Re: "MOM AND POP" BROWNFIELDS -Reply

[CHARLES PATRIZIA <CAPATRIZIA@phjw.com>]

Bruce's questions are good ones.  In addition it seems to me that
successful brownfields need to focus on whether the succeeding use is
going to be profitable enough to make the effort worthwhile.  That is, a
brownfields project gets done not because there is some use that could
be made of the property, but because that use creates enough overall
benefit i) financially for the developer, so that the initial financing can be
repaid; ii) financially for the operator, so that the business will operate
and there is a source of revenue to pay the developer or the financing
entity; and iii) for the community and other finance entities (industrial
development bonds, pollution control bonds, regular bank or other
financing).  Otherwise, the developer won't go forward, the bonds won't
sell, and no one will operate the facility.  

Small businesses, particularly storefronts with residential space over or
adjacent, can be a vibrant part of a community.  But how many
brownfields are there that really are appropriate for that use.  Is the
brownfield parcel in an existing community that will generate business
traffic for the storefront?  What kind of clean up will be required -- as
Bruce points out, residential clean up standards could increase the cost
substantially, and most small businesses don't generate a lot of excess
cash flow.  Is it the best use of limited bonding authority to finance those
types of businesses, which may have higher risk, and therefore cause
the bonds to be priced higher, or to go after larger fish which can create
greater employment?  

I think in part, I look at this issue from a very different perspective than
Lenny does.  Lenny sees the community needs, and wants to use
brownfields redevelopment as part of community redevelopment.  I
applaud the sentiment, but must question whether its sensible to put
community dollars into a project that can't sustain itself economically.  If
the parcel were cheap to redevelop, or the business base were there to
do storefronts, there would be significant demand to do them.  I don't see
that demand.