<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:25888.wais]
THE CHALLENGE OF BROWNFIELDS: WHAT ARE THE PROBLEMS AND SOLUTIONS IN
REDEVELOPING PENNSYLVANIA'S LEHIGH VALLEY COMMUNITIES?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON FEDERALISM
AND THE CENSUS
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
OCTOBER 25, 2005
__________
Serial No. 109-117
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
http://www.house.gov/reform
______
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California
DAN BURTON, Indiana TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee DIANE E. WATSON, California
CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California LINDA T. SANCHEZ, California
JON C. PORTER, Nevada C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia ELEANOR HOLMES NORTON, District of
PATRICK T. McHENRY, North Carolina Columbia
CHARLES W. DENT, Pennsylvania ------
VIRGINIA FOXX, North Carolina BERNARD SANDERS, Vermont
JEAN SCHMIDT, Ohio (Independent)
------ ------
Melissa Wojciak, Staff Director
David Marin, Deputy Staff Director/Communications Director
Rob Borden, Parliamentarian
Teresa Austin, Chief Clerk
Phil Barnett, Minority Chief of Staff/Chief Counsel
Subcommittee on Federalism and the Census
MICHAEL R. TURNER, Ohio, Chairman
CHARLES W. DENT, Pennsylvania WM. LACY CLAY, Missouri
CHRISTOPHER SHAYS, Connecticut PAUL E. KANJORSKI, Pennsylvania
VIRGINIA FOXX, North Carolina CAROLYN B. MALONEY, New York
------ ------
Ex Officio
TOM DAVIS, Virginia HENRY A. WAXMAN, California
John Cuaderes, Staff Director
Shannon Weinberg, Counsel
Juliana French, Clerk
C O N T E N T S
----------
Page
Hearing held on October 25, 2005................................. 1
Statement of:
Ferdas, Abraham, Director, Hazardous Site Cleanup Division,
U.S. Environmental Protection Agency, Region III; Eugene
Depasquale, deputy secretary for community revitalization
and local government support, Pennsylvania Department of
Protection; James M. Seif, vice president, corporate
relations, PPL Corp.; Paul Schoff, esq., Feinberg and
Schoff, LLP, CEO of Brownfield Realty, Ltd.; and Robert
Colangelo, executive director, National Brownfield
Association................................................ 30
Colangelo, Robert........................................ 72
Depasquale, Eugene....................................... 42
Ferdas, Abraham.......................................... 30
Seif, James M............................................ 48
Schoff, Paul............................................. 57
Michalerya, William, associate vice president, government
relations, Lehigh University............................... 1
Wrobel, Kerry, president, Lehigh Valley Industrial Park,
Inc.; Chad Paul, Jr., chief executive officer, Ben Franklin
Technology Partners; Ray Suhocki, president and CEO, Lehigh
Valley Economic Development Corp.; and Stephen Donches,
president, National Museum of Industrial History........... 86
Donches, Stephen......................................... 116
Paul, Chad, Jr........................................... 93
Suhocki, Ray............................................. 109
Wrobel, Kerry............................................ 86
Letters, statements, etc., submitted for the record by:
Colangelo, Robert, executive director, National Brownfield
Association, prepared statement of......................... 74
Dent, Hon. Charles W., a Representative in Congress from the
State of Pennsylvania, prepared statement of............... 14
Depasquale, Eugene, deputy secretary for community
revitalization and local government support, Pennsylvania
Department of Protection, prepared statement of............ 44
Donches, Stephen, president, National Museum of Industrial
History, prepared statement of............................. 118
Ferdas, Abraham, Director, Hazardous Site Cleanup Division,
U.S. Environmental Protection Agency, Region III, prepared
statement of............................................... 32
Michalerya, William, associate vice president, government
relations, Lehigh University, prepared statement of........ 3
Paul, Chad, Jr., chief executive officer, Ben Franklin
Technology Partners, prepared statement of................. 95
Schoff, Paul, esq., Feinberg and Schoff, LLP, CEO of
Brownfield Realty, Ltd., prepared statement of............. 60
Seif, James M., vice president, corporate relations, PPL
Corp., prepared statement of............................... 50
Suhocki, Ray, president and CEO, Lehigh Valley Economic
Development Corp., prepared statement of................... 11
Turner, Hon. Michael R., a Representative in Congress from
the State of Ohio, prepared statement of................... 7
Wrobel, Kerry, president, Lehigh Valley Industrial Park,
Inc., prepared statement of................................ 89
THE CHALLENGE OF BROWNFIELDS: WHAT ARE THE PROBLEMS AND SOLUTIONS IN
REDEVELOPING PENNSYLVANIA'S LEHIGH VALLEY COMMUNITIES?
----------
TUESDAY, OCTOBER 25, 2005
House of Representatives,
Subcommittee on Federalism and the Census,
Committee on Government Reform,
Bethlehem, PA.
The subcommittee met, pursuant to notice, at 10 a.m., in
rooms 291, 292, 293 of Lehigh University Rauch Business Center,
Hon. Michael Turner (chairman of the subcommittee) presiding.
Members present: Representatives Dent and English.
Staff present: Shannon Weinberg, counsel; Juliana French,
clerk; and Erin Maguire, Rep. Dent/LC.
Mr. Turner. Good morning. We will call to order the hearing
of the Government Reform Subcommittee on Federalism and the
Census, and this hearing is entitled ``The Challenge of
Brownfields: What are the Problems and Solutions in
Redeveloping Pennsylvania's Lehigh Valley Communities?'' We
have this morning William Michalerya to welcome us to Lehigh
University and we want to thank him and Lehigh University for
hosting us today.
STATEMENT OF WILLIAM MICHALERYA
Mr. Michalerya. Thank you very much. Congressman Dent,
Congressman English and Chairman Turner: On behalf of President
Greg Farrington and Lehigh University, I would like to welcome
you to Lehigh University, Bethlehem and the Lehigh Valley.
You could hopefully pick up on the university's emphasis on
partnerships, since it was mandatory to welcome you to the
university, the city and the region, and for Congressman Turner
from Ohio, to the Commonwealth.
At Lehigh, we consider ourselves a ``medium-sized''
university with approximately 4,700 undergraduate, 2,000
graduate students, 430 faculty members and 1,200 staff. Our
campus is approximately 1,600 acres. Our annual operating
budget is approximately $330 million, with research
expenditures of approximately $45 million.
Lehigh University was founded and initially grew to support
the railroad, steel and manufacturing industries. We are now
playing a key role in developing the ``knowledge economy'' and
transforming the economic landscape in the region and the
Nation.
We have another strong commitment in our research and
education mission and that is industry partnerships and
economic development. On our campus we host the Ben Franklin
Technology Partners, the Manufacturers Resource Center and, in
this building, the Small Business Development Center.
In addition, we have a tradition of developing major
research centers, including the Center for Advanced Technology
for Large Structural Systems, the Center for Optical
Technologies and the Center for Advanced Materials and
Nanotechnology. These centers are anchored by a strong industry
partnership program. They also have assisted with the missions
of many Federal agencies, including the National Science
Foundation, the Department of Defense, Department of
Transportation, and NASA.
We are also very committed to the revitalization of the
former Bethlehem Steel property and the south side of
Bethlehem, so your hearings on ``brownfield sites'' is
especially appropriate to us today.
Finally, I just want to acknowledge the hard work and
expertise of your staffs, especially Erin Maguire, Juliana
French, and Shannon Weinberg. It was a pleasure to work with
them to organize this hearing.
Again, welcome to Lehigh University and we are proud to
help with the important work of this committee. Thank you.
[The prepared statement of Mr. Michalerya follows:]
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Mr. Turner. Thank you so much. Before we begin, I want to
recognize the Members that we have on the panel today. With us
we have Representative Phil English, who I know that you all
know. He is from Erie, PA. We are very honored to have him
here. He is a leader in the House on the Ways and Means
Committee. He is also a member of the Speaker's Saving
America's Cities Working Group where he has been recognized for
his expertise in urban issues, the Speaker having turned to 24
Members of the House Republican Conference who have experience
in local government and looking to them for ways in which an
urban policy can assist in economic development in urban areas.
Representative English is also a leader in the issues of
protecting our manufacturing base. He was kind enough to come
to my district in Dayton, OH for a manufacturers' forum where
we listened to manufacturers in my community and the challenges
that they face and ways in which they can be assisted, and was
the author and the lead on recent action by the House to
encourage the floating of China's currency that has long been
an issue of dispute for manufacturers with the fear of their
undervalued currency providing them an edge in our economy. We
are very excited to have him here today. He is also a cosponsor
of my brownfields redevelopment bill, a tax credit bill, that
when you look at these economic development opportunities in
brownfields, could provide some Federal funding in an
unprecedented level. We appreciate having you here today and I
will recognize you soon for an opening statement.
And of course, we have Representative Charles Dent. I
greatly appreciate being asked to bring the hearing to your
district to look at the successes that are here. We had an
opportunity to tour the Bethlehem Steel site this morning and
what a great incredible opportunity and an example of a
private/public partnership, a community that has a plan and is
working diligently and has economic successes. It is great
today to get on the record some of the elements that have
caused that success, but also to look at the issues that I know
are very close to Mr. Dent's heart as he works in the House. He
has been recognized because of his leadership in Pennsylvania
as Vice Chair of this committee.
It is very unusual for a freshman to be named vice chair to
a subcommittee, but Mr. Dent was named Vice Chair of this
subcommittee, which is again Federalism and the Census, looking
at the interrelationship between State, local and Federal
Governments, so he brings his expertise in the Pennsylvania
government as we look to the issues of how the Federal
Government can work more effectively for communities.
And with that, I would again like to welcome you all to our
subcommittee on Federalism and the Census and this field
hearing entitled, ``The Challenge of Brownfields: What are the
Problems and Solutions in Redeveloping Pennsylvania's Lehigh
Valley Communities?'' This is the fourth in a series of
hearings held on the issue of brownfields and brownfield
redevelopment. Our hearings in D.C. are informative and
helpful, but all too often we get the inside-the-beltway view
and these field hearings allow us to reach out to the public
and interact with individual communities on a more personal
basis and to learn firsthand of their concerns, their
suggestions and their successes. We have had great response to
this hearing and I would like to again express my appreciation
to the city of Bethlehem and to President Gregory Farrington of
Lehigh University and his staff for sharing these facilities
and for their accommodating efforts.
We have a great number of witnesses present and we are here
to listen to you. In the interest of time, I will submit my
complete comments for the record, a copy of which is available
at the press table.
[The prepared statement of Hon. Michael R. Turner follows:]
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Mr. Turner. We have two panels of witnesses before us to
help us understand the state of brownfield redevelopment and
the impact of the EPA's Brownfield Program across the
Commonwealth of Pennsylvania. We also hope to hear your ideas
for improving or complementing the EPA Brownfields Program in
order to encourage more aggressive redevelopment. And as I
identify the members of the two panels, if I should slaughter
anyone's name, please reintroduce yourself to us as you come to
be recognized.
On our first panel we have Abraham Ferdas, Director of the
Hazardous Site Cleanup Division with the U.S. Environmental
Protection Agency's Region III office. We have Eugene
DePasquale.
Mr. DePasquale. Very good.
Mr. Turner. They wrote it phonetically, that helps. Deputy
Secretary for Community Revitalization and Local Support with
the Pennsylvania DEP. Jim Seif, vice president of corporate
relations with PPL Corp. Mr. Seif was also Secretary of the
Pennsylvania DEP under Governor Tom Ridge. Paul Schoff,
Feinberg and Schoff, LLP and Robert Colangelo is going to be on
our second panel. He is currently stuck in traffic and he is
the executive director of the National Brownfield Association.
Our second panel of witnesses consists of representatives
from the Pennsylvania State core community. And we have Kerry
Wrobel, President of the Lehigh Valley Industrial Park. Chad
Paul, Chief Executive Officer of the Ben Franklin Technology
Partners. Ray Suhocki, president and CEO of Lehigh Valley
Economic Development Corp. And Stephen Donches, president of
the National Museum of Industrial History.
I look forward to hearing all of your testimony. In
addition to your testimony, we will have a series of questions.
Everyone will be given 5 minutes for their presentation. I do
want to tell you that we are going to attempt to end the
hearing today by 12:30. We all have to return back to
Washington today for votes in hearings and so we are going to
try to catch an earlier train. And with that, I would like to
recognize the vice chair of the subcommittee, the
Representative for the 15th District of Pennsylvania, for his
opening comments and remarks.
Mr. Dent. Thank you, Chairman Turner, for holding this
important hearing and thank you, too, Congressman English for
coming from the other end of the State to be with us today. I
truly appreciate that. Thanks again to Bill Michalerya, Greg
Farrington and the entire staff at Lehigh University for
providing this wonderful facility for this hearing. This
proceeding does provide us with a wonderful opportunity to
address the issues surrounding brownfields clean-up as they
exist around the country and more specifically, as we have to
confront them within the Commonwealth of Pennsylvania.
