National Association of Local Government Environmental Professionals (NALGEP)
Local Government Views on Federal Incentives for Brownfields Cleanup and Redevelopment
Presented by R.B. Jones
City Council Member
City of East Palo Alto, California
Senate Committee on Environment and Public Works
Subcommittee on Superfund, Waste Control and Risk Assessment
March 21, 2000

Mr. Chairman and distinguished members of the Subcommittee, my name is R.B. Jones, and I am a City Council Member representing the City of East Palo Alto, California. I also served as the Mayor of my City for the previous four years. I am pleased to be here today to testify on behalf of the National Association of Local Government Environmental Professionals, or "NALGEP." NALGEP appreciates the opportunity to present this testimony on the views of local government officials from across the nation on the need for additional federal incentives to promote the cleanup, redevelopment and productive reuse of brownfields sites in local communities.

NALGEP represents local government officials responsible for ensuring environmental compliance, and developing and implementing environmental policies and programs. NALGEP's membership consists of more than 130 local government entities located throughout the United States. Our members include many of the leading brownfields communities in the country such as Providence, Trenton, Portland, Chicago, Los Angeles, Salt Lake City, Dallas, and Cuyahoga County (Ohio), to name a few.

In 1995, NALGEP initiated a brownfields project to determine local government views on national brownfields initiatives such as the EPA Brownfields Action Agenda. The NALGEP Brownfields Project culminated in a report, entitled Building a Brownfields Partnership from the Ground Up: Local Government Views on the Value and Promise of National Brownfields Initiatives, which was issued in February, 1997.

During the past few years, NALGEP has continued its work on brownfields through coordinating work groups of local officials to address the following issues: (1) Brownfields Cleanup Revolving Loan Funds; (2) use of HUD Community Development Block Grants for Brownfields; (3) building partnerships between business and local government officials to reduce sprawl and promote smart growth; and (4) implementing the Administration's Brownfields Showcase Community initiative. As a result of these efforts, NALGEP is well qualified to provide the Committee with a representative view of how local governments, and their environmental and development professionals, believe the nation must move ahead to create long-term success in the revitalization of brownfields properties.

NALGEP's testimony today will focus on the following areas: (1) the urgent need for increased federal funding to support the cleanup and redevelopment of brownfields sites across the country; (2) the need for further liability clarification to encourage the private sector to step forward and revitalize more sites; (3) the need to facilitate the participation of other federal agencies (e.g., Army Corps of Engineers, Department of Transportation, HUD) in supporting local brownfields initiatives; and (4) the urgent need to provide Superfund liability relief for local governments that owned municipal landfills or sent non-toxic municipal solid waste or sewage sludge to landfills.

The cleanup and revitalization of brownfields represents one of the most exciting, and most challenging, environmental and economic initiatives in the nation. Brownfields are abandoned, idled, or under-used industrial and commercial properties where expansion or redevelopment is hindered by real or perceived contamination. The brownfields challenge faces virtually every community; experts estimate that there may be as many as 500,000 brownfields sites throughout the country.

The brownfields issue illustrates the connection among environmental, economic and community goals that can be simultaneously fostered through a combination of national leadership, state incentives, and the innovation of local and private sector leaders. Cleaning up and redeveloping brownfields provides many environmental, economic and community benefits including:

-- expediting the cleanup of thousands of contaminated sites;

-- renewing local economies by stimulating redevelopment, creating jobs, expanding the local tax base, and enhancing the vitality of communities; and

-- limiting sprawl and its associated environmental problems such as air pollution, traffic and the development of rapidly disappearing open spaces.

East Palo Alto's Brownfields Initiatives

The City of East Palo Alto is a small community of 25,000 people that has never enjoyed the economic prosperity of its neighboring communities in Silicon Valley. The City has the highest levels of unemployment and poverty and lowest median income in San Mateo County. In addition, the City has struggled to significantly reduce its crime rate, which was one of the highest in the nation in the early 1990s.

However, the City is successfully moving forward to revitalize our community. East Palo Alto was selected by the Administration as one of 16 Brownfields Showcase Communities nationwide, announced by Vice President Gore in spring 1998. As part of the Showcase initiative, we are working with federal and state agencies to promote sustainable environmental cleanup and economic development.

Our focus is the Ravenswood Industrial Area ("RIA") and the adjacent Four Corners redevelopment area. The Ravenswood Industrial Area, a large, contiguous region of approximately 130 developable acres in a historically mixed agricultural, commercial, industrial and residential area, was designated as a U.S. EPA Brownfields Assessment Pilot in 1996. The property is affected by a multitude of toxic substances, including arsenic, chromium and other heavy metals, pesticides and herbicides, chlorinated solvents and petroleum contamination. The City partnered with U.S. EPA Region 9 and the San Francisco Bay Regional Water Quality Control Board to assess the site and estimates remediation costs at $2-5 million.

