Tom Darden: A Capital Idea
by John Spizzirri

BF News Editor John Spizzirri sits down with Cherokee Investment CEO Tom Darden to talk about responsible green redevelopment.

When Tom Darden was in the early stages of developing what would become the first private funding source for brownfield remediation and redevelopment, the economic stimulation of that particular market was not foremost on his mind.

It was the environment that stirred his passion. Darden, president and CEO of Cherokee Investment Partners, has been a willing and active passenger on the green bandwagon since it first rolled into public awareness in the early 1970s. You will still find a copy of the Whole Earth Catalog on his desk and, perhaps, a recent issue of Mother Earth News, evidence of his continuing education in environmental trends and issues.

Currently, issues surrounding the waste associated with bottled water have captured his interest. The idea that any bottled water company can market themselves as being vaguely green is laughable, he says, but certainly they are not the sole culprit.

“There is this notion that pollution is caused by some bad company as opposed to the idea that pollution is caused by the activities necessary to satisfy the lifestyles that we have. So I think pollution and environmental problems are a function of us,” Darden argues.

“It’s Pogo, ‘We have met the enemy and he is us.’

“On the other hand, there are people out there doing some incredibly important things to positively affect the environment. It’s an industry reducing its fuel consumption or changing the material that it uses.”

And that is exactly what Darden was doing in the mid-1980s, when he started building the Cherokee empire brick by brick. Literally.

After earning an undergraduate degree in anthropology—studying the environmental affect of economic development—and a master’s in urban planning, both from the University of North Carolina at Chapel Hill, Darden entered law school with plans to become an environmental lawyer.

He admits he was uncertain what that really meant, but he was interested in environmental issues after
all and it was a time when people were going to law school as a means to accomplish social change.

But after brief stints with two law firms, Darden found himself uninspired. A job with a consulting firm led to an opportunity to find ways to reduce energy consumption in the brick industry.

Darden and several other investors began buying brick plant sites in 1984, only to discover that they’d been contaminated by petroleum fuel storage. As they began to remediate these sites, they developed several methods for cleaning up soil, focusing mainly on bioremediation.

They also discovered they could use the petroleum in the surrounding clay to their advantage. In a simple but innovative process, they blended traditional brickmaking clay with the petroleum-enriched clay from their sites and let the baking process burn off the fuel inside the brick.

Their own remediation work led to work on other people’s sites, and soon they were buying them. And once they started buying sites, they realized they were no longer just in remediation, they were now in the investment business.

Initially called Cherokee Environmental Real Estate when they raised their first capital in 1992, Darden and his partners formed Cherokee Investment Partners in 1997, raising their first institutional capital with multiple investors a year later.

“Since then, we’ve just continued to raise money, buy and clean up sites, and help other firms’ redevelopment projects,” says Darden.

Since its inception, Cherokee has acquired some 520 sites and formed its fourth fund in 2005 with $1.2 billion. It continues to conduct remediation and sustain- able redevelopment work throughout North America and Western Europe.

Considered by some as a visionary and a pioneer in the brownfield industry, Darden admits that he did not foresee the substantive growth of the brownfield market at the offset.

“I perceived for a long time that economic, business and social decisions increasingly would be made to take into account environmental impacts,” he says. “But I had no idea how broadly brownfields would be perceived as important. There are so many related issues that are coming together around brownfields, having to do with needs that cities have for tax base and redevelopment and industry, factors that you just wouldn’t have thought about if you were just focusing on contaminated property.”

But the green and sustainable issues growing up around the industry and capturing the world’s attention have come as no surprise to Darden. Fascinated by green technology since his college days, he recognizes that, from a global level, the environmental impact of what gets built on sites is often more important than the pollution cleanup.

Many people, he says, find it difficult to comprehend the environmental consequences of land use, for example, determining the net environmental impact of urban redevelopment versus sprawl development.

“Now cities and mayors and planners, those people all get it. But the public doesn’t. They need something more tangible, like recycling or solar energy or green building,” he notes.

“So, I think that the communication surrounding what really is environmentally positive versus environmentally negative or just environmentally irrelevant is the really important issue.”

Despite some trepidation toward green marketing practices and aware of the public’s apathy toward the environment over the past few decades, Darden feels that we are on message this time.

“I kind of have the sense that this time is going to be different, that people are going to seriously think about these issues,” he says. “That’s why I feel charged up by the response that you’re seeing to global warming and Al Gore. And so much of it is visual. It’s pictures of glaciers and polar bears, and it’s
a good way for it to happen.”

For the foreseeable future, Darden plans to continue along the path he has chosen for himself and for Cherokee, combining the company’s effectiveness at managing investor capital with his passion for the environment.

“We want to continue to conduct leading edge research and to think about innovative ways to improve the environmental impact of development,” he says. “If I can do that, it’s a good day’s work.”