Re: [CPEO-BIF] The Stigma Issue

[Lenny Siegel <lsiegel@cpeo.org>]

Michael,

You make an interesting, valuable, and somewhat surprising observation. 
But isn't it true that specialist investors and developers are attracted 
to contaminated and otherwise blighted properties because the stigma 
normally depresses prices? I'm not saying that's a bad thing, but in my 
book there is a stigma.

My contention is the stigma and associated adjustment of property value 
is primarily a function of the actual contamination and condition of the 
property, more than a result of labeling it "brownfield," "Superfund," 
or "blighted." (In California, at least, one must demonstrate "blight" 
to set up a redevelopment area and receive tax-increment finding.)

Lenny


Michael.Goldstein@akerman.com wrote:
> I feel compelled to re-enter the dialogue to offer this observation:  In 
> many communities (and many markets) across the country, there appears to 
> be a subtle yet very real counter-dynamic at work that reflects a 
> willingness of private investors and their capital to move towards 
> stigma as opposed to away from it.   We have clients - and I'm sure that 
> many others on this listserve do as well - that use the Brownfields 
> designation or the Superfund status of a site, property assemblage, 
> corridor, or region as initial screening criteria to identify potential 
> deal opportunities that they may want to pursue and acquire.   So . . . 
> if one party's stigma is another party's potential value proposition, is 
> there really any stigma at all?  And in terms of trying to empirically 
> quantify the actual monetary discount purportedly related to stigma, if 
> there are parties - in fact if there is a whole industry - willing 
> (eager) to close, cleanup, and redevelop a given site, again, is there 
> really any stigma at all? 
>  
> Perhaps stigma, in this light, doesn't really mean what we think it 
> means.  Perhaps it should be redefined to simply refer to those parties 
> who lack the knowledge, ability, and risk tolerance to properly 
> underwrite cleanup and construction premiums related to contamination 
> and then identify, structure, and manage risk and liability properly.  
> In this sense, maybe stigma is not a "thing" to be quantified, but a 
> "state of mind" to be understood and put in context. 
>  
> I don't know the answers to any of these questions, but I do know this: 
> There are plenty of folks out there who, when they hear a site is a 
> Brownfield or on the NPL, not only do they not run the other way, their 
> response is, "fantastic, tell me where it's located, what I can do with 
> it, and what the asking price is."
>  
> Put another way, for an increasing number of parties the Brownfields or 
> Superfund status of a site isn't an alarm bell, it's the dinner bell.
>  
> -M
>  
> Michael R. Goldstein, Esq.
> Akerman Senterfitt
> One Southeast Third Avenue, 28th Floor
> Miami, FL 33131
> Direct Line: 305.982.5570
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> Mobile Phone: 305.962.7669
> michael.goldstein@akerman.com <mailto:michael.goldstein@akerman.com>
>  
> "Recycle, Reuse, and Restore Environmentally Impacted Properties: 
> Rebuild Your Community One Brownfield at a Time"
>
>
>
> <http://www.akerman.com/>
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--


Lenny Siegel
Executive Director, Center for Public Environmental Oversight
a project of the Pacific Studies Center
278-A Hope St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/961-8918
<lsiegel@cpeo.org>
http://www.cpeo.org



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