Brownfields are both an important environmental and
economic issue. How we decide to clean up and reuse brownfields
across the country will be an important question to resolve as
we go about the task of promoting industrial redevelopment,
especially in those areas that were once dominated by
traditional manufacturing concern, such as automaking, steel
fabricating and ship building. These parcels of land typically
contain hazardous substances, pollutants or contaminants and
that is where the problem lies. The presence of these foreign
substances sometimes makes it more cost-effective to abandon
the land rather than pay the bill to have the property properly
cleaned up and remediated. There are many disincentives to
remediating a contaminated property, the first and foremost of
which is price. To this effect, sometimes the cost of clean-up
may be more expensive than the value of the land itself.
Here on the south side of Bethlehem, right here in
Pennsylvania, lies one of the largest brownfield sites in the
country. It is the former manufacturing facility of the
Bethlehem Steel Corp. This old plant contains railroad tracks,
abandoned mills and left-over plant equipment on some 1,800
acres of land that run along the banks of the Lehigh River.
Steelmaking began here in 1857 and expanded greatly during the
early part of the 20th century. By the 1950's the company had
become the Nation's second largest steel producer and much of
that work was done on the Bethlehem site.
In fact, I was at a meeting last week of the Winston
Churchill Society and it was brought up about Winston
Churchill's deal with Charles Schwab in front of a very
distinguished Washington group about the history of Winston
Churchill and Charles Schwab and Bethlehem playing an important
role in that discussion, just as a parenthetical. This area
also played a vital role in the national defense. During the
Second World War the steel that formed the basis of the 16-inch
armor plating on battleships such as the Missouri and the
Wisconsin was rolled at this site. For many years, it was the
economic backbone of the Lehigh Valley.
By the 1990's, however, Bethlehem Steel Corp. found that it
could no longer effectively compete against foreign steel
products and in 1995 the plant closed its doors, leaving 375
tons of soil contaminated with arsenic and lead at the site.
During the last years of its existence, the company operated
the plant on what has been classified as a brownfield site
under guidelines set up by the Federal Resource Conservation
and Recovery Act [RCRA]. This act permitted operation of the
plant only if the company could demonstrate that it was capable
of managing and cleaning up the hazardous wastes that accompany
steel production.
While the steel company is no longer with us, the
environmental clean-up of this site has proceeded and the
future of this piece of property appears bright. Local
developers, several of whom will be testifying shortly, have
put forth plans to build a conference center, technology center
and retail shops. Further, there is a move afoot to commemorate
the actions of the great employees who worked here by
establishing the Smithsonian Institution's National Museum of
Industrial History on the site.
These great accomplishments are the result of the
Environmental Protection Agency and the Pennsylvania Department
of Environmental Protection working together to establish State
and Federal RCRA clean-up requirements with one plan.
Pennsylvania was the first State to sign an MOA, a Memorandum
of Agreement, with the EPA that included three Federal program
areas: the Comprehensive Environmental Response, Compensation
and Liability Act; the Resource Conservation and Recovery Act;
and the Toxic Substance Control Act.
I think this type of State and Federal partnership should
be encouraged throughout the country, an alliance that ideally
would bring together not only the EPA and a particular State's
environmental agency, but other Federal agencies as well, all
with a commitment to redevelopment.
Pennsylvania's Land Recycling Program has had an astounding
turnaround effect on brownfields that has not only promoted
environmental protections, but also created economic
opportunities for thousands of families. It has also
rejuvenated the tax bases of dozens of communities across
Pennsylvania. I applaud the fact that Pennsylvania's Land
Recycling Program has transformed abandoned, inactive pieces of
land into places of economic revitalization. Over 30,000 jobs
have been created or retained as a result of the many business
opportunities engendered by the recovery of brownfields in
Pennsylvania.
It is clear that we must continue to work at cleaning up
and redeveloping America's brownfield sites. This is imperative
in order to encourage job growth, promote the development of
transportation and infrastructure on these inactive urban
industrial areas while at the same time saving greenfields.
While many strides have been made, there is still much to be
done.
That said, it is important to acknowledge future
legislative proposals that will move us toward our goal of
complete brownfields remediation. Last Congress, Chairman
Turner introduced the Brownfields Revitalization Act of 2004,
H.R. 4480, which proposed a tax credit of up to 50 percent for
qualified remediation expenses performed at brownfield sites in
certain poverty-rated areas. Chairman Turner expects to
reintroduce a similar piece of legislation this Congress. This
bill will be similar to its predecessor, but it will also more
explicitly define the roles and obligations of some of the
major governmental entities or parties involved, including the
State's development agency and the environmental protection
organization.
It will also explicitly set out the requirements that need
to be fulfilled in order for a developer to enjoy a tax credit
in return for remediating a brownfields site. In addition, my
colleague and fellow member of the Pennsylvania delegation,
Representative Melissa Hart, has proposed the Pennsylvania,
excuse me, the Brownfield Redevelopment Assistance Act, H.R.
1237. This bill would provide grant moneys earmarked through
the Department of Commerce for promotion of economic projects
on brownfields' sites. Specifically, the goal of this
legislation is to provide funding that would target those
projects that have the potential to both restore employment and
bring new income and private investment to distressed
communities.
Congresswoman Hart has also proposed the Financing of
Brownfields Activities through Government Bonds Act, H.R. 3451,
which would amend the Internal Revenue Code to allow the use of
tax-exempt redevelopment bonds to finance the costs of
environmental remediation at brownfield sites. Permitting the
use of these bonds for the purpose of clean-up will provide
much needed capital that will not only make for a healthier
environment but will also promote needed economic redevelopment
in areas that would clearly benefit from the same.
Again, thank you, Chairman Turner, for acknowledging the
importance of this issue and I look forward to hearing the
testimony of our knowledgeable panelists, all of whom have a
distinguished background, either at the State or National level
or, later on, people at the local level who are just as
experienced. So again, thank you, Chairman Turner and Mr.
English for your presence.
[The prepared statement of Hon. Charles W. Dent follows:]
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Mr. Turner. Thank you. And I would like to recognize the
Honorable Phil English.
Mr. English. Mr. Chairman, I would like to submit my
statement for the record. I am very enthusiastic to hear the
testimony today of these two panels, which are truly
extraordinary, but having submitted my formal statement for the
record, I would like to thank you and Mr. Dent for bringing
your subcommittee here to Lehigh and allowing me to sit in on
it. The fact finding that you are doing today is particularly
significant for our National policy. It is important, I think,
that you are coming to Pennsylvania because, as Mr. Seif will
attest, Pennsylvania has a long track record of programmatic
commitments to economic development that I think can give us a
perspective that would be useful for our National efforts to
strengthen communities. At the same time, coming to this
community, I think, is particularly important because I think
looking at this from a Pennsylvania perspective, this community
has done an extraordinary job making maximum use of its
industrial space and reclaiming old sites for productive use.
The tour that we had this morning, for me, was a real eye
opener. And finally, I would like to say that I think you and I
agree on this--Jane Jacobs was right. I think the health of our
National economy is ultimately tied to the health of our urban
communities and one of the pillars of our effort to create
opportunities in urban communities has to be an aggressive
brownfields policy. I want to congratulate both of you, as a
colleague, for the extraordinary groundbreaking effort you are
doing to focus Congress on this issue and I just want to say we
on the Ways and Means Committee, Representative Hart and
myself, representing Pennsylvania, are strongly committed to
joining with you on this effort. So I thank you for the
opportunity to be part of this proceeding today.
Mr. Turner. Thank you. We will now start with the
witnesses. Each witness has kindly prepared written testimony
which will be included in the record of this hearing. Each
witness has also prepared an oral statement which summarizes
their written testimony. Witnesses will notice that there is a
timer, a light on the witness table. The green light indicates
that you should begin your remarks and the red light indicates
the time has expired. In order to be sensitive to everyone's
time schedule, we ask that witnesses cooperate with us in
adhering to the 5-minute time allowance to their oral
presentation. We will follow that with a question and answer
period. It is the policy of this committee that all witnesses
be sworn in before they testify, so we will now swear in panel
one of the witnesses.
[Witnesses sworn]
Mr. Turner. Please let the record show that all witnesses
have responded in the affirmative and we will begin with you,
Mr. Ferdas.
STATEMENTS OF ABRAHAM FERDAS, DIRECTOR, HAZARDOUS SITE CLEANUP
DIVISIONS, U.S. ENVIRONMENTAL PROTECTION AGENCY, REGION III;
EUGENE DEPASQUALE, DEPUTY SECRETARY FOR COMMUNITY
REVITALIZATION AND LOCAL GOVERNMENT SUPPORT, PENNSYLVANIA
DEPARTMENT OF PROTECTION; JAMES M. SEIF, VICE PRESIDENT,
CORPORATE RELATIONS, PPL CORP.; PAUL SCHOFF, ESQ., FEINBERG AND
SCHOFF, LLP, CEO OF BROWNFIELD REALTY, LTD.; AND ROBERT
COLANGELO, EXECUTIVE DIRECTOR, NATIONAL BROWNFIELD ASSOCIATION
STATEMENT OF ABRAHAM FERDAS
Mr. Ferdas. Good morning, Mr. Chairman, and members of the
subcommittee. My name is Abraham Ferdas. The chairman
pronounced it right. I am Director of the Environmental
Protection Hazardous Site Cleanup Division in Region 3 and I am
responsible for all brownfield, superfund, oil line and
emergency response. More than a decade ago, EPA identified a
large problem. We saw local communities who were having a hard
time dealing with properties that were contaminated or
potentially contaminated by hazardous wastes. The private and
public sector were very hesitant to get involved in those sites
which are now known as brownfields. So 10 years ago, EPA began
providing seed money through grants to local communities to
identify and assess contamination of brownfields properties.
Over the years EPA added grants for revolving loan funds to
clean up properties. The agency also provided job training
grants to promote employment opportunities in brownfields
communities.
Since EPA's earliest efforts, States, tribes, local
governments and nonprofit organizations are now focusing on
brownfields cleanup and development. The landmark 2002
brownfields legislation brought into EPA's program and provided
liability protection to promote private sector participation in
brownfields cleanup and development. Under the new law, EPA now
awards direct cleanup grants to public sector and nonprofit
property owners. The 2002 law also broadened the definition of
what could be considered a brownfields property. EPA can now
award its brownfields grants to petroleum contaminated
properties, mine-scarred lands and sites contaminated by
controlled substances.
The National brownfields effort has produced successful
results. Since EPA awarded its first grant, EPA and its grants
recipients have conducted more than 7,400 assessments.
Brownfield grantees have leveraged $7.2 billion in cleanup and
redevelopment money, creating more than 33,000 jobs.
Brownfields have proven to be a good public investment. For
every public dollar spent in brownfields leveraging, for every
public dollar the leverage is $2.50 in private investment.
Every acre of reused brownfields save 4.5 acres of green space.
The brownfields initiative has become a National effort that
links environmental protection and economic development with
the ultimate goal of breathing new life in local communities.
The Commonwealth of Pennsylvania and some 61 communities
and nonprofits so far have received $19 million in EPA
brownfields funding. This represents one of the Nation's
largest concentration of EPA brownfield resources.
Before the 2002 brownfields law, Pennsylvania was one of
the first to receive an EPA brownfield grant to address
contamination from mine-scarred lands. This paved the way to
include the sites in the National Brownfields Program. Since
passage of the Brownfields Law, all the Region 3 communities
have received funding to address mine-scarred land projects.
This includes the recent award of a second EPA cleanup grant to
a nonprofit organization, Earth Conservancy, to clean up mine-
scarred sites in the Nanticoke area.
Last year EPA and Pennsylvania Department of Environmental
Protection signed the Nation's first One-Cleanup Memorandum
Agreement, as Congressman Dent described better than me. This
agreement provides a one-stop shop approach where contaminated
communities, builders, lenders and businesses can get what they
need from the coordination of an EPA-DEP program to ensure they
are satisfying the State requirements in ways that are
consistent with EPA cleanup programs. And that is very
important. I mean, we want to be one-shop. The developer has to
only see Pennsylvania. It doesn't have to see EPA, if we can
help it.
So in conclusion, EPA Brownfields Program provides valuable
tools needed to protect and clean our environment, reduce
neighborhood blight, generate tax revenues and create jobs. Our
continued success will require even more interaction and
teamwork in all levels of government, the private sector and
non-government organizations. EPA is committed to reach out to
our partners and the administration is committed to continue to
strong funding for the program. Thank you very much.
[The prepared statement of Mr. Ferdas follows:]
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Mr. Turner. Mr. DePasquale.
STATEMENT OF EUGENE DEPASQUALE
Mr. DePasquale. DePasquale. Thank you, Mr. Chairman. First
of all, I want to thank you for highlighting this issue for
brownfields. I went to college at the College of Western Ohio,
which is about an hour to the east of Dayton and I am sure one
of the reasons why you are highlighting this is Dayton, Wooster
and cities all across Pennsylvania, if we are truly going to
get our cities moving forward, brownfields has to be considered
a critical piece of that, of the tools to make that happen.
