Study examines economic impact of brownfields
at the Andrew Young School of Policy Studies

Are metro Atlanta's abandoned commercial and industrial sites hurting the city's economic development potential?

That's the question Andrew Young School researchers are asking in a new study on the economic impact of brownfields - properties where development is impaired by the possibility of environmental contamination.

"Brownfields are typically older industrial sites or commercial sites that aren't in their highest and best use," says Laura Taylor, assistant professor of economics and a researcher in the Andrew Young School's Environmental Policy Program. "They really should be redeveloped, because there are better economic opportunities for the properties."

Funded by a $93,000 grant from the U.S. Environmental Protection Agency, the study looks at the loss in property values and reduced resale rates of hundreds of brownfields in Atlanta.

The project, which is due to be completed this summer, also examines whether some communities suffer disproportionately from the negative effects of such properties.

The results may be used to develop governmental policies that can enhance economic development and help keep the environment clean and safe, Taylor says.

Liability concerns

Developers and lenders often shrink from investing in contaminated land because they can be held legally liable for the cleanup and any damage that might already have occurred, Taylor says.

"Even suspected contamination can keep these properties from being redeveloped," she says. "Anybody who touches the property can get pulled into the legal liability. So there are some strong disincentives to be involved if you think there's contamination on a site."

Environmental problems aren't limited to old garbage dumps or abandoned industrial complexes. Dry cleaning establishments, auto body shops and other small businesses where chemicals are used and disposed of improperly may also create brownfield pockets in their neighborhoods, Taylor says.

When owners move or shut down their businesses, the abandoned property often languishes for years, exacerbating urban blight and creating conditions ripe for urban sprawl. If a site is thought to be contaminated, developers who otherwise might buy the property may flee to the suburbs, where it's cheaper and less risky to build.

No one knows for sure the size of the problem, but more than 2,000 properties in Fulton County alone are recorded on state and federal lists that track environmental contamination. Fulton County encompasses the heart of metro Atlanta.

'Small' problems

One example of a splashy brownfield redevelopment project is Jacoby Development Inc.'s plan to turn the 138-acre Atlantic Steel site in Atlanta's Midtown into a combined office, retail and residential complex.

But Taylor's project is unique mainly because it examines the combined impact of smaller properties. Large industrial complexes such as the Atlantic Steel site probably comprise less than 25 percent of all brownfields, Taylor says.

"Atlantic Steel and other large sites have been studied in the past," Taylor says.

"There's very little evidence on what the economic impacts are of these small undeveloped sites on their surroundings. And these things may really bring down a neighborhood."

Photo above: BROWN DOWNTOWN: Environmental policy researcher Laura Taylor is examining the economic impact of Atlanta's brownfields, properties that are or might be environmentally contaminated. Taylor plans to incorporate her research into the undergraduate and graduate environmental economics courses she'll be teaching this fall.