have been engaged in
an effort to try to build and kind of build our current
workforce system to not just make it larger, but to service
more people, to actually service those that are part of our
system even better.
[The prepared statement of Mr. Carbone follows:]
[GRAPHIC] [TIFF OMITTED] T9333.042
[GRAPHIC] [TIFF OMITTED] T9333.043
[GRAPHIC] [TIFF OMITTED] T9333.044
Mr. Shays. I believe in what you are doing.
Mr. Carbone. And I thank you.
Mr. Shays. Thank you.
STATEMENT OF ROBERT SANTY, PRESIDENT, REGIONAL GROWTH
PARTNERSHIP
Mr. Santy. My name is Robert Santy, and I am president of
the Regional Growth Partnership [RGP].
RGP is a non-profit economic development organization
comprised of public and private sector members in 15 towns in
south central Connecticut.
We perform a variety of functions in our region--
Connecticut being one of the two States in the Nation that
lacks county government. I will come back to that in a few
minutes. For example, we support transportation initiatives
such as the expansion of our local airport, increased train
stations, and infrastructure improvements for our highways.
Mr. Shays. Do you have a counterpart in the greater
Bridgeport, Stamford area?
Mr. Santy. I would say--and BRBC, are similar, but they
don't have the same economic development functions. Metro
Hartford Alliance and--are more similar to what we do.
Mr. Shays. Got you.
Mr. Santy. We provide a variety of services to our towns.
In our region, we provide our local economic development
offices with support ranging from grant writing to networking
opportunities and we seek ways for our region to work together.
We are a small State, made up of small communities. Our
average town size is about 25 square miles. So really, our
towns need to work together, if they are to achieve the
economic grout that we need to achieve as a State.
One example of what we have done for our region is our
brownfields development program, and of course, on the other
side of that one is greenspace preservation and smart growth.
And RGP has been a leader on these issues for several years.
RGP has been working on brownfield projects for almost 10
years. We have been the recipient of $1.25 million in grant
dollars from the State Department of Economic and Community
Development to conduct site assessments on properties in our 15
towns.
To date we've done phase I, II or III assessments on over
85 sites in our 15 communities, and these investigations have
assisted municipalities and private property owners to expand,
purchase, sell or lease their buildings. In every case, the
project has been stalled due to the lack of funding to complete
the necessary testing and would not have proceeded were it not
for our funding.
In addition to State funding, RGP has been the recipient of
two Federal EPA grants. In 2000, working in conjunction with
our council and government, we secured a $200,000 assessment
grant. And in 2003, RGP was awarded a million dollar revolving
loan fund. And we are currently working to close our first loan
under that program in the city of Meriden.
However, even with our successful track record, it has been
difficult for our organization to obtain funding. We have a
great partnership with both EPA and the State DEP, and the
Department of Economic and Community Development, but actually,
qualifying for Federal funding has been an issue for us. We had
to expend a considerable amount of money to pay attorneys to
work with our Council of Governments, and get an opinion from
our Attorney General, to argue that we, in fact, qualified as a
political subdivision in the State, which is the requirement
under Federal statute.
In other States, of course, with governments, this would
not be as big an issue, but there are also issues, I think, in
other States.
We hit a similar block recently in talking to the National
Park Service about Groundwork USA and becoming a groundwork
trust, which is funded with EPA dollars. And although in other
States Groundwork USA has worked with the counties and regional
planning agencies, they have not worked with a regional not-
for-profit organization to perform similar functions.
We are convinced that a regional entity advocating and
managing brownfields redevelopment should be eligible for these
programs and is probably one of the most efficient
organizations to administer them.
Our 15 towns clearly have limited resources. You spoke
earlier about Bridgeport and Shelton taking advantage of these
programs, other towns that don't. There are certainly towns
that cannot afford the administrative burden of some of these
programs, so we hope we address that by doing it on a regional
basis, and working with our towns.
I mentioned earlier we are close to closing our first EPA
revolving loan fund loan in the city of Meriden. The important
EPA program was considered essential for our region in order to
have access to the remediation dollars, which, as we know, are
difficult to identify in brownfield projects.
The RFL funding was a perfect fit for the Meriden site.
There were no complicated financial issues, however, the
process that we had to undergo to get to the point of drawing
up loan documents has taken us a year-and-a-half. Difficulties
arose due to a pending lawsuit against a potentially liable
party, which required detailed opinions from many lawyers
regarding the Superfund.
Additional problems arose when we realized much of the
contamination was petroleum, instead of hazardous waste, and
our application was for hazardous waste. So we weren't able to
do the petroleum cleanup because our dollars were dedicated to
hazardous waste, something Commissioner McCarthy mentioned when
she said maybe we can broaden some of these definitions.
Fortunately, these issues have been worked out, but as I
mentioned, the process has taken us a year-and-a-half, and we
are just about to close the loan.
I'd also like to turn for a moment to your bill, Mr.
Chairman, H.R. 4480, which is co-sponsored by two Connecticut
Congressman that I am aware of, Congresswoman Nancy Johnson and
Congressman Shays. And I would just say, in the interest of
time on that, that again, it is a toolbox that needs to be full
in order to do the stuff effectively.
And I would say that most of the low hanging fruit, to use
a phrase that comes up again and again today, probably has been
dealt with, and we deal with a lot of smaller sites, with a lot
more difficult issues. And the more options we have, both on
assessment remediation and redevelopment, as far as financing
for those functions, the better off we are. So we would welcome
new tax credit legislation at the Federal level.
