Issues of the Development of Brownfield Sites

Introduction:

Brownfield land, or previously developed land (PDL), “… is that which is or was occupied by a permanent structure, including the curtilage of the developed land and any associated fixed surface infrastructure.” This is the definition given in Planning Policy Statement 3 (PPS3) Housing, by the British Government, however in the United States the definition has been notably tweaked over time. The US Environment Protection Agency in 1997 quoted brownfields as being “… abandoned, idled or under-used industrial and commercial facilities where expansion or redevelopment is complicated by real or perceived contamination.” This description was however updated in 2002 to become “… real property, the expansion, redevelopment, or re-use of which may be complicated by the presence or potential presence of a hazardous substance, pollutant or contaminant.”

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The development of brownfield sites has been an area of great debate and discussion for many years. There are numerous issues surrounding their re-use from almost every viewpoint. Developers have historically been reluctant and unenthusiastic to make use of them for any new planned schemes for a variety of reasons. There can be great costs associated with the cleanup of a brownfield site depending on its previous employment. Further to this, legislation held every past and present owner of brownfield property completely responsible for any pollution or contamination to nearby people or property thereby presenting a large risk for potential developers.

As time has passed by, non-built-up space available for construction of any type of buildings has diminished and therefore the Governments of most countries have made policies in a bid to control over-expansion and prevent urban sprawl. Clearly this has an impact on brownfield sites and their usage or potential regeneration.

Another important area that warrants discussion is what has been termed as ‘sustainable development’ defined as, “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” (World Commission on Environment and Development, 1987) Sustainable development has become an objective which Governments throughout the world strive for. It is the core principal underpinning planning and aims to ensure a better quality of life for everyone, now and in the future. Poor planning can lead to run-down town centres, unsafe and dilapidated housing, and the loss of countryside. (HMG, PPS 1 – Delivering Sustainable Development, 2005)

Governmental policies are often introduced, altered or even eradicated depending on the state of the economy. A recent example is the reduction of Value Added Tax (VAT) carried out by the Government in the United Kingdom (UK) which was an attempt to try to limit the effects of recession by putting extra money in the pockets of consumers. Brownfield land can be affected in many ways by changes to existing economic policies and particularly planning legislation and guidelines, for example, they were brought very much more in to the spotlight with the establishment and enforcement of greenbelt land. This said, it is not just directly linked policies that can influence brownfields. The Government has five main economic goals and land use impacts on a number of these main goal areas particularly the protection of the environment, economic growth and unemployment.

Research Question:

The purpose of the project is to explore the issues surrounding brownfield sites for developers and the Government alike; including the incentives and support they offer, as well as restrictions they must adhere to or can receive. Further aims are to develop a deep understanding of land use focussing on brownfield land, the necessity for its redevelopment and consequences if it is left deserted and barren. The question itself centres on how the Government aims to encourage and drive new development towards brownfield sites or PDL, and whether the policies, legislation, and guidelines they introduce or modify are accomplishing this.

Aims and Objectives:

• To investigate the current regulations, guidelines and policies regarding the re-use of brownfield or previously developed land.

   

• To understand whether these measures are strong enough to encourage the use of brownfield or previously developed land, and study their effectiveness.
• To discover whether the quantity of brownfield land being redeveloped has risen since these regulations and incentives have been in place.
• To examine the major issues and obstacles hindering the re-use of brownfield land.

Research Methodology:

This chapter describes the method of data collection and gives reasons why these methods were chosen. The research encompassed three different means of data collection.

1. Documentation, journals and book research.
2. A case study method of research.
3. A question based interview with a property professional.

Documents, books and journals from the Government, professional bodies, public libraries and the internet will be reviewed as data sources. These will offer official information on policies or guidelines as well as help to analyse the findings from case studies and the questionnaire. Documentation in this form will help to present reliable, certified and unbiased information on brownfield redevelopment in general and further helpful information. This information will include Government reports, policy statements on the environment and planning, incentive plans, consulting reports of sites carried out by professional bodies, as well as market research and statistics. Through studying this data the researcher will be able to gain an in depth understanding of the regulations surrounding brownfields and their redevelopment, but also more detailed knowledge and comprehension of the many aspects involved.

