[CPEO-BIF] Re: Re-Working the Thinking on Brownfields Subsidies
Trilling, Barry
BTrilling at wiggin.com
Fri Oct 27 12:14:22 PDT 2006
As Lee Hoffman's message demonstrates, one size clearly does not fit
all. I continue to agree with Neal Frink that any look back, whether
negative or positive will likely discourage the participation of
developers. Nonetheless, a subsidy program that has clear,
quantifiable, negotiated terms resulting in potential bonus, as well as
refund, is much less objectionalbe than one that has only provisions for
recourse from the developer. Lee's example of an iterative process does
not constitute a look-back, but shows how proper goal setting can assure
accountability on a pay-as-you-go basis. Would that any governmental
authority had all such mechanisms available. Differing projects with
differing needs require differing mechanisms; what is appropriate for
one may not be appropriate for another.
Here in Connecticut where I live and where I devote a large part of my
law practice we have a legislatively appointed task force on brownfield
development, mandated by statute to come up with recommendations for
legislation to advance brownfields development. In testimony before the
task force earlier this week I recommended the creation of an agency
devoted exclusively to brownfields development that, among other
functions, would facilitate the availability of appropriate funding for
appropriate projects. Lee is a member of that task force and I trust
that this list-serve discussion will inform his work.
Barry
Barry J. Trilling
Wiggin and Dana LLP
400 Atlantic Street
P.O. Box 110325
Stamford, Connecticut 06911-0325
Tel: 203 363-7670
Fax: 203 363-7676
450 Lexington Avenue
New York, NY 10017
Tel: 212 490-1700
Fax: 212 490-0536
Quaker Park
1001 Hector Street, Suite 240
Conshohocken, PA 19428-2395
Tel: 610 834-2400
Fax: 610 834-3055
Cell: 203 556-3764
e-mail: btrilling at wiggin.com
website: www.wigginENVIRONMENTAL.com
<http://www.wigginenvironmental.com/>
-----Original Message-----
From: brownfields-bounces at list.cpeo.org
[mailto:brownfields-bounces at list.cpeo.org] On Behalf Of Hoffman, Lee D.
Sent: Friday, October 27, 2006 10:39 AM
To: brownfields at list.cpeo.org
Subject: [CPEO-BIF] Re: Re-Working the Thinking on Brownfields Subsidies
One way to bridge the gap between Peter and Barry might be to
incrementalize the funding. I've seen this done by various local
agencies here in Connecticut, and I think it could work more broadly in
that the subsidies can be tied to specific events. In order for
developers to get on board with this, you have to make the specific
events as clear as possible and subject to no interpretation. You
either hit the target or you don't. However, once a developer hits a
given target, the incentive money automatically flows to the developer.
For example, in one transaction I was involved in, a series of
condominiums was going up at a former MGP site. In that case, the
redevelopment agency gave some money up front, additional money when
certain cleanup targets were met, and then gave several payments when
various certificates of occupancy were issued by the municipality. In
that way, as one portion was cleaned and deemed suitable for occupancy,
money flowed automatically to the developer who could use that funding
to begin the next stage of development.
Obviously, this is not a one-size-fits-all cure, but it certainly beats
the alternatives of having a developer "on the hook" to lose a portion
of funding after the money has already been spent in good faith. That
is going to put a chill into the development community.
Lee D. Hoffman
Pullman & Comley, LLC
90 State House Square
Hartford, CT 06103-3702
Direct (860) 424-4315 | Fax (860) 424-4370
Mobile (860) 306-9843
lhoffman at pullcom.com | www.pullcom.com | Bio
THE INFORMATION CONTAINED IN THIS E-MAIL MESSAGE IS CONFIDENTIAL AND
PRIVILEGED, AND IS INTENDED ONLY FOR THE USE OF THE NAMED RECEIVER. IF
YOU ARE NOT THE NAMED RECEIVER, OR THE PERSON RESPONSIBLE FOR DELIVERING
THIS E-MAIL MESSAGE TO THE NAMED RECEIVER, YOU ARE NOTIFIED THAT ANY USE
OF THIS E-MAIL MESSAGE OR ITS CONTENTS, INCLUDING ANY DISSEMINATION OR
COPYING, IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS E-MAIL
MESSAGE IN ERROR, PLEASE IMMEDIATELY NOTIFY PULLMAN & COMLEY BY
TELEPHONE AT (860) 424-4300, AND DESTROY THE ORIGINAL MESSAGE. WE WILL
REIMBURSE YOUR TELEPHONE EXPENSE FOR DOING SO. THANK YOU.
