By Judy Sheahan
April 11, 2005

Conference President Akron Mayor Don Plusquellic testified at an April 5 Congressional subcommittee hearing on the impediments to brownfields redevelopment. Speaking before the House Subcommittee on Federalism and the Census, chaired by Representative Michael Turner (OH), Plusquellic called for a tax incentive that would spur the private sector to investment and redevelop brownfield sites throughout the nation.

Citing the successes that cities have realized in redeveloping 1,200 brownfield sites, Plusquellic noted that those successes marked a small fraction of the total brownfield properties - an estimated 400,000 of one million sites in the nation.

"Many cities have done a good job of developing their -low-hanging fruit- or what can be called the light tan brownfields," Plusquellic said. "These are the sites that are either not that contaminated or in a desirable location or both; these are the sites that businesses are maybe willing to take a chance with developing," he added.

"This however, is only applicable to communities that have not completely hemorrhaged due to major job or population loss," Plusquellic said. "Those community's have more in common with brownfield sites that are more contaminated or located in not so desirable locations. These are properties that no developer is going to touch without additional incentives to make them competitive in the marketplace," he continued.

Plusquellic also discussed the common problem of owners "mothballing" a site — not developing or even selling a property due to fear of cleanup costs and liability. "These owners have no motivation to do anything with these properties and they will sit on them forever unless something is done. That needs to change," Plusquellic said.

Plusquellic said that Turner's Brownfields Tax Credit Bill, which was introduced during the 108th Congress and which Turner reintroduced on April 5, 2005, was a tax incentive that could really spur private sector investment.

"The Conference of Mayors believes that your proposed legislation will make a tremendous impact on our efforts to redevelop brownfields because it has the potential of promoting more public-private partnerships and cost'sharing with the private sector," Plusquellic said.

Turner's bill, H.R. 4480, would provide $1 billion in federal tax credits allocated to states according to population. The program would provide credits to brownfield projects where the local government entity includes a census track with poverty in excess of 20 percent. The credits would be allocated for up to 50 percent of demolition and remediation costs pursuant to an approved plan. The credits would be transferable and sold to third parties. The remainder of the cleanup costs would be deductible/depreciable by the property owner. The bill also includes an incentive for potentially responsible parties that contribute no less than 25 percent of remediation costs to receive liability release for 100 percent of approved remediation costs.

Acknowledging that releasing potentially responsible parties from liability as the most controversial aspect of the Turner bill, Plusquellic outlined the Conference's position for supporting that provision.

"The Conference of Mayors has always supported the -polluter pays' principle because it makes sense to hold companies who are responsible for contaminating the land to also make them clean it up," Plusquellic said. "However, as a result, we have many -mothballed- sites where the owner has no motivation to assess, cleanup, or sell the land and so those sites remain stagnant, unproductive, and a blight to our communities. Your bill, Congressman Turner, is the first proposal that we have seen that recognizes this problem and tries to address the issue," he added.

Also testifying was Environmental Protection Agency Deputy Assistant Administrator Thomas Dunne, Government Accountability Office Director John Stephenson, James Maurin on behalf of the International Council of Shopping Centers and the Real Estate Roundtable, Jonathan Phillips of Cherokee Investment Partners, and Douglas Steidl, President of the American Institute of Architects. Those testifying agreed that the US EPA Brownfields program has had a positive impact on brownfields redevelopment, but due to the significant number of brownfields, more incentives were needed to spur on additional development, particularly private sector investment.

Plusquellic concluded, "In a time when we should be focusing on job creation in our Metro economies, reutilizing resources, and preserving our farm land, brownfields redevelopment is the way to accomplish those goals."

For a copy of Plusquellic's testimony, please see the usmayors.org website.