A case study method of research, involving two large scale developments, was decided upon as a reflection of the redevelopment process of a brownfield site. These will give an insight from the beginning all through the various stages to the final new usage being carried out upon the site. It will be possible to measure the success of brownfield redevelopment, primarily it will be successful purely if there is a new use for the site rather than if no redevelopment occurred at all, and it lay derelict. Brownfield redevelopment is a complicated economic, social and environmental phenomenon requiring a close and in-depth study.

Further to these studies a questionnaire interviews conducted with developers for property investment and development companies, to gain a developer’s viewpoint on the subject of brownfield redevelopment. Five professionals were contacted and asked for their opinions on the issue. The answers to important questions on the subject will help determine the current outlook on new development projects and whether professionals are still looking at greenfields.

Literature Review:

Definition of Brownfield Land/Sites

Brownfield sites are found in former industrial, commercial and residential areas normally in cities, however many are also found in older suburbs or small towns. (Greenberg M et al, 2001) Often Brownfield sites can be traced through economic history and the evolution of industrial areas. The industrial revolution caused great heavy industrial development in certain areas across the UK; they located around transport links including rivers, the canal network and railways. As time passed, after the wars, deindustrialisation and industry decentralisation occurred and therefore the old factories and some housing became obsolete, leaving Brownfield sites often in central city zones.

The Increased Importance of Brownfields

For a long time Brownfield sites were not a major concern for Governments worldwide, they were just derelict or abandoned sites, eyesores, waiting for new owners and uses. “In the 1990s business and community leaders began to see the successful redevelopment of brownfields as a major policy issue.” (Gorman H S, 2003) Brownfield sites are increasingly important as space is not a multiplying entity; furthermore with planning controls now restricting certain land to remain as open space, land for new development opportunities is harder and harder to come by.

Brownfields offer a great alternative development option to Greenbelt (or open space) development. As one of the Government’s goals, protection of the environment implies the idea of trying to retain as much open space as possible, as well as preventing urban sprawl. Furthermore in its continued aim for sustainable development, open space is highly important, as well as ensuring new development schemes are energy efficient and as non-detrimental as possible to the environment.

One of the central policies to endorse these objectives and impact on brownfield re-use is the introduction of green belts (or green belt land) around settlements where planning permission is extremely hard to gain for any proposed construction. The first official proposal to retain open spaces around developments and provide open space came as early as 1935 made by the Greater London Regional Planning Committee. Since then the codification of greenbelt land and its extension to areas other than London occurred in 1955, with the control policies still remaining valid today. (HMG 2001, PPG2 – Green Belts) Green belts now cover approximately 1,556,000 hectares or about 12% of land in England.

In PPG2 – Green Belts the Government sets out guidelines on the re-use of buildings or sites on green belt land, but there are more strict controls and expansion or extension is almost impossible as it would conflict with the openness of the land. This said there is at a willingness to consider schemes on what is protected, heavily regulated land when all said and done.

Overview of Governmental Intervention

In the United States the Government there have what is called a ‘smart growth policy’ which is “centered on Brownfield redevelopment it directs legislation, dollars, and government’s moral powers toward attracting developers and individual investors, non-profit organizations, and community groups to neighbourhoods with underutilized or abandoned properties rather than to pristine Greenfields.” (Greenberg M et al, 2001) As this highlights, by the use of legislation and cash incentives the Government can influence development towards Brownfield sites.

The UK Government did not have the same style of strategy under one name like this ‘smart growth’ policy, but instead had many directives covered under areas such as planning, housing provision targets, fiscal incentives and sustainable development. They have since with the help of research and studies conducted from and by other organisations, designed a ‘national brownfield strategy’.

