Summary: In recent decades, the decline of manufacturing in many cities has left a legacy of abandoned and idled factories commonly known as "brownfields," which are sometimes contaminated with hazardous wastes. The high cost of cleaning the sites up in accordance with federal and state environmental laws has deterred some new businesses from locating in brownfields, which, in turn, has deprived inner city neighborhoods of tax revenue and employment opportunities. Lenders and developers are often wary of investing in such contaminated property because under the environmental laws, they could be liable for cleaning up the contamination. Proposed legislation (S. 1285) would encourage local governments to redevelop brownfields by addressing two barriers to redevelopment: liability under the Superfund legislation and the costs to assess sites. The bill would protect lenders and property purchasers from some Superfund liability and would help with the costs of assessing the sites by providing interest-free loans of $100,000 per year, up to a total of $200,000 per site, that local governments would be permitted to use to cover these costs. This report discusses (1) what the universe of potential brownfield sites is nationwide, (2) what legal barriers Superfund presents for redeveloping brownfields, and (3) whether the proposed loans to local governments are likely to be enough for conducting site assessments.