The City has developed a strategic plan and design to redevelop this area into a mixed-use development and employment center, with up to 2 million square feet of commercial and high-technology offices and light manufacturing. New, medium-density housing is also planned nearby. The City will seek to promote the location of environmentally-sensitive businesses, the use of green building practices, and development that enhances and protects the beauty of adjacent resources such as San Francisco Bay, wetlands, and open space areas. The Four Corners portion is slated for the establishment of a new town center including government buildings, civic space and commercial establishments. The overall design will enhance the community and its livability. The City expects that redevelopment of the entire Ravenswood Industrial Area will create 4,000 new jobs and generate more than $1 million per year in new tax revenues.

The redevelopment of Ravenswood will also benefit the broader region. Silicon Valley is enjoying the hottest market in fourteen years, but is rapidly running out of office space and developable land. This leaves the Ravenswood Industrial Area poised to take advantage of a tight real estate market and finally enjoy the prosperity of the booming regional economy.

However, revitalizing this area will not be easy. Our biggest challenge will be to obtain the $2-5 million required to clean up the site. It is unlikely that a private developer would take on this project with such significant cleanup costs. Currently, there are few available sources to fill this gap. Consequently, East Palo Alto's last remaining developable area remains underutilized.

In addition, we will need to secure funds to upgrade the infrastructure in the area including expanding and improving the major entrance road to Ravenswood, enhancing our flood control and prevention, and upgrading our utilities. East Palo Alto's challenges clearly demonstrate the need for innovative partnerships and increased federal funding if we are to fully reap the many benefits from redeveloping brownfields like the Ravenswood area.

The federal government, particularly the U.S. EPA, has played an important role in helping East Palo Alto develop and advance our brownfields redevelopment efforts. Specifically it has:

-- Provided critical funding and a staff person to enable us to institutionalize a local program and to help investigate and clean up specific sites;

-- Provided technical assistance and other resources that have helped us learn from other communities and take on the many challenging obstacles to brownfields revitalization;

-- Connected us with other federal agencies that have resources and technical expertise; and

-- Most importantly, provided the critical leadership needed to educate the many stakeholders and the general public that redeveloping brownfields can be done and that it can provide significant economic and environmental benefits for communities across the nation. Brownfields Legislative Needs I. Ensuring Adequate Resources for Brownfields Revitalization

As East Palo Alto's efforts to redevelop the Ravenswood area clearly demonstrate, local governments need additional federal funding for site assessment, remediation and economic redevelopment to ensure long-term success in revitalizing our brownfields. The costs of site assessment and remediation can create a significant barrier to the redevelopment of brownfields sites. In particular, the costs of site assessment can pose an initial obstacle that drives development away from brownfields sites. With this initial obstacle removed, localities are much better able to put sites into a development track. In addition, the allocation of public resources for site assessment can provide a signal to the development community that the public sector is serious about resolving liability issues at a site and putting it back into productive reuse. Likewise, resources for cleanup are the missing link for many brownfield sites a link that keeps brownfields from being redeveloped into productive areas in many communities like East Palo Alto.

The use of public funds for the assessment and cleanup of brownfields sites is a smart investment. Public funding can be leveraged into substantial private sector resources. Investments in brownfields yield the economic fruit of increased jobs, expanded tax bases for cities, and urban revitalization. And the investment of public resources in brownfields areas will help defer the environmental and economic costs that can result from unwise, sprawling development outside of our urban centers.

The following types of federal funding would go a long way toward helping local communities continue to make progress in revitalizing our brownfields sites:

-- Grants for Site Assessments and Investigation: EPA's Brownfields Assessment Pilot grants have been extremely effective in helping localities to establish local brownfields programs, inventory sites in their communities, investigate the potential contamination at specific sites, and educate key stakeholders and the general public about overcoming the obstacles to brownfields redevelopment. Additional funding for site assessments and investigation is needed to help more communities establish local brownfields programs and begin the process of revitalizing these sites in their communities.

-- Grants for Cleanup of Brownfields Sites: There is a strong need for federal grants to support the cleanup of brownfields sites across the country. The U.S. Conference of Mayors' recent report on the status of brownfields sites in 223 cities nationwide indicates that the lack of cleanup funds is the major obstacle to reusing these properties. For many brownfields sites, a modest grant targeted for cleanup can make the critical difference in determining whether a site is redeveloped, creating new jobs and tax revenues, or whether the site remains polluted, dangerous and abandoned.

