2018 Report: Benefits of Brownfield Redevelopment in Minnesota
Minnesota Brownfields and the Minnesota Pollution Control Agency have released a “Benefits of Brownfield Redevelopment in Minnesota” report for 2018 highlighting how real estate redevelopment can enable economic growth and community revitalization, while improving the environment.
As the population of the U.S. grows, the housing market continues to expand into increasing demand. New millennial homeowners, aging baby boomers, and renters across the spectrum are all pushing on the real estate market. As a result, the demand for walkable, connected and hands-free neighborhoods with quality amenities and transit options continues to increase.
Infill development on brownfield land offers the ideal opportunity for more centrally located housing construction that provides residents greater location advantage in a city. Many old brownfield sites are close to city centers or urban hubs, with opportunities to walk, bike, and easily access nearby goods and services.
Infill redevelopment also reduces sprawl and the associated public infrastructure costs. On average, greenfield developments use 2-4X more land than brownfield redevelopments. And redevelopment presents opportunities to reuse existing infrastructure, which often result in unique projects with high quality of place. On the other hand, greenfield development can require the expansion of multiple public and private infrastructure systems, including: public sewage and water systems, utilities, cellular service, internet connections, streets and sidewalks, transportation systems, schools, and parks
So, the benefits of brownfield redevelopment extend far beyond the removal of contaminants and improved health. And now a new report, Benefits of Brownfield Redevelopment in Minnesota, published by Minnesota Brownfields and the Minnesota Pollution Control Agency examines the many benefits of brownfield redevelopment in detail.
“Redevelopment increases a region’s property values and tax base, encourages the creation of local businesses and new jobs, eliminates environmental threats to public health, promotes environmental justice, restores community vibrancy, and limits urban sprawl while protecting natural and agricultural resources,” the Minnesota report summarizes. And beyond direct impacts, the new report shows that the success of redevelopment projects in Minnesota often lead to secondary developments and fuel the economic resurgence of surrounding areas.
According to the report, over the 22-year life of grant awards from the Contamination Cleanup and Investigation Grant Programs, the Minnesota Department of Employment and Economic Development (DEED) has leveraged a total of $6.8 billion in private funding in Minnesota. On average, every dollar in grant funding provided by DEED leverages $38 in private investment, demonstrating the power of this public investment.
Moreover, by placing previously abandoned and undeveloped lots on tax rolls, brownfield redevelopment increases the local tax base. Communities benefit from job opportunities, new businesses and services, and increased utilization of existing infrastructure. Whereupon, consumer spending, state income tax, and sales tax revenue increase in a virtuous circle.
Once an area is catalyzed by brownfield redevelopment, the effects can spillover to grow neighboring economies and revitalize those communities too. The 2018 Minnesota benefits report cites neighboring University of Wisconsin-Whitewater Fiscal and Economic Research Center’s recent finding that the assessable tax base of an average remediated brownfield site in Wisconsin increased by $3.4 million as a direct result of redevelopment, with an additional $3.5 million increase from resounding effects on nearby properties.
The report goes on to note that projects in Minnesota supported through DEED’s Contamination Cleanup and Investigation Program have contributed an estimated total of $114 million to the collective local tax base from 1995-2017. And in Hennepin County, for example, Environmental Response Fund (ERF)-aided projects between 2003-2012 generated at least $64 million more in incremental property taxes than they did prior to ERF involvement. The report notes that Hennepin County estimates that the associated property value increase resulting from these ERF interventions to be an 11 to 1 return on investment.
Brownfield redevelopment also contributes substantially to job creation, the report notes. Minnesota DEED also reports that projects funded through its Contamination Cleanup and Investigation Grants from 1995 to 2017 retained 24,724 jobs and created 24,766 new jobs.
Like many states, technical assistance and funding are available from state agencies in Minnesota to facilitate the various phases of brownfield redevelopment. The Minnesota Pollution Control Agency (MPCA) Brownfield Program includes the Voluntary Investigation and Cleanup (VIC) Program and Petroleum Brownfields Program (PB). The VIC and PB Programs provide technical assistance and liability assurance to facilitate the investigation, cleanup, transfer, and redevelopment of brownfield sites.
The Minnesota Department of Agriculture (MDA) is the lead state agency for the investigation and cleanup of contamination from agricultural chemicals. Staff in the Agricultural Voluntary Investigation and Cleanup (AgVIC) Program provide technical assistance and liability assurance letters for agricultural chemical contamination sites. Some financial assistance for investigation and cleanup activities at agricultural contamination sites is available through the Agricultural Chemical Response and Reimbursement Account (ACRRA).
Minnesota DEED administers funds for the investigation and cleanup of sites with contaminated soil or groundwater. In awarding grants for brownfield cleanup, DEED prioritizes projects that address public health threats, increase local tax base, create jobs, and foster the social health of their surrounding communities. Minnesota also has additional state and regional resources for brownfield clean up and redevelopment, which include the Metropolitan Council Tax Base Revitalization Account grants, the MPCA’s Targeted Brownfield Assessment Program, and county programs, such as the Environmental Response Funds in Hennepin and Ramsey Counties, and the Redevelopment Incentive Grant Program in Dakota County.
In step with the robust national market, the 2018 Benefits of Brownfield Redevelopment in Minnesota report signals that demand in Minnesota is strong for the MPCA’s Brownfield Programs. In 2017, the MPCA enrolled 370 new sites totaling 2,265 acres in the VIC and PB Programs, according to the report.
As of January 2017, brownfield cleanup has been completed on 5,600 MPCA VIC sites and 4,100 MPCA PB sites. Over the lifetime of the VIC and PB programs, MPCA estimates that the combined programs have helped return approximately 91,238 acres of land back to productive use.
Despite Minnesota’s many brownfield cleanup and redevelopment successes, the report laments that MPCA estimates approximately 10,000 brownfields or potential brownfields sites in Minnesota remain to be reused. So, there’s plenty of brownfield work to do. In Minnesota, brownfields tend to be concentrated in the state’s urban and industrial centers. But many brownfields exist in smaller communities and rural areas, especially gas stations, dry cleaners and other smaller installations.
While many sites with reuse obstacles have been identified in the Land of 10,000 Lakes, there’s generations of real estate development remaining. And every acre of brownfield land presents an opportunity to capture the multiple benefits real estate redevelopment delivers to projects stakeholders, neighbors and communities nearby.
Download the 2018 report, Benefits of Brownfield Redevelopment in Minnesota.
Bonus Podcast: Listen to Minnesota Brownfields’ Executive Director Martha Faust on Metropolitan Council’s PlanIt Series on the brownfield redevelopment issues currently facing Minnesota. Along with discussing trends and practices, Martha Faust dives into the thought process behind redevelopment.
Learn more about Minnesota's Redevelopment Grant Program.
Check out U.S. EPA's Brownfield Grant fact sheet.