National Brownfield Association - Chapters - Georgia

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Brownfields: Urban Redevelopment Opportunities and the Beltline
Atlanta’s ambitious and extensive Beltline Project is expected to revitalize currently distressed and underutilized parts of the city by providing new mass transit, streetscape improvements, affordable workforce housing, new parks and green space, and environmental cleanup. To realize these goals, the Beltline project proposes a 22-mile transit loop along historic railroad corridors circling downtown, 33 miles of pedestrian/bicycle trails, 1,300 acres of new green space, and 12 high-density Redevelopment Nodes. The Beltline Five-Year Work Plan (2006–2010) also includes $8 million for brownfield testing and remediation of key sites in target areas.

The Beltline Project is being developed by Atlanta Beltline, Inc., a city-owned subsidiary of the Atlanta Development Authority. While most of the individual projects around the Beltline will be built and developed in the private sector, Atlanta Beltline, Inc. will create the transit infrastructure that will serve as a catalyst for the private-sector development.

The Beltline Project is expected to generate 30,000 new jobs and a $240M investment in affordable housing. In fact, the Beltline is already generating new jobs and stimulating economic activity in Atlanta. According to the Atlanta Development Authority, more than 60 new projects are already underway, and there is already more than $1.5 billion in new private investment within the Beltline Tax Allocation District ("TAD").

Unlike other Atlanta TADs, where the funds are used to offset the costs for developing in challenged and underutilized parts of the city, the Beltline TAD funds will mainly go toward infrastructure, not private development, except as incentives in a few select cases. Issuance of bonds for the TAD has been challenged in the courts and an initial ruling in favor of bond issuance has been appealed. In response, the City expanded the geographic coverage of the Downtown Development Authority ("DDA"), and used the DDA’s ability to issue bonds in order to finance the Beltline project. This motion was also challenged by the plaintiffs in the Beltline TAD case. Both cases are still pending at the time of writing. Oral arguments for the original bond issuance were heard by the Georgia Supreme Court on September 25, 2007; the Court is expected to rule on the case by March 2008.

Despite these challenges, the City, through the newly created Atlanta Beltline, Inc., has initiated the project using corporate donations, funding from other city departments, and by leveraging the resources of non-governmental "partners," such as the Trust for Public Land and the PATH Foundation. Fundraising is primarily the responsibility of the separate Beltline Partnership.

Despite the limited funding available, the Beltline initiated a Master Planning process this year. For Master Planning, the Beltline has been divided into five geographic areas (Northside, Northeast, Southeast, Southwest and West). Each area was subsequently divided into two Sub-Areas, designated Sub-Areas 1 through Sub-Area 10. In July 2007, consultants were selected by the City to prepare Master Plans for five selected Sub-Areas. For each Sub-Area, the Master Plans are to consider:

Land use and circulation;
Economic development;
Parks master planning; and
Mobility, including pedestrians and bicyclists.

The first Master Plans are expected to be completed by January 2008, at which time Master Plans for the remaining Sub-Areas will be initiated.

In addition to the creation of the TAD and the initiation of the Master Plans, other current significant Beltline activities include:

Preparation of a Five-Year Workplan (2006-2010) to guide implementation of the Beltline project
Creation of a Beltline Zoning Overlay District, which places additional design considerations on new construction along the Beltline, and requires review by the Bureau of Planning before a Construction Permit is issued
Acquisition of property for three major new parks
Creation of a public/private partnership to acquire and develop the transit corridor in the Northeast Beltline area

Future private-sector development is expected to primarily occur around the 12 Redevelopment Nodes, which will be evenly spread around the Beltline. Proceeding in a clockwise direction from the northern part of the Beltline, these Redevelopment Nodes are:

Peachtree Road
Ansley
10th Street & Monroe Drive
Ralph McGill Boulevard
Bill Kennedy Way & Memorial Drive
Boulevard Crossing & Cherokee Street
University Avenue & Pryor Road
Metropolitan Parkway & University Avenue
Lee Street & Murphy Crossing
Cascade Avenue & Ralph David Abernathy
Simpson Road
Northside Drive

Development is substantially mature around much of the Northern and Northeastern areas of the Beltline and their associated Redevlopment Nodes (e.g., Peachtree Road, Ansley, and 10th & Monroe). Excellent opportunities for reuse and redevelopment exist in the other nodes (Northside Drive, Boulevard Crossing, Lee Street & Murphy Crossing).

