1.1 Important definitions

1.2 Background

For most cities, waterfront property along rivers, lakes, bays, estuaries, ports and harbors holds the highest value and highest resale potential. As the marquee land for a city, it receives the heaviest use in all sectors (commercial, industrial, and residential), and reflects an image to outsiders and potential investors. Its setting also places it in a position to absorb large amounts of contamination, not only from heavy on-site use, but from sources higher in the watershed as well, through surface runoff, subsurface flow and aqueous transport.

The presence of brownfields along the waterfront hinders the economic health and tax base of a city, and is widely thought to attract crime and other social problems. Redevelopment of waterfront property often drives redevelopment in other areas of the city, particularly for second-tier properties located upland in nearby neighborhoods or industrial zones. For a city attempting revitalization, therefore, the waterfront is a natural place to start.

Depending on a municipality's resources and approach to redevelopment, it may place particular importance on certain priorities for initial waterfront brownfield redevelopment - namely, that it occurs rapidly and on a municipally owned property with a low likelihood of contamination. This not only accelerates the property's return to the tax base, it provides an easy example to convince lenders and property owners to redevelop second-tier sites and additional, more complicated, waterfront sites on their own. Indeed, this has been the example for countless Brownfield pilots across the nation².

The majority of municipal governments, however, lack the capacity and resources to undertake sustained site investigations and cleanups without significant state and/or federal assistance. Meanwhile, owners of contaminated property still perceive a number of legal and technical disincentives to stepping forward and sinking assessment costs that may lead to legal consequences³.

In recent years, two program categories have sought to remedy these problems. At the federal level, since 1995, the EPA's Brownfields initiative has provided pilot grants to over 300 municipal, state, or tribal governments to explore and demonstrate reuse solutions. These grants seek to create frameworks for future redevelopment at the local level, with a focus on stakeholder involvement. Coinciding with the federal policy initiative, over 44 states now have some form of voluntary cleanup program (VCP), and approximately 28 have both state brownfield and VCP programs⁴. Nearly all (95%) of these programs have been developed during the 1990s, with an intent to limit owner liability through "No Further Action" (NFA) letters, cooperative agreements, and memorandums of understanding (MOUs) between EPA Regions and state regulators⁵.

Very few brownfields pilots, however, and only a handful of state initiatives have allocated funds expressly to pay for site characterization or cleanup. Agencies at all levels currently lack funds for this purpose, even if the money remained within the public sector (for instance, a state-city transfer for a municipally owned property). Fortunately, the federal Brownfields Initiative, as well as most states, now have Revolving Loan Funds (RLFs) to lend resources for this purpose. The bill to reauthorize Superfund, S. 1285, which has languished in committee for over 6 years, also proposes interest-free loans of up to $200,000 explicitly for site assessment purposes⁶. In the meantime, however, the broader emphasis remains focused on developing frameworks so that redevelopment of potentially contaminated sites may continue after funds expire.

Barring a grant or loan to the municipality, the responsibility to pay assessment and remediation costs on a land parcel still rests with either the seller or a prospective buyer who has agreed to assume the risks. Given the needs and priorities of interested parties, cheaper, faster, more effective, and more accurate site characterization should arise as a major demand feature of all media in this market.

For many reasons, however, this only somewhat describes the present scenario for site characterization tools. Gorte (1999), for one, has accurately captured the challenges for such vendors seeking to enter the brownfields market⁷. While the issues she notes are not themselves unique to the waterfront setting—rather, they apply to the technology market on all brownfields projects—they are adequately embodied by the present situation in it.