Thank you for the opportunity.
And I'd be happy to answer your questions.
[The prepared statement of Mr. Santy follows:]
[GRAPHIC] [TIFF OMITTED] T9333.045
[GRAPHIC] [TIFF OMITTED] T9333.046
[GRAPHIC] [TIFF OMITTED] T9333.047
[GRAPHIC] [TIFF OMITTED] T9333.048
Mr. Turner. Mr. Soler.
STATEMENT OF STEPHEN SOLER, PRESIDENT, GEORGETOWN LAND
DEVELOPMENT CO.
Mr. Soler. Thank you, Chairman Turner and Congressman
Shays, for inviting me to testify before this Committee on such
an important topic.
For the record, my name is Stephen Soler. I'm president of
the Georgetown Land Development Co., the owner and developer of
a 55 acre wire mill in the Georgetown section of Redding, CT, a
town of about 8,500 people, so it's not a big city. I've been
in the brownfields business for well over 10 years and have
developed about 50 properties.
Our development plan calls for the reuse of this property,
if you will. They will have about 416 residences, about 350,000
square feet of commercial space.
Mr. Shays. How much commercial?
Mr. Soler. About 350,000 square feet of commercial space.
It will create 1,500 jobs, 1,500 jobs that have not existed
there since 1959, which it gets to one of the points the State
of Connecticut is trying to stimulate job retention, job
creation.
The purpose of my testimony today is to talk about the
process we went through, and how coordinated State and Federal
resources make complex redevelopment a reality.
The most important point I could make in this testimony is
that this process could be replicated and used as a model
throughout the United States. But first, a little bit of
history to understand how we got to where we are.
In 2000, the town of Redding, a town of 8,500 people, wrote
about $1 million in taxes.
They watched a large, thriving complex. Under the
leadership of the first selectman, they knew something had to
be done, so they enlisted the services of a Connecticut
architect and planner, Patrick Pinnell, and listened to him on
what could happen.
Pinnell suggested that this would possibly become a new
village. By taking some of those historic buildings and
integrating it into the existing area, that you could create a
new town center. But there was a problem. Nobody knew how much
it was going to cost to clean up the property. There was wild
speculation, it was $30 million, it was $50 million, and that
gets to the point about getting assessments done.
Pinnell advised the town, and we listened to what he had to
say.
One of the problems that has faced brownfields, I think
it's probably the largest problem that's faced brownfields, is
the fact that secured creditors refuse to take title to these
properties. You heard from the Mayor that there are a lot of
properties that they can't take on the liability. Those secure
creditors include banks and tax holders. There are taxes that
are past due that are owed to cities and towns. I primarily
purchased those properties by buying the mortgages and taxes,
so I kind of knew how to go about doing this.
In 2002, I made a proposal to the town to repurchase the
outstanding taxes for about $1 million. And part of our
agreement with the town was to involve them in the planning
process, and also to make available to them remediation
information. We were going to investigate the site, and make
that information available to the public, so that people knew
what was going on. And I think that's also a big issue, that
people have no concept of what's really going on. And when you
do get that information out there, you sort of break down that
barrier, what is really going to happen, and what people think
is going to happen.
Based on our development plan, the former wire mill, we
bought those taxes in 2002, September 2002, negotiated the deed
from the owner, who no longer wanted it, and in March 2003,
acquired the mortgage from the bank.
To put that into perspective, the bank put $26 million, and
to further complicate the problems, it was the Commercial Bank
of Kuwait, go to the local bank and buy the mortgage.
We spent the better part of 2003 stabilizing the property
and completing the environmental investigation. And in October
2003, we had a planning session which involved the town. We had
over 1,000 residents attend that Charrette.
Many of the ideas that came out of the Charrette were given
to us by local residents and stakeholders.
Mr. Shays. Just to stop you for a second.
Mr. Chairman, this was an amazing thing to watch, because
the developer had a concept, he came forward with a concept,
invited the whole community to come in, and then was receptive
to amend, change, adjust, based on good suggestions of the
residents.
I have to tell you, it was one of the more impressive
things that I've seen since I've been in government.
Mr. Soler. It was a pretty impressive process.
At any point in time, they didn't know what was going to
happen at the end of the week.
There was some consensus that was built as to what could
happen, and it all started with Pinnell's initial drawings,
initial ideas.
Mr. Shays. Let me ask you, you also had different groups of
people to go to, and they could make a suggestion, and the
artist, on the spot, would kind of conceptualize and draw, and
let people know what this would look like, based on their
suggestions.
Mr. Soler. It was a very proactive Charrette. We had about
50 people working for us during the Charrette process.
So that, as a group that was dealing with the
transportation issues, they had some concerns that they wanted
to raise. We had transportation professionals, they were
transportation planners, engineers. They could actually solve
and answer that question right then and there.
What that also did was it took a lot of the problems that
we normally faced with large scale developers off the table
because people got the answer to their question right away.
Mr. Shays. We'll get him back up here later to see it.
Mr. Soler. The Charrette input, for the record, included
information from U.S. EPA, Connecticut DEP, local planning and
zoning officials, historic preservationists, the National Park
Service, and various departments of Connecticut DOT who were
working with us on reactivating the train station that was
closed, and that train station would provide service to Grand
Central Station.
The plan, after we had done the Charrette, was presented to
the town in June 2004, or just about 8 months later, and in
September 2004, we received unanimous approval with no appeal.