Government Targets

Since the late 1990s the Government has endeavoured to reach the target set that 60% of new housing in the UK is to be built upon previously developed land. (HMG, PPS3, 2006) “With our new policies in place, we expect local planning authorities to be able to raise the national proportion of new homes to be built on previously developed land to 60 per cent over the next 10 years.” (John Prescott, House of Commons Debate, 23rd Feb 1998) After this aim was announced, there was great debate over whether it was achievable. It was, and continues to be a high target and therefore measures needed to be taken to ensure its fulfilment. In 1999 Friends of the Earth claimed that the goal was attainable but only if central Government provided more guidance and assistance to local planning authorities, particularly in the case of clean up policy for contaminated land. (Environmental Data Interactive Exchange, 1999) The Government has also set targets for the number of new homes, and also their, and non-domestic buildings’ energy efficiency in a movement towards sustainable development. In 2007, Gordon Brown made housing a priority and promised 2 million new homes by 2016, and 3 million by 2020 with a further clause that homes built from 2016 onwards would be zero carbon. (HMG, 2007, Building A Greener Future: Policy Statement) At Budget 2008 strict targets for carbon emissions were set on non-domestic buildings when the Government announced its ambition that all new non-domestic buildings should be zero carbon from 2019. (HMG, 2008)

Measures to Influence Development towards Redevelopment of Brownfield or PDL

At Budget 2001, the UK Government stated: “The Government wants to improve the confidence of owners and investors to bring contaminated land back into productive use and assist with the costs of doing so. Budget 2001 introduces a 150 per cent accelerated payable tax credit for owners and investors for the costs they incur in cleaning up contaminated sites. This is part of the Land Remediation Relief (LRR) incentive, contained within the Urban White Paper, November 2000, and introduced in 2001. These measures make the development of these sites more viable, helping to tackle the legacy of previous industrial uses and reduce the pressure to develop Greenfield sites.” The LRR introduced the 150 per cent tax incentive as well as bringing in the possibility for companies to elect that capital expenditure on qualifying land remediation expenditure is allowed as a deduction in computing its profits. Furthermore companies can opt to receive a payable tax credit in exchange for any qualifying land remediation loss surrendered to the Exchequer – the rate of the payable tax credit being 16 per cent of the loss surrendered. The credit is restricted however to the lesser of 16 per cent of the uplifted expenditure or 16 per cent of the company’s unrelieved loss for the period. (HMG, Urban White Paper, 2000)

It is fair to suggest that the Government is following up on the original policies made and the concerns expressed by Friends of The Earth. Primarily, the LRR has been updated and in doing so planning controls and incentives enhanced. There has also been action taken by the use of surveys and reports completed and recommendations made to the Government.

‘Tax incentives for development of brownfield land: a consultation’ is a document produced in March 2007, and illustrates the two fiscal, tax incentives the Government has introduced to promote brownfield regeneration. The document is ‘a consultation’ in which the Government proposes the removal of one of the tax breaks, but the enhancement of the other. The two forms of fiscal incentive offered are firstly an accelerated 150% tax credit which helps with costs incurred in the cleanup of the site. The second measure is landfill tax exemption, introduced in 1996 when landfill tax began. Landfill tax is a tax on the disposal of waste collected by landfill site operators, aimed to encourage waste producers to produce less waste. There are some exemptions, and the one particularly relevant to brownfield regeneration is that which relates to waste arising from the cleanup of contaminated land.

It was intended to ensure that landfill tax does not act as a barrier to developing contaminated land. When the relief was introduced in 1996 there were few alternatives to dealing with contaminated land other than landfill, however as time has passed new technologies have emerged, making on site decontamination the preferred option. It is the Government’s belief that on site decontamination is the better solution due to the high environmental impacts of landfill itself and its demand for space, the harm to the environment caused by the transportation of this waste, and the securing of recycling materials. These ‘costs’ to the environment as the Government explains are necessary to consider in the same way as PDL itself.

