‘Brownfield’ developers face maze of obstacles

Ask Jeff Vose, the former executive director of the Windham Mills Development Corp., and he’ll tell you he was lucky to take on the redevelopment of the American Thread mill complex when he did.

“A lot of the funding was already in place, and I came in at the tail end of the demolition and remediation,” he said. “It was a large-scale project with regional support, and it had put a couple of different funding sources together.”

Still, the WMDC ended up in bankruptcy. And now appears to be stuck there as the U.S. Environmental Protection Agency assesses still more pollution at the site.

The project is just one example of the difficulties that confront brownfield redevelopment projects in Connecticut.

New England and the so-called rust belt that stretches to the industrial cities of the Midwest are home to thousands of once-prosperous mills that made everything from shoes and thread to automobiles and munitions.

They, and polluted modern sites that predate state and federal environmental regulation, have come to be called brownfields, and each state has a different strategy for cleaning them up and returning them to some kind of commercial productivity.

Connecticut is home to an estimated 13,000 brownfield sites, according to the EPA, and people in the business of redeveloping them say the state has one of the least effective, most poorly funded patchwork of regulations in the Northeast.

“In Pennsylvania, you get handed one sheet of paper that’s the entire brownfield program,” said Lee Hoffman, a partner at law firm Pullman & Comley in Hartford, a member of the Town of Windsor’s redevelopment authority and member of a brownfields task force the legislature put together in 2006.

“In New York, it’s a single, solitary program…In Connecticut, you don’t have that sense of assurance, so banks are reluctant to finance projects and investors are reluctant to provide equity,” Hoffman said. “In Connecticut, nobody knows, and that’s very unsettling for savvy real estate developers.”

Equally unsettling are the liability issues. Other states have decided that abandoned, polluted properties pose a threat to society and that society should share in the burden of cleaning them up.

Connecticut still wants to track down those responsible for the pollution. In many cases, the state simply “hopes to find the polluter or someone to buy the property and become the polluter,” Hoffman said.

In many states, a brownfield developer’s responsibility is simply to make a contaminated site safe and stop any further contamination from oozing off site. In Connecticut, developers aren’t protected from liability for undiscovered contamination that may already have migrated to neighboring private properties.

“You’re stuck buying an unknown,” Hoffman said.

The legislature’s Connecticut Task Force on Brownfields Strategies acknowledged the problems confronting brownfields developers in its 2007 report.

“A new approach is needed to our state’s approach to brownfields, including providing financial support and liability relief to municipalities, existing and future owners,” the report said. It also called for much greater interagency cooperation.

Joan McDonald, commissioner of the state Department of Economic and Community Development, said the report resulted in improvements to the process.

“One of the outcomes was the creation of the Office of Brownfield Remediation and Development, the lead state agency for all brownfield redevelopment,” McDonald said. “The state does have one-stop shopping.”

The legislature also made changes to laws governing liability for the cleanup of polluted sites, but they mainly absolved municipalities, rather than developers, from that responsibility, according to Peter Simmons, executive director of the DECD’s Office of Responsible Development.

And if Pennsylvania’s single sheet of paper, or New York’s program, which is administered by a single agency, is the goal, then Connecticut has missed the mark.

Anyone interested in redeveloping a brownfield site, whether it’s a broken-down brick mill or an abandoned mom-and-pop drycleaner, still could find him- or herself dealing with not only the OBRD and DECD and the ORD, but various combinations of the state Department of Environmental Protection, the Connecticut Development Authority, the Connecticut Brownfields Redevelopment Authority, the state Department of Public Health and the state Department of Transportation.

“There are six or eight programs that we manage that are brownfields-oriented,” Simmons said.

Even if there were fewer, “the one-stop shop OBRD hasn’t panned out because of a lack of funding,” Hoffman said.

Vose said, “A lot of times in larger scale projects, you deal with all the agencies, and they really haven’t funded it. There’s supposed to be representation from all the different agencies, but it just doesn’t have the funding, it’s not a self-sustaining operation.”

Other legislative efforts to promote brownfield development also suffer from a lack of money. With a budget continually in crisis, for example, the legislature has never met the task force’s recommendation that the state provide $200 million in support, in the form of tax credits, to brownfield redevelopment efforts.

The legislature did appropriate $5 million to “pilot” brownfield projects around the state. DECD got authorization to use $2.25 million of it in May 2008. The second half was approved by the state Bond Commission last November, and the application process for projects closed in late March.

The first $2.25 million will be split between five projects in Stamford, Waterbury, Norwalk, Redding and Shelton.

In the coming years, “significant funding for brownfield projects is not too promising,” McDonald said, “and there’s never been enough for brownfield redevelopment.”

Barry Trilling, an environmental lawyer at New Haven firm Wiggin & Dana and author of “Brownfield Development In Connecticut: Overcoming the Legal and Financial Obstacles,” said the combination of confusing and overly-complex programs and chronic underfunding is killing the state’s chance to have polluted properties cleaned up and redeveloped in any number.

What laws Connecticut does have pertaining to brownfields are spread out over several statutes and handled by too many agencies, Trilling said.

“And it seems like it’s not written down, it’s in the minds of these people,” he said.

The result isn’t just that the state doesn’t see private money – there are companies that do nothing but brownfield redevelopment – coming to take on projects, but it watches as money leaves for friendlier, neighboring states.

“I always assumed Connecticut would be a very sophisticated place. It is a backwoods,” Trilling, who came to the state in 2003, said. “It is incredible how much more progressive every other state is in terms of brownfield issues.”

The legislature has virtually ignored the recommendations of the brownfields task force, Trilling said.

“They took pieces that were politically popular and continued with a patchwork system of regulation,” he said.

State Sen. Edward Meyer, D-Guilford, co-chairman of the legislature’s environment committee, said the system the legislature has put in place for brownfield remediation and development “has been praised,” but it and the agencies charged with carrying it out are underfunded because of the state’s miserable economy.

“What’s been troublesome is not the standard we set, but the fact that our remediation fund is hurting,” he said.

Meyer said certain duties within the brownfield remediation system could, and probably should, be consolidated within DEP, but the legislature, “is reluctant to move it to DEP, because DEP has been decimated, and there have been no additions to staff.”

As a result, the current system is “suffering from delays,” Meyer said. “It’s taking months, often up to a year before DEP gets around to granting a remediation permit.” Nevertheless, DEP is undertaking a new effort to cut permitting time by up to two thirds, Meyer said.

Brownfield developers can recognize a good project almost right away. And Connecticut sites like the Connecticut Convention Center, the Waterbury Brass Mill Mall and Killingly Commons on the site of a former 1 million-square-foot glass manufacturing plant, have been successfully redeveloped

Others, like the Windham Mills complex in Willimantic, have been mired between success and failure. The town of Windham seized the former American Thread mill for back taxes, sold the complex to a developer for $1, gave the project $2 million of local taxpayer dollars and watched as the quasi-public Windham Mills Development Corp. went bankrupt.

Michael T. Paulhus, former first selectman of Windham, said the regulatory process for redeveloping the mills was cumbersome.

“It’s just a slow process. Sometimes it’s hurry up and wait. There are too many brownfields and not enough funding, and it appeared to be very convoluted, a lot of red tape and a lot of government hoops you had to jump through,” Paulhus said.

“I didn’t get the sense that there was anyone there to guide us through that…it had a chilling effect on the whole deal,” he said

Matthew L. Brown is an award-winning journalist who has covered a wide range of subjects as a reporter for the Willimantic Chronicle and the Hartford Business Journal. He is currently the managing editor of the Worcester Business Journal in Worcester, Mass. He lives in Dayville.