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Wednesday, January 23, 2013

Going Brown (When Going Green is Bad)

In my previous post, I wrote about the ponzi scheme that most municipalities fall into by investing public dollars for infrastructure improvements so that developers can build strip malls and big-box stores on greenfields and that ultimately fail in the long term to return on the public’s investment in them.  I said that there are typically two factors that work symbiotically to discourage brownfield development in favor of greenfield development.  They are: haste to start building; and inflexible, outdated zoning and land development ordinances.  Here is how this dysfunction happens.

(photo credit: London [Ontario] Free Press)
First, developers are understandably in a hurry to get their bulldozers rolling over a site so that Walmart can have their next grand opening as soon as possible.  Then the developers lull the government officials into thinking that there is a big competition for them to commit to infrastructure improvements on which their long-term payback will be less than $1 on the dollar.  A local politician would not want their constituents to think that the next town down the road scored the fancy, new strip mall because their own leaders could not come up with a suitable public infrastructure subsidy package to lure that same developer.  The result is new commercial spaces – be they retail or warehouses – that are only 50-60% occupied because their developer forged ahead based on opportunity rather than on market demand.

(photo credit: http://www.sonorannews.com)
Second, our municipal zoning ordinances often prohibit intelligent redevelopment of existing properties.  Sure, variances can be granted by the local zoning hearing board to allow a new use for an existing developed property, but it might add another year to the planning and review phase of the project before ground could be broken.  Most developers won’t wait that long to redevelop an existing parcel.  So they’ll go after a readily available greenfield and look for a government hand-out to subsidize the big-box boondoggle they are dreaming of plopping on a cornfield.

(photo credit:  http://www.capturelehighvalley.com)
The solution is for our local governments to amend their zoning and land development ordinances to be flexible enough to accommodate redevelopment of sites with something other than the exact thing that had been built there for 60 years ago and prospered for the first 40, struggled for 10, and has been sitting as a vacant eyesore for the past 10 years. If a commercial or industrial property’s previous use ran its course and that use is no longer viable for that community, why wouldn’t the community open its mind to a different use that could be viable for the next 60 years?

Brownfield development is nothing new.  By now, I suppose that most states have cleanup laws that were written specifically to grant environmental liability protection to entities that purchase a contaminated property and cleans it up.  My own state of Pennsylvania was one of the leaders in developing a realistic regulatory framework to help get environmentally compromised properties back on the tax rolls and employing people.

As an environmental consultant, over the past 15 years I’ve been involved in obtaining environmental liability relief for more than two dozen sites in Pennsylvania.  Obtaining liability relief for a site, also known as getting closure for the site, simply means getting the site cleaned up sufficiently so there are no remaining threats to human health or the environment and so the Department of Environmental Protection (DEP) can close their file on the property.

Sites do not have to be cleaned up to pristine conditions; their owners simply have to eliminate any contaminant pathways to human or ecological receptors.  After delineating the bounds of the contamination in the soil, sometimes installing a simple concrete or asphalt cap on the soil is sufficient to prevent humans from coming into contact with the residual contaminants and to prevent rainwater from leaching the contaminants down into the groundwater.  And sometimes the closure process is nothing more than collecting enough samples to prove that there are no contaminants present at concentrations above their cleanup standards for soil or groundwater.  Usually it’s just environmental science, not rocket science.

I should also say that I’m not completely opposed to government subsidies for development projects.  If the cost-benefit analysis shows an acceptable return on the taxpayers’ investment, why not?  However, I think you’re more likely to see a reasonable return on investment from updating existing utilities or infrastructure to facilitate redevelopment of a brownfield than you would building new utilities or infrastructure to accommodate building on a greenfield.
You can teach an old dog new tricks.  When Bethlehem Steel shuttered operations at their flagship plant in Bethlehem, PA, in the mid-1990s, the city rallied to create a renaissance at the dilapidated, 100+ year old industrial property. (photo credit: http://kgurban.com/new/beth.html)

The brownfields are there, and they already have utilities.  They already have roads in front 
of them with people driving past them.  Many already have rail lines adjacent to them to move either freight or commuters in and out.  Let’s use the infrastructure that we already have in place and let the greenfields alone to continue to recycle our carbon dioxide into oxygen.  Building a new big box with a 4-acre parking lot on top of a fallow farm field does not do a thing to mitigate our carbon footprint.  But it does create a need to extend utilities and roads that taxpayers will have to start maintaining in 10 years when the developer is long gone.

