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New Plans For Barren Lands

A brownfield redevelopment guide for northern Michigan’s coastal communities

November 10, 2005 | By Mac McClelland
and Keith Schneider
Great Lakes Bulletin News Service

Anna Jonnson/MLUI

Work began on Traverse City’s first brownfield redevelopment project, River’s Edge, in 1997.

Many well-meaning government programs inadvertently generate unintended consequences. In the early 1980s, few such consequences stirred as much civic reaction in Michigan as the federal Superfund law and its state-level twin, the Michigan Environmental Response Act.
Both statutes, which considered public health, chemistry, risk analysis, and regulation in entirely new ways, compelled manufacturers to greatly improve their waste disposal practices. Both also required companies to clean up their toxic messes, which contaminated an estimated 500,000 sites nationally, according to an analysis by the Northeast Midwest Institute, a research group in Washington. The Michigan Department of Environmental Quality identified over 10,000 such sites statewide, many of them in cities and towns.

But administrators discovered that the new laws’ unrealistic expectations about the cost, public health risks, and legal responsibilities of cleaning up such sites were actually harming the communities they were supposed to help. By the late 1980s, it was clear that the new federal and state environmental laws actually blocked, rather than facilitated, urban development.
The two main problems were liability and chemical exposure standards. The liability provisions, in both Michigan and federal law, put cleanup costs squarely on the current owners of contaminated property, regardless of whether they caused the pollution, while the exposure standards required landowners to essentially eliminate any trace of chemical pollutants.
Cleanup contractors enjoyed the latter rule because decontamination involved weeks of lucrative work shipping thousands of tons of slightly contaminated soil from one place to another — an activity that industry disparagingly referred to as “suck, muck, and truck.” But developers and city leaders disliked both provisions. With cleanup costing $20 million an acre or more, nobody wanted anything to do with buying, decontaminating, and redeveloping contaminated sites. So sites just sat there, gathering litter, polluting groundwater, driving down property values, and encouraging blight.

The call for changes in the laws was loud, persistent, and nationwide. It was most urgent in Michigan, where post-industrial, economically troubled big cities and small towns were desperate for revitalization, but hamstrung by the cleanup laws.

A Successful Call To Arms

Fund This Program!

Michigan’s brownfield redevelopment program started in 1988 when voters approved the $800 million state Environmental Protection Bond. About $425 million went to identifying and cleaning up contaminated sites, and $45 million went to brownfield redevelopment. 

Ten years later, voters approved the $675 million Clean Michigan Initiative. Almost half was dedicated to brownfield redevelopment; $75 million of that provided brownfield grants and loans to communities.

In 2004, Michigan communities garnered a total of $17.6 million in state and federal grants and loans — $12.2 million in grants and $5.4 million in loans. This includes several northern Michigan coastal communities that, in the last three years alone, attracted $2.5 million in federal brownfield redevelopment incentives.

That is up from $600,000 awarded from 1997 to 2002.
The U.S. Environmental Protection Agency has provided Michigan $28 million in brownfield redevelopment grants and loans since 1997, an annual average of nearly $4 million. This year the state received $6.75 million from the EPA for brownfield redevelopment, and is expected to gain the same amount next year.

But that will be the only money Michigan cities have for brownfield redevelopment, unless the Legislature and Governor Jennifer M. Granholm agree on new funding. The $20.4 million remaining in the state brownfield grant account is enough for roughly two more years of work, according to state officials.

State leaders listened. From 1994 to 2000, Republican Governor John M. Engler and state legislative leaders of both parties approved a series of trendsetting laws, and Michigan citizens approved a $675 million bond referendum. Both made cleaning up contaminated sites faster, easier, and less expensive. The result: Michigan’s brownfield redevelopment program is now responsible for 14,000 new jobs since the mid-1990s and $3.8 billion in private investment since 2000, according to the Michigan Economic Development Corporation. It is the most efficient and successful state urban redevelopment program of the past generation.
All across Michigan, new homes and offices stand on what were once empty lots. In fact, two of Michigan’s great cities, Grand Rapids and Traverse City, owe much of their revival in this century to state help in cleaning up the industrial detritus left from the last.

This report, New Plans For Barren Lands: A brownfield redevelopment guide for Michigan’s northern coastal communities, summarizes the statewide achievements in downtown investment resulting from modernized state toxic cleanup laws, now a decade old. It explains that investing millions of taxpayer dollars to transform ugly parcels into centers of commerce is smart because it generates more jobs and economic growth. That spending, the report says, should grow significantly.
In an era of rising joblessness, fading old-line industries, and local and state budget shortfalls, encouraging healthy economic growth is extraordinarily challenging. We believe that Michigan must look hard at its small and large urban centers, which generated real wealth through much of the 20th century and can do so again.

The saga of how the state’s brownfield redevelopment program has efficiently turned hundreds of abandoned parcels into generators of work, housing, and economic well-being is one of a well-reasoned government program that works. There are many examples:

  • A $4.5 million state approval for tax capture that
    leveraged more than $2 million in local matching
    dollars is enabling Muskegon to turn a moribund downtown shopping center into a new neighborhood
    of shops, homes, and restaurants.
  • Strategic investments of more than $27 million in state brownfield grants, loans, and tax capture utterly transformed Traverse City’s downtown (see Chapter 6).
  • Ludington, Elberta, Frankfort, and East Jordan turned vacant or poorly utilized property into places people flock to. Frankfort even built a handsome city hall (see Chapter 7).

The redevelopment market is astonishingly strong in Michigan, as energy prices soar and demographic trends encourage retirees, professionals, and families with children to seek the convenience and quality of life that living near workplaces in cities and towns provides.

Still, the most important goal of New Plans is not to remake the case for a program that has proven its value — a case so strong that it should prompt the Legislature and Governor Granholm to renew the state’s brownfields redevelopment budget. Just $20.4 million in state brownfield redevelopment grants remain, and the program’s management and oversight staff could dissolve. (See sidebar.)

A How-to Guide
Rather, New Plans can help state lawmakers, government officials, local leaders, and developers in northern Michigan’s coastal communities understand and use the state’s brownfield redevelopment program.

New Plans explains how to access the many economic incentives provided by the state’s brownfield program. The report also describes how several northern Michigan communities brought public and private resources together to spur investment in their downtowns. It emphasizes that success stemmed from:

  • Planning — knowing what the community wanted and establishing a master plan and zoning ordinancs that encourage downtown redevelopment.
  • Partnerships — bringing together developers, the state, and local officials to thoughtfully packaged projects.
  • Perseverance — devoting plenty of time to seeking the best solutions and financial incentives for downtown redevelopment.

In short, New Plans is a convenient guide that helps the region’s lawmakers, local officials, and developers use Michigan’s incentive programs effectively to redevelop brownfields in northern coastal communities. New Plans can help build a new era of downtown excitement in northern Michigan, one distinguished by cleaner, greener, more inviting and vital places to make a home and a life.

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