Congressman English and Congressman Dent, thank you for being
here, as well. Special thank you to Congressman Dent for when
we passed the Land Recycling Program in Pennsylvania, the
Congressman was then a member of the General Assembly and was a
critical leader in that effort and also Congressman English,
from the local effort in Erie for the International Paper site
and the Erie Gunite site, those are critical excellent
brownfield projects and we respect all of your leadership on
those issues.
Abe, who preceded me, we have the role that most
environmental regulators are jealous of and that is we get to
create jobs and clean up the environment, sort of one of the
few jobs that people get jealous when you are an environmental
regulator. And to my left is Jim Seif. Mr. Seif was the
secretary that preceded this administration and the reason why,
one of the key reasons why, the grid work is happening in this
district in brownfields is his leadership on the issue. The
Pennsylvania Land Recycling Program is a model for the Nation
and without that, you would literally have thousands of people
that would not have jobs today, you would have hundreds and
thousands of acres that have not been cleaned up and you would
have jobs that would not have been brought into Pennsylvania.
Mr. Seif deserves a huge amount of credit for that, so I thank
him for his efforts, as well.
Before we go--or before I go--into recommendations, it
might be good to talk about a little bit of how we got here
today. Pennsylvania, prior to 1995, was, because of several
brownfields, it would be the steel mills in this district to
where I grew up in Pittsburgh, you are talking about hundreds
and hundreds of acres of sites and thousands of jobs that were
lost and in many ways businesses were prepared to give up on
those sites. Pennsylvania passed through the first, or Act II
of 1995 that Governor Ridge signed into law, the Land Recycling
Program that offered the liability relief and also the cleanup
standards that would be site specific to the sites, depending
on what you wanted to use, whether it be housing, which would
have very strict standards, to whether it be a parking lot,
which would have lower standards, without compromising public
health. That bill has helped spearhead the brownfield movement
across the country.
Moving forward, when Governor Rendell took office, one of
the first things he did as Governor, was put together a
stimulus package. A critical piece of that stimulus package was
a $300 million investment called Business in Our Sites and that
money was used to help local economic development corporations
acquire sites, mainly brownfields, clean them up and also
revitalize the infrastructure. That program has been put in
place across the State now and they have now invested close to
$200 million in revitalizing old industrial sites to prepare
them to be pad-ready so Pennsylvania can bring jobs into them.
Another issue that we have done is the Brownfield Action
Team program. The Brownfield Action Team program has been a
critical addition to the Pennsylvania brownfield arsenal. In
fact, the Bethlehem site was the first Brownfield Action Team
site in Pennsylvania. What we aim to do with the Brownfield
Action Team is to equal the playing field between brownfields
and greenfields by streamlining our permits so that we cut the
permitting time in half and when communities designate a site
as a priority site, we move those sites through the permitting
process as fast as the law will allow.
We also have a Memorandum of Agreement with EPA so that we
become a one-stop shop. Pennsylvania is right now the only
State in the country and while we are happy about that, because
it has given us a competitive advantage, the reality is that we
think every State in the country should at some point have that
agreement with EPA so that we can move projects forward across
the country on brownfields.
What the Federal Government can do--and obviously we have
talked about some legislation that is in before you, whether it
be from the tax credit side or from bonding from Congresswoman
Hart--the big picture is keeping in mind that we have to level
the playing field, so whether it be from the permitting side--
maybe EPA and DEP could look at how we can bring our model of
an MOA to the rest of the country--providing, perhaps, a
streamlined permitting process for priority brownfield
districts at the Federal level, or, also, perhaps some more
flexibility on our EPA funding for the brownfields. I will
commend Region 3 because they have been very cooperative with
us on those programs, but we need to continue to work at ways
to equalize that playing field from the funding side and the
permitting side, because if the sites are not, if people that
are investing feel that they are going to have too long a time
of getting their permitting up or the funding will be too
difficult to achieve, they will simply not invest in those
sites, so we all have to work together to come to that common
ground.
[The prepared statement of Mr. DePasquale follows:]
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Mr. Turner. Thank you. Mr. Seif.
STATEMENT OF JAMES M. SEIF
Mr. Seif. Mr. Chairman, welcome to Pennsylvania and Mr.
English, welcome to the Lehigh Valley and Charlie Dent, welcome
home. It is good to have you. I will correct the record at the
risk of not being gracious of the nice things that have been
said. It was Tom Ridge that was responsible for the brownfields
program in Pennsylvania, not Jim Seif.
Mr. DePasquale. But you are sitting to my left.
Mr. Seif. Tom Ridge was occasionally to my left, as well,
but that is another--let me talk about what, I am going to
depart from my testimony. It has that little anecdote about
representing National Cash Register, which was an unfortunate
event, where the adversarial system was used in a totally
inappropriate place, which was to try to solve an environmental
problem. That says it all about Superfund.
Let me talk about what I think a successful recipe for
brownfield statutes would be. First, you have to start with the
recipe itself, a piece of paper and that piece of paper needs
two things. They are mentioned in the bullets at page three of
my testimony. You have to have a real cleanup, an actual,
transparent-to-the-community, safe cleanup. This is not just
paving stuff over and wishing for jobs. It has to be, the
community has to agree to it. The risk standards have to be set
sometimes State by State. I would not favor a Federal
approbation of risk standards.
Second, you need a piece of paper from the State or other
authority that says you have done what you are supposed to do.
That is what puts the property back in the stream of commerce.
It has been prevented from being there by so many things, the
long dissertation I have done about Superfund's failings as the
principle example. It became legally toxic and people just let
it go and that can't happen.
The next thing you have to do is clear out the kitchen.
There is some stuff in there that shouldn't be there. One, you
have to administer the laws that are in place that are not
toxic waste laws so that you create no more Superfund sites. To
stop creating brownfields we have to conduct ourselves
economically and environmentally the way the public wants us
to, whether we are a company or whether we are administering
statutes.
And then you have to clean out Superfund. I think that has
been done. I am among, you know, EPA has done a great job, like
any reform center does and I was among the sinners. I was
talking with Abe this morning when we worked together on
Superfund. We did have to chase around a lot of people and with
all the dysfunctions in the Superfund statute and the
incentives to fight instead of get the job done, it didn't
work. And I think the Federal Government got off to a wrong
start administratively. It also got off to a start at a time
when we didn't know what the dimensions of the problem were.
There were thousands of these, not 128, which is what Jimmy
Carter once thought. Thousands of them. We also didn't have
ways to clean up stuff, technologies or money or administrative
techniques and they had to be invented and since the Superfund
program used litigation to invent, it took awhile.
Looking more positively on what it takes, then you have to
have not just the piece of paper and a clean kitchen, but a lot
of stuff, a lot of ingredients, lots of cooks--lots of people
like the second panel who get it about there is economic
opportunity in land, that it is a commodity and it has value
and it is not just something to stay away from. You have to
have new technology and these people are good at inventing it.
I think Mr. Colangelo will talk about his group which consists
of hundreds of people in Pennsylvania, alone, who have an
incentive economically and from the community point of view to
make this thing work. Contrast that to Superfund, who had
hundreds of lawyers whose career depended on making it not
work. And this is a far more important bunch of people in terms
of getting things done.
You would have to have a sensitivity to land use. I think
the sprawl debate has helped prevent some greenfields from
being used and tipped the balance a little bit toward using
land in Erie or Dayton or Bethlehem or Allentown. That has been
helpful. You have to advertise like hell. Frankly, I have used
the Henry Ford analogy. He didn't make better or more cars than
anybody else, but he sure got out and sold a lot of cars. And
people are concerned about these toxic sites. I think that
concern has been considerably less over the last few years, but
you have to do what we have heard Gene DePasquale talking
about: get out and tell people about it. Use the Business on
Our Sites program that Rendell has used or the Site Finding
program that we instituted and just get out and make it happen,
just as you would push any other asset in a State--good land,
close in.
You have to have good quality control. The sites have to be
really cleaned up. You have to have KOZ kinds of items
available. You have to have flexibility. You can put a
playground where an old factory was if you do it right. You
have to have a deal where you can get it wholesale, like our
multi-site agreements. You have to have State variation. Not
every State deals with risk the same way, deals with economic
incentives the same way and if the 10th amendment is as strong
as we have recently learned that it is, that will be a good
thing.
And into the mix comes tax policy, for which I commend the
committee for looking at. There will be revenue consequences
and there will be difficulties over how do we simplify the code
and still do all these things and I will let Congressman
English worry about that in his other committee. The fact is
that it is not only Federal taxes, but local taxes that are a
problem or an opportunity with brownfields. KOZ has solved, in
some respects, the local problem, Keystone Opportunity Zone,
which is a tax-free zone. But more could be done in those
areas. I would be happy to talk about more war stories or more
parts of the recipe if there is interest.
[The prepared statement of Mr. Seif follows:]
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STATEMENT OF PAUL SCHOFF
Mr. Schoff. Thank you. My name is Paul Schoff and I know
that I am definitely to the left of Mr. Seif. It is my pleasure
to address the members of the Subcommittee on Federalism and
the Census and in particular, I am pleased and privileged that
you would send an invitation to me to talk about brownfields
here in the Commonwealth of Pennsylvania. My company,
Brownfield Realty, LTD handled the first brownfield transaction
under Pennsylvania's then new voluntary cleanup program [VCP],
the Land Recycling Act, known colloquially as ``Act 2.''
Pennsylvania's VCP or brownfield law has provided a tremendous
boost to the Pennsylvania economy by allowing a common sense
approach to the handling of environmentally challenged
properties.
That first site, the Delta Truck Body site, if you take a
look at exhibit A to my materials, had been on the list
maintained by the Pennsylvania Hazardous Sites Cleanup Act
[HSCA], for more than 3 years when we negotiated that first
Consent Order and Agreement, with Pennsylvania's DEP Office of
Chief Counsel. That order, which was dated October 31, 1995 was
the first step in getting this property back into productive
use and generating tax revenue and providing employment for the
local community.
Since that first site, Pennsylvania's DEP has approved the
cleanup reuse of hundreds of sites and now 10 years later, it
is clear that the Pennsylvania VCP is not only an unqualified
success, but a model for other States to follow.
As noted in my article written for ``Business Law Today''
in May 1997, at the time of the Delta Truck Body site
transaction there was no Federal law allowing for risk-based
cleanups. There was no Federal VCP. Since that time, Congress
has passed legislation which provides for no Federal
involvement, a process commonly called ``overfiling,'' on a
State brownfield site, which is being remediated under a State
brownfields program unless the State requests EPA action or the
EPA determines that a continuing release presents an imminent
and substantial endangerment to human health or the environment
or where certain new information regarding the extent of
contamination is perceived by the EPA as requiring further
remediation. Notably, however, this law only limits EPA
overfiling under CERCLA, the Federal Superfund law, while the
EPA is free to pursue claims and enforcement under Federal
environmental laws such as RCRA, TSCA and the like.
Fortunately, in April of last year, Pennsylvania and the EPA
executed a Memorandum of Agreement, or Memorandum of
Understanding, which covers Federal involvement where CERCLA,
RCRA and TSCA legislation is implicated and clarifies how sites
remediated under Act 2 may also satisfy requirements for these
three key Federal environmental laws.
Since inception, Pennsylvania's Act 2 has allowed the
cleanup and reuse of at least 1,712 sites. In addition to the
enviable record which Pennsylvania has behind it, DEP has not
rested on its laurels. The formation of the Brownfield Action
Team, the Low-risk Sites Process, the Clean Fill Policy are all
outgrowths of the original VCP program. Together with the
Pennsylvania SiteFinder which has listed 485 properties since
its creation in 2001, DEP has awarded 50 Brownfield Inventory
Grants. These grants, together with the grants and low interest
loans under the Industrial Sites Reuse Program, have all
contributed to making Pennsylvania an extremely hospitable
venue for new and existing businesses.
It is also important to mention the use of environmental
insurance products, such as stop-loss coverage, environmental
impairment liability protection and cap cost policies, which
have allowed questionable transactions to proceed with the
assurance that financial resources will be available in the
event unexpected contamination is found at a later date or if
remediation costs end up exceeding preliminary estimates. These
policies, together with the Pennsylvania brownfield initiative
have permitted transactions to proceed in situations where
uncertainty and speculation abounded regarding a particular
site.
It should also be noted that Act 3, which was part of the
original package--Acts 2, 3 and 4--under Pennsylvania's VCP
legislation adopted in 1995 provides protection for economic
development agencies, lenders and fiduciaries. In my written
materials I have gone into an analysis of exactly what that
protection is for economic development agencies, lenders and
fiduciaries. I don't know that it is necessary for me to go
into that at great detail at this time, but suffice to say that
a lot of the economic development agencies which Mr. DePasquale
had referenced in his remarks would not have taken title to
these properties, or acted as conduits, if this legislation had
not been passed. Act 3 provides that protection. Act 3, as well
as Act 2, is a model for other States.
These protections for economic development agencies,
lenders and fiduciaries, they all add up to providing key
relief to an area which was fraught with danger. To that end, I
believe Act 3 has been an unqualified success in providing the
comfort required by these third parties in order to maintain
reasonable control over their respective situations.
