Brownfields are potentially contaminated sites that often present economic development opportunities that require financing. State environmental voluntary clean-up programmes (VCPs) offer closure letters as a way for developers to obtain assurance that their clean-up was completed properly and is 'bankable'. However, there is still fear among lenders about the potential for these closed remediated sites to be reopened and therefore negatively affect the value of the real estate as collateral. While it is believed to be an infrequent act, there has been no comprehensive study of reopeners, and therefore of the effectiveness of VCPs available. This study seeks to quantify the incidence of reopeners in the USA through a systematic inventory of VCP administrators. The authors initially find that among the 46 states with VCPs, only 12 cases were reopened out of 11 497 closed environmental cases, a reopener rate of between 0.1% and 0.2%. However, reopener rates may increase with more vigorous enforcement and over the passage of time. This information means that brownfield deals can go forward with confidence, and that the risk of reopeners can now be quantified, allowing cheaper insurance and more assurance that negative outcomes can be avoided.
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Document Type: Research Article
Urban Planning and Real Estate Development, Levin College of Urban Affairs, 1717 Euclid Avenue, Cleveland State University, Cleveland, OH 44115, USA. Email: [email protected]; [email protected] Center for State, Local and Regional Environmental Programs, Environmental Law Institute, 1616 P Street NW, Washington, DC 20036, USA. Email: [email protected]
Publication date: March 1, 2003
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