That's a unique accomplishment for any development that tries
to go through the process in the State of Connecticut. And we
expect to break ground on the project next month.
Because of the process that's on the record, we undertook
that in 2000, and the results of that process, the U.S. EPA
awarded the town of Redding the National Award for Smart Growth
Achievement in the Small Communities categories. And to put
that in perspective, most of the recipients were from the west,
with the exception of a project in Orlando, FL.
In addition, EPA has provided a tremendous amount of
support, both in brownfields assessments and brownfields
grants.
And this past January, the project received a sustainable
design, design project designation, from the U.S. Treasury,
which will enable the project to take advantage of tax exempt
bond financing for the development. And it's only one of four
projects in the country to receive that recognition.
Most important, though, it shows that the efforts of EPA to
promote brownfield development, they're not only taking root in
the urban areas, but they're also taking root in the suburbs.
Not all the brownfields exist in the urban core. In fact, many
brownfields exist in suburban environments. And it's good to
know that to provide those suburban environments the ability to
tap the resources that the urban core and that the cities get,
as well.
This all begs the question, how do you take our model and
adapt it to cities and towns where so many brownfields are?
We believe it can happen with the following factors: One,
cities and towns need professionals, and they think EPA is
working hard to provide that resource for them.
Two, States need to be more proactive, with a regulatory
framework that streamlines the process. And I believe
Connecticut, under the direction of Commissioner McCarthy,
shall become a model for brownfields development.
And at the Federal level, in addition to existing financial
tools available to brownfield sites, there needs to be
brownfields tax credit legislation that's targeted to a very
specific geographic area. It shouldn't be for every site.
I think the best method for increasing the capital is for
Federal policy to reflect the critical importance of
revitalizing American cities and towns, now impaired by an
industrial legacy. I think tax credit legislation is arguably
the best, most straightforward method of creating an equity
pool to achieve this goal, and is vital to ensuring that this
becomes a reality in communities who need it, just as it's
become a reality for the residents of Georgetown.
Thank you for giving me the opportunity to speak at this
session. I'll be happy to answer any questions.
[The prepared statement of Mr. Soler follows:]
[GRAPHIC] [TIFF OMITTED] T9333.049
[GRAPHIC] [TIFF OMITTED] T9333.050
[GRAPHIC] [TIFF OMITTED] T9333.051
[GRAPHIC] [TIFF OMITTED] T9333.052
Mr. Turner. Mr. Trilling.
STATEMENT OF BARRY TRILLING, PARTNER, WIGGIN AND DANA, LLP
Mr. Trilling. Thank you, Mr. Chairman, for inviting us here
today.
I'm Barry Trilling. I'm a partner in the Stamford, CT,
office of Wiggin and Dana. I also chair the Legislation and
Policy Committee of the Connecticut chapter of the National
Brownfield Association, and the Government Affairs Committee of
the local chapter of the National Association of Industrial
Office Properties, which had the pleasure of hearing Chairman
Turner speak back in February, about H.R. 4480.
I work both in Connecticut and elsewhere in the country----
Mr. Shays. Just lower it down a bit.
Mr. Trilling. I've had judges tell me that I wear out their
court reporters. I appreciate the admonition.
I work in properties all over the country, as well as here
in Connecticut.
Success stories about brownfields get a lot of press
attention. Yet hundreds and, perhaps, thousands of small,
commercial and real estate projects that would result in
cleanups in the use of contaminated properties have failed due
to bureaucratic and international barriers. In addition, we
seldom hear about the properties not available for cleanup and
redevelopment, because of the owners' fears of unending
liability if they allow those properties to come on the market.
Here are two examples: An idle finishing business in
Elmhurst was put up for sale. It's a dilapidated property. Site
remediation costs about $150,000. Prospective buyers show
interest in this transaction, but remediation and environmental
insurance costs proved too high. The property thus remains
unremediated and undeveloped.
In another instance, a New Haven County building
construction supply business wants to expand and move its
operations near its current site. It finds suitable a long-out-
of-use munitions plant, for which it would pay about $1
million. But potential cleanup and insurance premiums could
cost more than $300,000, killing the deal.
Current governmental assistance programs either have too
many barriers to entering or take too long to use in these
transactions. What would make these deals work, resulting in
brownfield revitalization?
All 50 States have adopted some form of brownfields
remediation and developed a program, and the Federal Government
has more than 20 such programs administered by more than half a
dozen agencies.
Your committee has already heard how many of these programs
have been working. All of these programs require enforcement
agencies to welcome and to nurture private sector cleanup
efforts. The old command and control micromanagement attitude,
suspicion and cynicism, just doesn't work.
Here in Connecticut, for example, the Department of
Environmental Protection Commissioner Gina McCarthy is working
to make her agency more ``user friendly,'' and EPA has provided
resources for brownfields revitalization in every one of its
regions.
Mr. Chairman, Representative Shays, my remarks--my written
remarks--describe both Federal and Connecticut grants and loans
for site assessment for remediation and redevelopment.
Government funding programs, however, often create bureaucratic
mazes that real estate developers would just rather avoid.
These programs also depend largely on the government,
rather than private sector initiatives, and political pressures
which may outweigh the projects' own merits. And State
agencies, with overlapping mandates, frequently don't work well
with other further deterrents to revitalization.