If there is one bugaboo in the system, it is the
increasingly popular policy of State environmental agencies
seeking compensation for natural resource damages. While
Pennsylvania has taken a common sense approach and has not
proceeded to follow this path. Our sister State, New Jersey,
has embarked upon an aggressive campaign to obtain financial
recompense for responsible parties for the overall damage done
to the State's natural resources as a result of migrating
pollution.
While the policy has surface appeal, if you take the
argument to its logical conclusion, each one of us could and
should be prosecuted for driving vehicles which contribute to
the deteriorating condition of the air we breathe. My question
becomes where does it end? In my humble opinion, while the
States are free to govern their own affairs, U.S. Congress
could require, by statute or regulation, that any existing or
future MOUs or MOAs with States require prohibition on the
recovery of NRDs except in the case of willful or malicious
intentional acts.
Notwithstanding the controversy of NRD recovery, my opinion
is that the Pennsylvania program Acts 2 and 3 and 4 has been
one of the finest legislative products produced by the
Commonwealth and the fact that we are holding these hearings in
the city containing this country's largest brownfield site,
serves as further testimony as to the viability and vitality of
the Pennsylvania program and the cooperation between the
Commonwealth and the Federal Government. Thank you for
extending the invitation to speak before your subcommittee. I
thank you for offering me the opportunity to share my views
with the members of the subcommittee. I look forward to any
questions you may have.
[The prepared statement of Mr. Schoff follows:]
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Mr. Turner. Mr. Colangelo.
STATEMENT OF ROBERT COLANGELO
Mr. Colangelo. Thank you. Good morning, Mr. Chairman and
members of the subcommittee. Thank you for inviting me here
today and I really commend each of you for tackling this
brownfield issue and looking at alternative financial
incentives to attract private sector investment. Government
can't do it alone. It has to be a public/private partnership
and now a lot of the easy brownfield sites have been done and
in order to attract the private sector, we need more innovative
financial solutions.
The National Brownfield Association is a nonprofit
educational organization and we have more than 900 members,
property owners, developers, investors, service professionals
and representative governments who are all dedicated to the
responsible redevelopment of brownfields. And one of my
pleasures is that I get to travel the country working with a
lot of States on their brownfield programs, so I think I can
offer you a unique perspective on what is happening in the
brownfield market.
The NBA has a longstanding relationship with the State of
Pennsylvania. Pennsylvania DEP was one of our founding members
under Governor Ridge and Secretary Seif, and you know, we
learned firsthand just the quality of people that are involved
in the agency and the innovativeness that has come out of the
agency and its programs. And also, just recently, we launched
our NBA Pennsylvania chapter working with Secretary McGinty and
Deputy Secretary DePasquale. And that has been a great success.
That chapter started out with 100 people. There is a very
strong interest here in Pennsylvania and you have a very
sophisticated market with a number of highly skilled
specialists.
I can attest that the Land Recycling Program, through Act
2, 3 and 4 is innovative and it is innovative because owners
can secure liability relief. The program is unique because it
has flexibility. The applicant can choose the type and level of
cleanup based on end use. And it also requires the Department
have timely response so that they can move at the speed of
business, which is very important in the development community.
And then last, it provides an array of financial incentives and
technical insistence.
Additional program innovations under the current
administration include the MOU that Deputy Secretary DePasquale
mentioned and it is so important that you can offer a broad
range of brownfield sites, such as RCRA, CERCLA and TSCA to be
included under the brownfield program. And so this MOU, I
think, is a model that other States will start to emulate. And
then last, the formation of a department of revitalization,
local government support, which really gives an emphasis to
making brownfields a redevelopment issue is very important and
we strongly support this and we hope that hits a trend that
other States will soon follow.
The act program incubated under Governor Ridge and
Secretary Seif was nationally recognized for its innovative
solutions, but probably one of the most important things that
happened under that time was that they marketed that program
very aggressively and not only did that raise public awareness
in Pennsylvania, but it really raised public awareness of the
whole brownfield issue. They were the tide that floated all
brownfield boats and it really increased the level of interest
out in the National marketplace and now I could say that there
is 5,000 to 10,000 people that make their livelihood in
brownfields. And so again, I really commend Congress. I am not
sure if they knew they were creating an industry, but there is
a whole industry out there of people that make their livelihood
out of redeveloping these sites and a lot of that stemmed, you
know, through the Pennsylvania Department of Environmental
Protection's aggressive efforts to market their program and it
had National repercussions. And that effort has been continued
now under this administration. But the State can't, you know,
tackle brownfields alone. It requires a partnership with the
private sector. And the government's role, I think, is best as
a facilitator and the administrator of programs that reduce
risk and attract private investment.
For government incentives to be meaningful to the private
sector, they need to be predictable and consistent, be easy to
understand and administer, applied to a wide type of projects,
allow flexibility in the use of funds and provide meaningful
funding amounts. And I think Pennsylvania has many of those
elements. As time goes on, fewer easy-to-develop brownfield
sites are available, and so cities are going to be left with
the harder, more complicated sites and these have to have
financial incentives to attract private sector investment.
Chairman Turner, I personally commend your efforts to look
for a financial solution and support the legislation similar to
H.R. 4480, which allows a Federal tax credit program to deduct
demolition and remediation expenses. As you draft language for
the bill, I encourage you to consider allowing for these
credits to be traded on a secondary market. I think this would
further enhance their value and would stimulate more private
sector investment. And again, thank you very much for asking me
to present my comments. Also, the NBA has recently created an
analysis of State voluntary cleanup programs and recognizing
that no State has the best program, but many States have great
elements, we put that forth in our analysis and I encourage you
to look at that as a resource. Thank you.
[The prepared statement of Mr. Colangelo follows:]
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Mr. Turner. Excellent. Thank you so much. We will go to Mr.
Dent for the first questions.
Mr. Dent. OK. Thank you, Mr. Chairman. Thank you all for
your testimonies. It is very helpful. Secretary DePasquale, you
talked a bit about the allocation of Federal moneys and how
they are too restrictive and that States with established
programs should be afforded greater flexibility with those
Federal dollars. Explain how this increased flexibility would
assist in a greater efficiency in rebuilding communities and
you know, what we should do, you know, legislatively to help
you get that flexibility?
Mr. DePasquale. Here is, I mean, the simplest answer is
that, you know, some of the money that we are allocated needs
to go into marketing of brownfields or even of the program, and
that is money that we think, at this point, we have
significantly marketed the brownfields program. I mean, people
that are doing economic development in Pennsylvania know about
the tools that we have and we certainly can go out to forums
like this and use those efforts to market what we have. We
think that, for States that have established programs and
people already have a familiarity with what we do, that money
would be more effective going straight into remediation. So if
you have an economic development deal you are trying to put
together and you already know about our brownfields program,
but one of the pieces is you need $250,000 of remediation money
to make the project go and so again, when we talk about
leveling the playing field between greenfield and brownfield
sites, and this is one that Region 3 has been working with us
to increase the flexibility of what we can do in Pennsylvania,
but we do know that is something that if we could use all of
our money for remediation and that would be very helpful.
Mr. Dent. So OK, you would just like to be able to use all
that money for remediation?
Mr. DePasquale. To have the ability to use it.
Mr. Dent. OK.
Mr. DePasquale. There may be some instances where we would
need to use it for marketing, but I can tell you that if we
were able to use all of our money for remediation, that would
be something that we would likely do.
Mr. Dent. Do you think that would require an administrative
change or a legislative change?
Mr. DePasquale. I think it would be more, my sense is it
would be more administrative. That would be my sense.
Mr. Dent. And my second question, final question for you,
Mr. DePasquale, deals with liability relief. What can the State
and Federal Government do to get on the same page with respect
to liability relief?
Mr. DePasquale. Again, with the MOA, between EPA Region 3
in Pennsylvania, I think we are getting pretty close to nailing
this, you know, threading that needle. But I do, possibly what
we could do, you could even have, whether it be Abe and myself
taking a little road show out to other States or simply using
this forum with your committee to inform other States as to
what, and other regions, as to what is happening. And you know,
I don't know if that is taking place on from a larger level,
from EPA headquarters, but I do know that is, that I think
sometimes at some level, it is just letting people know what we
are doing, because when you talk about a one-stop shop, we were
in a situation where we were trying to, you know, nail down an
economic development deal in the north central part of our
State and we were in the process of losing it and then during
the conference call, I informed them that we had an MOA with
EPA for the brownfield program and the tenor of the discussion
immediately changed. They didn't realize how quickly you can go
through the EPA and DEP process on a brownfield site and so
that enabled us to secure it.
Now, there is somebody at a pay grade higher than me that
will announce that project in the near future, so I don't want
to be taking away any of their gusto, but I do, I can tell you,
without the project's name, that is something that happened
within the last week in a conference call. And so that is a
project that easily could have gone and they would have just
bought 50 acres of a greenfield site and gone there as opposed
to reusing an old industrial site.
Mr. Dent. And quickly, to Jim Seif, in your testimony you
almost go as far as to say that Superfund should not have been
passed. You didn't quite go that far, but what led you to such
a conclusion and just tell us again what your thoughts are with
respect to the distinctions between what we have done here in
Pennsylvania, what you did, largely, in Pennsylvania with
brownfields and contrast that to the Superfund experience.
Mr. Seif. I think Superfund is one of the least successful
Federal environmental statutes of my professional lifetime,
which goes back to the founding of the agency. And it simply
took the wrong premises about the nature of the problem and
about the sub-decisions you would have to make to get it to
work right, you know, how clean is clean and so on and
miscalculated what, how large the task was. Like prohibition,
there were certain wrong premises about the public response to
the prohibition that was settled upon. But we sort of had to do
it that way to learn what the right way was. We had to go down
some wrong paths to decide, wait a minute, how can we make this
faster, you know, time is money, when they learn that you can
get a State and Federal judgment at the same time. That took 25
years after the passage of Superfund. How can we decide how
clean is clean, can it vary by site? We concluded that it
could. Can we just cap stuff? We concluded that we can. But
those were big fights.
And I guess we had to have those fights to learn that the
answer should have been we didn't have to have those fights.
That is the way policy gets made, I guess, in a democracy,
disjointed incrementalism it has been called. But I think the
Superfund taught us a lot of lessons. It gave us a lot of
expertise as physical, chemical, medical risk expertise that is
now part of the tools that go together to make a good
brownfield program. Yes, I would have passed it. I guess I
would have. It might have been that we could have made it worse
so that it would have taught us faster, but we didn't and here
we are. I think all is well that ends well.
Mr. Dent. And one more.
Mr. Turner. Sure.
Mr. Dent. And finally, Jim, same question that I gave to
Mr. DePasquale. What do you think we should be doing at the
Federal level to give you greater flexibility or funding? What,
specifically, do you think we ought to do to make the efforts
we have seen in Pennsylvania even better on brownfields?
Mr. Seif. In Pennsylvania, not very much. I think that with
tax relief, Federal or property tax, which we know is a huge
debate in our Commonwealth right now, there might be a few more
dollars added. And when you are dealing with a decision between
this piece of land or that piece, $12.50 can swing a deal. It
can be the lubrication that is needed to make a decision go
faster and the tax element is always part of a deal. I would
not wish to see the tax element become so large that deals are
made because of it. I think deals have to be good deals, good
cleanups, good commercial outcome and so on, and tax can help.
Again, with reference to the revenue implications of it all and
the simplification issues that I think would be helpful to
everybody, we probably ought to be doing that. Property tax
abatement is not a Federal Government issue, but there should
be some encouragement, possibly even Federal grants to
communities that provide that abatement so that it is less
painful and they get a quicker payoff on the bringing of the
jobs and the redeveloped property back onto the tax rolls.
Mr. Turner. Thank you. Mr. English.
Mr. English. Thank you, Mr. Chairman. One of the things I
found most encouraging about the evolution of brownfields
policy is that since we got started, there were new
technologies available that are actually bringing down
radically the costs of doing cleanups. There have been some
examples. For example, biologicals that are now being used to
break down poisons in the ground rapidly and allow for what
would have been fantastically expensive cleanups with huge
movement of earth to be achievable in a fairly unintrusive way.
What sorts of changes need to be made in the Federal program to
make it easier to introduce these new technologies? Mr. Seif.
Mr. Seif. You are right, and Superfund engendered those
technologies as capitalists desperately looked for ways not to
dig up thousands of tons of Earth, burn it and bury it
somewhere else, which was often required, even in these big
landfills where NCR got caught in.
We have since learned that a variety of new techniques can
be used, many of them developed in the private sector, which is
the best place to develop anything, in my view. It saves the
taxpayers a lot of money, but in the energy area, and because
of the most recent energy bill, there will be a lot of
investments in clean coal technology and that will have an
enormous benefit in Pennsylvania and Ohio and elsewhere because
you have a lot of old abandoned coal sites, or grayfields, if
you will. The coal that we used to throw away is now, has
enough BTUs in it to make it worthwhile going after and you can
make diesel fuel out of it. That is what we have done in
Schuylkill County shortly here and do other things. The Federal
Government has really stepped up to the plate in the most
recent energy bill in helping that happen.