-- Grants to Capitalize Brownfields Cleanup Revolving Loan Funds: In addition to grants, federal funding to help localities and states to establish revolving loan funds (RLFs) for brownfields cleanup is another effective mechanism to leverage public and private resources for redevelopment. EPA deserves credit for championing brownfields RLFs as a mechanism for helping communities fill a critical gap in cleanup funding.

Unfortunately, the effectiveness of the EPA's current brownfields cleanup RLF program is severely undermined by the lack of new federal brownfields legislation. Under current law, localities are required to jump through and over numerous National Contingency Plan (NCP) bureaucratic hoops and hurdles to establish their local RLFs. Moreover, the NCP prevents the use of RLF funds on petroleum contaminated sites and on buildings contaminated with asbestos or lead common elements of brownfield sites. East Palo Alto has received $500,000 from EPA to capitalize a local RLF. However , the current NCP requirements will make it difficult and costly for the City to effectively use these funds. These NCP requirements were originally established for Superfund NPL sites, not for brownfields sites. Congress can easily fix this problem by making it clear that local brownfields RLFs are not required to meet the NCP requirements established for Superfund sites. V. Liability Clarification at Brownfields Sites

On the issue of federal Superfund liability associated with brownfields sites, NALGEP has found that the Environmental Protection Agency's overall leadership and its package of liability clarification policies have helped establish a climate conducive to brownfields renewal, and have contributed to the cleanup of specific sites throughout the nation. Congress can enhance these liability reforms by further clarifying in legislation that Superfund liability does not apply to certain "non-responsible" parties such as innocent landowners, prospective purchasers and contiguous property owners.

It is clear that these EPA policies, and brownfields redevelopment in general, are most effective in states with effective voluntary cleanup programs. NALGEP has also found that states are playing a critical lead role in promoting the revitalization of brownfields. More than forty states have established voluntary or independent cleanup programs that have been a primary factor in successful brownfields cleanup. The federal government should further encourage states to take the lead at brownfields sites. States are more familiar with the circumstances and needs at individual sites. Moreover, it is clear that U.S. EPA lacks the resources or ability to provide the assistance necessary to remediate and redevelop the hundreds of thousands of brownfields sites in our communities.

The effectiveness of state leadership in brownfields is demonstrated by those states that have taken primary responsibility for brownfields liability clarification pursuant to Superfund "Memoranda of Agreement" (MOAs) with U.S. EPA. These MOAs defer liability clarification authority to those states. In order to further facilitate brownfields cleanups across the country, NALGEP finds that the federal government should create clear standards under which States that meet minimum criteria can assume the primary role for resolving liability and issuing no further action decisions for brownfield sites.

Authority for qualified states to play the primary role in liability clarification is critical to the effective redevelopment of local brownfields sites. A state lead will increase local flexibility and provide confidence to developers, lenders, prospective purchasers and other parties that brownfields sites can be revitalized without the specter of Superfund liability or the involvement of federal enforcement personnel. Parties developing brownfields want to know that the state can provide the last word on liability, and that there will be only one "policeman," barring exceptional circumstances (i.e., where there is an imminent and substantial threat to public health or the environment).

At the same time, local officials are also concerned about delegating too much cleanup authority too fast to states that have not clearly demonstrated the ability to play a primary role. States vary widely in the technical expertise, resources, staffing, statutory authority and commitment necessary to ensure that brownfields cleanups are adequately protective of public health and the environment. If brownfields sites are improperly assessed, remediated or put into reuse, it is most likely that the local government will bear the largest impact from any public health emergency or contamination of the environment. NALGEP believes that the U.S. EPA has a role to play in ensuring that liability authority over brownfields sites should only be delegated to states that demonstrate an ability and commitment to ensure protection of public health and the environment in the brownfields redevelopment process. Moreover, EPA should be able to assert its Superfund authority at particular sites in exceptional circumstances (i.e., where there is an imminent and substantial threat to public health or the environment) where the state response is inadequate; or where the state requests EPA assistance. VI. Facilitating the Participation of Other Federal Agencies in Brownfields Revitalization

The cleanup and redevelopment of a brownfields site is often a challenging task that requires coordinated efforts among different government agencies at the local, state and national levels, public-private partnerships, the leveraging of financial resources from diverse sources, and the participation of many different stakeholders. Many different federal agencies can play a valuable role in providing funding, technical expertise, regulatory flexibility, and incentives to facilitate brownfields revitalization. For example, HUD, the Economic Development Administration, the Department of Transportation, and the Army Corps of Engineers have all contributed important resources to expedite local brownfields projects. The U.S. EPA and the Administration have provided strong leadership through the Brownfields Showcase Community initiative that is demonstrating how the federal government can coordinate and leverage resources from many different federal agencies to help localities solve their brownfields problems.