Connecticut, with the creation of the Nutmeg Coalition, has
begun to confront these issues, and our General Assembly has
also begun to create a one-stop shop for brownfields
remediation and development. Still, smaller brownfields sites,
with low levels of contamination, such as I have described,
have difficulty in obtaining insurance. The premiums on smaller
cleanups are disproportionately large and frequently
unaffordable, in the context of a project.
Further, we need reforms, both Federal and State liability
schemes, to encourage the original responsible parties to
participate in revitalization and to encourage them to make
their brownfield sites available for restoration. Under
Pennsylvania's Act 2, for example, any party that contributes
to any extent to cleanup, meeting State standards, receives
protection from liability under State statutes, even the PRP's,
and they are coming to the table for remediation of sites.
Legislation such as H.R. 4480 is a good step. It has tax
credits for up to 50 percent for demolition and environmental
remediation. It would be even stronger if its credits also
applied to insurance costs. Other, more traditional forms of
financing cannot match direct tax credits.
Further, legislation would also result in more properties
for development, and encourage the current owners to
participate in site assessment, cleanup, and the redevelopment
process.
If owner liability relief were available, who knows what
additional sites my clients may have been able to revitalize.
Thank you, and I appreciate the time.
[The prepared statement of Mr. Trilling follows:]
[GRAPHIC] [TIFF OMITTED] T9333.053
[GRAPHIC] [TIFF OMITTED] T9333.054
[GRAPHIC] [TIFF OMITTED] T9333.055
[GRAPHIC] [TIFF OMITTED] T9333.056
[GRAPHIC] [TIFF OMITTED] T9333.057
[GRAPHIC] [TIFF OMITTED] T9333.058
[GRAPHIC] [TIFF OMITTED] T9333.059
[GRAPHIC] [TIFF OMITTED] T9333.060
Mr. Turner. Thank you.
The type of training in the area of brownfields, both
assessment and remediation, has to be very technical. I was
wondering how the costs for people were dealt with, with
respect to this or other types of training that might be
provided.
Mr. Carbone. In this case, I would say it's probably a bit
more expensive, probably somewhere between $4,000 and $5,000
per person, but that's inclusive of the administrative charge
along with that. But in terms of outcome--it's what's important
here--you're looking at $14 an hour, which is really wages that
would start at that, but a real potential is still much higher.
And if continued education took place, opportunity into other
areas of environmental health, that would even bring it a lot
higher than that. It's really a small amount of money for a
person to be a starter of this.
And also the fact that there is not much question as to
training as to whether or not employment is there. As I
mentioned before, it did open our eyes to the very rich vein of
opportunities that I think many of the parties who work for our
system have neglected to really see it there. But it's there,
meaning we are talking about environmental health. It's a much
broader field than some of the fields that we're talking about
here today, including like inspection of restaurants. That's
all part of environmental health. So once you kind of get your
foot in the door, it opens opportunities into the field.
But in terms of how it compares to other training, it might
be a bit more expensive. But again, it's meeting the jobs for
the wages that we're talking about.
Mr. Turner. Each of you have not had the benefit of each
other's testimony as you were preparing to testify. And, Mr.
Carbone, you were probably not aware, in the written testimony
that an issue that was raised was the availability of personnel
to conduct assessments, and to conduct environmental
remediation, both from the standpoint of the expertise, but
also from the standpoint of lowering the overall costs and
increasing competition. So I'm certain that your efforts not
only provide the economic ability for the people who have
participated but also have an impact on what is needed in
providing the expertise for each of these groups to be able to
accomplish what is necessary.
Mr. Carbone. Yes.
It might also serve to increase the number of training
providers in the field. And there are not many at this point in
Connecticut that can do that well.
But I think we are beginning to see the undercurrent of
some economic activity, where for-profit operators see the
potential here. And that will begin to drive down the per unit
cost. It always works that way. I think we can all be positive
to see that these for-profit operators will recognize this
opportunity here. And I think we will see that happen by the
next round of actual training that takes place here.
Mr. Turner. Mr. Trilling, as another example of ``great
minds think alike,'' your comment to me about including the
costs of environmental assurances was not the only one I had
received on the bill last time. And as a result of the number
of people like yourself who are practitioners and have had
experience with that, the bill does include a qualified
remediation expense for financial assurances, including
insurance.
Mr. Trilling. I second what everybody said about
demolition, and costs, as well.
The insurance ambition in the last 2 to 3 years
particularly has become acute, and I commend you for looking at
it.
Mr. Turner. You being, again, a practitioner, what we are
greater aware of is the extent to which the insurance products
are playing a role in encouraging lenders to become comfortable
when coming to the table, so that's a capital issue for the
redevelopment project itself, after remediation is complete.
Mr. Trilling. The lenders are concerned not so much about
their own liability anymore. There is State legislation to
protect them. But they are always concerned about the security
of the collateral and the ability of the borrower to pay.
Insurance product provides that assurance. That bolsters the
lenders' ability to provide their share of the money.
Mr. Turner. To the attorneys, I'm very interested in the
issue, looking at Connecticut's not to sue provisions,
including responsible parties as a prospect to that process. I
wonder if you will, if you could speak about incentives that
you believe that we should be undertaking at the Federal and
State level.
And there's one last thing, and that is it is my belief--
and I would like your thoughts on this--that those properties
that are the worst, that have the worst contamination, are
probably not undertaking the assessment process because of the
owners' desire not to know, and not to have others know, the
contamination that needs to be remedied.
So if you would speak about incentives to bringing the
responsible parties to the table in this process, do you think
it might work. And the second aspect, how the assessment
process impacts those properties that are the worst; the
disincentive for people to come to the table.