You can also prevent more grayfields from being formed if
there were more nuclear power. That is way off the topic of
this meeting, I understand, but it is clear that if nuclear
power came to us now with the global warming effort, the
enviros would be saying what a great thing. And we perhaps
ought to turn in that direction for the variety of reasons that
we are all familiar with. But the Federal Government can
incentivize at fine universities, especially like this one, the
development of more technology, but not be the developer
itself, obviously, and let the private sector judge which one
makes it in the market and which ones don't.
Mr. English. Mr. DePasquale, in applying these new
technologies, do you see any way that we should be refining or
sharpening the Federal program to make it possible to introduce
them more quickly?
Mr. DePasquale. I think that some of the tools are already
there and Don Welsh, who is the Region 3 Administrator, has
shown his leadership in being creative with the MOA. I think
that across the board, whether it be environmental protection
agencies across the country at the State level or even all the
regions in EPA and Washington, you need to have a culture of
creativity and, because I believe the tools are already there,
and you need to have, you know, people that are committed at
the higher level of the agencies and also at the lower level,
that are committed to being problem solvers on these issues
because the tools that you raise in the question are already
there. I mean, I don't think that you really need to pass new
legislation, I think, you know, maybe it is banging away at it
to make sure that the people who are listening both at the
State and Federal level that they need to be creative and find
solutions because, you know, in a, to be fully honest, if you
think everyone in the DEP in Pennsylvania is really throwing
parties because of what I do, it is not the case. I mean,
sometimes you have to really work to get people to come to the
table and figure these things out, but I am fortunate to have a
boss like Governor Rendell and Secretary McGinty that back me
up on these things. And I can imagine that for Abe doing some
deals at the Federal level, he has similar issues. It is a
culture of creativity that needs to be a match from the top on
down.
Mr. English. Mr. Colangelo, do you have anything to add
from your perspective with your association?
Mr. Colangelo. I would say training, education and outreach
is, this brownfields market is constantly changing. Each year
the USCPA hosts a brownfield conference and the numbers have
grown each year. This year they are looking at 5,000 people in
Denver and the interesting part of that is that there are so
many new faces each year as this rotates around the country.
And so when you are talking about new technologies or new
processes, all these new entrants into the market need to be
trained and they need to understand, you know, how they apply
and what changes have taken place. And that goes for all the
stakeholder groups, too, you now, working with the property
owners, working with the developers, you know, working with the
investors. And again, you know, Pennsylvania had gone through
some budget cuts and to say it politely, but they were really a
lead marketer and that hurt the whole industry when that budget
got cut, so providing that constant outreach and education and
training internally and to the stakeholders, I think, is
something that has to be done continuously.
Mr. English. Thank you, Mr. Chairman.
Mr. Turner. Thank you. Mr. Seif, one of the things that you
related to us when you talked about the two points that need to
occur is the issue of getting a piece of paper or a release and
understanding of your liability. The question that I have for
the panel relates to a portion of my brownfield tax credit
bill, which is No. 4480, and that is the goal of providing that
type of relief to individuals that come in and redevelop
brownfield sites or even a past polluter that has joined in the
redevelopment and the cleanup of the site.
A brief overview, again, the bill provides a 50 percent tax
credit, it doesn't provide 100 percent of the funding, but the
tax credit can be applied to environmental remediation and
building demolition to the extent that buildings need to be
removed with respect, as part of environmental remediation. It
also includes petroleum. The goal of providing relief to
individuals who utilize the tax credit, initially, in the 108th
Congress, the bill provided a release if the past polluter came
to the table and funded portions of the remaining environmental
remediation and the individuals that were redeveloping it,
also, were able to avail themselves of liability relief.
And in working with the Real Estate Roundtable, we have
narrowed that as a result of a number of objections that people
had who, on the environmental side, were very concerned about
another form of relief or release being provided. And we were
encouraged to fashion the bill so that there is a requirement
now that individuals availing themselves of the tax credit
would have to go through the volunteer cleanup program, and
through the volunteer cleanup program, they would then receive
their relief from liability that they would be seeking.
One of the issues that we have, obviously, Mr. Schoff, your
summary in your testimony of your Business Law Today article
where you talk about the 2002 bill, the Small Business
Liability Relief Act, and the relief that it provides under
CERCLA, but the failure to include RCRA and TSCA that the MOA
with Pennsylvania encompasses, raises an issue of there are
several States that do not have that opportunity of providing
their volunteer cleanup program developers or past polluters
this type of relief.
And I would like, if you will, one, to talk about the issue
of how difficult was it to accomplish including all of those.
Since the 2002 bill did not specifically include RCRA and TSCA,
did Region 3 have difficulty in coming to the table and
providing that umbrella with Pennsylvania, and from that, then,
is there a need for additional legislation to enable EPA to do
that on a routine basis so that the 2002 Small Business
Liability Relief and Revitalization Act would recognize that
both EPA and the States are encouraged to have a more broader
MOA? From Pennsylvania's standpoint, how critical has it been
for it to be a full umbrella, how difficult was it to include
it? And if the rest of you could talk about the issue of the
need for that relief and what you have seen and experienced.
Mr. Ferdas.
Mr. Ferdas. OK. First of all, I want to say that one of the
major events in Superfund was a realization that private people
can do the work better than us. We basically went into a so-
called enforcement first, so we basically encouraged the
responsible parties to do the cleanups and Region 3 right now
is 80 percent of all the cleanups are being done by responsible
parties and that is what gives the credibility and the
creativity to the cleanups. And one other point is a major
development is also going on in the assessment side in the
sense that we are getting better and better tools to sample
things in the field and that is also reducing significantly the
amount of cost of assessing aside, which is the first step for
that.
And that, just following with your question, I think that
what we did in Region 3 in Pennsylvania is we figured out how
to deal in the back room in the sense that we still have the
whole RCRA structure clicking away, but it is hidden. It is
basically taken care of in the back room and if there are any
problems, obviously, we will say it and we have the authority
to say it, but basically, it is done invisibly, transparent
from the person who is trying to do the development and I think
that is a key issue and we never claimed that RCRA went away,
that TSCA went away. They just, we made it transparent to the
person that is coming in and Pennsylvania understands those
laws and they can do it. So I mean, I obviously can't say that
we should change RCRA. I mean, I am not in a position to say
that, but I think what we did was actually come to a solution,
which is just make it transparent to the person that is coming
in.
I mean, TSCA has even more severe problems than RCRA, I
think, because of the different regulations and so on and so I
think that, you know, I can't talk about changing the law, but
what I am saying is we found a way to kind of do it transparent
from the people who are trying to get help to develop.
Mr. DePasquale. I mean, my response would be it depends on
whether you are trying to find a way to get the yes or trying
to find a way to get to no, and in our region and with DEP, we
are trying to get the yes. So when it comes to the umbrella
side, yes, there is this Memorandum of Agreement, but as you
can imagine, when it comes to day by day, I mean, there are
things that develop that are somewhat outside of that agreement
or there are problems that you didn't know about or you know,
like Jim has been banging away at this for a couple years more
than me, maybe two or three more than me. There are things that
you need to get better at over time and so the best way I, you
know, just really would echo what Abe has said and that is we
really get in project by project sometimes to figure out some
of the new challenges that come up inside of this umbrella
agreement that we have, so you know, you can pass a law and
sometimes that will make it, you know, enforce what we are
already doing, but again, sometimes I don't want to give people
an out. There are already the tools to make this work.
Mr. Seif. The transparency issue was the most important.
The developer doesn't care under which statute or under which
sovereign it is that he can proceed, he wishes to proceed. And
it is incumbent upon public servants, if they wish to be called
servants, to figure out how to help. Forcing standards to be
sure, but to make it happen. It also occurs to me that any
scheme, mix of Federal and State cleanup laws, regulations and
people needs not to make any distinction between past polluter,
future user and all that.
There is no such thing as a polluter on most Superfund
sites, either in the legal sense, because they are long gone
and their grandchildren are in California, or in the sense that
you still have a viable company and what it did in 1942 was
make products that we all bought for less cost than they would
be today because the practice was to throw it out in the back
40. Not blameworthy, maybe not nice and neat, but the point is
when we go after people, common term used in the bureaucracy or
when we call people, make the polluter pay was the
congressional mantra when Superfund was passed. Well, you are
looking at a polluter and you would find that same polluter in
the mirror.
The fact is, it is a public problem most severe in States
like ours which have an industrial legacy that we ought to be
proud of and not point fingers about, so when we enable a
cleanup, statutorily or otherwise, we ought to say everybody
welcome, do your part and that excludes date cutoffs about
eligibility for certain tax credits. It includes petroleum
because that was an inexplicable omission in Superfund, well,
explicable in a certain way and not explicable logically. And
we also ought to, for the benefit of the public, require the
use of the program that exists in a given State because that
program was passed by the general assembly or the legislature
and it is administered in a public and, we want to hope,
transparent way, and the community ought to have whatever the
other parties are up to, some confidence that there is a
procedure that is common to everybody.
And the people who are developing other sites ought to have
some confidence that no shortcuts are being made by their
competitors. So there ought to be whatever the package that is
developed ought to have those characteristics, in my opinion.
Mr. Turner. Mr. Schoff.
Mr. Schoff. I will keep my remarks very brief. Just two
points, Chairman Turner. One is during Mr. Ferdas' initial
testimony he said that it was important that the consumer or
the taxpayer had a one-stop shop and I think it is very
important in order to have a one-stop shop. And before the MOU
or the MOA came into effect, you still had the concern that
``Gee, if it was something covered by RCRA or TSCA, you know,
the legislation which was passed in January 2002 is not going
to cover it.'' So you still have that potential risk. In the
back of your mind you are thinking, ``Well, the EPA could still
come in and do this. They could come in, they could do an
overfiling, they could say, `Alright, we know you are under the
Pennsylvania program, but under our auspices, now, we don't
think that meets muster.' '' To have that one-stop shop is
critical from the private sector's standpoint, you know, to
know that you have complete protection, that you only have to
deal with the agency on a one-time basis. That is very, very
important.
The second point I want to make, I guess, is that the
easiest thing to do would be to amend the 2002 legislation to
include protection under all Federal environmental laws, not
just under CERCLA. Like Mr. Seif had indicated, for CERCLA not
to include petroleum, I mean, I can tell you from a practical
standpoint, the vast majority of brownfields out there have
some petroleum contamination, some petroleum constituent. I
think everyone would agree with that on this panel. Sure, you
want to make sure that the dioxin sites are very carefully and
very detailed, examined, that they have a very high level of
scrutiny and the potential for damage to the health, safety and
welfare of the individuals and the public is very high there.
But for sheer numbers standpoint, you have industrial solvents,
you have petroleum, you have leaking underground storage tanks.
A lot of these are petroleum based. CERCLA doesn't touch that.
That is RCRA and other Federal environmental statutes.
If the 2002 legislation were to be amended to include
protection for under all Federal environmental statutes, I
think that would go a long way toward easing a lot of people's
fears and putting their fears to rest once and for all.
Mr. Turner. Mr. Colangelo.
Mr. Colangelo. Thank you, Mr. Chairman. According to our
research, there is about $4 to $6 trillion of industrial
property in the United States and corporations own about 40
percent of that. And we estimate that somewhere between 20 to
50 percent of it is environmentally impaired. And those sites
aren't coming to market because of this reason. And I think
that is the next evolution for the brownfield market is dealing
with this liability relief for liability clarity for the
potentially responsible parties and you know, the key there is,
I think we all agree in polluter pays, the question is how much
and there is a whole group of companies out there that are
willing to voluntarily clean up their properties to the
suggested standards through the State voluntary cleanup
programs if they can get off the hook and right now, we have a
double standard. A developer or a perspective purchaser can buy
a property, enter it into the program, clean it up to the
standard, get liability relief, but the property owner can't.
And so I think that is the next issue that needs to be fixed,
you know, using a combination of the State oversight insurance
or a third party fiduciary to help, you know, look at the long-
term stewardship of this are all ideas that I think have some
efficacy in this area.
Mr. Turner. Thank you. Mr. Dent.
Mr. Dent. Yes, I am just going to ask one fairly quick
question to both Paul Schoff and to Jim Seif. Paul, you
mentioned the policy of State environmental agencies that are
seeking compensation for National resource damages. You
discussed the approach taken by New Jersey, I think, in
particular to obtain financial compensation for the damages
suffered by natural resources. Can you explain your suggestions
to how Congress could assist in helping this trend with regard
to existing and future MOAs?
Mr. Schoff. Sure, I will be happy to. It is a subject that
is near and dear to my heart. Natural resource damages is a
concept which, I am not sure exactly where it began, but I know
New Jersey has taken a fairly active role where they believe
that, or at least it is the policy is such, that if there was
damage to the State's natural resources in any fashion as a
result of contamination from a particular site--for instance,
if groundwater had been affected and migrated to a field, to a
stream, to a river--if there was anything which affects the
natural resources of the State, there should be compensation
paid by whoever did this pollution. Which, if you just listen
to it, it sounds like it actually makes sense except for the
fact that there is, the real question is where do you draw the
line?