IRS CIRCULAR 230 DISCLOSURE: TO ENSURE COMPLIANCE WITH REQUIREMENTS
IMPOSED BY THE IRS, WE INFORM YOU THAT ANY U.S. FEDERAL TAX ADVICE
CONTAINED IN THIS COMMUNICATION (INCLUDING ANY ATTACHMENTS) IS NOT
INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF
(a) AVOIDING PENALTIES UNDER THE INTERNAL REVENUE CODE OR (b) PROMOTING,
MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TRANSACTION OR MATTER
ADDRESSED HEREIN. IF YOU ARE NOT THE ORIGINAL ADDRESSEE OF THIS
COMMUNICATION, YOU SHOULD SEEK ADVICE BASED ON YOUR PARTICULAR
CIRCUMSTANCES FROM AN INDEPENDENT ADVISOR.
-----Original Message-----
From: brownfields-bounces at list.cpeo.org
[mailto:brownfields-bounces at list.cpeo.org] On Behalf Of
brownfields-request at list.cpeo.org
Sent: Friday, October 27, 2006 10:31 AM
To: brownfields at list.cpeo.org
Subject: Brownfields Digest, Vol 26, Issue 27
Send Brownfields mailing list submissions to
brownfields at list.cpeo.org
To subscribe or unsubscribe via the World Wide Web, visit
http://www.cpeo.org/mailman/listinfo/brownfields
or, via email, send a message with subject or body 'help' to
brownfields-request at list.cpeo.org
You can reach the person managing the list at
brownfields-owner at list.cpeo.org
When replying, please edit your Subject line so it is more specific than
"Re: Contents of Brownfields digest..."
Today's Topics:
1. Re: Subsidies (Peter B. Meyer)
2. Re: Subsidies (Trilling, Barry)
3. RE: Subsidies (Trilling, Barry)
----------------------------------------------------------------------
Message: 1
Date: Fri, 27 Oct 2006 02:20:12 -0400
From: "Peter B. Meyer" <pbmeyer at louisville.edu>
Subject: Re: [CPEO-BIF] Subsidies
To: 'Brownfields Internet Forum' <brownfields at list.cpeo.org>
Message-ID: <4541A51C.2090401 at louisville.edu>
Content-Type: text/plain; charset=ISO-8859-1; format=flowed
Having worked in local economic development for some 30 years and
brownfields for over a decade, I have to agree fully with Barry Trilling
on the ideal for determining what subsidies are appropriate. But I still
disagree with him completely on the real possibility of the calculation
being seriously undertaken at the local level. Thus some sort of ex-post
monitoring, holding recipients responsible for what they promise, is
needed.
Sharon Barr accurately points out that, "... it is very hard to come up
with a perfect formula that also works in the dirty nitty-gritty world
of political influence and decisionmaking. One cannot underestimate the
role of politics in this arena ..." This is the reality. Her
observations echo academic research and informal narratives about
economic development practice that have been around for decades. The
public sector generally has to rely on the applicants for financial
support for the data it needs to assess their applications ... and it is
not realistic to assume that there will be no distortion of the
information provided in order to increase the chance of getitng funding.
The political pressures on local officials are actually more acute in
the case of brownfields than in 'normal' economic development. Efforts
to influence decisions come not merely from developers interested in
potential profits from brownfields, but also from neighborhoods and
community based organizations concerned for pollution abate and human
and environmental health risk reduction.
The possibility of deriving a single allocation formula for brownfield
support is further confounded relative to the grant of support for
traditional economic development efforts due to multiple objectives As
Sharon noted, traditional economic development has focused on jobs,
incomes, and property value increases, while brownfield redevelopment
efforts include additional objectives, including housing provision,
protection of human health, preservation of environmental conditions.
