Roles of Community-based Organizations in Brownfields Redevelopment

As part of a series of educational programs on brownfields redevelopment for community-based organizations (CBOs), the Lincoln Institute will offer its third course, “Reuse of Brownfields and Other Underutilized Properties: Identifying Successful Roles for Community-based Nonprofit Organizations,” in Detroit in late March 2004.

The impetus for the series arose from a number of issues in the CBO community. First, CBOs are often left out of brownfield redevelopment training programs, which are generally designed for the private sector, including developers, environmental engineering firms and financial institutions, or for local governments. While these sectors must gain a better understanding of brownfields, particularly where the fear of liability looms large and remains a chief obstacle to entering into any development process, CBOs are also essential redevelopment partners. Learning how to partner with other sectors and when to bring these partners into a brownfields project is an important aspect of successful brownfields redevelopment for CBOs, and has been an integral part of the Lincoln Institute course curriculum.

Second, CBOs are often viewed as underfunded and lacking sufficient capacity to take on brownfield redevelopment. This is sometimes true, but as a result of this perception the importance of CBOs can be underestimated by both the public and private sectors, and this phenomenon becomes a self-fulfilling cycle. A wider range of state and federal funding sources are now available to CBOs, but they need to know how to access them. Some examples are special funds to conduct site assessments or do neighborhood planning, banks seeking to make loans in low-income areas where they can get special federally recognized credit, and other resources available only for nonprofit organizations.

Moreover, CBOs can play many unique roles that draw upon their strengths and capacities as community-oriented institutions. CBOs—particularly large, long-standing and well-funded CBOs—may act as the developer and/or the property owner, or they can serve as a broker or community champion, which does not require the more complex skills normally characteristic of a commercial developer. In addition to learning how to partner and play different roles, many CBOs are beginning to expand their traditional focus beyond housing or community services to encompass a broader range of economic development activities, such as property redevelopment. As a result, CBOs are interested in building their organizational capacity to take on brownfields redevelopment and other related activities.

The neighborhoods in which CBOs often work exhibit many signs of disinvestment, including as much as 30 percent vacant property, high unemployment rates, absentee land ownership and few commercial businesses. Therefore, with an inherently weak market, the brownfield sites in these neighborhoods are routinely ignored by both the public and private sectors, specifically because they may be the hardest sites to redevelop. These redevelopment difficulties may arise from the level of on-site contamination—real or perceived—as well as from the challenges of the market. There is a need for both the public and private sectors to establish partnerships, but often a lack of will to bring the two entities together. The leadership of the nonprofit sector is frequently pivotal in attracting public attention and stimulating private sector interest in the neighborhood, and thus improving the likelihood that properties in these neighborhoods will be redeveloped. CBOs with a strong presence in a neighborhood can often take this leadership role in redeveloping these sites.

Case Studies

One of the most popular aspects of the Lincoln Institute series has been the opportunity for smaller, less experienced CBOs to interact with larger ones that have a track record in doing redevelopment work. Through both formal and informal exchanges of ideas and information, the CBOs are exposed to the best brownfield redevelopment practices. This opportunity to learn from peers is enhanced with the use of case studies. In direct response to participant demand, these case studies were developed and integrated into the curriculum to allow the participants to learn directly from the practical experience of their colleagues and from other CBO staff attending the courses.

The case studies were developed through interviews with the CBOs involved in the projects and have been published as a Lincoln Institute working paper, “Three Case Studies on the Roles of Community-based Organizations in Brownfields and Other Vacant Property Redevelopment: Barriers, Strategies and Key Success Factors” (Brachman 2003). The cases are:

• Brokering Redevelopment on a “Silver Shovel” Property, involving the Greater Southwest Development Corporation in Chicago, Illinois;
• Maximizing Community Benefits Through a Community Garden Strategy, with the New Kensington Community Development Corporation in Philadelphia, Pennsylvania; and
• Connecting Comprehensive Economic Planning with Brownfield Projects, featuring the Racine County Economic Development Corporation in Racine, Wisconsin.

Common successful redevelopment strategies emerged in these cases, despite the variations in CBO role, organizational structure and external conditions. These strategies included partnering with city officials on property acquisition and use of city services; linking redevelopment with other visible physical improvements; communicating regularly with city officials and community groups; undertaking redevelopment primarily as part of a comprehensive plan, instead of on a site-by-site basis; and utilizing tax increment financing.

Breaking Barriers to Redevelopment

The need for extensive predevelopment work constitutes one of the major barriers to brownfields redevelopment. This work includes assessing environmental conditions on the site; figuring out a pathway to site control or property ownership; finding ways to protect owners from liability; locating funding sources; determining the beneficial property reuse for the community; and eliciting community support for the project. Discovering the true status and location of on-site contaminants is a key step toward assessing and limiting liability as well as targeting an appropriate end use.