And it may be a combination of things that have caused that
contamination. It may be a combination of contamination from
several different sites that have caused pollution of a
particular stream bed or a river. It may be the wind blowing
contaminated soil from one site to another. There is three
media that contamination can exist in. There is air, there is
water and there is soil, you know. Right now, if you take a
look at their policy, they are focusing on soil and water,
especially on water. But, as I said in my remarks, I mean,
everybody could be held liable for fouling the air we breathe
because we drive cars that pollute the air.
The real question is where do you draw the line? I think it
is sort of taking the, taking something, an idea which has
surface appeal and then just magnifying it, saying well, we
just need to get compensation for any damages which were ever
done to any natural resources of the State.
As I mentioned in my remarks, one of the things that
perhaps could be considered is to have EPA institute a policy
that they won't sign an MOU or MOA unless NRDs, natural
resource damages, are excluded. That may provide some
incentive. I mean, ultimately, it is a State issue, but from a
Federal standpoint, I would imagine that would be one way that
the Federal Government could get a handle on it by having the
EPA say this just doesn't make sense.
In some ways, it is almost a throwback to the old days of
CERCLA where, you know, we are going to clean it up to pristine
Adam and Eve standards, which is just as, it is just not
practical. And you end up, you know, the people that you want
to get to pay end up being people that are not the people that
did the pollution to begin with. You know, they may be people
who purchased the site, cleaned it up for whatever was there at
the time, from the previous owner and yet, they are still being
hit by natural resource damages because the site, itself,
contributed to those damages. It would seem to me that, you
know, one way of dealing with that would be through the EPA.
Mr. Dent. Finally, Jim, just a quick question for you. You
participated in the MOU agreement, the signing ceremony down
here, a few blocks from here a few years ago.
Mr. Seif. Yes, I did.
Mr. Dent. If that agreement had not been signed by DEP and
EPA at the time, do you believe that we would be able to
redevelop that 1,800 acre tract of land?
Mr. Seif. I have it on the authority of Hank Barnett, the
president emeritus of Bethlehem Steel and you will hear, I
think, from Steve Donches, that answer would be no. There are
other sites that the company owns in other States that were
closed at the same time and have had no further progress made.
Mr. Dent. So that agreement is really what facilitated all
the activity we are seeing down there today?
Mr. Seif. Essentially. Tom Ridge would say so, as well, I
might say.
Mr. Turner. Gentlemen, I want to thank you for both the
time that you prepared for this hearing and also your
participation in it and I also thank you for your expertise
that you lend to our communities as we tackle this tough issue
and I want to give you one opportunity for closing remarks. If
there are things that we didn't ask you that you wanted to add
to the record or things that you thought of since you have
heard other people's testimony that you would like to add to, I
want to give you one opportunity for those closing remarks.
Would anyone like to add anything to their testimony? Mr. Seif.
Mr. Seif. One of the most sensitive Federal/State relations
areas in the environment is the overfiling situation, whether
it is a water case, a Superfund thing. It is a really sticky
thing causing lots of disputes. I don't know that you can
legislate borders that prevent those kind of disputes. The real
solution to this and indeed, to the problem of natural resource
damage suits is to have smart Governors appoint sensible DEP
secretaries and so they don't fight with them. I am not saying
that has been done in Pennsylvania, but I do believe that
results show less strife and more progress than elsewhere,
where I have seen real blowups and in my own history at EPA,
between--Abe recall West Virginia on just about every case and
progress was not made. You really need to be sensitive in
legislating not to create new opportunities for those kind of
struggles and to count on the training and other kinds of
things that people who want to make these sites work can bring
to the table and the fact that people who really want cleanups
would rather not fight, they will just figure out how to do it
right. The private sector is that way. Time is money. Fights
are losers.
Mr. DePasquale. Yes, under the Commerce Department there is
the Economic Development Administration and while that is maybe
not necessary for this panel here to have jurisdiction over,
but it may be something to take back to your colleagues and
that is as much the EDA/NPA has some funding to help with
remediation, Commerce has the big money to help put some deals
together. When I was director of Economic Development in the
city of York, we did a brownfield project and the key was EDA
money. They brought in $1 million and that is the whole of what
we get in Pennsylvania from EDA and again, I am not saying that
is bad, I mean, but that is just where the two agencies are
limited in funding.
I would take back to your colleagues that EDA, that
funding, considering the President's priority he has put on
brownfields, that is another pot of money that when you think
about that can be targeted to brownfields across the country
and there is no real stipulation one way or the other right
now, I mean, but that is an area where they could really focus
on helping to revitalize the cities by using that money, also,
for remediation in putting together economic development
projects in the cities across the country, so that is another
piece that I wanted to make sure that I made you aware of.
Mr. Schoff. Just very quickly, I just want to thank the
subcommittee for taking the time to go into this and this is
just, it is one of the--Acts 2, 3 and 4 in Pennsylvania--are
one of those few pieces of legislation that really, really
works and I really have to hand it to then-Governor Ridge and
to Jim Seif for putting in place a program which really has
been exemplary and from the private sector has been a
tremendous boon and as Bob Colangelo told you, it has been a
model for the country, you know, and has spurred development
throughout the country, so really kudos to that administration
for doing this and for following up, and with this
administration for following up on Governor Ridge's program.
Mr. Colangelo. I mentioned earlier that this brownfield
market is growing and one of the things, as the market matures,
is that there is starting to be a big economic divide between
the ``have'' and ``have-not'' cities and so one of the things
that we need to look at, as an industry, is how do we help some
of these smaller cities on the other side of the economic
divide? As the market matures, all the developers, investors
want to do the big projects in the well-located areas and they
don't want to tackle the smaller brownfield sites in the cities
without strong market demand. And so I think that is something
that we are going to have to collectively look at, is there
special incentives or what can we do, as an industry, to help
provide extra relief for those smaller cities, because many
times that is a harder problem for that city. They don't have
the resources and they lost a big job base when that factory
closed.
Mr. Turner. Good point. Well, gentlemen, I want to thank
you so much again for your time here and with that, then we
will be turning to our second panel. Our second panel includes
Kerry Wrobel, president of the Lehigh Valley Industrial Park;
Chad Paul, chief executive officer of the Ben Franklin
Technology Partners; Ray Suhocki, president and CEO of the
Lehigh Valley Economic Development Corp.; and Stephen Donches,
president of the National Museum of Industrial History. If you
gentlemen will come forward. To let you know, I am going to ask
you to take the oath, which means that you will be standing. If
you would like to set your materials down and remain standing,
we can just proceed directly to the oath. Gentlemen, it is the
policy of this committee that all of the witnesses be sworn in
to testify.
[Witnesses sworn].
Mr. Turner. Please let the record show that all witnesses
have responded in the affirmative. Kerry, we appreciate the
tour that you gave us this morning and it was wonderful to see
the site and your success. We look forward to your testimony
and we will begin with you.
STATEMENTS OF KERRY WROBEL, PRESIDENT, LEHIGH VALLEY INDUSTRIAL
PARK, INC.; CHAD PAUL, JR., CHIEF EXECUTIVE OFFICER, BEN
FRANKLIN TECHNOLOGY PARTNERS; RAY SUHOCKI, PRESIDENT AND CEO,
LEHIGH VALLEY ECONOMIC DEVELOPMENT CORP.; AND STEPHEN DONCHES,
PRESIDENT, NATIONAL MUSEUM OF INDUSTRIAL HISTORY
STATEMENT OF KERRY WROBEL
Mr. Wrobel. Thank you, Mr. Chairman. Good morning. My name
is Kerry Wrobel and I am president of Lehigh Valley Industrial
Park. LVIP is a private, nonprofit economic development
corporation, which ironically was founded due to a 100-day
strike at Bethlehem Steel. Today LVIP is constructing its
seventh industrial park on 1,000 acres of the former Bethlehem
Steel plant in the city of Bethlehem. As in our previous six
parks, we envision a premier business center with diverse uses,
manufacturing, technology, distribution, office and retail, all
in this major brownfield site that we call LVIP VII at the
Bethlehem Commerce Center. LVIP's first six parks converted
greenfields into business centers. Our success, 1,500 acres of
industrial development, 370 companies and 17,000 employees, has
played a supportive role in diversifying the Lehigh Valley
economy and ultimately, weathering the loss of Bethlehem Steel.
While developing our greenfield park over the past 15
years, LVIP kept a watchful eye on opportunities to redevelop
an urban brownfield site. In June 2001, Bethlehem Steel
approached LVIP with just such an offer to develop a major
portion of the company's South Bethlehem plant. I have to give
credit to Steve Donches, who made the phone call to LVIP. We
purchased 1,000 acres of the plant in May 2004. LVIP VII at the
Bethlehem Commerce Center will cost approximately $100 million
to develop, and that is just infrastructure alone. That is more
than our previous six parks combined. LVIP, a land developer,
will construct roads, as you saw this morning; utilities and a
108-acre intermodal facility. We are addressing all
environmental issues on the site and we are preparing the
parcels for end users.
And progress can be seen already this afternoon. In fact, I
will leave here and attend a ribbon cutting ceremony for our
first tenant, U.S. Cold Storage, a firm based in Cherry Hill,
NJ, and Cold Storage has constructed a first phase 175,000
square foot facility with 38 employees on LVIP VII's 32 acres.
At full build-out, they expect a 625,000 square foot facility
and 200 employees.
Perhaps no other issue resonates as soundly with today's
populace as the continual march of suburban sprawl. As farms
give way to residential and commercial developments, there is a
clear understanding that public policy and regional planning
must incent and direct the reuse of urban sites. If we are to
rebuild our cities and prioritize brownfields, the public
sector must invest public dollars to offset the premium costs
associated with brownfield development. Here are a few of my
recommendations.
As Secretary DePasquale just mentioned, allocate a fixed
percentage of EDA funding annually for brownfield development.
LVIP VII received a $2 million EDA grant for the construction
of infrastructure in its first phase. The grant offsets the
significant premium costs of trenching for utilities and roads
through 20 foot foundations and 5 foot slabs. By offsetting the
premium costs, the EDA grant has allowed LVIP to sell its land
at a price that is competitive with greenfield developments.
Certainly, any new targeted brownfield funding that was
mentioned here this morning would be welcome and appreciated by
the economic development community.
No. 2 would be to allow funds from the EPA's Brownfields
Revolving Loan Fund to pay for environmental insurance.
Environmental insurance premiums for brownfield sites can reach
seven figures. Equally challenging, the environmental insurance
premium must be paid at the time of land acquisition, before
land sales can generate revenue of an organization. A grant
from the Revolving Loan Fund could provide critical assistance
early in the project's life and, once again, offset a premium
cost not experienced in greenfield development.
We heard much from the previous panel about the One Clean-
Up Program Memorandum of Understanding and I echo their
sentiments that, without that agreement, we would not be
funding or developing LVIP VII. It is that critical to the
confidence of our private sector developers and users. As the
developer of a 1,000-acre site who knows that the timetable for
that development will occur over 10 to 15 years, my concern is
in 10 years will we still have the same fervor for brownfields
as we do today? How do we codify and how do we incent our
regulators to continue to work with us over the next decade in
development?
My comments have been based on that of a practitioner,
someone who is developing the site. I will state that the
legislation proposed by you, Mr. Chairman, regarding the
Brownfields Revitalization Act of 2005, would add another
weapon to our arsenal. We can provide local tax incentives, we
can provide State funding, we can provide Federal funding. If
we can also provide Federal tax incentives, that is a missing
link that at the moment we cannot provide. As you know, we
cannot provide Federal grants directly to private businesses,
so that is a hole in our incentive program and another form of
assistance for those taking the risk--it truly is a risk to
step on and develop and put one's equity into a brownfield
site.
In closing, LVIP VII at the Bethlehem Commerce Center is an
exciting project that has challenged and galvanized all
elements of our organization. It is extremely fulfilling to
work with partners at the local, State and Federal levels on a
project that will make a difference for generations to come. On
behalf of the Board of Directors, I would like to thank you for
the opportunity to speak before you today.
[The prepared statement of Mr. Wrobel follows:]
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Mr. Turner. Thank you. Mr. Paul.
STATEMENT OF CHAD PAUL
Mr. Paul. Good morning, Mr. Chairman, Mr. English, Charlie.
Thank you very much for inviting me to speak about the Ben
Franklin involvement with the brownfields projects here in
Bethlehem. The Ben Franklin Technology Partners was another
great idea coming from a Governor. Governor Thornburgh, in
1982, along with legislative partners, passed legislation to
create the Ben Franklin Technology Partners. We work with early
stage technology entrepreneurs to bring their companies to
market and we use technology to creatively solve problems for
established manufacturers in Pennsylvania to keep those family
sustaining jobs in Pennsylvania. Our particular center is
located here on the campus of Lehigh University and my office
is responsible for this activity in the 19 counties that make
up the northeastern corner of Pennsylvania.
