CHALLENGES TO BROWNFIELD REDEVELOPMENT Wanda Ballard Repasky - PDF document

CHALLENGES TO BROWNFIELD REDEVELOPMENT Wanda Ballard Repasky JOHNSON & REPASKY, PLLC 6013 Brownsboro Park Boulevard Suite B Louisville, Kentucky 40059 wrepasky@lexlaw.us (502) 749-7933 Innovative regulations and technical advancements in environmental remediation have allowed Kentucky to catch up with other states in the development of abandoned and underutilized industrial properties. Progress in brownfield 1 development has also been aided by increased understanding of the liability associated with these sites. Developing an environmental site management plan (SMP) and designing an economically viable development that accommodates environmental concerns and challenges can now be the “easy” part of redeveloping a brownfield site. Unfortunately, navigating the zoning and permitting processes for a proposed development can prove a greater and more expensive hurdle, particularly if stakeholders have something else in mind. One concern, if not the primary concern, of developers when approaching any potential development are cost and the length of time between the expenditure of funds and the generation of return . Nowhere is the adage “time 1 The Louisville Metro Land Development Code (LDC) defines a brownfield as a “potent ial development site that has existing public water and sewers, but has some level of environmental impediment to re- development.” LDC Ch.1, Part 2. The USEPA defines a brownfield more generally , “T he term "brownfield site" means real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant .” Public Law 107-118 (H.R. 2869) - "Small Business Liability Relief and Brownfields Revitalization Act" signed into law January 11, 2002. 1

is money” truer than when you are financing the construction of a brownfield development. Land costs are often reduced to reflect the potential cost of remediation, but that advantage can be quickly lost when opposition to a project forces long delays, repeated public meetings, design changes, and concessions to development plans result in increased costs, extended delays and loss of square footage, all of which may impact returns on the project. I. LOCAL GOVERNMENT REGULATION While state environmental agencies and departments have authority over the environmental aspects of Brownfield redevelopment, all zoning is local. The nature of planning and zoning is that it is driven, in large part, by stakeholders who live or work in close proximity to the brownfield sites and who often have strong opinions as to the nature of any development in their neighborhoods. Zoning Changes Purchase agreements for brownfield properties are often made contingent upon the receipt of all necessary zoning approvals and permits required for construction and operation of the development. In such cases, the buyer and seller will not close on the property until all zoning approvals for the development are obtained. In the meantime, which is often more than a year, the owner continues to incur the expenses associated with the property and the potential buyer incurs legal, assessment, consulting and design fees, and bears the cost of the zoning process. In most cases, former industrial properties must be “ downzoned ” in order to be redeveloped for lighter industrial, commercial or even residential purposes. 2

The process of rezoning may take months even without public input or opposition. Typically, downzoning of a property from heavy to a less intense use is welcomed by neighbors; however, if the downzoning is seen as a threat to remaining properties in the area, those owners may oppose a lighter use as well. In Louisville Metro, industrially zoned properties, those designated M-1, M- 2, and M-3, can be rezoned for residential or commercial uses if the downzoning is compatible with adjoining uses, or a deviation from the adjoining uses can be justified. (Ch. 11, Louisville Metro Land Development Code (LDC)). Even if the property can be developed without changes to the zoning designation or form district 2 , a Conditional Use Permit (CUP) must be obtained in Louisville Metro if new structures are added or if the use was not specifically approved for the facility and doesn’t clearly fit into t he general categories of activities allowed on the site. Requests for modifications to CUPs are reviewed and heard by the Board of Zoning Adjustment (BOZA) if industrial uses are changed or new buildings added to the property. (LDC Ch.4, Part 2). The Zoning Process (Briefly) Zoning map and form district amendments require the approval of the Metro Planning Commission. Property owners and legislative bodies with jurisdiction may initiate zoning map and form district amendments. If the development plan is a developer’s, but the developer doesn’t yet have title to the property, then the owner and the developer must file the application jointly. (LDC 11.4.1). 2 “Form Districts” is a n area with district boundaries, delineated on the Zoning District Map to which a set of regulations governing the pattern and for of development and redevelopment applies. LDC Ch. 1 Part 2. 3

The application can be both lengthy and expensive. The application requires the submission of a development plan sufficient to show the character and objectives of the proposed development. (LDC 11.5A.4). Prior to submission of a formal application for zoning or form district amendments, a plan must be submitted to the Planning Director for review for compliance with the LDC. The proposed use must conform to Louisville’s Comprehensive Plan o r the owner/ developer must explain why the current zoning is appropriate for the property and its surroundings. (LDC 11.4.4). Public Input At least one public meeting is required by the regulations prior to the submittal of the full plan to the Planning Commission. It not unusual for the review process to require many additional public meetings, charettes, and negotiations with adjacent neighbors and other interested parties, depending upon the location of the property. After the submittal of the application, a formal public hearing is required prior to presentation to the commissioners. (LDC 11.4.5). At one level or another, nearly all brownfield projects will eventually be the subject of public scrutiny. Some opportunities for public input are required by status, regulation, or ordinance. Others are voluntary and can be approached as an opportunity to sell the project. Charrettes Charrettes are not mandated under state or federal law. In land use and urban planning, the charrette has become a technique for consulting with all 4

stakeholders. Charrette ideally promotes joint ownership of solutions and attempts to defuse typical confrontational attitudes between residents and developers. With Brownfields, charrettes provide an opportunity to explain and to allay environmental concerns. Charrettes tend to involve small groups; however, the participants may not represent all the residents nor have the moral authority to represent them. Residents who do participate get early input into the planning process. For developers and municipal officials, charrettes achieving community involvement may satisfy consultation criteria, with the objective of avoiding costly legal battles; however, they can be costly in their own right. Public Hearings/Public Comment The zoning process provides repeated opportunities for public comment in an open forum. Comments can also be submitted to the Planning Commission and BOZA. In Jefferson County, local zoning regulations require the Planning Commission to hold at least one public hearing on each application for a Zoning or Form District Map amendment. 3 The general requirements of the zoning process, including those for public notice and input, are set by state statute in KRS Chapter 100. While the code requires one public hearing, additional hearings may be ordered by the either the Planning Commission or BOZA, which may be 3 Louisville Metro LDC 11.4.5. 5

pressured by interested parties to provide more opportunity for discussion and debate on the issue. The regulations governing modifications of Conditional Use Permits (CUPs) require that notice of a neighborhood meeting prior to submittal of the application for a modified CUP and at least one public hearing before Board of Zoning Adjustment (BOZA) prior to action being taken on the application. (LDC 11.5.A). Minor modifications can be acted upon in business session rather than in the open public forum of a regularly scheduled meeting. Public Records Discussions with officials in meetings and negotiations with agency personnel are generally confidential; however, development plans, zoning applications and environmental data submitted to state or local agencies for review are generally subject to open records laws. (Kentucky Open Records Act of 1992, KRS 61.870 to 61.884). Agencies do have the ability to conduct preliminary reviews of environmental data, development plans and construction plans without their being subjected to public scrutiny. To assure that a proposed permit application or development plan isn’t unintentionally or prematurely released to members of the public or interested parties, copies should not be distributed to agency employees, the community or others until they are thoroughly reviewed and ready for dissemination. 6