Mr. Trilling. I've only been here 3 years.
The first thing I would look at is the Brownfields
Revitalization Law of 2002, which, in one provision, restricts
EPA enforcement actions, sites that have been cleaned up
pursuant to State programs. So if the State program provides
liability relief for the PRP, for the owner, then that's going
to encourage more insights into the program. Regrettably, here
in Connecticut, we still don't have that recognition.
At the very least, States should encourage the owners to
come forward, participate in assessments, and evaluations.
There is no cookie cutter. Every State has its own problems.
But I think we need to be creative in trying to address this to
bring these properties to the table.
Mr. Turner. In Pennsylvania, are PRP's eligible for relief?
Mr. Trilling. Yes, they are. Act 2 applies. Act 2 is the
remediation standard statute, essentially, and it applies to
all cleanup programs, whether voluntary or involuntary. And
anyone participating in that program can get relief, including
if an owner voluntarily comes to the table and meets the
standard.
The Pennsylvania attitude was--clean is clean and I don't
care who's involved. If you clean it up, it's done.
Mr. Turner. Ms. Barton, I'll wait for you to get your
microphone, and I'll restate your questions: The first one, of
course, being the issue of incentives to bring the task
polluter to the table, and the second being the assessment
process, is there a disincentive for the worst properties?
Ms. Barton. I think that there definitely is a
disincentive. And I'm not sure if it's necessarily for the
worst property.
Often the properties with respect to the issue, the owner
doesn't quite know what to do. And then the fear of stepping
into traffic without knowing what might be the final phases in
response to what was found.
But they're going to want help, basically, without any sort
of strings attached, should they find a circumstance--a real
estate development project makes it not worthwhile. And then
you have the property owner saying, ``What do I do now? I now
have this information about my site.'' So I think it is a
disincentive.
I do think, by the way, some of the recent developments
will, hopefully, be of some assistance in that regard in
dealing with contingent liability. And I think it's getting
some of the larger companies, in particular, to step back, and
perhaps reexamine whether an approach of putting an incentive
that is no longer used is the best thing to do. So we still
need more incentives.
Mr. Turner. Could you comment on Connecticut's tax credits
program and the bond termination program. I'm going to tell you
again why I'm asking it, and hope I don't confuse you.
In the first draft of the Federal Tax Credit Program that I
proposed, one of the criticisms that we received of it was that
the taxpayers were awarded by a State development agency,
because the focus was on redevelopment, but the remediation was
coordinated by the State EPA. And those who were involved in
EPA remediation programs wanted to make sure that there was a
lane.
So what we did was, we required the State development
agency that still evaluates the projects for award, that a
project must be part of the voluntary action program in order
to be able to get the tax credits, thereby making it at least
coordination, if not cooperation.
How is it working here? And what have we learned from it?
Ms. Barton. I don't think there really is that linkage. In
making that statement, I'm not conveying criticism. I just
think they're separate programs. I think they are programs that
are not into it anymore.
The economic development program, the programs involved, I
don't think we truly have an incentive program, like the tax
credit program.
But while the programs that the economic development
agencies are responsible for will make reference to and rely
upon an outcome of a program, and require it to be in
compliance with DEC, we do not have in Connecticut the sort of
voluntary action programs, remediation programs that I and
Barry have said they have in many other States.
We do have what, to a large degree, functions as our
program, clearly not voluntary--the transfer program that
Commissioner McCarthy referenced. And that program was very,
very effective, and it works really well, I think primarily
because it has limited public sector involvement.
The public sector dictates the filing, dictates as
Commissioner McCarthy says. They have to look at the
properties. And there is a process that you have to go through.
It's largely between the buyer and the seller.
While there is a statute, two statutes, actually, that
refer to voluntary remediation, the reality is, those are not
statutes that are used anywhere to the degree that is used in
other States where there are very well-developed voluntary
remediation programs. There is a bit of a disconnect.
We have the building blocks, but through these people that
Barry referenced, the agency coming together and having a
coalition, and proposing legislation, and we still have work to
do.
Mr. Turner. Thank you.
Mr. Santy. Could I make a comment?
I just want to comment that was not a tax credit program.
The State has an urban remedial action grant program that's
administered jointly by the Department of Economic and
Community Development, partnered with Environmental Protection.
And before a grant is made under that program, both of those
departments need to agree to move forward. So you might want to
take a look at that statute as an example.
Mr. Shays. Thank you.
I would like you to assess, it seems to me that we have
seen some very real progress under the brownfields programs.
But is it a success because there is just a lot of low-hanging
fruit, or has it been a success because the Government has
provided noticeable incentives?
The difference between whether a property is developed or
not is obviously what kind of attorney you've got. Does a
little bit of action make a big difference in return? Or my
assumption is that if brownfields were a mystery, we didn't
know how many we had, the particular type, or what its
liability was, and so really we were able to then take the easy
ones, and now we've got a lot of more difficult ones on the
books. Help me understand the environment.
Can I start with you?
Ms. Barton. Sure.
I think, unfortunately, it gets back to circumstances with
reference to the tool box. The tools that are needed are not
the same.
I think in some instances money does play a key role, and
it's critical, makes a difference whether or not the project
goes forward. But truly, if you look at some of the success
stories--and I think you're right, we've had some very, very
good success stories in our State--but if you look at the
success stories, and Steve said, what the end needs to work is
everyone is on board with respect to the project.