Since these activities often inhibit private sector interest, CBOs can offer particular economic value to the redevelopment process and improve a project’s chances for success. The cases and other experiences demonstrate that CBO involvement with the predevelopment work reduces the costs and effort of the private sector, thus improving a project’s economics in comparison with greenfields developments.

If redevelopment is viewed as a linear process (which is not entirely accurate, but for the sake of discussion we will assume so here), then CBOs can invest time and money in upfront activities that traditionally have made brownfield properties incrementally more costly than development of other properties. One of the most important activities is conducting an inventory of brownfield sites throughout a neighborhood or community. This function may be performed by a local government or by a CBO, but it can lead to engineering a broader strategy or master plan that leverages the redevelopment of multiple properties. These types of tactics can help address broader market imperfections that usually plague those areas adversely affected by brownfield sites where these CBOs operate.

Another major barrier is obtaining property ownership or site control. The case studies and other examples discussed throughout the course reveal that this barrier can be overcome with city involvement or even temporary municipal ownership. Site control is a difficult problem since ownership is often obscure. Some properties have been abandoned or “orphaned;” the owner is bankrupt; or the properties are burdened with back property taxes. Again these are time-consuming issues that extend the development timeline, but they are not insurmountable when the CBO can gain knowledge about state statutes and tax practices.

Site contamination has receded somewhat as a major barrier to property redevelopment in and of itself (except for the implications for unknown and thus economically unquantified liability), but market conditions and location remain frequent and intractable barriers. The solutions to such conditions vary from location to location, but they include some of the tools discussed in the course: a redevelopment master plan for multiple properties (including uncontaminated vacant properties); a city land bank; and state statutory authority that eases the property disposition process for properties burdened by back taxes.

Learning from Experience

CBOs are in a unique position to ensure that the community is involved in the process and then benefits from the site redevelopment. However, due to minimal funding and staffing, CBOs have a particularly steep learning curve with respect to brownfields redevelopment, as do community residents. Because of their inexperience with the unique characteristics of these properties and the complications these characteristics pose for the real estate development process, residents and some CBOs can be intimidated by brownfields—the potential environmental conditions on these properties, the industrial owners, the cleanup process and the liability. Education about the process for assessing environmental conditions, the laws governing the cleanup, and issues of property ownership and liability can go a long way toward reducing the mystery surrounding these sites and alleviating the stigma often attached to them.

Brownfields redevelopment is complicated on two additional fronts. First, it requires the involvement of multiple stakeholders to be successful. Thus, included among the Institute’s course faculty have been representatives from the federal Environmental Protection Agency and the state environmental agencies overseeing the brownfield programs that approve cleanup activities and standards for properties; and funders such as financial institutions, private foundations and government agencies. Second, it is inherently interdisciplinary. The course also includes experts in legal liability, real estate development, property assessment and environmental health impacts; environmental engineers; and CBO and community development corporation staff and directors who have successfully completed brownfield deals.

This year’s course will be held in Detroit and will target primarily CBOs in Michigan and other midwestern states, allowing for a sharper focus on the common challenges faced by CBOs in that region and helping CBOs understand the importance of specific state policies and laws. Furthermore, CBOs and their statewide umbrella organizations may be able to play an advocacy role in bringing improved property disposition and tax laws to their states to increase their chances of success in future projects.

The city of Detroit and its environs, as well as other Michigan cities, are afflicted with hundreds of undeveloped brownfields, primarily the remains of former automobile factories and related service industries, so it can serve as an example of the redevelopment challenges that remain. Held in conjunction with local partners, the course will focus on how CBOs can get started with their projects; the roles they can assume—as developer, property owner, broker or facilitator, predeveloper, intermediary or advocate; possible funding sources and other resources; the relationship of the CBO to local government; the need for effective state policies to help CBOs do their job; and “green” reuses.

Another outcome of this experience working with CBOs will be the preparation of a guidebook on brownfield redevelopment to assist CBOs in addressing the challenges identified here and in deriving community benefits from underutilized property. The guidebook will address the need for structured guidance on brownfields redevelopment, similar to guidebooks that exist for the private sector but tailored for the needs of the nonprofit sector. The guidebook is still being formulated, but it is expected to cover such topics as why and when CBOs should be involved in redevelopment; what roles they can play; identifying and assessing properties for redevelopment viability; investigating the environmental conditions and cleaning up the property; obtaining liability protection; finding funding; working with other partners; building their own organizational capacity for these projects; as well as other topics.

Lavea Brachman is director of the Ohio office of the Delta Institute and a Lincoln Institute faculty associate who develops the curriculum and helps teach the course series on urban redevelopment. She also serves as a gubernatorial appointee to Ohio’s statutory body charged with reviewing and awarding state bond funds for brownfield redevelopment projects throughout the state.

Reference

Brachman, Lavea. 2003. Three Case Studies on the Roles of Community-based Organizations in Brownfields and Other Vacant Property Redevelopment: Barriers, Strategies and Key Success Factors. Lincoln Institute Working Paper.