Cutting through the Clutter: Evaluating Brownfields Sites for Return On Investment

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Cutting through the Clutter: Evaluating Brownfields Sites for Return On Investment

by Anna Read

Image source: http://s0.geograph.org.uk/photos/20/38/203894_c8f16c80.jpg

November 16, 2009

The Brownfields Transaction Forum got started with this panel discussion, which emphasized the importance of collaboration in evaluating, remediating, and reinvesting in brownfield sites. The panel was moderated by James Riley, a Baton Rouge-based real estate professional, who assembled the panel based on the perspectives he would want represented when approaching a redevelopment. Panel members represented the development, real estate, environmental engineering, legal, and architecture/planning perspectives. The panel offered a set of practical recommendations for addressing brownfield redevelopments:

Steve Collins, a St. Louis-based developer started the session off by talking about the importance to establishing an accurate and realistic value for the site. This can be more difficult with brownfields due to clean up costs, holding costs, and the relative price of neighboring greenfields;
Paul Richard, who works in real estate in the Greater New Orleans Area said, “the value of your site is the value of your clean-up,” so it is important to understand the market and consider the cost to acquire, the cost of remediation, the potential lease income or resale value, the value added analysis, and the return on time and investment. Setting up a matrix and establishing metrics is essential to a successful redevelopment;
Caleb H. Dana, Jr., a Mississippi based environmental engineer discussed environmental assessments, focusing on the importance of completing an accurate assessment of environmental contamination that looks at what the sources of contamination are, where it is on the site, where it is moving, and how it is moving;
Michael Waguespack, a New Orleans-based attorney, focused on the liability and risks associated with brownfield projects. The buyer, seller, and lender all face liabilities, but there are ways to eliminate or minimize these, including the innocent purchaser or landowner defense and the lender liability program, as well as voluntary remediation programs;
John C. Williams, a local architect, emphasized focusing on projects that are available for other types of tax credits, including new market tax credits, state new market tax credits, historic tax credits, and tax abatements. He also noted that many lenders now require LEED certification on projects they are funding.

Participants were able to sign up for a 15-minute consultation with the panel on their sites and projects following the session. The Brownfields Transaction Forum will continue today at 2:00 pm with a special land use and redevelopment presentation in R7/R8/R9. The Brownfields Transaction Forum Property Displays, Networking, and Property Consultations, will take place from 3:00 pm to 5:00 pm today in Halls C/D.