Mr. Shays. If everyone is on board, or that it's easier to
do a brownfields cleanup in Stamford, CT, versus Bridgeport,
because the property is worth more, the return--you're going to
get a better rent, so to speak--return on investment, the site
that Mr. Soler has is an awesome site and it's around
tremendous wealth. And I'm wondering, if that's the case, or--
--
Ms. Barton. Well, I think it depends. The reality is that
there are some properties that are not going to be developed,
no matter what you do.
Mr. Shays. Right.
Ms. Barton. Yes.
Mr. Shays. And would they tend to be closer to a Superfund
site?
The site's location maybe not being as economical?
Would it be basically that the cleanup is more intense, and
the liability greater?
Ms. Barton. I don't think it's so much the cleanup, quite
candidly. I believe its time has not come yet in terms of the
economic viability, the particular location.
But the reality is if you have a cleanup scenario, while it
may be more challenging in getting the incentive to work, the
reality is that with money, and commitment, and resources, you
can address it. Beyond that, I think that it is definitely
going to be beneficial from the perspective of the investment
needs. But not all projects require the money. For other
projects, it's just a need to get everybody going in the same
direction.
Mr. Shays. That last response to me is encouraging because
that's doable.
Ms. Barton. Absolutely, absolutely.
Mr. Shays. It's doable within even the financial restraints
we have.
Let me ask Mr. Carbone to respond. I'm assuming, Joe, that
you have an opinion.
Mr. Carbone. No.
Mr. Shays. He's been involved in so many good things.
You also speak as a former Deputy Commissioner of the
Connecticut Department of Economic Development, so this is
right up your alley.
Mr. Santy. And brownfield redevelopment is about
development, there's no question about it. I don't think there
is any doubt that we're all alone and continuing here. Some
projects were easier, and they're getting tough. Both the size
of the project--more the size of the project than the types of
remediation that are necessary. But there were none that were
easy.
And I think I go back to Joe's comment, that all of these
are really development projects. They all require a return.
As to your point about Stamford or Bridgeport, harkening
back to the days when I was with the State, there were multiple
properties there. All of them had environmental issues on them,
and yet, clearly, that was the deal that was going to go in
Stamford.
Mr. Shays. Ultimately UBF.
Mr. Santy. Ultimately the UBFs, yes.
So I do think location makes a big difference, but, more
importantly, people in Connecticut are very concerned about the
way the State is growing. And I think we have an opportunity,
to follow on Elizabeth's comment, to talk about brownfields and
land preservation, because they are only sides of the same
coin. And if we put $1 into protected land, which our suburban
communities and our rural communities more and more do, why
shouldn't we put a dollar into brownfields redevelopment and
get that investment back in our cities at the same time?
And that's one way of getting the public to understand why
you do this.
Mr. Shays. I'm going to put it in my own words--a
developer, if he is going to develop half a million dollars of
square foot of commercial office, better he do it in an urban
area.
So your point, and I'm hearing, you're saying to me, that
in spending money for brownfields, in a sense, indirectly
you've almost put up money to preserve open space.
Mr. Santy. Correct. Getting the public to understand that's
critical. They don't necessarily see the connection, but they
don't like what's occurring in their urban communities. So
that's one way.
Mr. Shays. I believe in my suburban areas, when I'm helping
in Bridgeport, Stamford and Norwalk, and obviously, a site like
Soler has, which is already there, is already a part of an old
community, that's contaminated.
Mr. Soler, maybe you can respond as well.
Mr. Soler. My comment really would be geared more toward
higher leverage of the dollars and what happens when you
leverage the dollars and it's put into perspective.
The first Federal agency that jumped on board was the EPA
and they provided us with a site assessment.
Mr. Shays. You're talking about your site here.
Mr. Soler. At our site in Georgetown. Because the EPA came
to the table, that allowed all the other Federal agencies to
come to the table. They like to work with each other. EPA tends
to be the first one.
I figured you were going to ask this question, so I wrote
down some of the agencies that we're dealing with to put this
in perspective.
We received a targeted brownfield assessment from EPA, a
cleanup frame from EPA; obviously, in the town of Redding, a
$72 million allocation of tax exempt bonds from the U.S.
Treasury; $550,000 of CDBG funds to demolish the property; $5
million from the U.S. Department of Agriculture to build a
wastewater treatment facility because Redding is a rural
community; we will probably get about $3 million of tax credits
using the Historic Tax Credit Program through the National
Parks Department of the Interior; and $3 million in tax credits
from the Department of Energy, primarily through different
energy efficiencies that we're going to use.
Mr. Shays. Did you know that in the beginning?
Mr. Soler. Yes.
Mr. Shays. When you started out, you anticipated, to make
this project succeed, you'd have to do all of this?
Mr. Soler. Yes.
We knew that if we started with the EPA--and that's
leveraging the dollars--that people could really put on paper
like this, that $100,000 targeted brownfields assessment got us
to where we are, and all these other programs, because every
other Federal agency came to the table.
Mr. Shays. Now, you live in the area of the sites, correct?
Mr. Soler. I live in Cos Cob.
Mr. Shays. But the bottom line is you develop all over the
country.
Mr. Soler. I develop property from Miami to Boston, yes.
Mr. Shays. Mostly----
Mr. Soler. Brownfield sites, that's all I do. And mostly,
they've been small. I have a working knowledge of small sites.
Mr. Shays. I don't call this one small.
