The Organizational Contexts of Decisions to Invest in Environmentally Risky Urban Properties

Previous industrial and commercial development has left a legacy in the form of economically depressed and environmentally impaired areas of cities. Properties are unused, at least in part, as a result of contamination, thus depriving municipalities of needed employment and tax revenues for education and social services. The toll in terms of poverty and attendant social problems are apparent. People of color who live in the depressed areas are paying an especially high price [Lee 1996]. To a considerable extent, the 1980 Comprehensive Environmental Response, Liability, and Compensation Act (CERCLA), intended to clean up polluted properties, has exacerbated the problem of economic depression [Meyer et al. 1995]. The provisions of the Act have resulted in liability schemes that hold any party in a chain of property ownership responsible for the full cost of environmental cleanup, whether or not they created the contamination. Concerns about liability deter redevelopment as investors seek to avoid an ownership stake in the properties [Yount and Meyer 1994]. Since the mid-eighties, increasing attention in both the public and private sectors has turned to the problem of cleanup and redevelopment of brownfields, defined by the Environmental Protection Agency (EPA) as abandoned, idled, or underutilized industrial and commercial facilities where expansion or redevelopment is complicated by real or perceived environmental contamination [U.S. EPA 1996]. Regulatory and legislative changes at the federal and state levels have addressed the uncertainties associated with the projects. The EPA has taken a proactive approach to the problem with its 1995 Brownfields Economic Redevelopment Initiative,