Conference Call Minutes from July 24, 2014

Untitled Document

State Coalition for Remediation of Drycleaners Teleconference

Thursday, July 24, 2014
11:00 a.m. - 12:30 p.m. Central Daylight Time

Attendance & Opening Remarks - Scott Huckstep, Missouri

Conference Call Participants - State Representatives:

  • Bonnie Temple, Alabama
  • Cary Spiegel, Alabama
  • Nathan Casebeer, California
  • Bob Asreen, Delaware
  • Bill Linn, Florida
  • Joe Dom, Kansas
  • Scott Huckstep, Missouri
  • Jim Harrington, New York
  • Steve Hole, New Jersey
  • John Doyon, New Jersey
  • Pete Doorn, North Carolina
  • Vlad Cica, Ohio
  • Katie Courtright, Ohio
  • Allison Hensley, Tennessee
  • Charles Rowan, Tennessee
  • Dan Switek, Texas
  • Kerry Martin, Texas
  • Meade Anderson, Virginia
  • Jennifer Feyerherm, Wisconsin
  • Keith Arnold, EMS

Outreach Subgroup Report -

Administrative Subgroup Report - Pete Doorn, North Carolina

Project Management/Technical Subgroup Report - Bill Linn, Florida

Old Business

New Business

State Spotlight: Virginia

See attached power point that presents a graphical framework for thinking about drycleaner sites (or really any brownfield site) within the context of value, risk, and resources.

Slide 5: Brownfield asset value. People often forget that remediation is costly on many levels.
Slide 6: Conceptual model of # of sites and return of capital.
Slide 7: Zone 1 contains the easiest sites: valuable properties with less extensive cleanup. These are sites that private developers have economic motivation to do on their own.
Slide 9: There is a fair amount of money you can make on Zone 1 sites. Redevelopment of these sites does have additional costs over greenfield sites, but not insurmountable. While most of these sites have limited government involvement, many do have some involvement, providing value to the developer in terms of legal immunities, etc.
Slide 10: Zone 1 sites can be redeveloped pretty quickly. Banks like them better too. These are the malls that are being redeveloped in areas where property is at a premium. Stigma might not be as prominent in some of these strip malls, though can vary with surrounding land use. For example, if there is a daycare next door, there can be additional stigma associated with the site.
Slide 11: Program flexibility is developing in order to move sites through the program and get them cleaned up.
Slide 12: Zone 2 sites are characterized by owner financing, less return on capital, and more risk. There are a greater number of sites with less financial return on them in Zone 2. Examples include sites in less valuable strip malls that are not in a development corridor. Plumes on these sites are less manageable and more risky.
Slide 13: More uncertainty limits the amount of money that can be made on these sites.
Slide 14: Public cleanup monies a lot more important to these sites. All it takes is one person in the government or in the community to portray site owner as a “black knight” to increase the stigma associated with the site.
Slide 15: The “punish the polluter” attitude is lessening but still there. Note that we are generations away from the origins of the problem in many cases.
Slide 16: Zone 3 sites need significant public involvement and funding in the form of grants, loans, etc. These sites don’t have the value to drive the cleanup itself. There are a lot more sites out there than we are seeing because there is no value bringing them to the table. Many of these sites drop out before the cleanup is complete because the cleanup projects are so fraught.
Slide 17: Zone 3 sites are a lot more risky, lessening the willingness of private developers to take them on and increasing the amount of public money that is necessary. Many orphan sites are in Zone 3. Monitoring and mitigation post closure are very challenging in these cases. Often, owners don’t understand that longer they hold a contaminated property, the more the value of that property decreases.
Slide 19: A lot of private investors are uncomfortable with the public process. 
Slide 20: The original presenter quipped that Zone 4 sites shouldn’t even be called brownfields because it gives them a bad name. These are sites that are too rural and too valueless to be cleaned up. The negative value of these sites often leads them to be abandoned. There are probably a lot more out there than we think.
Slide 22: Zone 4 sites tend to be large, rural sites, or complicated sites in economically challenged towns with poor economies. Assessment costs alone are probably more than the property is worth. Economic incentives to clean up in these cases run completely counter to prioritization by risk because these sites pose big risks to small towns. They often occur at a central location, were older operations with more contamination, and are older sewer lines that are much more likely to have spread the contamination. There is no way to clean these sites up without significant public involvement. Legal fights can be limited because often there is no one with money to get at for the cleanups
Slide 23: The legal process and regulatory process offers little flexibility for these sites. There are significant issues with putting use restrictions on other people’s property (i.e. surrounding affected properties).
Slide 24: This slide illustrates the total market out there, the values of the sites, and the returns on capital.
Slide 25: This approach really simplifies how one can look at brownfield sites. These concepts have been in the back of my head, but I had never seen it broken out this way. This approach can apply to lots of different sites, not just drycleaners.
Slide 26: This approach can be very useful in highlighting the need for public funds that we can invest in these sites.
This is good stuff for anyone looking to develop a fund down the road; it is a good way to explain to folks how much we need public funding for these cleanups.

View/Download Presentation (PDF) (27pp, 2.0 MB)

Final comments and Wrap Up - Scott Huckstep