Congress can help strengthen the national brownfields partnership by further clarifying that the various federal partners play a critical role in redeveloping brownfields and by encouraging the agencies to work cooperatively to meet local needs. For example, Congress should be commended for legislation passed in 1998 to clarify that HUD Community Development Block Grant funds can be used for all aspects of brownfields projects including site assessments, cleanup and redevelopment. This simple step has cleared the way for communities across the country to use these funds in a flexible fashion to meet their specific local needs. In addition, Congress has provided $25 million in each of the past two years for HUD's Brownfields Economic Development Initiative.

Similarly, Congress should consider clarifying that it is appropriate and desirable for the Army Corps of Engineers to use its resources and substantial technical expertise for local brownfields projects. East Palo Alto needs the Corps of Engineers' help to succeed in its Ravenswood revitalization initiative. The Ravenswood area has experienced severe flooding from the adjacent San Francisco Bay, making flood damage prevention a top priority. In addition, East Palo Alto needs assistance in the construction of drainage, sewage and other environmental infrastructure. Moreover, the Corps could assist East Palo Alto to protect and restore the ecosystem of the area, which includes wetlands and other significant natural areas, as well as the challenges of brownfields contamination. East Palo Alto has worked closely with the Corps to assess environmental contamination and waterfront development issues, and we seek to continue this close cooperation.

I understand that the Corps of Engineers intends to propose new authorities in the Water Resources Development Act (WRDA) 2000 legislation for brownfields cleanup and environmental infrastructure, in order to protect the water quality and promote the revitalization of communities across the nation. I want you to know that East Palo Alto believes this is an excellent proposal that will make a big difference for our city and many other communities.

Congress also should work with EPA and the Administration to determine how other agencies can help facilitate more brownfields revitalization. By taking these steps, Congress can give communities additional tools, resources, and flexibility to overcome the many obstacles to brownfields redevelopment.

VII. Providing Superfund Liability Relief for Local Governments

Local governments have a very serious problem. We have been saddled with years of delay, and millions of dollars of liability and legal costs under the Superfund law simply because we owned or operated municipal landfills or sent municipal solid waste or sewage sludge to landfills that also received industrial and hazardous wastes. Local governments have faced costly and unwarranted contribution suits from industrial Superfund polluters seeking to impose an unfair share of costs on parties that contributed no toxic wastes to these so-called "co-disposal landfill" sites. We estimate that as many as 750 local governments at 250 sites nationwide are affected by the co-disposal landfill issue. The costs that our citizens bear as a result are unfair and unnecessary.

Local governments are in a unique situation at these co-disposal sites. First, municipal solid waste and sewage sludge collection and disposal is a governmental duty. It is a public responsibility to our communities that we cannot ignore, and we make no profit from it. Secondly, the toxicity of municipal solid waste and sewage sludge has been shown to be significantly lower than conventional hazardous wastes and, as such, represents only a small portion of the cleanup costs at co-disposal landfills. Yet industrial Superfund polluters continue to attempt to make localities pay millions of dollars in liability costs unfair costs that place an unreasonable burden on local taxpayers across the country.

In February 1998, the EPA finalized an administrative settlement policy to limit liability under Superfund for generators and transporters of municipal solid waste and sewage sludge, and for municipal owners and operators of co-disposal landfills. However, as fair and appropriate as the administrative policy is, it appears that legislative action to resolve the municipal Superfund liability issue is necessary and justified. First, the EPA policy is only a policy, non-binding on the Agency and subject to change or challenge. Second, this policy has already been the subject of litigation, and the real threat of further litigation involving local governments remains. A change in the Superfund law to address this issue is necessary to reduce the costly litigation and delay that municipalities continue to face at co-disposal sites. Third, we believe that legislative enactment of municipal Superfund liability provisions will give localities the certainty and confidence to make use of this settlement mechanism much as the codification of lender liability Superfund provisions has provided certainty for the banking industry. Conclusion

In conclusion, local governments are excited to work with the federal government to promote the revitalization of brownfields, through a combination of increased federal investment in community revitalization, further liability clarification, and other mechanisms to strengthen the national partnership to cleanup and redevelop our communities. NALGEP thanks the Subcommittee for this opportunity to testify, and we would be pleased to provide further input as the process moves forward.