Beltline Brownfields Opportunities
Within the Beltline Project, there are more than 1,500 acres in industrial use and more than 540 parcels covering more than 2,900 acres that are either vacant or considered underutilized. A preliminary environmental evaluation within the Beltline corridor identified 146 properties having potential environmental impact, and 124 of those properties were considered potential brownfield properties that had not yet been redeveloped.

The largest number of identified brownfield properties along the Beltline can be found in the industrial and commercial areas on the West side of Beltline, although not all brownfield properties in this area have been identified. In addition to environmental constraints, the redevelopment potential of some areas has been limited by challenges encountered in assembling a "critical mass" of land, i.e. enough parcels to warrant redevelopment and trigger redevelopment. The redevelopment success in other areas of the Beltline will be a catalyst in spurring redevelopment on the West side of the Beltline.

Georgia Brownfields Framework
While redeveloping contaminated property poses certain legal and financial challenges, changes in the law governing environmental liability and the increasing flexibility and streamlining of the regulatory programs dealing with contaminated properties have facilitated a growing number of "success" stories. Perhaps the best known local example of a redeveloped brownfield is Atlantic Station, a 138-acre office, retail/entertainment and residential midtown development on the site of the former Atlantic Steel Company.

Real estate factors overshadow contamination factors because redevelopment is driven by the value of property after it has been cleaned up. Revitalization of contaminated properties unlocks potential value for the developer, and provides communities with an opportunity to reduce environmental and health risks and the pressure to develop open space, leverage existing infrastructure, increase the tax base and attract new businesses and jobs to the community.

There now exist several municipal and state incentives favoring redevelopment of contaminated properties. Funding for this effort is currently tied up in the litigation over the constitutionality of the TAD legislation. The City has also enacted the Sustainable Brownfield Redevelopment Project to identify and inventory brownfield sites, undertake environmental assessments and recommend remediation strategies while leveraging additional future federal funding.

To encourage the cleanup, reuse and redevelopment of contaminated properties, Georgia passed the Hazardous Site Reuse and Redevelopment Act in 1996. Following passage by Congress of the Small Business Liability Relief and Brownfields Revitalization Act of 2002, Georgia amended its "Brownfields Act" to provide additional incentives for the redevelopment of brownfields. Under the Brownfields Act, the primary incentive is a limitation of liability available to a prospective purchaser of contaminated property.

In 2003, Georgia made available tax incentives to provide a prospective purchaser of brownfield property with the ability to recoup investigation and cleanup costs. After obtaining the limitation of liability and upon EPD’s certification of the investigation and cleanup costs, the new owner can apply to the local taxing authority for a "freeze" of the assessed value of the property for up to a ten-year period or until the EPD-certified site investigation and cleanup costs have been fully recouped.

To date, the authors of this paper know of only two applications for assessment freezes in Fulton County. One applicant withdrew his application after determining that in fact he didn't have any brownfield properties to remediate. The second applicant spent $16,000 assessing a potential brownfield property to find out that there was no remediation needed. This parcel is currently in process of having an assessment freeze to allow the landowner to recoup the $16k for testing.

In addition, if the brownfield property is located within a City of Atlanta "Renewal Community," as designated by HUD under The Community Renewal Tax Relief Act of 2000, all costs as defined in IRS Code § 198(d) incurred to clean up brownfield properties may be deducted in the fiscal year in which they were incurred.

Example Beltline Brownfield Project
A brownfield property located west of Midtown Atlanta and the Georgia Tech campus was recently redeveloped. The property was not identified on the Beltline Brownfield Map although it was significantly impacted. The property was within the Beltline TAD and the Beltline Zoning Overlay District, as well as within the Northside Study Area (Sub-Area 8).