We bring business expertise and, notably, investment in
those companies; up to a half a million dollars over 3 years
can be invested in a particular company that we are working
with. We bring business, university and government links
together to solve problems for those clients. What does that
have to do with brownfields? Ben Franklin Northeast has started
over 300 companies, created almost 600 new products, created
almost 10,000 jobs in Pennsylvania, retained in excess of
17,000 jobs and we have done that through our investment
processes and through the operation of our National award
winning business incubator on the mountaintop of Lehigh
University's campus.
The problem is that those incubators can only be so big and
when companies get to a certain point, we need to move them
out. We need to create post-incubator space and we have done
that on the south side of Bethlehem. The committee had an
opportunity to see two of the three buildings that are on the
Bethlehem Technology Center campus and that was, in fact, a
collaboration of Ben Franklin and our economic development
partners, notably organizations represented by two other folks
on this panel, showing you that local, State and ultimately,
Federal assistance can do great things with respect to the
development of technology and redeveloping brownfields all at
the same time and with the same money.
We collaborated together in 1993, before the 1995 act,
obviously, was passed to build the first Bethlehem Technology
Center on Bethlehem Steel brownfields property without the
protections that came with the 1995 act. It made it much more
difficult, as you can imagine, for a nonprofit group to create
an ``if you build it, they will come'' kind of project. We were
able to do that with $3.7 million and now that facility is
occupied 100 percent by one of the original tenants, IQE, with
an employment of 90 folks. Bethlehem Technology Center II
followed in 1999, a $3.2 million collaboration of the similar
partners, primarily for OraSure Technologies, but also for two
other incubator graduates, CDG Technologies and SCG. All folks
that started in our incubator with one or two folks and an
idea.
Bethlehem Technology Center III is now the headquarters of
OraSure Technologies and it was built entirely with resources
provided by OraSure and its management. No public money was
involved in the development of that facility, at all.
And finally, we are in the planning stages of Bethlehem
Technology Center IV, since we are bursting at the seams, both
at the incubator and in our post-incubator facilities and it is
in that area that I would say to the committee that to the
extent that you are providing funding sources, that you can
strongly consider that an element of funding for redevelopment
should be in helping local economical development organizations
to do projects such as our Bethlehem Technology Centers through
grants that match what it is that we can provide in the way of
funding to make more opportunities for more of these technology
companies to grow in our communities and reclaim brownfields at
the same time. I think you can see that the leverage that is
being provided by these activities has been outstanding.
[The prepared statement of Mr. Paul follows:]
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Mr. Turner. Thank you. Mr. Suhocki.
STATEMENT OF RAY SUHOCKI
Mr. Suhocki. Good morning. Good morning, Mr. Chairman,
Charlie, Congressman English. Thanks for the opportunity.
Lehigh Economic Development Corp. is somewhat unique. We are an
economic development organization representing the two counties
of Lehigh and Northampton and we are what we call a one-stop
shop and part of that one-stop shop includes a function called
the Lehigh Valley Land Recycling Initiative. And we are unique
in that we are not, we don't do redevelopment of the property,
we are not a government agency, we are a facilitator between
the government agencies and the property owners and the
developers. So it is a somewhat unique situation and I want to
offer some perspective as it relates to our experience in
dealing with both sides of the fence.
First of all, I want to note that the majority of the
brownfield sites within the Lehigh Valley are located within
the urban boundaries of our three cities, Allentown, Bethlehem
and Easton or smaller, generally poorer municipalities and
therefore, the proposed Federal tax credit legislation should
provide incentives to support LVEDC's continued effort in the
redevelopment of brownfield sites in the region.
A few of the impediments that should be looked at and could
help us, and I will touch on three of them, the first, the
community perception of health risks associated with
environmental impact that remain in place as part of brownfield
redevelopment projects. Although the use of engineering and
institutional controls are widely accepted as safe, permanent
alternatives to removing historical industrial impact, the
public continues to fear the presence of residual
contamination. Additional education efforts are needed to help
the general public understand the use of these strategies and
their long-term impact on a community. I want to talk about the
public understanding. That public is not just the John Q.
Public, it is also folks that are developers, engineering
firms, accounting firms that are, and bankers who are advisers
to potential property owners.
The second issue, multi-layered regulatory programs that
often require numerous approvals from multiple agencies and
departments within agencies. This results in increase of
project costs and time to insure appropriate approval is
obtained from all parties involved. Recently, in Pennsylvania,
the Department of Environmental Protection under Secretary
Kathleen McGinty, announced a new program to facilitate the
review and approval process on brownfields redevelopment
project. That program, the Brownfields Action Team [BAT]
program, created a single point of contact approach to the
review and approval process across the agency. Permits, plans,
reports and submittals are required to demonstrate compliance
under State laws go through one point of contact. That person
is responsible for facilitating the review and approval process
that ultimately reduces the cost and time to complete the
project. This effort should be extended to the Federal agencies
through the recently approved Memorandum of Agreement between
Pennsylvania and EPA such that one point of contact can be
assigned to brownfields projects and involve both State and
Federal approvals.
Through the MOAs, a one-stop shop can be established where
both agencies agree to one lead agency and one point of contact
that is responsible, again, for facilitating all reviews and
approvals required to comply with both State and Federal
environmental laws. Our experience has been that one-stop shop
through the BAT team is extremely helpful and allows that
insider to cut through red tape, to understand how to push for
approvals, etc.
And last, funding for due diligence and site assessment
activities needs to be increased. With the reduction in funding
available from State environmental cleanup programs, in this
case, the ISRP, the Industrial Site Redevelopment Program, a
critical gap is developing. Although EPA brownfields assessment
grants are available for these activities, the time and
administration associated make these dollars hard to use on
small and time-sensitive projects. With the introduction of new
regulations governing All Appropriate Inquiry [AAI], and due
diligence that is required to protect innocent purchasers,
greater focus will be on completing due diligence and site
assessment activities before communities or innocent purchasers
take title to brownfield properties.
These investigations typically come when crucial, time-
sensitive decisions need to be made. For example, tax
foreclosure or property takings by eminent domain. Time to
develop and obtain approvals for work scopes and bid contractor
workout may not be available under the EPA funding programs and
historically, State brownfield programs filled this gap and
provided the necessary funding on time-critical schedule to
complete the work. Those are a few examples of our experience
and recommendations for where some changes might be made. Thank
you for your time and attention.
[The prepared statement of Mr. Suhocki follows:]
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Mr. Turner. Thank you. Mr. Donches.
STATEMENT OF STEPHEN DONCHES
Mr. Donches. Chairman Turner, Mr. Dent, Mr. English, thank
you for the opportunity to speak today. I would like to talk
about Bethlehem Steel's approach to brownfields remediation
during the time I was in charge of the redevelopment of the
idled former steel plant you visited this morning. The decision
to close a plant is never an easy one and without exception, it
presents hardships to both communities and to employees.
Historically, the loss of jobs and business opportunities and
tax revenues is always further aggravated by the fact that too
many sites remain dormant because existing laws and practices
provided no incentive for the owner to redevelop the property.
The steel industry, along with other old line industries,
suffered through downsizing throughout the 1980's and 1990's
and at which time numerous plants in many States were closed.
And, depending on the State in which a shut down facility was
located, a company may or may not have had a good opportunity
to redevelop or reuse the site. For example, Bethlehem Steel
closed a plant in Lackawanna, NY in the early 1980's and then
subsequently closed the local plant in the mid-1990's. The
Lackawanna plant in New York under then New York law, did not
provide for brownfield cleanup and liability release and
consequently, other than demolition, not much else has taken
place up there. Plans have been put in place, but the laws
restricted activity.
Contrast that, if you will, with the Pennsylvania approach.
When Governor Tom Ridge took office in 1995, he worked with the
General Assembly to pass the Land Recycling Act, which we have
heard, Act 2, early that year. The law addressed two key things
from an employer-owner standpoint: that is the uncertainty
associated with brownfield cleanup standards and it also
brought finality as far as liability release is concerned.
Secretary Seif already commented, but it is safe to say and at
the time, our chairman, Hank Barnett did say that had
Pennsylvania not had Act 2 in place at the time, Bethlehem
Steel would not have been able to take the approach it did on
the 1800 acres here in Bethlehem. It would have been a totally
different project and the Beth Works now and the LVIP projects
that we see today are only possible because of the fact that we
had Act 2 in place.
There are several key factors that position the 1,800 acres
for the opportunity that exist today and one was the leadership
provided by Secretary Seif of the DEP and which is being
continued by Secretary McGinty. Another was the enlightened
management of Bethlehem Steel that was willing to take some
measured risks and to negotiate some uncharted waters in
applying the new law to its property. Many of the principles of
both DEP and Bethlehem Steel were the same both before the new
law and after the law. The difference was that with the new law
in place and with inspired leadership, instead of an
adversarial approach with little or no progress, the parties
saw an opportunity to convert an inactive operation into a
potentially prosperous community economic development project
by jointly addressing the issues.
Another key factor was that DEP introduced EPA into the
project at an early date and we have heard about the agreement
that was signed between the parties. This turned out to be very
significant because throughout the negotiations, all the
principle parties, the decisionmakers, Bethlehem and its
advisors, DEP and EPA, were always at the table. And the
importance of this approach was that surprises were eliminated
or at least minimized because new information was passed among
the parties almost simultaneously upon being received.
Now, after completing the studies to determine highest and
best use of the land, the most important question critical to a
property's future was how the environmental issue was going to
be managed. By choosing the brownfield remediation approach,
Bethlehem was able to prepare most of the 1,800 acres for sale
or reuse, and DEP and EPA at the time called this a National
model for brownfields redevelopment. Bethlehem had projected
that when fully developed, investment of private and public
dollars in the Bethlehem Works and Bethlehem Commerce Center
project would be about $1.2 billion, would create between 7,500
and 10,000 jobs and generate some $70 million in annual tax
revenues.
These projections still look good today, but now the
investment looks, now looks like it will approach $2 billion
and probably exceed the $2 billion. To date, there has been
significant investment in a power plant by CONECTIV Energy,
about $600 million, an intermodal facility by Lehigh Valley
Rail serving Norfolk Southern, three technology centers you
have heard referred to, a skating rink, LVIP's new industrial
park and onsite infrastructure of more than $25 million. Site
preparation and planning by Bethlehem Steel exceeded $40
million. Congressman Dent was here recently announcing funds
for a new highway expansion, it will also add about $60 million
to the project and the National Museum of Industrial History
has about a $25 million investment in the project it is doing.
None of this would have happened had we not had the
Pennsylvania brownfields law in place. Thank you, Mr. Chair.
[The prepared statement of Mr. Donches follows:]
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Mr. Turner. Thank you. Mr. Dent.
Mr. Dent. Kerry, thank you for the tour this morning and
also, I just was reviewing your comments once again and you
made some specific suggestions about what we ought to be doing
particularly with respect to Federal EPA funding. As you are
probably aware, Ray probably more so, many of the State
programs, I believe, are directed or there are incentives to
take State program funding dollars toward brownfield sites.
They give you greater incentive. I am not sure if there is a
fixed percentage. Has it been your experience, and this is
really for Kerry and for Ray, that EDA funding is not as
targeted toward brownfields sites and do we need to provide
that kind of a fixed percentage for brownfield sites of that
funding? I just always thought that most of the funding would
logically go there because that is where it is most needed.
Mr. Wrobel. LVIP was a recipient of EDA funding for three
out of its previous six industrial parks and I think the issue
there is the legislation and the environmental insurance
industry catching up that allows for private development on
brownfield sites, so most recently, I would say yes, it is my
understanding that there has been an emphasis with EDA funding
on brownfield sites, but if we can, again, codify and make sure
a fixed percentage each year is definitely allocated toward
brownfield----
Mr. Dent. What would be a reasonable percentage?
Mr. Wrobel. Working in brownfields? I would say----
Mr. Dent. Because industrial site reuse at the State level,
I believe there is a fixed percentage. I don't know what it is
off the top of my head, but----
Mr. Suhocki. The ISRP funds are down to about half a
million dollars a year now.
Mr. Wrobel. But 100 percent allocated toward brownfields
sites.
Mr. Dent. It is 100 percent?
Mr. Wrobel. Yes.
Mr. Dent. OK.
Mr. Wrobel. Yes. So I would say at least, you know, 60 to
75 percent I would assume.
Mr. Dent. Of EDA funds----
Mr. Wrobel. Should be targeted toward brownfield sites.
Mr. Dent. Great, OK. And then on the, you also mentioned
the environmental insurance.
Mr. Wrobel. Correct.
Mr. Dent. That issue, how would you, would you recommend
that EDA funds be allowed to go toward that, as well?
Mr. Wrobel. It is my understanding this is being discussed
at the staff level and at EDA currently and again, the
representative from EDA this morning, Abe, spoke about the
block grants that are being given to communities. At the
moment, those block grants must be used for remediation, which
triggers another level of Federal reporting that is not
required by Pennsylvania's DEP. By funding environmental
insurance premiums, it is being discussed that Federal funding
would not be triggered and because it is not actually funding
remediation, it is funding the insurance premium and an
organization like us would get the benefit of having the
streamlined approach that DEP's providing as far as reporting
and remediation with the added bonus of a grant paying for what
is a very significant up front cost.