Table 1. State VCP and Brownfield Programs at a Glance

1.3 Overall market size of the waterfront voluntary sphere

Before information collection began, an exercise was undertaken to estimate the number of waterfront properties falling within the scope of federal and state voluntary cleanup efforts. In 1995, EPA estimated that 79,387 non-NPL known or suspected state hazardous waste sites existed in the United States⁸. These numbers were derived primarily from state hazardous site inventories and CERCLIS the EPA database of potentially contaminated sites. Due to the fact that they are not listed under the federal NPL program, they constitute the balance of sites referred back to the states for action. Once referred back to the states, the properties remain subject to CERCLA and usually end up in so-called "state Superfund" programs, if the states have their own system of prioritization, cleanup, and reimbursement. Of those sites, EPA had information to suggest that 28,997 required further attention⁹.

A 1999 report to the EPA from Kensington Systems, Inc., revised the total 1995 non-NPL figure upward to 92,057¹⁰. It found, however, "no such vehicles to track abandoned and underutilized sites…an important part of the brownfields definition," leaving the true number of brownfields potentially much higher¹¹. In other words, Kensington found it difficult to distinguish which sites on the state Superfund rolls would receive attention through state priority, voluntary cleanup, and brownfields programs. The author sympathizes entirely, and has included the most comprehensive list of publicly accessible online databases in the "contacts" datatable.

Before further estimating the waterfront voluntary market size, one should note the impact of non-NPL "state Superfund" market size on environmental technology providers. The vendors remain highly reliant on state enforcement and voluntary actions once the federal facility and Superfund (NPL) work realms are removed from consideration. Furthermore, the health and activity level of a state's mandated corrective action program often parallels and sometimes supports its activities in the voluntary sector. With only 11 State Superfunds spending more than $10 million in 1997, the already fragmented market has had its viability extremely limited in some places¹². The most current data shows that¹³ :

• 6 states represent 76.4% of total state Superfund balances
• States represent 43.7% of the total amount added to funds in FY 1997.
• 11 states (including NE, which has no fund) have fund balances insufficient to cover a single cleanup.

Between EPA and the states, no known datasets group specific voluntary sites by contaminant, setting, ownership, or other criteria. For the total number of waterfront properties, we might assume a back of the envelope calculation around 5-10% of the Kensington figure. This hypothetical number has relevance both to the present field-portable technology market and to prospective common property resource (groundwater, sediment) assessors. It is clearly not, however, the limit of the universe for either service provider. Field-portable and on-site lab technology in particular emphasize widely applicable soil and groundwater characterization tools. This sublevel of analysis instead represents the ripest potential market in the voluntary sector for both groups of characterization tool developers. Therefore, this sublevel provides the same obstacles with a much larger overall market size, potentially revealing a more realistic picture of actions transpiring outside the realm of mandated corrective action and/or demonstration programs. The goal will be to assemble a representative dataset with a small fraction of this sublevel.

1.4 Market fragmentation by contaminant

For any contaminated site, the possible assessment technologies depend on the possible contaminants desired for detection. The FRTR Field Sampling and Analysis Matrix (Version 1.0) presents most necessary information about such tools and their proper contaminant applications, though, as the name states, its emphasis rests with sampling and collection, rather than longer-term detection and monitoring. While many tools can serve a variety of purposes including detection, screening, and monitoring, the obstacles to designing a multi-contaminant assessment tool are many. This causes the characterization technology market to become fragmented by the diverse, contaminant-specific nature of sites. Additionally, sites with multiple contaminants may require several completely different detection tools. Even conventional "non-detect" soil samples, once tested, usually cannot undergo further analysis, because initial testing chemically alters them. Before the advent of field-based technologies, this last fact often necessitated multiple rounds of site sampling.

1.5 Why use field-based tools for waterfront and other voluntary sites?

Field-based tools provide advantages in cost effectiveness and speed, and can screen samples to provide better definition of contaminated areas. Some newer on-site analysis tools can provide results on par or even more accurate than those in labs, depending on the contaminant, its sample handling requirements, and its propensity to degrade or volatilize. For waterfront properties, due to the variety of media that should be tested, screening and on-site analysis tools can provide dramatic savings and eliminate the need to hire multiple contractors for multiple rounds of sampling. The sizable turnaround value of a clean property may offset the high sticker price of using field-portable tools—a key reason for choosing this setting over others for research. Most importantly, the waterfront voluntary setting may provide the only opportunity for further assessment of common resources—specifically aquatic sediment—in the near future.

