Some of the prime locations for redevelopment in Houston are “brownfields” – properties where previous uses left the sites either contaminated or perceived to have environmental impacts. These can be abandoned buildings, vacant lots, former commercial or manufacturing sites, or other types of property. Brownfields diminish a neighborhood’s quality of life, drive down property values and decrease tax revenues.

The City of Houston Brownfields Redevelopment Program helps with redevelopment by providing free environmental site assessments and other assistance for owners and purchasers of eligible properties. Attorneys who are aware of this and similar programs will be better able to advise their clients who own or want to purchase brownfield sites. The Texas Commission on Environmental Quality (TCEQ) and the Texas Railroad Commission also have brownfields programs that can help owners or prospective purchasers of sites beyond the City of Houston’s extraterritorial jurisdiction.1 This article, however, focuses on what attorneys should know about the City of Houston Brownfield Redevelopment Program, which has applicability within the city limits and the city’s extraterritorial jurisdiction.

In the past, many developers were discouraged from investing in brownfields, because they feared the environmental liabilities that may arise under statutes such as the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 2 also known as Superfund. Those developers built on undeveloped green spaces on the outskirts of cities instead of purchasing brownfields. However, to the extent that brownfields can be redeveloped, the environmental advantages of sustainable development result - existing infrastructure is reused, open space is preserved, and traffic and its pollution are decreased. According to a 2001 study conducted by George Washington University, every acre of brownfields redevelopment saves more than four acres of green space. 3

The U. S. Environmental Protection Agency (EPA) started a nationwide Brownfields Program in 1995, which provides various types of grants to encourage brownfields redevelopment. 4 In 1996, Houston received its first Brownfields grant and initiated the City’s Brownfields Redevelopment Program. The City currently has approximately $300,000 remaining in two community-wide grants from the EPA to fund environmental site assessments at eligible properties. Each site assessment begins with a “Phase I” report that costs a few thousand dollars. And if a Phase I report indicates the need for a “Phase II” assessment, 5 including soil and/or groundwater sampling, that work can often cost $10,000 to $20,000 or more. These site assessment reports are the type that banks typically require before lending money for the purchase of non-residential property.

The City will also be applying to the EPA for additional site assessment grant money as well as a revolving loan fund grant of up to $5 million. The City also has $100,000 available for eligible site cleanup projects.

In addition to sites where the EPA grant funds paid for assessments, the City has also used its own funds for environmental work at some brownfields, resulting in major redevelopments. Examples include the Hobby Center for the Performing Arts, the Downtown Aquarium, and the property on Allen Parkway that is now occupied by the Federal Reserve Bank.

In 2001, Congress further encouraged brownfields redevelopment by passing the Brownfields Revitalization and Environmental Restoration Act, Title II of the Small Business Liability Relief and Brownfields Revitalization Act (the “Act”).6 This legislation amended CERCLA to provide certain liability protections. The Act clarified Superfund’s “innocent landowner” defense for a person who unknowingly purchased contaminated land, provided the person made “all appropriate inquiry” (as defined in the Act) prior to the purchase.7 If all appropriate inquiry (and other) requirements are met, there are also protections from Superfund liability for owners of property contaminated by a source on contiguous property and for prospective purchasers of property that may be contaminated. In addition, the Act authorized additional funding through the EPA for brownfields assessment and cleanup grants.8

The mission of the Houston Brownfields Redevelopment Program is to help improve Houstonians’ quality of life by facilitating the identification, assessment, cleanup, and beneficial redevelopment of brownfields.9 The redevelopment can be anything that will benefit the community, such as housing for the elderly, new businesses that create jobs or shopping opportunities, or parks. The Program works in coordination with other neighborhood improvement efforts of the City government, other governmental agencies, and the private sector.

 

The Program offers to qualified applicants:

•  Free environmental site assessments (Phase I and Phase II);
•  Help with participation in a State Voluntary Cleanup Program,10 if necessary;
•  Coordination among local, state and federal governmental agencies; and
•  Placement of each site or project on the City's brownfields website,11 describing its planned transformation from a brownfield to a new productive land use.

