The researchers at the Urban Land Institute estimated that about 150,000 acres of abandoned or underused industrial land exist in major U.S. cities.This estimate excludes some commercial properties that could also be classified as brownfields; those excluded are sites with underground storage tanks, such as former gas stations, or dry cleaners. Most brownfields are not likely to be added to the list of potential NPL sites because they are not severely contaminated. To lower the barriers to brownfield redevelopment, S. 1285 would limit the liability of lenders and such property purchasers as developers under certain conditions and also would provide assistance for the state programs that encourage the voluntary cleanup of hazardous waste sites. Under CERCLA, a party (such as a bank) that holds the evidence of ownership (such as a mortgage) in the property to protect its interest, and does not participate in the management of the property, is not considered a property owner. It also places a cap on the total amount that lenders would have to pay in the event they are liable. Second, the bill would limit the liability of certain purchasers of property, such as developers, if they assess a site for contamination before buying it and find none. These problems may be even more intractable barriers to redevelopment than Superfund. Before brownfields can be redeveloped, it is necessary to perform a site assessment to determine the nature and extent of the contamination present. These plans are often subject to review and approval by the local or state government.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed proposed legislation to redevelop abandoned, urban industrial sites, focusing on: (1) the number of potential sites nationwide; (2) impediments to redeveloping sites posed by the Superfund program; and (3) whether proposed loans to local governments are sufficient for conducting site assessments.

What GAO Found

GAO found that: (1) researchers estimate that about 150,000 acres of abandoned or underused industrial land exists nationwide; (2) lenders, property buyers, and property owners are reluctant to redevelop these sites because federal and state environmental laws may require expensive cleanups of latent industrial wastes before property improvements can be made; (3) federal law limits the liability of a party that holds ownership in a property but does not manage the property; (4) proposed legislation would limit the amount lenders would have to pay in the event they are liable, limit the liability of property buyers who assess a site for contamination before buying it, and provide assistance for state programs that encourage voluntary cleanup of industrial waste sites; (5) even if the liability of lenders and property buyers is limited, abandoned industrial sites might continue to be viewed as risky investments due to the possibility of contamination; and (6) proposed legislation would provide interest-free loans to localities to conduct site assessments to determine the extent of contamination.