Statement by Mayor Chris Bollwage, Elizabeth, NJ on behalf of The U. S. Conference of Mayors on Pending Brownfields Legislation before the Senate Environment and Public Works Committee Subcommittee on Superfund, Waste Control and Risk Assessment March 4, 1997

Mr. Chairman, Members of the Committee, I am Chris Bollwage, Mayor of Elizabeth, NJ. It is a pleasure for me to testify today on behalf of The U. S. Conference of Mayors, which represents about 1,050 cities in our nation with populations over 30,000.

The nation's mayors have been at the center of our national debate on the redevelopment of brownfield sites and the need for comprehensive Superfund reform. In 1994, Louisville Mayor Jerry Abramson, as President of the Conference, formed our first Brownfields Task Force. St. Louis Mayor Freeman Bosley, Jr. was appointed as chair of this task force. The work of the Conference's Brownfields Task Force resulted in a Mayors' National Brownfields Action Agenda that called on Congress and the Administration to develop a national brownfields strategy that included, at a minimum, the following:

  1. Liability Protection for Lenders, Innocent Third Party Purchasers and Redevelopers of Brownfield Sites;
  2. Development and Expansion of EPA's Brownfields Initiative, Including Funds for Preparation and Implementation of Local Brownfield Redevelopment Strategies, Including Funds for Site Assessment and Characterization;
  3. Development and Capitalization of Local Revolving Loan Funds for Brownfield Clean Ups;
  4. Targeted Tax Incentives for Brownfield Redevelopers;
  5. Expedited Cleanup Strategies and Cleanup Standards Based on Future End-Use; and
  6. The Availability of Tax Exempt Financing for Redevelopment of Brownfield Sites.
Mr. Chairman, we are now revising this agenda and I would like to submit for the record a further elaboration of these principles for a national strategy once it is finalized.

The mayors of this nation want to thank the members of the Committee for realizing the importance of developing a national strategy for cleaning up the hundreds of thousands of brownfields that can be found all across the nation.

We believe that it is preferable that brownfields be a major part of Superfund reform and reauthorization process and it is also critical that we move on brownfields during this Congress. Why? Two of Superfund's greatest accomplishments are: 1) a dramatic national reduction in the generation of hazardous waste; and 2) a much safer, national hazardous waste management and disposal system. But along side these tremendous public benefits is a horrible, unintended consequence of the Superfund program -- the fact that the private sector would not invest in hundreds of thousands of non-NPL, contaminated properties because of the fear of being caught in the Superfund liability web. These properties are now commonly called brownfields.

Mr. Chairman, contamination of industrial property was not caused by local governments or the citizens who now must live with the consequences of lost jobs, an eroded tax base and abandoned or underutilized properties that denigrate communities. In large measure, this unintended, negative consequence of our federal Superfund policies has been the price for achieving the Superfund program's national benefits. This unfortunate situation simply must be addressed in an aggressive way. We must undo the unintended harm that Superfund has imposed upon our communities.

Last year The U.S. Conference of Mayors released at its Winter Meeting a 39-City Survey on the Impact of Brownfields on U.S. Cities. Of the cities surveyed, 33 cities with brownfield sites said that more than $121 million is lost each year in local tax revenues -- using conservative estimates. More than $386 million is lost each year, using more optimistic estimates, suggesting that the more than 20,000 cities and other municipalities nationwide could be losing billions of dollars each year in local tax receipts due to the existence of brownfields. The survey also found that cities of all sizes, small and large, had brownfield sites which were extremely diverse in terms of size and configuration. I would like to submit the Survey findings for the record.

I would also like to give you an example of how brownfields impact my community. To date, we have identified 56 brownfields in the City of Elizabeth, NJ, alone. For me, these sites represent 56 possibilities to create new industry, jobs, housing, and more tax ratables. We have been able to focus our resources on rehabilitating several of these properties -- and our successes have been monumental. On one property we built an IKEA store, which has become the chain's best performing store, and a Toys R Us Superstore, the largest of its kind in the chain. Both businesses provided hundreds of new jobs, more than $1 million in annual tax revenues and more than $2 million in Urban Enterprise Zone revenues.

Nearby we cleaned up a former municipal landfill, and soon hope to use the land for a 250-store Mega Mall project on 166 acres of land. The project will create as many as 5,000 jobs. As part of our ongoing efforts in rehabilitating these and other contaminated properties, we have applied for designation as one of EPA's brownfield demonstration pilots.

I have provided to the Committee a report, "Inventory of Reclaimable Sites," which was prepared by the Regional Plan Association of New Jersey. I would ask that this report be included in the record. I have also provided information pertaining to the OENJ Development Project.