Mr. Soler. This is not a small site. This is a once-in-a-
lifetime opportunity. But that should speak to how you leverage
dollars.
But more important than that, when EPA makes an investment,
sometimes you don't see the real impact of that investment.
When EPA made the investment on a targeted assessment for
the Jenkins Bell property, look what happened. People now
started to quantify the risk and they could start seeing the
light.
Mr. Shays. What I'm hearing you say is that having the
Department of Environmental Protection get involved as a
promoter, in a sense, of the project, it's a message to people
around you that what is viewed as the most difficult part, you
have that agency at the table.
Mr. Soler. Yes. Having EPA at the table, at the same time.
This happened during our Charrette. We had Connecticut DEP at
the table. People realized that those two agencies were there,
talking in unison, saying this can happen.
The thing of Beth's comment--to bring all those
stakeholders, those various groups together, is important,
because at the end of the day, it's a real estate transaction,
and it has to have an intrinsic value. Otherwise, no one is
going to do it.
But there are properties that are going to get built. There
are properties that are marginal, that with the right
incentives, with using some of these tools that are out there,
they can get done. But it's not easy.
Mr. Turner. Thank you.
Mr. Shays. Mr. Trilling, before you answer the question I
asked, is Mr. Soler more unusual, or are there a lot of folks
like him that have over 10 years in development this expertise.
Mr. Trilling. There are a number of prominent brownfields
developers who specialize in these properties and Mr. Soler is
probably the best of those. The way he works with communities,
the way he works with government, the way he integrates, he has
this whole holistic approach to development. It really shows
the best creative side of the private sector.
Mr. Shays. My purpose for asking, though, is if you don't
have that expertise, you have some disadvantages.
Mr. Trilling. You've got problems if you don't.
And I'd like to speak to the unsexy problems.
Atlantic station, in Atlanta, another sexy project.
Here in Connecticut----
Mr. Shays. It's good where we introduce sex into our
hearings.
Mr. Trilling. I'm trying to avoid getting myself in real
trouble.
Ms. Barton. You're dead.
Mr. Trilling. The projects I'm talking about, they're not
sexy. I'm talking about getting developers to promise--the
Steve Solers in this world who don't specialize in brownfield,
or don't have that expertise, who right now do as Bob Santy
mentioned he has to do in order to get grants, hire extensive
experts and lawyers--you know, I'm trying to talk myself out of
a job here--but right now, the process is too expensive, it's
too complex, it's too sophisticated.
What you do by things like H.R. 4480, which provides simple
tax credits if you meet certain standards, allows the mom and
pop developer to go out and start becoming a part of this
process.
As Beth has pointed out, as Bob has pointed out,
brownfields properties are a subset of real estate development;
and the private sector knows how to deal with real estate
development.
Allow that creativity of a mom and pop developer to go out,
find a property, use their own money to clean it up. You're
going to have a turnaround in cities like Bridgeport, and
Milford, and Shelton, and all the other towns that don't have
perhaps a huge tax base that these other sites do that attract
these projects. It's the making this a mainstream idea that
will turn around our cities, free up our resources, and protect
our other resources.
I don't mean to use hyperbole, but I'm going to. Other than
winning the war on terrorism, I don't think there is a more
important task that the government has than restoring our
cities. Restoring our cities will cure a host of social
problems. We can help eliminate poverty, we can make our cities
more livable. We can bring people back in. You make them more
livable by increasing tax bases, creating jobs, making them
safer, making them places where people want to live.
Mr. Shays. Wouldn't it be great--excuse me, it's a bit of a
digression--but in a Presidential debate, instead of talking
about whether a Senator earned three Purple Hearts, or a
President hasn't properly fulfilled his National Guard duty,
that you had a public debate about this issue?
And believing that we can't see success in Iraq, or the
Iraqis can't see success, it's not lost on me the opportunity
cost of billions and billions of dollars, and we're really
debating hundreds of millions, if that.
Mr. Trilling. You're preaching to the choir, as far as I'm
concerned, at least to me.
And, again, I take some missionary zeal in this because
I've seen projects I've worked on that were laying idle,
unused, where there was blight in the neighborhood, and having
turned those around, creating new businesses, including small
business opportunities, and new jobs, seeing the hope in
people's eyes. You can't get paid enough for that.
Mr. Shays. Well, one of the values of this hearing for me
has been, at this point here, is we are not going to have a
world to live in if we keep doing what we're doing. And if we
can tie this effort to a strong environmental movement, it can
make a world of difference.
I want to thank you all for your testimony. You're all
experts on this.
And if I could, Mr. Chairman, just ask if there is any
point that needs to be put on the record that we haven't put on
the record? I find sometimes those last points tend to be
sometimes the most important.
Yes.
Mr. Santy. Thanks for the opportunity. Two points. One is,
I have some language that might be helpful in meeting the
eligibility standards of the program. And it's not attached to
my testimony.
Mr. Shays. I'd just like to make sure that's specifically
inserted in the record.
Mr. Santy. Thank you.
One issue we haven't raised at all I think deserves mention
because of its prominence nationally and in Connecticut right
now and that's the effect of limitations on eminent domain on
redevelopment.
We have a number of bills in the Connecticut Legislature
that seek to take economic development out of the public as a
definition, which will be in the courts for years.