Mr. Dent. OK, thank you. And just finally, Steve, I wanted
to say I thank you to you and your colleagues at Bethlehem
Steel at the time for being enlightened. The tour that we took
today, I mean, Bethlehem Steel could have taken the approach,
it could have just locked the gate and they didn't. They did a
lot of things very thoughtfully and they planned well and I
think today we are seeing some of the results of that planning
in conjunction with Acts 2, 3 and 4 at the State level and just
proud to be able to drive through there today and just see all
the activity on a dreary, rainy morning, just to see, you know,
life there, a lot of life and a lot of action there and I just
want to thank you for your leadership and could you just quick
give us a summary of where you stand with the museum right now?
Mr. Donches. Well, we have raised about half the money we
need, about $12\1/2\ million. We started restoration work on
the building by replacing the roof recently and we continue to
raise funds to do the rest of the construction work and exhibit
work. It is an opportunity to bring the Smithsonian Institution
with our relationship to a small community, which was a major
part of the affiliations program that the Smithsonian talked
about, how to take objects that have been in storage in and
around Washington warehouses and bring them out to communities
throughout the country.
I am proud to say that we were the first affiliate. We
served as the template for the affiliations program for the
Smithsonian. There are now about 140 in some 38 or 39 States,
all different types of purposes, so this is another opportunity
that the brownfields presented, because you would not have done
this otherwise.
And if I might comment, Charlie, that I think the important
thing in this whole brownfields project was the public/private
partnerships that we were able to establish early on. And it
was to know the working process with EPA and DEP literally
sitting around the table on a regular basis talking about the
issues, doing the testing and I think the reference that was
made earlier about the need to communicate to the public what
brownfields are all about. It can't be overemphasized. It is
critical because the general consensus right off the bat, for
example, the steel plant, was that it will be so contaminated
that it won't have possible future use. In fact, many of the
sites are managed quite well from an environmental standpoint
and the remediation under the options under brownfields law can
be accomplished at reasonable cost and put to good use in the
future.
But the detail work that went into the remediation plan is
very, very significant. The monitoring wells, the soil testing,
over periods of many quarters to determine what, if any,
contamination exists and then to file a Notice of Intent to
remediate with the State, which required approval. I think all
that information is often just passed over because you say
brownfields and people say oh, it is a different approach. It
is different, but it is also very detailed and it does result
in a cleanup.
Mr. Dent. Thank you. Thank you, Mr. Chairman.
Mr. Turner. Thank you. Mr. English.
Mr. English. Mr. Chairman, if I could, I would be happy to
yield my time to Mr. Dent.
Mr. Turner. Good, excellent. Gentlemen, I would assume that
many communities come to you and look at the things that you
have accomplished and look to advice as to how they can be more
successful. When those communities come or when people ask you
what do you think is essential for them to have success, what
advice do you give them? Kerry.
Mr. Wrobel. Well, I think the LVIP model is very
interesting. It is a stand alone organization, nonprofit, no
government affiliation, so we keep politics at the door. We say
we are nonpolitical. Our only focus is economic development, so
to have an organization, and this is not simply to toot our
horn, but it is something that other communities will say we
don't have something like LVIP, which is a group that is
independent, has the ability to secure Federal and State grants
and low interest funding.
It has a specific focus of infrastructure development and
selling land to end users and then really basically getting out
of the way and letting the private sector function, so I would
say LVIP is certainly a model that could be shown and
demonstrated to develop brownfields successfully to other
communities. And then will echo what Steve has said. LVIP VII
is possible by funding from State, county and Federal levels,
from the city of Bethlehem with timely approvals and tax
abatement, the school district and the county, as well, with
tax abatement, so it has to be--it is an overused term now,
over 15 years I have been hearing this word--the
``partnership,'' it is overused, but it is so critical. You
cannot develop a brownfield site without all governments at the
table with nonprofits making this a top priority for a
community.
Mr. Paul. Well, ``partners'' is in our name. Ben Franklin
Technology Partners is the most respected, most successful and
most imitated technology-based economic development
organization in the United States. As a result, we have had
visits from Governors' offices and various economic development
groups from a dozen or more States and some foreign countries.
And to echo Kerry, the partnership is what makes it work
because we don't have all the resources that we need under our
umbrella. The fact that we work with the university, with the
city, with all of the other economic development organizations
in a partnership to make something happen has been the secret
to our success. Our companies that we are going to put into
those brownfields buildings and have put in those brownfields
buildings have companies that would not exist if these
partnerships did not work.
Mr. Turner. I will just build on that, and the partnerships
are critical and the partnerships are on a regional basis. As I
mentioned earlier, I represent two counties and across those
two counties, that network that Chad talked about of education,
government, etc. really pulls together in setting priorities so
that when we are talking to government, we are talking from the
same page. The issues that are important to us are the issues
that are important for every partner, so there is that kind of
agreement that doesn't keep us fighting one for the other for
the few dollars. It lets us focus on the top priorities and
move on those.
Mr. Donches. Mr. Chairman, I would say that it is important
that people looking at sites understand that there are
voluntary cleanup standards that they want to meet and they
have the choice as to how they want to meet those standards, so
it is important to have technical expertise as you approach the
standards. Of course, the issue that I mentioned of finality
and liability release, if you don't have that, you are not only
not going to get developers, you are not going to get anybody
to finance the projects, either.
I think communication broadly, to the community, is
provided for in the brownfields law in Pennsylvania but it is
important to do that at an early date. For example, we had a
couple of open hearings, public hearings where we just invited,
through newspaper advertisements, people to come and hear what
the project was about and how remediation was going to be
addressed. I thought that was very useful.
And I think I would probably say to owners or developers
not to be afraid to explore the issues and the opportunities.
You find one, you sit down today with DEP certainly in
Pennsylvania and EPA. It is a different approach. And you find
that it is not as bad as it used to be, the old adversarial
days where we locked horns. I think today openness is there,
there is transparency and I would say explore the issues; the
opportunities are great.
And then, finally, it has been mentioned a number of times,
infrastructure funding, both onsite and offsite, is critical
and to get that into play early on. Locally here, we were
fortunate to have the county, Northampton County, push for a
bond issue that resulted in some $13 million for a road that
gets into the area that Kerry is going to be developing, but
even with early support, that has taken a long time; they are
finishing it up now. But it won't do any good to have a
remediation plan and go through the whole process if you can't
get to the site. And in the case of this one, it is extremely
large, 1,800 acres.
It has been called the largest private brownfield
development. You need not only the onsite infrastructure that
the county has helped provide, but the highway that surrounds
the site, State Highway Route 412. That funding has been under
discussion for every bit of 10 years and we are now finally
getting to that point where the funding is essentially in
place. I think construction is out to 1998 for starter, but
without the infrastructure funding, all the other work, if you
can't have access to the site, it comes up a little bit short,
so that is critical.
Mr. Turner. Thank you. Mr. Dent for final questions.
Mr. Dent. Just to Chad Paul, actually. I believe before you
arrived at the Ben Franklin Technology Partners, I guess
Technology Centers I and II were already up and running, if I
am not mistaken and I believe one or, I believe maybe both of
those buildings were built prior to Acts 2, 3 and 4. Is that
correct?
Mr. Paul. We had coverage on 2, 3 and 4, I believe, Steve,
right, for Beth Tech II?
Mr. Donches. Yes, Beth Tech II. Only the first one was----
Mr. Paul. But we did not have it for the first one.
Mr. Dent. I guess the question I have, and maybe it is a
better, I am not sure if I should address it to Chad or to
Steve, but how is it that you were able to build Tech Center I
without that liability protection when you did it?
Mr. Paul. The board of Lehigh Valley Industrial Parks of
Northampton County Development Corp. had long talks with folks
from Bethlehem Steel. They had guarantees, corporate guarantees
from Bethlehem Steel to ease the pain and Steve was involved
with all that. Perhaps you may want to address that in more
detail, but it was the, it was assurances of help from
Bethlehem Steel if there was more of a problem than what we had
originally seen on the site that allowed all of us to, and
again, I am talking about my organization, not me.
Mr. Dent. So Bethlehem Steel was essentially going to
assume liability or----
Mr. Donches. Yes, there were dollar limits if they were
exceeded, that Bethlehem Steel would step up and there was a
risk involved, but it was a relatively small site and my memory
is maybe 4 acres or something of that sort and since we owned
the site for, Bethlehem Steel owned the site for 100 years,
pretty good records as to what was there and what it was used
for, so it was a measured risk which you might take on a small
site and also, the main thing at the time was that Bethlehem
was trying to present an opportunity to help revitalize the
community, so it was part of a good citizenship thing that,
with the consortium, would help to underwrite part of the
costs, just to make it, just to give it a start and with LVIP,
Job Corps II, BETCO, Northampton County, it came together,
again, it was a partnership that everybody helped to pull a
little bit on the oars.
Mr. Paul. I should note as an addendum that finally this
year we are getting final clearance on that original site.
Mr. Dent. My point is that I think you can see that
somebody had to accept responsibility for a potential
contamination liability; in this case it was Bethlehem Steel.
Mr. Paul. Correct. Since our partnership of organizations
owns those buildings through Northampton County New Jobs Corp.,
once Bethlehem Steel was no longer there to back us up, we felt
it prudent to spend the dollars we needed to spend to get that
final work done and get that clearance.
Mr. Suhocki. And we are trying to sell it, so obviously, we
have to go through those clearances.
Mr. Dent. Trying to sell Tech Center I? OK.
Mr. Wrobel. And just finally, I just want to acknowledge
for the committee here, that there were good local partners in
this process. It wasn't just the State and the Feds, the MOA,
but the--as was mentioned--the county governments matched
significant dollars on that road that we drove on today,
actually, that four lane highway--Commerce Boulevard. And also
municipal government and, of course, the economic development
corporations all played leading roles in the redevelopment of
this site, so I just wanted to acknowledge that.
Mr. Turner. Great. As with the first panel, I want to give
you an opportunity for any closing remarks or if there are
questions that we haven't asked you that you would like to
respond to or things that you would like to add, having heard
the other panel members. I want to give you that opportunity if
you have any additional comments.
Mr. Suhocki. I would just like to say that we appreciate
your interest and involvement here. It is very, very important.
We have approximately 100 brownfield sites in the Lehigh
Valley. They are not all as famous and large as, fortunately,
as the LVIP project, but they are very important and each one
of those, as I mentioned earlier in my comments, are typically
within an urban setting and it is great as we look at the
proposed legislation that you are preparing that the tax credit
will help those kinds of properties be returned to use and
useful.
Mr. Turner. Excellent. Well, before I give you my closing
comments, I want to thank Mr. Dent for having us here in his
district and for allowing us to focus on what is obviously a
successful partnership and has given us some additional issues
and ideas of what we need to do on the Federal level for
brownfields. It is great to hear the past successes that you
have had as a community and certainly, Mr. Dent's participation
in that is why he is so effective in Congress and as Vice Chair
of this committee because he brings that level of experience in
working with you at the community level and his experience in
the legislature to Congress so we can address National issues.
And I want to thank Mr. English for being here. He certainly
raises our profile and his leadership in being here at this
hearing.
Mr. English. Mr. Chairman, I would also like to thank you
and Mr. Dent for being so proactive in sponsoring this hearing
and in focusing on what I think is one of the better case
studies in the country for this program and how you tackle
brownfield problems, so it has been a privilege to be part of
this process today and I think this will be immensely valuable
to us when we make decisions in a number of committees in
Congress.
Mr. Turner. Excellent. Before we adjourn, Mr. Dent, do you
have any closing comments for us?
Mr. Dent. I want to thank everybody for providing testimony
today and I think what we have seen here today is, again,
talking about the Bethlehem issue in particular is interesting,
but most brownfield sites, of course, aren't as big or as
complex and that, you know, we can take a lot of lessons out of
here and apply them, frankly, to smaller sites, that hopefully
will be less complex but nevertheless difficult and that is
really what I am hoping for, that, you know, here we are
taking, really, the mother of all brownfields in the United
States and seeing a lot of success and there are lessons
learned and hopefully we can take this experience, this model,
from Pennsylvania and from Bethlehem and apply it around the
country.
Mr. Turner. Thank you. I want to thank all of our panel
members, again, for your preparation today, for what you
contributed in participating and also what you do for your
communities. These field hearings are a valuable tool for us as
we get to learn from your experience and your expertise and be
able to take those back to Washington to look at Federal
policies.
I would also like to express my appreciation to the city of
Bethlehem and to Lehigh University for hosting us and we owe a
special thanks to President Farrington and his staff,
particularly, to Vice President Michalerya, who has stayed here
with us and for showing your wonderful facilities and for your
accommodating efforts. And in the event there may be additional
questions that we don't have time for today, we will leave the
record open for 2 weeks for submitted questions and answers and
statements for the record. With that, I thank you all and we
will be adjourned.
[Whereupon, the subcommittee was adjourned.]
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