Mr. Chairman, all of this information supports our claim that we need federal help to develop and implement strategies reclaiming brownfields sites. When these sites were previously flourishing with manufacturing, commercial or other uses, the nation shared in this prosperity, including all governments in the form of tax receipts and other economic activity.

What is important to note is that for each tax revenue dollar that is generated, local governments realize about 15 cents. More than 80 cents of each dollar accrues to federal and state governments in the form of income taxes and other revenues. This explains why local governments can't do it alone, and we need your help. We can't expect the level of government who realized the smallest share of the prosperity to absorb the largest share of the cleanup, remediation and redevelopment costs.

Mr. Chairman, we are pleased that the brownfields issue has the bipartisan support of this Committee. The bills that have been introduced, both S. 8 and S. 18, are good starting points launching a more detailed deliberation on the brownfields problem and the need for a comprehensive national strategy. The Conference of Mayors President, Mayor Richard Daley, has indicated that brownfields legislation is one of the Conference's top priorities, and we want to work with you to further refine your proposals.

We are pleased, for example, that both bills make efforts to address many of the issues we have laid out as our principles. We are pleased that funds will be made available for site characterization and assessment work on brownfield sites, although these funds are, quite frankly, too modest compared to the damage that has been done to our communities. Likewise, we are very pleased that both the EPA pilot program and your bills call for the capitalization of local revolving loan funds for the ongoing, bureaucratic-free cleanup of brownfield sites, although again the effort is too modest compared to the magnitude of the problem. These funds should be used for local programs and not be given to State bureaucracies, unless such state programs are targeted to smaller jurisdictions that would be unlikely to administer their own local revolving loan programs.

We believe both bills need to address brownfield sites that are in the hands of public entities, either through tax default or acquisition for economic development purposes. Not only must liability protections be extended to such public entities, but direct grants should be available for the cleanup of properties in neighborhoods of disinvestment and in properties that have negative value due to more significant contamination.

We also want to commend the Committee for addressing the need for liability protections for redevelopers of brownfield sites. It will be important to strike a balance between giving redevelopers certainty that they will not be thrown back into the liability web after having invested in cleanups, and at the same time protecting the public against future contamination of these sites.

We believe the Committee should seriously address the need to give local governments the flexibility to cleanup properties with brownfield redevelopment funds that are free from many of the arcane rules and regulations of the Superfund program. We need the flexibility to bring common sense to cleanups. This is not only the case with the issue of cleanup standards based on end-use, but in the definition of brownfields. We believe there are too many exclusions to the "brownfields facility" definition. For example, many abandoned industrial sites will have both removal and remediation needs. These sites are typical brownfield facilities which require a removal of immediate threats and a less urgent remedial process to restore the property to a useful purpose. The bill would exclude all of these facilities from any funding under this program. We would be glad to provide examples to the Committee.

It is also important for the Committee to address the relationship between State Voluntary Cleanup programs and local brownfield cleanup initiatives to effectively address the brownfield problems in communities. We have talked to several state voluntary cleanup program administrators who indicate that their voluntary programs tend to focus on projects that are close to being NPL sites, not those brownfields that are less contaminated but still suffer from the Superfund stigma. While we believe there may be an appropriate link to state voluntary cleanup programs, we should not assume that they will expedite brownfield cleanups or that they are the panacea for brownfield cleanups. Again, we believe local governments are best equipped to expeditiously cleanup certain sites and to work with the private sector in the redevelopment of brownfields, albeit in some form of partnership with state agencies.

Mr. Chairman, as a result of your efforts and those of the Administration to support brownfields redevelopment, communities are finally having some success in cleaning up less contaminated properties, which is allowing us to get these sites redeveloped and back on the tax rolls. More complicated cleanups or NPL-caliber sites do create some misconceptions about the nature of the bulk of the inventory of sites, which we commonly refer to as brownfields.

Mr. Chairman, many other issues remain to be addressed and we will be supplementing our comments with further technical comments on the drafts of both bills. But let me again commend the Committee for beginning a bipartisan debate on brownfields. We support your efforts to address brownfields in the 105th Congress and we look forward to working with you this year to enact legislation. We cannot afford to let another Congress go by without enacting a comprehensive national program that will lead to thousands of brownfields cleanup, job creation, and sound local economies.

Finally, Mr. Chairman, while it is not in the jurisdiction of this Committee, we believe it is extremely important for the Congress to enact tax incentives that help companies redevelop brownfield sites. We have worked closely with the Administration on the development of their proposal and would welcome the opportunity to work with the Senate as they consider this year's tax bill.

Again, we thank you for the opportunity to appear before you today.