In light of these concerns, it is inappropriate for public policy to be
grounded wholly in a belief in the possibility of objectivity in subsidy
provision, or in calculations of public rates of return. Barry, and
others who have agrred with him, are correct that any retrospective look
back and imposition of accountability might discourage some developers
from engaging in some brownfield projects.
However, the increased efficiency and effectiveness of public spending
on brownfields that such accountability could generate must also be
considered. Any subsidy funds provided that are not needed to make a
project economically viable are funds not available for other possible
subsidies that could actually increase the number of brownfields
redeveloped. The issue is not one of "subsidize or not" but rather of
the allocation of public funds to maximize attainment of public
objectives through that spending.
We can all agree that we want to see the limited brownfield funds
available have the greatest possible impact on the rate of site
mitigation and redevelopment. We may all also agree that we would prefer
to see more public funds available. To the extent that additional
appropriations depend on demonstrated effectiveness in utilization of
current funds, increased accountability can lead directly to future
expansion of public funding for the reclamation of contaminated lands,
Peter Meyer
------------------------------
Message: 2
Date: Fri, 27 Oct 2006 08:03:25 -0400
From: "Trilling, Barry" <BTrilling at wiggin.com>
Subject: Re: [CPEO-BIF] Subsidies
To: <pbmeyer at louisville.edu>, <brownfields at list.cpeo.org>
Message-ID:
<8785D27486771F43B6970B8EA12709E2036C19DD at sfexch01.wiggin.com>
Content-Type: text/plain; charset="utf-8"
Peter Meyer and I actually agree more than we disagree except with
regard to the efficiency and wisdom of claw backs. I object to a
non-market oriented approach that has no upside and that is subject to
post-hoc second guessing that may result in discouraging optimum
participation in the brownfield develoment process. Rather than
clawbacks, why not borrow a page from the private sector and use a "risk
sharing" approach to inventivize goal attainment, followed bt program
evaluation and adjustment? For example, the public entity could award
an amount to the developer for an amount with a clearly articulated and
quantifiable negotiated goal which, if not met, requires some refund,
and if exceeded, requires some bonus to the developer. That would be a
rational arms length process that would encourage participation and
disincentivise poor performance. Barry
-----Original Message-----
From: brownfields-bounces at list.cpeo.org
<brownfields-bounces at list.cpeo.org>
To: 'Brownfields Internet Forum' <brownfields at list.cpeo.org>
Sent: Fri Oct 27 02:20:12 2006
Subject: Re: [CPEO-BIF] Subsidies
Having worked in local economic development for some 30 years and
brownfields for over a decade, I have to agree fully with Barry Trilling
on the ideal for determining what subsidies are appropriate. But I still
disagree with him completely on the real possibility of the calculation
being seriously undertaken at the local level. Thus some sort of ex-post
monitoring, holding recipients responsible for what they promise, is
needed.
Sharon Barr accurately points out that, "... it is very hard to come up
with a perfect formula that also works in the dirty nitty-gritty world
of political influence and decisionmaking. One cannot underestimate the
role of politics in this arena ..." This is the reality. Her
observations echo academic research and informal narratives about
economic development practice that have been around for decades. The
public sector generally has to rely on the applicants for financial
support for the data it needs to assess their applications ... and it is
not realistic to assume that there will be no distortion of the
information provided in order to increase the chance of getitng funding.
The political pressures on local officials are actually more acute in
the case of brownfields than in 'normal' economic development. Efforts
to influence decisions come not merely from developers interested in
potential profits from brownfields, but also from neighborhoods and
community based organizations concerned for pollution abate and human
and environmental health risk reduction.
The possibility of deriving a single allocation formula for brownfield
support is further confounded relative to the grant of support for
traditional economic development efforts due to multiple objectives As
Sharon noted, traditional economic development has focused on jobs,
incomes, and property value increases, while brownfield redevelopment
efforts include additional objectives, including housing provision,
protection of human health, preservation of environmental conditions.
In light of these concerns, it is inappropriate for public policy to be
grounded wholly in a belief in the possibility of objectivity in subsidy
provision, or in calculations of public rates of return. Barry, and
others who have agrred with him, are correct that any retrospective look
back and imposition of accountability might discourage some developers
from engaging in some brownfield projects.
However, the increased efficiency and effectiveness of public spending
on brownfields that such accountability could generate must also be
considered. Any subsidy funds provided that are not needed to make a
project economically viable are funds not available for other possible
subsidies that could actually increase the number of brownfields
redeveloped. The issue is not one of "subsidize or not" but rather of
the allocation of public funds to maximize attainment of public
objectives through that spending.
We can all agree that we want to see the limited brownfield funds
available have the greatest possible impact on the rate of site
mitigation and redevelopment. We may all also agree that we would prefer
to see more public funds available. To the extent that additional
appropriations depend on demonstrated effectiveness in utilization of
current funds, increased accountability can lead directly to future
expansion of public funding for the reclamation of contaminated lands,
Peter Meyer
_______________________________________________
Brownfields mailing list
Brownfields at list.cpeo.org
http://www.cpeo.org/mailman/listinfo/brownfields
**********************************************************************
This transmittal is intended for a particular addressee(s). It may
constitute a confidential attorney-client communication. If it is not
clear that you are the intended recipient, you are hereby notified that
you have received this transmittal in error; any review, copying or
distribution or dissemination is strictly prohibited. If you suspect
that you have received this transmittal in error, please notify Wiggin
and Dana immediately at 203-498-4400, or by email, reply to the sender
and delete the transmittal and any attachments. Neither this message nor
the documents attached to this message are encrypted.
**********************************************************************
-------------- next part --------------
An HTML attachment was scrubbed...
URL:
http://www.cpeo.org/pipermail/brownfields/attachments/20061027/54409c57/
attachment-0001.html
------------------------------
Message: 3
Date: Fri, 27 Oct 2006 08:29:42 -0400
From: "Trilling, Barry" <BTrilling at wiggin.com>
Subject: RE: [CPEO-BIF] Subsidies
To: "Trilling, Barry" <BTrilling at wiggin.com>,
<pbmeyer at louisville.edu>, <brownfields at list.cpeo.org>
Message-ID:
<8785D27486771F43B6970B8EA12709E2036C19DE at sfexch01.wiggin.com>
Content-Type: text/plain; charset="us-ascii"
Apologies for the spelling typo's: I wrote that last message on my
Blackberry while on a train, but I think the meaning nonetheless came
through. BJT
-----Original Message-----
From: brownfields-bounces at list.cpeo.org
[mailto:brownfields-bounces at list.cpeo.org] On Behalf Of Trilling, Barry
Sent: Friday, October 27, 2006 8:03 AM
To: pbmeyer at louisville.edu; brownfields at list.cpeo.org
Subject: Re: [CPEO-BIF] Subsidies
Peter Meyer and I actually agree more than we disagree except
with regard to the efficiency and wisdom of claw backs. I object to a
non-market oriented approach that has no upside and that is subject to
post-hoc second guessing that may result in discouraging optimum
participation in the brownfield develoment process. Rather than
clawbacks, why not borrow a page from the private sector and use a "risk
sharing" approach to inventivize goal attainment, followed bt program
evaluation and adjustment? For example, the public entity could award
an amount to the developer for an amount with a clearly articulated and
quantifiable negotiated goal which, if not met, requires some refund,
and if exceeded, requires some bonus to the developer. That would be a
rational arms length process that would encourage participation and
disincentivise poor performance. Barry
-----Original Message-----
From: brownfields-bounces at list.cpeo.org
<brownfields-bounces at list.cpeo.org>
To: 'Brownfields Internet Forum' <brownfields at list.cpeo.org>
Sent: Fri Oct 27 02:20:12 2006
Subject: Re: [CPEO-BIF] Subsidies
Having worked in local economic development for some 30 years
and
brownfields for over a decade, I have to agree fully with Barry
Trilling
on the ideal for determining what subsidies are appropriate. But
I still
disagree with him completely on the real possibility of the
calculation
being seriously undertaken at the local level. Thus some sort of
ex-post
monitoring, holding recipients responsible for what they
promise, is needed.
Sharon Barr accurately points out that, "... it is very hard to
come up
with a perfect formula that also works in the dirty nitty-gritty
world
of political influence and decisionmaking. One cannot
underestimate the
role of politics in this arena ..." This is the reality. Her
observations echo academic research and informal narratives
about
economic development practice that have been around for decades.
The
public sector generally has to rely on the applicants for
financial
support for the data it needs to assess their applications ...
and it is
not realistic to assume that there will be no distortion of the
information provided in order to increase the chance of getitng
funding.
The political pressures on local officials are actually more
acute in
the case of brownfields than in 'normal' economic development.
Efforts
to influence decisions come not merely from developers
interested in
potential profits from brownfields, but also from neighborhoods
and
community based organizations concerned for pollution abate and
human
and environmental health risk reduction.
The possibility of deriving a single allocation formula for
brownfield
support is further confounded relative to the grant of support
for
traditional economic development efforts due to multiple
objectives As
Sharon noted, traditional economic development has focused on
jobs,
incomes, and property value increases, while brownfield
redevelopment
efforts include additional objectives, including housing
provision,
protection of human health, preservation of environmental
conditions.
In light of these concerns, it is inappropriate for public
policy to be
grounded wholly in a belief in the possibility of objectivity in
subsidy
provision, or in calculations of public rates of return. Barry,
and
others who have agrred with him, are correct that any
retrospective look
back and imposition of accountability might discourage some
developers
from engaging in some brownfield projects.
However, the increased efficiency and effectiveness of public
spending
on brownfields that such accountability could generate must also
be
considered. Any subsidy funds provided that are not needed to
make a
project economically viable are funds not available for other
possible
subsidies that could actually increase the number of brownfields
redeveloped. The issue is not one of "subsidize or not" but
rather of
the allocation of public funds to maximize attainment of public
objectives through that spending.
We can all agree that we want to see the limited brownfield
funds
available have the greatest possible impact on the rate of site
mitigation and redevelopment. We may all also agree that we
would prefer
to see more public funds available. To the extent that
additional
appropriations depend on demonstrated effectiveness in
utilization of
current funds, increased accountability can lead directly to
future
expansion of public funding for the reclamation of contaminated
lands,
Peter Meyer
_______________________________________________
Brownfields mailing list
Brownfields at list.cpeo.org
http://www.cpeo.org/mailman/listinfo/brownfields
**********************************************************************
This transmittal is intended for a particular addressee(s). It
may constitute a confidential attorney-client communication. If it is
not clear that you are the intended recipient, you are hereby notified
that you have received this transmittal in error; any review, copying or
distribution or dissemination is strictly prohibited. If you suspect
that you have received this transmittal in error, please notify Wiggin
and Dana immediately at 203-498-4400, or by email, reply to the sender
and delete the transmittal and any attachments.
Neither this message nor the documents attached to this message
are encrypted.
**********************************************************************
**********************************************************************
This transmittal is intended for a particular addressee(s). It may
constitute a confidential attorney-client communication. If it is not
clear that you are the intended recipient, you are hereby notified that
you have received this transmittal in error; any review, copying or
distribution or dissemination is strictly prohibited. If you suspect
that you have received this transmittal in error, please notify Wiggin
and Dana immediately at 203-498-4400, or by email, reply to the sender
and delete the transmittal and any attachments. Neither this message nor
the documents attached to this message are encrypted.
**********************************************************************
-------------- next part --------------
An HTML attachment was scrubbed...
URL:
http://www.cpeo.org/pipermail/brownfields/attachments/20061027/16855901/
attachment.html
------------------------------
_______________________________________________
Brownfields mailing list
Brownfields at list.cpeo.org
http://www.cpeo.org/mailman/listinfo/brownfields
End of Brownfields Digest, Vol 26, Issue 27
******************************************* << File: Hoffman, Lee
D..vcf >> << File: ATT173678.txt >>
**********************************************************************
This transmittal is intended for a particular addressee(s). It may constitute a confidential attorney-client communication. If it is not clear that you are the intended recipient, you are hereby notified that you have received this transmittal in error; any review, copying or distribution or dissemination is strictly prohibited. If you suspect that you have received this transmittal in error, please notify Wiggin and Dana immediately at 203-498-4400, or by email, reply to the sender and delete the transmittal and any attachments.
Neither this message nor the documents attached to this message are encrypted.
**********************************************************************
More information about the Brownfields
mailing list