1.6 General obstacles to field-based characterization technologies under current programs

Many reports have dealt with the following points as "the barriers to brownfield redevelopment," and Gorte has addressed most regarding their impact on innovative technologies. Without reinventing them, it seemed necessary to mention them here before proceeding further, including elements unique to the waterfront voluntary setting where appropriate.

• Funding sources—Funding questions with waterfront brownfields and VCP sites are not as easy to answer, despite the sizable turnaround value of a clean property. In communities where federal pilots have been in place for some time, some property owners and municipalities have waited for government or RLF support before proceeding further with redevelopment, even though they may have taken previous voluntary action. Without such support, funding sources for what is by nature a voluntary cleanup process remain solely in the private sector. Currently, many perceive that the greenfields setting still provides a more secure investment and a more rapid turnaround for private capital.
• Time scale—Lenders and investors demand rapid turnaround and have little tolerance for cost overruns due to uncertainties or incorrect application of technology.
• Cost—The limited amount of innovative technology application in all media has limited cash flow for vendors, causing "sticker" prices to remain higher than the non-innovative remedies. This affects in-house research and development and the availability of characterization and remediation technology overall. Cost/benefit and performance information, where innovative technologies—especially for characterization—tend to perform better relative to conventional methods, is now more readily available, though regulatory acceptance lags dramatically.
• Questions on effectiveness—Most importantly, state and local officials have regularly refused to approve characterization and cleanup plans with "unproven" technology, instead insisting on a sampling standard far in excess of that required by a risk-based approach. Lenders and investors, as well as contractors and engineering firms, also tend to frown upon any method that has not seen significant full-scale application. This effectively closes the market for hundreds of thousands of brownfields sites to technology vendors.
• Field problems—Using technology correctly remains a problem in some field cases. Firms must train personnel to use the tools properly, but more importantly, someone with a chemistry background should review the sampling/screening/ analysis plan to denote the best way to achieve data quality objectives with the new technology.

The above problems leave a limited number of providers. In the latter case, a company may lose incentives to develop new technology if that sector is not making a profit, forcing many firms to look overseas—particularly to Europe—where fewer regulatory issues provide greater comfort. Several analysts have set an informal timeline of five years for American firms to enter the international market, fearing that further delays will force some firms out of business¹⁴.

[ Back to Abstract | Forward to Chapter 2 ]

²Refer to the "Oversight" data in this paper. City Redevelopment Agencies and Economic Development Authorities traditionally serve as middlemen in the resale process, allowing them to recover costs for cleanup.
³Superfund: Barriers to Brownfield Redevelopment (GAO/RCED-96-125). General Accounting Office, Washington, DC, June 1996, p. 2.
⁴An Analysis of State Superfund Programs: 50-State Study, 1998 Update. Environmental Law Institute, Washington, DC, 1998.
⁵Ibid.
⁶Superfund: Barriers, p. 9
⁷Gorte, Julie F. Marketing Brownfield Cleanup Technologies. Northeast-Midwest Institute, Washington, DC, February 1999.
⁸Cleaning Up the Nation's Waste Sites: Markets and Technology Trends (1996 Ed.) (EPA/542/R-96/005)Office of Solid Waste and Emergency Response-TIO, EPA, Washington, DC, April 1997, Sections 9.3-9.4.
⁹Ibid.
¹⁰Internal Document: "Brownfields Data Collection Sources." Report for EPA-OSWER Outreach and Special Projects Staff. Kensington Systems, Inc., Los Angeles, CA. March 1999.
¹¹Ibid.
¹²An Analysis of State Superfund Programs: 50-State Study, 1998 Update. Environmental Law Institute, Washington, DC, 1998., p. 20.
¹³Ibid.
¹⁴Personal Communication, Dr. Thomas DeKay, EPA-TIO.

Page last modified: