That IS How You Spell “Relief”

My compliments on Chris Olson’s article in the June issue of Brownfield News. In particular, his #3 — Flip Side of Prospective Purchasers Agreements — makes sense and I enjoyed his use of a logical and clever analogy of long vs. short stock sell. Overall they are good recommendations. I wonder if any regulators are listening? Thanks again.

Anonymous

Congratulations on a Fantastic Edition

Congratulations on a fantastic edition of Brownfield News addressing several key issues, especially community concerns, which are of crucial importance for NBA members (June 2006).

A great feature, this month’s “paper bag” author, was mostly right on about inventories. While the suggestion that determining a property is brownfield just based on previous use would get some owners perturbed, he or she was correct that inventories (if that is the right term for lists of sites) can be useful for promotion in slow markets, in helping to measure success, but can drain resources and most importantly are not and should not be an attempt to replace the real estate brokerage community.
 
I was also glad to see discussion of the academic side to brownfields. Here at the Newman Real Estate Institute, City University of New York, we also offer a course in brownfields. Rather than a whole program, which I think would be too specific to well serve students starting their careers, several of our adjunct faculty members bring their brownfield expertise in teaching broader courses. Examples include Stephen Soler of Georgetown Land who teaches real estate development, Steve Luftig, retired from EPA, who teaches environmental issues in real estate, and Bill Penn of the Clean Land Fund and Steve Ancona of Flatiron Realty Advisors, who both teach real estate finance.

Barry Hersh
City University of New York and Vita Nuova

Reopeners Not an Issue

I am completely blown away Chris Olson’s veiled assertion that regulators, particularly state regulators, are reopener happy. His solution is for states to bloat their government by procuring “an environmental insurance policy to cover these unknowns.” With every new procurement comes new staff, new regulations and new red tape.

Unfortunately, Mr. Olson must have limited experience with state regulators. In a 2003 study, EPA and academic sources found that state regulators rarely require developers to conduct additional cleanup at sites already remediated under state voluntary cleanup programs. Of 11,497 sites studied in 46 states, only 12 cases were reopened, or one tenth of one percent of sites.

This study supports what we’ve always known, that states have a “git ‘er done” attitude and have a proven track record of not reneging on their deals. Armed with this data, I recommend that the regulated community (and that includes the insurance markets) get with the program and either 1) move the reopener paranoia into the business risk evaluation or 2) pass the risk onto a private party, either through a guaranteed fixed price remediation contract with an environmental consultant or to an insurance carrier.

This letter came from an anonymous reader who signed it “Uncle Redtape.”

Corrections

The correct name of Accounting Department author Greg Rogers’ company is Advanced Environmental Dimensions. The correct name of the publication where Barbara Carss’ article on an Ottowa project originally appeared is Canadian Property Management. BFN