Concertgoers gather for a show at the base of the former Bethlehem Steel blast furnaces in the heart of the new SteelStacks arts and cultural center in Bethlehem, PA.  (photo credit: http://www.philadelphiafed.org/community-development/publications/cascade/81/03_keys-to-success-for-small-industrial-cities.cfm)
The former Bethlehem Steel blast furnaces were retained as an historical and cultural monument in the heart of the new SteelStacks arts and cultural center in Bethlehem, PA.  (photo credit: http://www.philadelphiafed.org/community-development/publications/cascade/81/03_keys-to-success-for-small-industrial-cities.cfm)

Friday, January 11, 2013

The Ponzi Scheme of Suburban Sprawl

(photo credit: http://kbenglishhlg.wikispaces.com/Gatsby's+mansion)
I can’t recall which book it was, because I was forced to read it well over 30 years ago in my 11th grade English class.  But it was a typical late 19th century rags to riches story, and I recall being amused that the relatively uneducated, newly wealthy protagonist tried to give the impression of sophistication by stocking his home library with blank books.  Blank pages in bindings that sported impressive titles and authors.  This ruse apparently was not uncommon in the 19th century and carried over to the 20th century, at least in literature.  I can recall that one of The Great Gatsby’s party guests was impressed that Gatsby’s library contained real books rather than impressive titles printed on the spines of bound blank pages.

Fast-forward to the 21st century, and now there is a website (http://www.booksbythefoot.com) where you can buy stacks of books with color-coordinated bindings simply to use as decorations.  Presumably, that website is geared toward interior designers rather than posers trying to give the false impression of intelligence.  Yes, they charge by the lineal foot of books rather than based on the merits of each individual book they are selling. So what do color-coordinated bookbindings or literary characters with fake libraries have to do with conservation?  Read on.

Earlier this week, I had the opportunity to attend a lecture by Chuck Marohn, author and executive director of the Minnesota-based non-profit group Smart Towns.  The mission of Strong Towns is to support a model for growth that allows America's towns to become financially strong and resilient (taken from http://www.strongtowns.org).  Chuck stopped in my town as part of his week-long, 11-town lecture tour of Pennsylvania.  Here is a link to a news story about Chuck’s talk in Lancaster, PA, later the same day that I heard him speak.  Drawing on his experience as both a civil engineer and a land planner, Chuck’s message was that the way U.S. municipalities have been growing since World War II has been based on an unsustainable ponzi scheme that funds continually expanding suburban development without considering the long-term costs of that development. 

Strong Town’s website explains that, since the end of World War II, our cities and towns have experienced growth using three primary mechanisms (http://www.strongtowns.org/the-growth-ponzi-scheme/):
1. Transfer payments between governments: where the federal or state government makes a direct investment in growth at the local level, such as funding a water or sewer system expansion.
2. Transportation spending: where transportation infrastructure is used to improve access to a site that can then be developed.
3. Public- and private-sector debt: where cities, developers, companies, and individuals take on debt as part of the development process, whether during construction or through the assumption of a mortgage.
But these developments rarely generate more revenue for the governments that invested in them than the governments must pay in both up-front costs and long-term maintenance costs.  New, short-term gains in public revenue must then be used to offset the long-term costs from the “next big thing” of 20 years ago.  That’s because the costs to these governments in long-term maintenance or added debt service were not accounted for when the politicians were being courted by the developers decades earlier. 

For me, Chuck’s take home message was that any private development project that is seeking public assistance (e.g. utility or transportation subsidies or financing incentives) should present a realistic cost-benefit analysis.  And that includes all long-term costs.

When we allow our municipal officials to cozy up with developers who exploit land development ordinances that fail to recognize Smart Growth principles, we get more and more big box stores and strip malls on the outskirts of developed areas.  In other words, we get more sprawl.  They try to sell it to us with a fairy tale about how many more jobs their big box will create and how much more tax revenue the development will generate if the municipality will “partner” with the developer to extend roads and utilities to the cornfields that they want to pave over.  But widening our local roads to accommodate more sprawling developments only gives the illusion of prosperity in our local communities.

(photo credit: http://www.saveourlandsaveourtowns.org)
This sprawl is nothing more than a library full of books with blank pages.  A whole bunch of style over substance.  But unlike a fake library, the sprawl doesn’t stop when the bookcases are full.  Developers and municipal officials, who may either be na├»ve or have ulterior motives, will continue the ponzi scheme of getting governments to subsidize the infrastructure for more sprawl until there is a grassroots push to demand cost-benefit analyses for these train wrecks of cinder blocks and asphalt being touted as economic development.

Strong Towns’ mission to help towns become financially strong and resilient by making better-informed decisions is a mission that should appeal to folks of all political stripes.  For tree huggers (or stream huggers) like myself, it means putting the brakes on unchecked development of greenfields, because most developers would have to fund more of the infrastructure improvements themselves.

For arch conservatives, it means that anyone looking for public dollars to subsidize a private development land development would have to show a careful cost-benefit analysis proving that the return on investment from the public dollars will be greater than the short-term and long-term dollars going into the project.  And if that cost-benefit analysis shows that developing 60 acres of fallow farm field on the edge of town is not going to return as much of the public investment as that same development on a shuttered industrial site (a brownfield) that already has the transportation and utility infrastructure, then the municipal leaders should pass on participating in that greenfield project.
(Photo credit: http://lowermacungie.patch.com)

In my next blog post, I’ll talk about the two factors that I think work symbiotically to discourage brownfield development in favor of greenfield development.  They are haste to start building and inflexible, outdated zoning and land development ordinances. Check back in a couple of days to read more.