Re: [CPEO-BIF] The Stigma Issue

["R CHAPIN" <rwc27q@verizon.net>]

Lenny et al.

In my experience, if the "deal" is right a site's contamination issues will 
not effect that site being re-used no matter what it is called. However, 
site contamination has been set forth as the reason for a project stopping 
many times, when it wasn't the real cause at all.

I agree with Mike that a site with contamination and, perhaps a lower price 
tag, is looked at as an opportunity by a number of developers who know and 
understand the "process" for cleaning up sites. I also agree that the 
"stigma" can, at times, be only preception. Of course, there are also many 
sites where a "bad site" label is well deserved, but that in itself doesn't 
necessarily prevent sie development. For example,

Here in Jersey many "bigbox" warehouses have been built on contaminated 
sites because of their proximity to the Port of Newark container operations. 
I was involved with one where the developer was going to re-develop a very 
seriously contaminated  site (pesticides, some low level radioactive stuff, 
free product chlorinated DNAPL in groundwater to name just a few) while 
agreeing to restore a very large wetlands area that was roughly 1/2 the 
property. When the economy went sour last year, the deal was tabled; but 
until then, the "deal" had sufficient money to give the developer the return 
he wanted AND cleanup the place. BTW, that particular developer had 
successfully aquired and redeveloped a number of other Jersey sites before 
this occurred.
This site is neither a superfund site nor designated as a brownfield, but it 
has been in investigation/cleanup for over 25 years, so it clearly 
languished until it's location and the potential of the expanding regional 
economy overcame the contamination issues. I don't see that  labels matters 
to those that really understand what's needed to clean up a site. Sometimes, 
a silk purse can be made with a sows ear.

Rich Chapin

_____________________________________________________
Richard W. Chapin, M.S., P.E.
President, Chapin Engineering
27 Quincy Road, Basking Ridge, NJ 07920
908-647-8407 908 625 5697 (cell) 908-647-6959 (fax)





----- Original Message ----- 
From: "Lenny Siegel" <lsiegel@cpeo.org>
To: <Michael.Goldstein@akerman.com>
Cc: <brownfields@lists.cpeo.org>
Sent: Thursday, September 17, 2009 12:41 PM
Subject: Re: [CPEO-BIF] The Stigma Issue


> 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
> > Direct Facsimile: 305.349.4787
> > 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/>
> > www.akerman.com <http://www.akerman.com/> | Bio 
> > <http://www.akerman.com/public/attorneys/aBiography.asp?id=619> | V Card 
> > <http://www.akerman.com/public/attorneys/vcard.asp?id=619>
>
> --
>
>
> 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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