June 19, 2017

Brownfield ‘land banks’ a step closer in CT

PHOTO | Contributed
PHOTO | Contributed
Two downtown Hartford buildings — 101 and 111 Pearl St. — have qualified for state brownfield loans to help convert them to apartments.
Tim Sullivan, deputy commissioner at the state Department of Economic and Community Development, stands inside a former Hartford brownfield site.

A second attempt in one year at encouraging municipalities to hasten cleanup of Connecticut's inventory of contaminated commercial-industrial properties is expected to draw the governor's signature this time around.

A year ago, Gov. Dannel P. Malloy vetoed the predecessor to this year's measure — House Bill 7229 — allowing for the establishment of local nonprofit land banks that would collaborate with cities and towns to acquire, remediate and redevelop some of the hundreds of contaminated, or "brownfield,'' sites in the state, supporters say.

The land banks would also be eligible for state incentives, including grants, as well as legal protections that make it more palatable to develop risky soils.

Ann M. Catino, a Hartford environmental and land-use attorney who co-chairs the legislature's Brownfield Working Group, said the bill, which she and others expect Malloy's signature on soon, provides municipalities greater flexibility in cleaning and redeveloping brownfield sites.

The measure is particularly good news, said Graham Stevens, office director for constituent affairs and land management at the Department of Energy and Environmental Protection (DEEP), for Connecticut's urban communities, many of which are home to a number of current and former manufacturing and industrial sites.

Many more vacant or underused polluted sites are scattered throughout the state: vacant gas stations/auto-repair shops, dry cleaners, auto and metal scrapyards, tire dumps, among others.

A pair of long-vacant downtown Hartford office buildings — 101 and 111 Pearl St. — qualified for $4 million in brownfield-remediation loans to convert both to apartments. Older buildings like those often contain lead paint and asbestos insulation.

Moreover, some sites are too big, or are subject to cloudy ownership or murky operations, complicating cleanup, Stevens said.

DEEP's role, Stevens said, is to work with the land banks and municipalities to ensure brownfields are remediated satisfactorily.

Since the Brownfield Working Group's creation a decade ago, Catino said, the state has sought ways to encourage cities and towns to remediate brownfields within their borders and return fallow acreage to productive residential or commercial use.

"A lot of these properties are nonperforming,'' said Catino, partner at law firm Hallaron & Sage LLP. "Nobody's paying taxes. Taxes are delinquent. … Ideally, it will come back on the tax rolls.''

Dirty legacy

The state Department of Economic and Community Development, which oversees brownfield remediation/development, estimates at least 1,000 known brownfield sites exist in Connecticut. Many date back to the state's colonial days, when Connecticut's land, air and water were all harnessed to churn out farm plows, housewares, long guns and cannons. Later, Connecticut was home to makers of machinery and other capital goods, including parts for aircraft engines.

Their legacy was the toxic exposure of Connecticut's soils and surface and groundwater to high levels of heavy metals such as mercury, and toxins such as arsenic, and oily and polluted runoff containing, among other things, polychlorinated biphenyls or PCBs, which are known cancer-causers in humans.

That's enough to scare off the most seasoned cleanup specialists, much less a municipality with no expertise in toxic cleanup, observers say.

It was a concern that the Waterbury Regional Chamber of Commerce expressed in supporting testimony in March to the Commerce Committee.

"Unfortunately, many municipalities do not have the financial resources to acquire, remediate and redevelop these sites, or are wary of the challenges inherent in such efforts, including federal liability exposure,'' said David Krechevsky, the chamber's public policy and economic development director.

"Communities also may not have access to the expertise needed,'' Krechevsky said, "in dealing with the complicated regulatory maze such remediation and redevelopment efforts entail.''

House Bill 7229 is the latest in a series of state efforts the past 10 years that encourage municipalities to get more active in acquiring and restoring brownfields, said Tim Sullivan, DECD deputy commissioner overseeing his agency's brownfield conversions.

Under Malloy, the state has committed nearly $200 million in loans and grants aimed at brownfield cleanup.

Yet despite that sum, Connecticut has barely made a dent, authorities say, incentivizing municipalities to get involved and ultimately reducing the inventory of brownfield sites.

While other states, such as New York and Michigan, have authorized more than 80 land banks, theirs still rely on municipalities to take the lead, officials said.

Connecticut, by contrast, pursued a "more market-oriented approach," Sullivan said, not only because the private and nonprofit sectors can do it better, but also because the state lacks the money to do it any other way.

Local example

The Connecticut Brownfield Land Bank Inc. is the only land bank so far in this state, said founder-president Arthur Bogen, an environmental strategist from Essex. The land bank's board includes municipal representatives from a half-dozen towns, including Southington and Torrington.

The 501 (c)(3), operating on a fees-for-services model, recently signed an agreement with the town of Southington to remediate the abandoned, 2-acre Becton-Corbin manufacturing site, next door to the main firehouse in the center of town, Bogen said. The town recently won a $400,000 remediation grant from DECD for the site.

Restoring idle properties to productive use is especially vital, Bogen said, at a time when the state and municipalities are struggling financially.

"It's important we not write off these assets,'' he said. "They were an important part of the tax bases. We've got to turn these dormant assets around and put them back on the tax rolls.''

Among its highlights, the bill makes land banks eligible for state and federal grants, instead of relying on more costly loans that must be repaid. They also may accept charitable contributions to fund cleanup efforts and could be eligible for forgiveness of local property taxes, supporters say.

Land banks also benefit from certain regulatory and limited-liability protections that give its operators and municipalities confidence that a brownfield site, once properly cleaned, won't boomerang and require more cleanup because more toxins are discovered at the site later on.

That shield also extends to protection from lawsuits or other legal action from abutting property owners to a remediated brownfield site. Worries about future liability once a site is cleaned up have posed past stumbling blocks to municipalities.

A year ago, Malloy vetoed a predecessor measure, House Bill 5425, despite supporting it in general terms. The governor objected at the time to provisions exempting notes or other obligations issued by the proposed land banks from any state taxation. Malloy said that could have led to a loss of millions of dollars in state revenue.

He also worried it might set a legal precedent that could lead to corporations arguing they shouldn't be required to pay state corporate taxes.

Catino said the 2017 measure revised language to address Malloy's concerns.

According to a Malloy spokesman, the final language of Bill 7229 is under review.

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