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<P><FONT SIZE=2>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<BR>
<BR>
-----Original Message-----<BR>
From: brownfields-bounces@list.cpeo.org <brownfields-bounces@list.cpeo.org><BR>
To: 'Brownfields Internet Forum' <brownfields@list.cpeo.org><BR>
Sent: Fri Oct 27 02:20:12 2006<BR>
Subject: Re: [CPEO-BIF] Subsidies<BR>
<BR>
Having worked in local economic development for some 30 years and<BR>
brownfields for over a decade, I have to agree fully with Barry Trilling<BR>
on the ideal for determining what subsidies are appropriate. But I still<BR>
disagree with him completely on the real possibility of the calculation<BR>
being seriously undertaken at the local level. Thus some sort of ex-post<BR>
monitoring, holding recipients responsible for what they promise, is needed.<BR>
<BR>
Sharon Barr accurately points out that, "... it is very hard to come up<BR>
with a perfect formula that also works in the dirty nitty-gritty world<BR>
of political influence and decisionmaking. One cannot underestimate the<BR>
role of politics in this arena ..." This is the reality. Her<BR>
observations echo academic research and informal narratives about<BR>
economic development practice that have been around for decades. The<BR>
public sector generally has to rely on the applicants for financial<BR>
support for the data it needs to assess their applications ... and it is<BR>
not realistic to assume that there will be no distortion of the<BR>
information provided in order to increase the chance of getitng funding.<BR>
<BR>
The political pressures on local officials are actually more acute in<BR>
the case of brownfields than in 'normal' economic development. Efforts<BR>
to influence decisions come not merely from developers interested in<BR>
potential profits from brownfields, but also from neighborhoods and<BR>
community based organizations concerned for pollution abate and human<BR>
and environmental health risk reduction.<BR>
<BR>
The possibility of deriving a single allocation formula for brownfield<BR>
support is further confounded relative to the grant of support for<BR>
traditional economic development efforts due to multiple objectives As<BR>
Sharon noted, traditional economic development has focused on jobs,<BR>
incomes, and property value increases, while brownfield redevelopment<BR>
efforts include additional objectives, including housing provision,<BR>
protection of human health, preservation of environmental conditions.<BR>
<BR>
In light of these concerns, it is inappropriate for public policy to be<BR>
grounded wholly in a belief in the possibility of objectivity in subsidy<BR>
provision, or in calculations of public rates of return. Barry, and<BR>
others who have agrred with him, are correct that any retrospective look<BR>
back and imposition of accountability might discourage some developers<BR>
from engaging in some brownfield projects.<BR>
<BR>
However, the increased efficiency and effectiveness of public spending<BR>
on brownfields that such accountability could generate must also be<BR>
considered. Any subsidy funds provided that are not needed to make a<BR>
project economically viable are funds not available for other possible<BR>
subsidies that could actually increase the number of brownfields<BR>
redeveloped. The issue is not one of "subsidize or not" but rather of<BR>
the allocation of public funds to maximize attainment of public<BR>
objectives through that spending.<BR>
<BR>
We can all agree that we want to see the limited brownfield funds<BR>
available have the greatest possible impact on the rate of site<BR>
mitigation and redevelopment. We may all also agree that we would prefer<BR>
to see more public funds available. To the extent that additional<BR>
appropriations depend on demonstrated effectiveness in utilization of<BR>
current funds, increased accountability can lead directly to future<BR>
expansion of public funding for the reclamation of contaminated lands,<BR>
<BR>
Peter Meyer<BR>
<BR>
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