A Phase I Environmental Site Assessment was performed in June 2004 and identified the following on- and off-site Recognized Environmental Conditions (RECs):

Abandoned UST and piping (now removed).
Hydraulic repair/sales facility which generated hazardous waste during the 1980s and 1990s.
A chemical manufacturing company that operated from mid-1960s until the late-1970s).
An automotive paint and body shop containing a paint booth, a solvent drum storage area, and floor drains leading to an unknown discharge point.
Two steel 250-gallon Aboveground Storage Tanks (ASTs) containing hydraulic fluid and motor-oil.
Several plastic 500-gallon ASTs containing used-oil and detergents.
Soil, gravel, and concrete staining observed in the area of ASTs.
Numerous surrounding commercial and light industrial properties handled petroleum and/or hazardous chemicals.
A former service station was located at an adjacent property during the 1960s.

A Limited Phase II Site Assessment was completed in August 2004 and an Expanded Phase II performed in October-November 2004. In accordance with the Georgia Brownfields Act, a Prospective Purchaser CAP was initially submitted in October 2005. Another developer was later substituted as the Prospective Purchaser and submitted a revised CAP on December 13, 2005. Georgia EPD approved the Revised CAP on December 19, 2005, and the substitute developer eventually purchased the property in October 2006.

As is typical for properties impacted by multiple sources and with a complex history, several phases of investigation were necessary to complete the assessment. In addition to the August and October-November 2004 Phase II investigations, additional soil and groundwater investigation was completed in January 2005. A Geotechnical Engineering Evaluation was performed in October 2006, and a final supplemental soil and groundwater investigation was performed in December 2006.

In addition to the impacts to soil and groundwater, the existing on-site structures required assessment and abatement of asbestos and lead-based paint prior to demolition. Additionally, several drums of unidentified substances were discovered on site that required characterization and disposal.

Based on the site investigations, regulated substances were detected in soil at four locations with concentrations in excess of applicable clean-up goals. A total of 972 cubic yards of soil were ultimately excavated and disposed off site, and confirmation soil sampling demonstrated that the remaining soil was at acceptable concentrations.

The Georgia EPD issued a Limitation of Liability letter for the property on March 1, 2007. As a result, the Prospective Purchaser is not liable to the State or any third party for pre-existing releases, nor is he required to certify regulatory compliance with groundwater standards, perform corrective action or otherwise be liable for pre-existing releases to groundwater.

The developer of this property has the right to avail himself to the tax incentives passed by the Georgia legislature in 2003 to recoup investigation and cleanup costs. After obtaining certification from the EPD of the investigation and cleanup costs, the developer can apply to the local taxing authority for a "freeze" of the assessed value of the property for up to a ten-year period or until the EPD-certified site investigation and cleanup costs have been fully recouped. Since the property is within the Beltline TAD, after the "freeze" period ends, taxes on any increase in the assessed value would be directed toward the cost of Atlanta Beltline Inc.’s infrastructure construction projects (or, more accurately, toward guaranteeing the bonds ultimately issued for the construction). In accordance with the TAD legislation, the City, County and School Districts won’t see any increase in tax revenue above the 2005 baseline until 2030.

As the Beltline vision of new transit, new greenspace and new development is realized, property values and revenue generated by the property is expected to substantially increase, and the initial expenditures on the property, including the brownfield remediation costs, will be well worth the risk and investment.

Conclusion
The Beltline project marks a major investment in infrastructure and redevelopment in Atlanta. By providing transit, streetscape improvements, and financial incentives for affordable housing and environmental clean-up, it is expected to revitalize underutilized and distressed parts of the city. Numerous brownfield properties occur along the Beltline. By accessing the limitation of liability available to prospective purchasers through the Georgia Brownfield Rule, and the tax incentives to recoup and/or deduct brownfield cleanup costs, substantial opportunities now exist along the Beltline to develop properties formerly overlooked by the development community which may be valuable assets in the future.

Steven W. Hart, PG is a Senior Consultant with Premier Environmental Services, Inc. Mr. Hart serves on the Atlanta Beltline TAD Advisory Board (including the Economic Development, Trails, Transit and Transportation, Parks, Trails and Greenspace Subcommittees), and is the Study Group Coordinator for the Northside Master Plan.