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About Brownfields

Cleanups costly, but sites have what buyers want

October 31, 2011
By LINDA HARRIS - Business editor (lharris@heraldstaronline.com) , The Herald-Star

Wherever you go in the Ohio Valley, chances are you're not far from an old, unused industrial property, the kind that has to be cleaned up - remediated, as they say in government circles before it can be reused.

Problem is, remediation is an exhaustive, expensive process. It takes significant expenditures of time, money and planning to remove contaminants and rehabilitate industrial properties so they can be revenue-generating again.

Not every community with a potential brownfield can get help paying for its rehabilitation. Banks tend to be reluctant to lend money to brownfield buyers, fearing unanticipated costs could leave them holding the liability bag. Potential buyers, themselves concerned with liability and delays, typically prefer properties that already have been cleaned up. And while grant money is available, demand is widespread and the supply not nearly enough.

Article Photos

TOO COMMON OF A SIGHT — Abandoned industrial properties are common in the Upper Ohio Valley. Chester’s Taylor Smith & Taylor property, shown here, is currently being assessed to determine the kinds of contamination that exist on the site as well as the levels present, a precursor to the property’s pending remediation and redevelopment. - Linda Harris

"Money is an issue, but it's not always the defining issue of why a site isn't redeveloped,"said Luke Elser, projects director for the Northern West Virginia Brownfields Assistance Center. "It can be lack of money, lack of information on the property, or even just the challenge of getting the right people to the table."

Numbers are hard to come by but Elser said the "generally accepted estimate" is that there are somewhere between 650,000 and 1 million brownfield sites across the nation. Individual states tend to keep their own inventory, but methodology varies from state to state. In West Virginia, Elser said it's easier to quantify how many sites are currently being actively redeveloped that's more than 60, he said than to try to define the scope of the problem for the lay person.

"Every community has a piece of property that could be redeveloped but it isn't because of either real or perceived problems," Elser adds. "It can be a gas station, a dry cleaner, a warehouse, a pottery site, a manufacturer there's just any number of different kinds of industry that moved away for whatever reason. Every town in West Virginia has a site with redevelopment potential that could be worked on."

In Ohio, it's even more difficult to get a handle on the extent of the problem, though locally, Jefferson County Regional Planning Commission Director Domenick Mucci did say they've conducted about 20 Phase I assessments that's a historical evaluation of suspect properties along with eight Phase II studies, which identify contaminants and the level of contamination through soil and groundwater testing, all of it using $1 million in federal grant money.

While costs vary in relation to the size and past use of a particular property, Mucci said it can be an expensive process remediating the Kaul Clay site in Toronto could run into the hundreds of thousands of dollars before all is said and done.

"Unless funding comes available through federal and state government, it's rather expensive for a property owner to do Phase I and Phase II studies, let alone for them to have the resources to clean up their property," Mucci said. "And a lot of property owners don't quite understand the advantages of having these studies completed it puts them in a position where any contaminants on them have been identified and they'll have a document that will identify the contaminants. If they ever try to sell the property, the financial institutions and Realtors are going to require them to have (that information)."

While job creation isn't going to happen overnight, Mucci said the goal is to position the properties "to be productive again."

"It's fair to say that, sooner or later and we feel it's pretty much just around the corner gas and oil (growth) will be here, and sites such as Kaul could be productive again," Mucci added.

John Brown, executive director of the Brooke-Hancock Regional Development Council, said a $400,000 grant paid for 15 Phase I assessments in the two northernmost West Virginia counties, seven of which have since undergone Phase II groundwater and soil testing. He said the savings to property owners is significant and can be the difference between those sites sitting idle for years on end and their redevelopment.

"In some cases it's a stopper for businesses," he said. "It's another cost, and the costs start adding up. They don't want to have to put that up-front money in."

But, costly as remediation is, the price tag can pale in comparison to the cost of turning a greenfield that's a site in pristine, never-been-developed condition into a working commercial or industrial space. That's because brownfield sites already have costly infrastructure in place access roads as well as water, sewer and electricity are already on site plus the advantage of generally being prime locations.

In the Upper Ohio Valley, some of the most attractive properties are or were brownfields think Kaul Clay in Toronto, Taylor, Smith & Taylor in Chester and many of the 1,700 excess acres ArcelorMittal still owns in Weirton, including Brown's Island, where Weirton Steel's coke-making operations had been based years ago. All have easy access by rail, water and interstate highways.

"It's the Northern Panhandle," Brown said. "Our legacy is steel and manufacturing. Sites that were developed 80 or 90 years ago are now mothballed, but they're still strategically located near roads and they already have utilities. And if someone wants to bring them back, in many cases it's cheaper to (remediate) and redevelop them than to do a greenfield."

 
 

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