COVER STORY, FEBRUARY 2006

ENVIRONMENTAL ENTRIES
Green barriers-to-entry are subsiding.
Daniel Beaird

In the past few years, environmental engineers and consultants have begun to witness their clients warm to the idea of more environmentally friendly developments. Developers shied away from such projects in the past because of the initial cost. However, with the introduction of Leadership in Energy and Environmental Design (LEED) projects throughout the nation, developers have learned that taking part in this U.S. Green Building Council's program and others like it can reap some economic as well as environmental benefits. Some states include a tax credit for taking part in programs like these; and an environmentally friendly development can reduce operating costs and enhance asset value and profits for the owner. Steadily, owners and developers are beginning to recognize the rewards.

Is it an overnight transition? “No,” says Bill Hogg, senior vice president of PSI, a consulting, engineering and testing firm in Atlanta. “But it's evolving. We are seeing more and more incentives for LEED-type designs and operations. I expect it to continue to grow.” As the largest brownfield urban redevelopment in the United States, Jacoby Development's Atlantic Station is Atlanta's example of an environmentally friendly mixed-use community. Atlantic Station was constructed on a former steel mill site. Contaminated soil was remediated and a soil barrier was formed to prevent human exposure to the remaining site soils. Today, Atlantic Station is a model for smart growth and sustainable development as it provides a home to more than 10,000 people and employment opportunities to more than 30,000 people as well as shopping and entertainment.

“The idea is progressing,” says Mark Shearon, Georgia regional manager of QORE Properties, an environmental engineering services firm. “Five or 10 years ago, almost all environmental work was done because a regulator was forcing a developer or owner to do it. Now, far more of the work we do is being done because a developer or owner wants to do it.” QORE Properties is involved in geotechnical services related to storm water management on the site. “With an increased understanding of environmental requirements, developers are building the cost into their projects. It's not a hindrance anymore,” Shearon says.

The biggest challenge is finding a consensus between a reasonable technical answer that regulators can accept and an answer that meets the needs of the property owner. “If a developer is going to take an unused contaminated property that isn't being addressed, regulators are very willing to talk,” Shearon says. Conservative lenders are becoming more involved as well. “For many years conservative lenders shied away from brownfield redevelopment because of its liability,” Hogg says. “But the positions that state and federal governments are taking on environmental issues like risk-based assessments and cleanups have turned the marketplace slightly around in the past decade.” Hogg sees much more cooperation and coordination from all involved parties in the future.

Cities like Atlanta, which has only seen suburban housing developments for years, are beginning to witness the change to urban developments. Suburbs of major cities like Bethesda, Maryland, are also seeing change as more suburban models are mimicking urban areas. In Boca Raton, Florida, and Chattanooga, Tennessee, closed shopping malls have been razed and replaced with open-air mixed-use facilities. Environmental engineers forsee infill and mixed-use properties continuing to be the hottest trend during the next 5 years.

What makes an infill design successful? Proper planning through parks and public landscapes, transportation systems, urban design, streets and sidewalks, signs and street furniture, and building elements make for a successful infill design. Of course, environmental hazards arise during the infill process. QORE Properties has worked with Green Street Properties at Glenwood Park in Atlanta. Some of the problems incurred on that site included wood chip and concrete burial from a former concrete manufacturing plant on site.   Many of the materials that were   present onsite were reused.

The Environmental Protection Agency (EPA), the U.S. Department of Housing and Urban Development (HUD), Economic Development Administration and other government agencies have tried to simplify and accelerate brownfield redevelopment through incentives like state tax credits.   Previous barriers to entry such as liability concerns have been addressed by these government agencies as to limit the number of obstacles for redevelopment. According to The Congress for New Urbanism, a Chicago-based non-profit organization involved in the creation of cities and towns, the EPA has included “prospective purchaser” agreements to protect innocent developers; a contaminated-aquifer policy to protect owners of property affected by migrating underground contamination; and the removal of 30,000 low-risk sites from the EPA's list of hazardous sites.

However, a big concern remains in respect to funding the assessment and cleanup process at many sites, especially those infill sites that do not lend themselves to good marketability. In most areas, developers can participate in a voluntary cleanup program which uses a risk-based decision making to balance cost, exposure, community needs, technical feasibility and environmental outcomes. Usually financial incentives are offered to connect brownfield cleanup with larger economic development plans. Risk-based Corrective Action Standards (RBCA) have been adopted by many states to set appropriate cleanup levels for individual sites. “Smaller projects are a large component of environmental corrective action through brownfields or the voluntary program a state has,” Shearon says.

Even though obvious obstacles remain, developers and property owners are understanding and accepting environmental regulations more and more. Developers are building it into their costs and some are going above and beyond the civic call. As mixed-use properties become more popular, more urban brownfields will have to be developed as developers run out of green space. Liability issues will continue to arise in the future, but the recent success of projects like Atlantic Station should ease the fears of developers, lenders and owners fears about redeveloping a formerly contaminated site.

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