Is the Bank Opening?
Evans Paull, Redevelopment Economics, and Seth Otto, Maul, Foster, & Alongi, pose the question: Could a Brownfields land bank be matched with revved up TIF authority to create a new brownfields tool and lure manufacturing back to former industrial sites?
Many communities are making brownfields redevelopment a priority in order to maximize the many benefits of accommodating growth in existing communities. Many communities have also established land banks to manage and dispose of vacant property. However, Paull and Otto know that the promotion of brownfields redevelopment through a land bank mechanism is almost completely unexplored territory.
Paull told us that as the federal government attempts to change the tax structure to favor “re-shoring” (attracting manufacturing back to the U.S.), communities that have made their brownfield sites development-ready might be rewarded with economic growth that fits sustainability objectives like a glove: re-using former industrial sites for newly attracted manufacturing and corporate operations. A brownfields land bank might be just the mechanism to accomplish this.
In this issue, Paull and Otto outline some best practices in creation of development-ready land from a brownfields inventory; then recommend the use of tax increment financing, albeit modified for the somewhat peculiar case of a brownfields land bank, to get the ball rolling.
Both Paull and Otto know there is considerable potential for a brownfields land bank to be a key long term economic redevelopment mechanism if it is endowed with a mix of tools that are derived from best practices from both vacant land banks and redevelopment authorities.
One example they cited was the Cleveland Industrial-Commercial Land Bank, which may be the only current example of a land bank that is geared to re-positioning brownfields and industrial-commercial property, Paull and Otto report.
The Cleveland Land Bank, established in 2005, represents “a proactive approach to reusing properties with serious real estate obstacles, such as environmental contamination and/or economic hardships.” It also provides the opportunity for the city to strategically assemble properties to attract businesses and create long-term economic and community investments.
According to Tracey Nichols, Cleveland’s Economic Development Director, the Land Bank has acquired 11 properties, totaling 125 acres. Two have been sold and redeveloped: Garrett Square (retail with 170 employees) and Green City Growers (greenhouse with 30 employees). Another is under option for a data center projected to employ 40 persons on a portion of a 10-acre site, acquired because of its proximity to the City’s Health Tech Corridor.
Of the remaining Land Bank sites, three are being marketed after gaining environmental clearance; and five are in the cleanup and site prep phase. The acquisitions are a mix of proactive/voluntary acquisitions and tax foreclosures.
Paull and Otto remark that Cleveland’s program benefits from “a far-sighted element of the Clean Ohio bond issue: in 2009 the program was split into two components: an end use known track; and a development-ready land track.
The split enabled state financial assistance to Land Bank sites that otherwise might have scored poorly when ranked against known redevelopment plans. The city’s aggressive use of HUD 108 loans to finance acquisition and cleanup is another distinguishing feature.
In terms of lessons learned, Nichols said the Land Bank is now more strategic and selective about the properties it acquires, both with reference to cleanup liabilities and with reference to market and access characteristics.
Paull and Otto state that “the jury is still out on whether the Land Bank will succeed with industrial growth.” But one thing is certain: A brownfields land bank could be a key long term economic redevelopment mechanism if it is endowed with a mix of tools that are derived from best practices from both vacant land banks and redevelopment authorities.
One key: Be strategic about property acquisition: Choose sites that need a boost and contribute to big picture objectives – it’s not possible to turn all “ugly ducklings into swans,” the authors state.
Telling the story
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