 

Property owners applying for acceptance of their properties into the Program should be aware of the eligibility requirements. Applicants must:

•  Have legal title to the property or a contract to purchase the property;
•  Have performed all appropriate inquiry as to the environmental condition when acquiring the property (this can be the Program-funded site assessment for a prospective purchaser);
•  Not have contributed to the contamination at the site;
•  Enter the property into one of the State’s voluntary cleanup programs, if necessary; and
•  Allow identification of the property as a brownfield undergoing redevelopment in the City’s Program.12

 

There are currently 67 properties in Houston’s Brownfields Redevelopment Program. Fifteen of those properties have redevelopment completed, while 52 are in the assessment, cleanup or redevelopment stage. Although the new end-uses of these sites vary greatly, the primary goal of the Brownfields Redevelopment Program remains the same – to improve neighborhoods and the quality of life for Houstonians. 

The Brownfields Redevelopment Program is a part of the Planning and Development Department. The Land Redevelopment Committee aids, informs, and advises the Brownfields Redevelopment Program. The Committee is appointed by the Mayor and is comprised of professionals from diverse fields related to property redevelopment and environmental matters. Further information is available at www.houstontx.gov/planning/brownfields or by contacting Shannon Teasley at 713-837-7978 or shannon.teasley@cityofhouston.net

Ron Sandberg is the former manager of the City of Houston’s Brownfields Redevelopment Program and is currently Vice President - Brownfield Projects at Conservation Capital.
Nelson R. Block, a shareholder in Winstead PC.’s real estate and banking practices, is a member of the City’s Land Redevelopment Committee.

 

Endnotes

1.See TCEQ’s Brownfields Site Assessment Program at http://www.tceq.state.tx.us/remediation/bsa/bsa.html and RRC’s Brownfield Response Program (BRP) at http://www.rrc.state.tx.us/divisions/og/brownfield/index.html.   2. 42 U.S.C. § 9601 et seq.   3. Jonathan P. Deason, George W. Sherk, & Gary A. Carroll, Public Policies and Private Decisions Affecting the Redevelopment of Brownfields: An Analysis of Critical Factors, Relative Weights and Areal Differentials (2001), at http://www.gwu.edu/~eem/Brownfields/project_report/report.htm.    4.http://www.epa.gov/brownfields/about.htm.   5. A Phase I environmental assessment entails an on-site visual inspection and a review of past property ownership and use, including a search of historical and government records. If the Phase I assessment reveals any Recognized Environmental Conditions (RECs) or any indication of actual or potential hazardous substance releases which might affect the property, a Phase II assessment is indicated. The Phase II environmental assessment entails a more thorough site investigation, usually including sampling and analysis for contaminants. More information is available at the EPA’s Targeted Brownfields Assessments (TBAs) site: http://www.epa.gov/oamsrpod/hcsc/tba/dsow.pdf.   6. Small Business Liability Relief and Brownfields Revitalization Act, Pub. L. No. 107-118, 115 Stat. 2356 (2002) (codified in various sections at 42 U.S.C. §§ 9601-9675).   7. The Act § 223 (codified at 42 U.S.C. § 9601(35)(B)). See also: Environmental Protection Agency, Brownfields Handbook: How to Manage Federal Environmental Liability Risks 21-4, (2002), available at http://www.epa.gov/compliance/resources/publications/cleanup/brownfields/handbook/bfhbkcmp.pdf.   8. The Act § 211(b) (codified at 42 U.S.C. § 9604(k)). See also: Environmental Protection Agency, Brownfields Handbook: How to Manage Federal Environmental Liability Risks 37-8, (2002), available at http://www.epa.gov/compliance/resources/publications/cleanup/brownfields/handbook/bfhbkcmp.pdf.   9. City of Houston’s Brownfields Redevelopment Program website: http://www.houstontx.gov/planning/brownfields/index.html.    10. For more information see TCEQ’s Voluntary Cleanup Program website: http://www.tceq.state.tx.us/remediation/vcp/vcp.html, and Railroad Commission of Texas’s Voluntary Cleanup Program website: http://www.rrc.state.tx.us/divisions/og/site_rem/VoluntaryCleanupProgram.html.   11. City of Houston’s Brownfields Redevelopment Program website: http://www.houstontx.gov/planning/brownfields/index.html.    12. City of Houston’s Brownfield Redevelopment Properties are online at http://www.houstontx.gov/planning/brownfields/properties.html, and redevelopment pictures are available at http://www.houstontx.gov/planning/brownfields/gallery.html.