December 1, 1999

The economic development of distressed neighborhoods and communities is a multifaceted challenge but one issue lies at its core: the difficulty of redeveloping many previously used sites into employment, housing and community facilities that will help to bring about a transformation of these areas as economic centers. Central to the prospects for economic development efforts is the environmental condition of these properties, because many past uses have resulted in on-site contamination that threatens human health and ecosystems. The importance of environmental issues in site re-use first came to the fore in national policy with the 1980 passage of the Comprehensive Environmental Response, Compensation and Liability Act, (CERCLA), or the Superfund law. The latter half of the 1990's has witnessed a widespread effort on the part of state legislatures to respond to local redevelopment barriers posed by past pollution in relation to CERCLA requirements. State after state promulgated "voluntary cleanup programs" (VCPs) intended to relieve developers of uncertain liability risks and otherwise support regeneration efforts. Over 90 percent of states have some form of VCP in place as of late 1999. Many of these programs combine regulatory flexibility and liability relief with various forms of financial support for redevelopment. Some are targeted specifically at individual contaminated sites or neighborhoods in which such sites are common. The sites are often labeled as "brownfields" and can be characterized as abandoned, idled or underutilized industrial or commercial facilities, where redevelopment or expansion is complicated by suspected or identified past pollution. A large proportion of brownfields have been contaminated by leaking storage tanks for fuel and other petroleum products that, while excluded from CERCLA requirements, still pose problems for redevelopment, especially when groundwater pollution and in-soil migration of liquid contaminants has occurred. The redevelopment problem also arises from contamination of property previously committed to residential uses, where exceptional costs may arise from cleanup of lead, asbestos, PCBs, and other dangerous substances. This brownfield definition suggests, however, that the problems on the sites involve more than pollution. Tainted sites that are abandoned or sitting idle may be too small or be in a location that does not have much private market appeal. Underutilized sites appear not to generate the public benefits that could be gained from more intensive or different activity on them. The purpose of this study is to gain a better understanding of the current regulatory and economic development initiatives of states that could help promote the economic revitalization of depressed neighborhoods through the redevelopment of brownfield sites.