GlobeSt.com EXCLUSIVE: AB 389 Brings Development Opportunities

SAN DIEGO-Passed last year, the California Land Reuse and Revitalization Act of 2004, or Assembly Bill 389, is opening up some much-needed developable land to Southern California. The act has eradicated financial liability for owners and purchasers of brownfields, and with it, the hesitation of acquiring or owning polluted land. Without lawsuits to worry about, brownfields are starting to pique the interest of developers. Before AB 389 passed, a property owner or potential buyer could be held financially responsible for the clean up process of a brownfield if contamination was found, even if that party had no part in the damage. Dan Johnson is vice president of San Diego-based Environmental Business Solutions, an environmental consulting group that evaluates brownfield sites. Johnson says that though there is a real interest in these sites, the provisions of the bill remain largely unknown. “We see an incredible interest level out there from developers and clients in brownfields properties. Because the liability relief is so powerful, I have to believe that more developers will take advantage of it,” Johnson tells Globest.com. What is so appealing is that the law allows parties to avoid responsibility for costs or damage claims for contamination on, under, or adjacent to the property in question if the party performs environmental assessment and remedial actions. According to Johnson, if the parties involved perform the required assessments, the Act also provides protection from later legal action or requirements by a regulatory agency of any kind. “While this doesn’t provide an easy way out, it is a step in the direction of accurate liability assessment,” Johnson says. Before purchasing a brownfield, potential buyers must investigate the property by enlisting the help of a regulatory agency. If contamination is indeed found, the buyer must take action under the direction of the agency. Once the plan is approved and carried out, the property owner is granted immunity from future liability. One such notable project Johnson has worked on is a 35-block portion of Downtown San Diego. Hired by CCDC, EBS found contamination during site investigations dating from the 1800s. What has followed is a $1 billion clean up and redevelopment effort, the largest of its kind in California. Developing upon contaminated land is not a new concept. Johnson tells Globest.com that the Staples Center and the Penske Speedway were built on brownfields, as well as Bank One Ball Park in Phoenix. “Many if not most of these urban sites have a legacy of environmental issues from prior land uses. You would be surprised how many people look at site that appears innocuous only to find a six-figure legacy of contamination,” Johnson says. According to Johnson, there are approximately 8-10 developers nationwide who concentrate solely on brownfield development. The latest followers are residential developers who have run out of developable land and are looking now at infill and backfill product, says Johnson. Besides providing a little relief to Southern California’s land shortage, brownfield reuse presents inherent benefits to the public sector. Like any redevelopment project, when adapted successfully, these sites generate a greater tax base for cities. Johnson says a mix of housing retail and community development provides a good balance and the projects provide “community benefits and easily align with smart growth principles,” he adds.