State investments in brownfields yield 14-fold return
November 12, 2015
Efforts to investigate, clean up and redevelop Wisconsin brownfields, fueled by $121.4 million in state grants and leveraged by local and federal incentives, have cumulatively recouped $1.77 billion, a more than 14-fold return on investment.
Those are among the findings of a University of Wisconsin-Whitewater study that analyzed the economic impact of the incentives. Over half the state revenue outlay is recouped in state tax revenues from construction activities generated by the investments alone, and redevelopment of the properties directly or indirectly resulted in the retention of 54,483 permanent jobs.
Economists from UW-Whitewater's Fiscal and Economic Research Center calculated that local governments gain $88.5 million annually in tax revenues from redeveloped brownfields, not including property taxes derived from the new or renovated buildings. On average, post-redevelopment assessed values exceed pre-development values at a ratio of 3.5 to 1.
"There are a lot of brownfields still sitting idle," said Russ Kashian, UW-Whitewater professor of economics and co-author of the study. "This study demonstrates that when the state has the capacity to expand the program, it would be a smart investment."
Brownfields are defined as "abandoned, idle or underused industrial or commercial facilities or sites, the expansion or redevelopment of which is adversely affected by actual or perceived environmental contamination." One example is the former Allis Chalmers plant in West Allis, now known as Summit Place. Redevelopment of the site led to 2,700 permanent jobs in 630,000 square feet of converted office space.
"As a direct result of this brownfields cleanup initiative," said West Allis Mayor Dan Devine. "The once-contaminated and dilapidated property is now the city's largest taxpayer and the city's largest employment center."
Since 1998, the State of Wisconsin brownfields funding programs have assisted 703 sites, resulting in 4,713 acres of contaminated land that was assessed, cleaned up or both. Also in 1998, the state established the Wisconsin Brownfields Study Group to evaluate Wisconsin's current brownfields initiatives and recommend changes, as well as propose additional incentives for the cleanup and reuse of abandoned or underused properties.
"The study shows that for a relatively small investment, the state recoups benefits that far outweigh the costs," said Nancy Frank, associate professor of urban planning at University of Wisconsin-Milwaukee and appointee to the study group, which commissioned the study. "And the state's investment was critical to these sites getting cleaned up and put into productive use."
Frank pointed to the fact that brownfields redevelopment had tangible benefits to the public, unlike some economic development initiatives.
"When you clean up a brownfields site you can see it in the landscape," said Frank. "You can also see the new businesses moving in, so you know it's having an economic impact. And with this study, we can measure it."