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<DIV><SPAN class=130415018-26102006><FONT face="Lucida Sans Unicode"
color=#800080>I sense some need here to punish developers willing to take risks
on the remediation and development of clearly challenged properties. Peter's examples of "claw-backs" present false hope. How many more projects would have been developed without such "claw-backs?" Defining a
general public benefit standard that applies in every case amounts to a
one-size-fits-all cookie cutter: it may have appeal to bean counters and
for purely academic purposes
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<DIV align=left><FONT face=CCHBold8><FONT color=#0080ff><FONT
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size=5>Barry</FONT></STRONG></EM><BR></FONT></FONT></FONT><FONT
face="Arial Black" size=2>Barry J. Trilling</FONT></DIV>
<DIV align=left><FONT face="Arial Black">Wiggin <FONT color=#ff8000>and</FONT>
Dana LLP</FONT></DIV>
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but its a sure way to discourage development. Go ahead and audit the project afterwards to see what benefits accrued, if any; but don't try to take
the money back if some pre-conceived beneficial goal was not attained.
Rather, use some statistically significant number of examples to shape future
public policy. Doing otherwise will apply an inverse pressure on the market, discouraging developers from engaging in brownfield
projects.</FONT></SPAN></DIV>
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<DIV class=OutlookMessageHeader lang=en-us dir=ltr align=left><FONT
face=Tahoma size=2>-----Original Message-----<BR><B>From:</B>
brownfields-bounces@list.cpeo.org [mailto:brownfields-bounces@list.cpeo.org]
<B>On Behalf Of </B>Peter B. Meyer<BR><B>Sent:</B> Thursday, October 26, 2006
2:36 PM<BR><B>To:</B> Bill Cocose<BR><B>Cc:</B> 'Brownfields Internet
Forum'<BR><B>Subject:</B> Re: [CPEO-BIF] Subsidies<BR><BR></FONT></DIV>Bill
Cocose's point about assessed values is exceptionally well taken -- but incomplete. There are, indeed, states in which it is very difficult to discharge old tax debts in the case of redevelopment of abandoned, and thus
tax delinquent, sites. In such cases, the burden accumulated from those tax
obligations can, as he points out, add to the financial burdens carried by a
brownfield site.<BR><BR>However, there is another side to the issue. In other
instances, especially with warehoused small sites, some of which are held on
spec against expected property value increases, the carrying cost for holding
a site off the market would be depressed by reassessments to close to zero for
un- or under-utilized sites. In Kentucky, for example, some cities were pressing for the right to assess a higher tax rate burden on vacant unused
brownfield sites as a means of getting access and forcing sites onto the market. <BR><BR>The problem really is that there are few, if any formulaic solutions or responses that make sense. The real need is for tailored responses - and for subsidies where needed, but not as automatic
grants. The problem, then, is that such responses require data, and we have
not been willing to demand information from business applicants requesting
public support, while we have always required it from individuals and
families. "Need-based assistance" is acceptable as a basis for providing welfare or supplemental security income to the elderly -- why isn't it equally
appropriate for developers? <BR><BR>There is also no reason not to require some sort of assurance of public benefit as a condition of that assistance. To continue the welfare analogy, we evolved "workfare," in which
people had to show that they were making an effort to get themselves beyond
dependency. We could, logically, require a similar demonstration of
environmental or other socially beneficial outcoems from brownfield
developers, and we might even penalize them after the fact for nonperformance.
<BR><BR>We do not need to look to welfare for an analogous program, but to the
economic developemnt experience with "clawbacks." These are conditions imposed
on various forms of state support for economic development projects, in which
the developers or new firms promise some number or jobs or total payroll in
return for some subsidies. States, dating back to the 1970s, monitored
development project performances and implemented clawbacks of different sorts,
and this did not seem to acutely discourage investment. (A typical clawback
might be a higher interest rate on a low interest loan proviced in response to
a commitment to generate a specific number of jobs, if the target jobs were
not created.)<BR><BR>In the brownfield case, the performance measure could be
the site remedial response, and the pollution abatement condition attained.
This is an outcome that is more under a developer's control than the number of
jobs generated by a company, and one that can be attained regardless of
the unknowns of economic condition or real estate market changes. Such a
clawback provision need thus need not add to the uncertainty prospective developers would face, and could actually save investors time and money by
providing community representatives, who might otherwise be a real thorn in
brownfield redevelopers' sides, with some assurance about the environmental
performance the project will deliver. Reduced community resistance can speed
project approvals and safe money.<BR><BR>-- All in call, this is an excellent
and important debate to have, and I am very pleased to see that CPEO has hosted the discussion thus far.<BR><BR>Peter<BR>- - - - - - - -<BR>Peter B.
Meyer<BR>Professor Emeritus of Urban Policy and Economics<BR>Director, Center
for Environmental Policy and Management<BR>School of Urban and Public
Affairs<BR>University of Louisville<BR> - - - - - - - -<BR>Director of
Applied Research<BR>Institute of Public leadership and Public
Affairs<BR>Northern Kentucky University<BR>- - - - - - - - <BR>Senior Advison,
E<SUP>2</SUP> Inc.<BR>- - - - - - - -<BR>President, The E.P. Systems Group,
Inc.<BR>- - - - - - - -<BR>Managing Member, Ecofun, LLC<BR>- - - - - - - -<BR>cell
502-435-3240<BR>phone 859-491-9298
<BR>fax
859-491-9252<BR>skype pbmeye02 or 859-648-0373<BR>- -
- - - - - -<BR>3205 Huntersridge Lane<BR>Taylor Mill, KY 41015
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