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ESG Goals Increasingly Drive Brownfield Redevelopment

“Brownfield” is the technical name for an underused or abandoned industrial or commercial property. Brownfields can range from old factories to vacant warehouses; from defunct gas stations to former dry cleaning establishments. Many brownfields are contaminated with potentially dangerous waste. Solvents and waste oil, for example, might be found at the site of an old automotive repair shop; the chemical perchloroethylene could be identified at a site previously occupied by a dry cleaner.

Appearances, however, can be deceiving. Despite the way they look, not all brownfields are actually contaminated. Unfortunately, even those properties that are not truly contaminated are widely believed to be. The General Accounting Office has estimated that there are over 450,000 brownfield properties in the United States. And, according to the California Environmental Protection Agency, California is home to almost 90,000 them.

As the availability of readily developable land decreases, brownfields are attracting more attention from developers. These sites, typically located in urban areas with well-developed transportation infrastructure, are potentially attractive targets for redevelopment to new uses, but often require regulatory support or public subsidies to overcome the additional costs and risks associated with environmental remediation.

Public support for brownfield projects – such as the $1.5 billion that The Bipartisan Infrastructure Law recently committed to the Environmental Protection Agency’s Brown- fields Program – is increasingly conditioned on meeting environmental, social and economic sustainability targets.

“Realizing significantly more sustainable brownfield redevelopment projects on the ground will require even more decisive leadership at all levels, effective policies and programs, robust stakeholder collaboration and buy-in, support from ESG (Environment, Social and Governance) investors, and investment from the commercial real estate industry,” according to a new report from the NAIOP Research Foundation.

“Sustainable Brownfield Development” was authored by Christopher De Sousa, Ph.D., MCIP, RPP, professor, School of Urban and Regional Planning, Toronto Metropolitan University. The report is an analysis of two dozen brownfield projects that include best practices for developers and their public and non-profit partners. The brief also considers the construction methods and design features that developers most commonly adopt to meet sustainability objectives.

“As global and national concerns about the environment accelerate, so too will environmentally sustainable actions aimed at generating renewable energy, eliminating waste, electrifying transportation, producing local agriculture, cleaning the air, offsetting carbon emissions, mixing land uses, and moving to net-zero and climate-positive actions,” the report said. “Making these changes in strong markets will be challenging enough from a feasibility perspective; they will be even more challenging in weaker markets that must also prioritize robust social and economic outcomes.”

“We are going to see more brownfield redevelopment,” said Marc Selvitelli, CAE, president and CEO of NAIOP. “The speed at which these projects reach completion will depend on the commitment of the commercial real estate industry, local community support that is based on two-way communication, funding, and other cooperation from local, state and federal governments. Our hope is that this report provides a road map and accelerates the process.”

For more information, visit naiop.org, or download the full brownfield report at naiop.org/brownfieldsresearch.

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