Mr. Turner. Before we change the topic, let me just tell
you, on the Federal level--and you certainly are going to find
a very sympathetic legislator here on the issues of the need
for tools for economic development--the bill that passed the
House, which was highly restrictive in the areas of eminent
domain, included specific exceptions for brownfields. So, from
this perspective, at least on the Federal level, eminent
domain, we will still, even if that less restrictive bill was
passed, the brownfields were covered.
Mr. Santy. That's great, and that's the point--just to keep
an eye on that as these things go through because the reaction,
particularly on the State level, may limit our ability to do
brownfields, and eminent domain is really necessary.
Mr. Shays. Could I just ask, did you want to ask any more
questions?
Mr. Turner. You can wrap it up.
Mr. Shays. I don't want to wrap up, I want you to wrap it
up. But I just want to make sure, if you would just ask the
question, because we haven't asked you as many questions as
you're probably prepared for, I would like to make sure that
the key points that you want to make are put on the record. So
maybe with that, we can end up with a commercial.
Mr. Turner. Aside from Mr. Soler, is there anything that
you would like to add? You have an opportunity to say it now.
Ms. Barton. I think the one point I would like to make is
actually a point that Commissioner McCarthy made, and that is,
there is a need for us to maximize the realization in the way
the real world works as we try to do the very, very important
things that all of you are doing; that is, recognizing that
things do not proceed in a sequence, and therefore, there is a
need for flexibility when it comes to when the money is
available and what it's being used for. It has to be the
ability, for those who are going to be responsible for
allocating the moneys, to have those moneys be put to the best
use for each project.
But again, as I said, it's not a one-sided control
unfortunately. So any flexibility that can be built into any of
the efforts would be helpful.
Thank you.
Mr. Carbone. Just the one point that I wish to make is
that, as you allocate dollars in the future, I know it's
important to help people, particularly those who might live in
this area, and earn a livelihood from the particular field, but
the need to increase the number of people with occupations in
this field is really great, and the need to do things that
actually stimulate private investment in for-profit operations
is equally as great. And to the extent that you can include
this funding, if possible, to enhance it, I think you will be
accomplishing something.
Mr. Turner. One of the things I find most exciting whenever
we do a hearing on urban economic development issues--CDBG,
brownfields, public housing--you get together urban people who
not only have expertise, but they have a love for accomplishing
the end goal of redeveloping our cities. That camaraderie, that
body of knowledge that's sharing, is always a valuable
experience.
And I want to let you know that's how I feel about your
Congressman, Chris Shays. That in the House, there aren't that
many people who would sit around this table, like Mr. Soler's
associates, who share the end goal and the love of making
certain that our communities are redeveloped.
Congressman Shays, thank you again for having me here, and
thank you for your friendship, and your advocacy on all the
issues in the House.
Mr. Soler, as I said to the Mayors, we have a transcript
that's being made and we will use that testimony when we put
together the reports.
And the Mayors, I asked them to give the commercial as to
why this is important to their communities. They talked about
issues of taxes, and economic development, and blight. Of
course, they're talking from a Mayor's perspective.
And from your perspective as a developer, I would love for
you to give us your thoughts on why this is important for you
to do. Not every developer is doing it, so the reasons are not
so evident, otherwise, the line behind me would be very long.
Please share with your thoughts as to why it's important
that you do what you do.
Mr. Soler. I will tell you that a lot of developers would
want to do it. They're scared. They are fearful that they're
going to lose money. They're not in the business of losing
money, they're in the business of making money. But many
developers that I talk to want to gravitate into the
brownfields business. I think that if you had protections in
place, and you had a little bit more certainty in place, and
you had these tax incentives, they would get into the business.
And you're starting to see that happen now, for
institutional investors. What's happening in Stamford, CT, is
not being done by a brownfield developer, it's being done by an
institutional investor, buying what up to now they knew it as
properties nobody wants. So there are a lot of people who get
into it.
I also think that you're seeing a tide change in the
development community. You're seeing people that are taking a
little bit more of a responsible role in what will happen with
buildings in the future.
Four years ago, when I started this project, and I looked
at creating green buildings, everybody thought I was nuts, why
would you want to do that, until last year, when we had an
energy spike. Then, all of a sudden, everybody thought I was a
genius.
The reality is that time is going to take a toll on how we
develop properties in this country. And if we start at looking
the way that the Europeans develop it, and other countries
develop it, and adopt some of those models, we're going to look
smart, we're going to end up having the future become our
reality. So that's the reason why I'm doing this.
Those are the opportunities that are in the marketplace. I
think taking advantage of those opportunities, because,
frankly, no one else is looking, and doing it in a very
creative way, is not only going to be financially rewarding,
but I think it's the right way of doing it. There are a lot of
people out there that are following me. We are not the only
ones doing it.
Mr. Shays. Before you adjourn, Mr. Chairman, I just want to
thank you for coming here. I want to thank you for setting up
two excellent panels.
I just have so much admiration for what you're doing on
this issue, and so many more. And it's nice to be part of your
team in this effort. And so, thank you very much for coming, I
appreciate it.
Mr. Turner. I want to thank you again for your preparation
and for your participation today.
And we stand adjourned.
Mr. Shays. And may we thank the transcriber.
Mr. Turner. Yes.
[Whereupon, at 3 p.m., the subcommittee was adjourned.]
[Additional information submitted for the hearing record
follows:]
[GRAPHIC] [TIFF OMITTED] T9333.061
[GRAPHIC] [TIFF OMITTED] T9333.062
[GRAPHIC] [TIFF OMITTED] T9333.063
[GRAPHIC] [TIFF OMITTED] T9333.064