Another area mentioned is that the regulatory environment has changed since 1996, and has altered how waste is handled and regulated considerably. Since October 2007 all waste has had to be treated before it is sent to landfill, and liquid waste has been banned from landfill sites. In 2005 the ‘Hazardous Waste Directive’ applied increased controls to hazardous waste resulting in the prices for it to be taken as landfill rising sharply, and the paper points out that landfill tax would now only be a small proportion of the overall costs of sending hazardous waste to landfill.

Also in this document the Government expresses a desire to update and amend policies if necessary pointing out that all measures taken must be monitored and possibly altered to ensure maximum compliance and success. “The Government remains committed to these aims and to the continuation of the relief, but after 6 years of operation it is time to consider how the scope and take up of the relief can be improved to help it more efficiently deliver the objectives set out in 2001.” (HMG, Tax incentives for development of brownfield land: a consultation, 2007)

It is important that the necessity to potentially alter regulations, incentives or policies to guarantee the best results is acknowledged by the Government, as it shows a willingness to be proactive and manage the issue.

Further to this report however the Government carried out its proposed changes to the existing LRR. In the 2008 ‘Pre-Budget Report’ there are some separations made between PDL itself, and alterations to the conditions of relief given. It is stated that legislation would be introduced in the ‘Finance Bill 2009′ extending LRR to cover expenditure on remediating long term derelict land if the land has been derelict since 1st April 1998. Additionally the land will only qualify if the land was already derelict when acquired by the claimant, and moreover a list of qualifying expenditure is published.

“The relief will be available on specified expenditure. The qualifying costs are expenditure on the removal of:

• post-tensioned concrete heavyweight construction;
• foundations of buildings or other structures or machinery bases;
• reinforced concrete pilecaps;
• reinforced concrete basements; or
• underground pipes or other apparatus for the supply of electricity, gas,water or telecommunication services or for drainage or sewerage.” (HMG, 2008, Pre-Budget Report)

Towards a National Brownfield Strategy

In September 2003, English Partnerships produced an advisory document to the deputy Prime Minister having been appointed as special adviser to the Government on brownfield issues. They intended to compose a comprehensive National Strategy for brownfield land.

In their report, English Partnerships express a very significant detail that brownfield, or PDL, continues to be created, stimulated by economic and social factors and that a key challenge is to ensure the pace of reuse exceeds the pace of new creation of this land. Their concern is that it is an on-going issue and requires far more than just refocusing new schemes, but to address the subject of this newly created brownfield land.

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A further chief observation made is that PDL must be differentiated between. There are marked differences, some sites have no need for encouraging policies or legislation to be made for developers to appreciate a new use and realise the profit of carrying out their new planned schemes, these are described as ‘self resolving’. There may be little to no time between when the site becomes obsolete, or unused, and then is regenerated in to something different or merely updated. This could be land currently in use, but which once redeveloped may have a higher value, and therefore more commercial value. These sites naturally therefore may be called ‘commercially attractive sites’.

Fairly evidently the report then distinguishes between ‘marginally viable’ and ‘non-viable’ sites, which are reasonably self explanatory, in that they lack attraction to developers due to clean up and preparation costs exceeding potential profits in the latter, or only offering a small profit in the former. Finally ‘non-development’ sites are explained as being suitable only for ‘soft’ or amenity use, with their values severely reduced and not necessarily related to the costs of bringing them back in to use. Here more than just the financial returns must be considered, the social costs and benefits are principal and are difficult for the private sector to take in to consideration, overall implying a clear role for the public sector, in more than just a policy making manner, but as a regenerator itself. (Towards A National Brownfield Strategy, English Partnerships, 2003)

Government Response to English Partnerships

The Government responded to the recommendations made by English Partnerships, with a number of policy creations and claim to be “successfully encouraging the re-use of more brownfield sites reducing pressure for development on greenfield land.” (HMG, Securing the Future Supply of Brownfield Land, 2008) English Partnerships made nine policy recommendations in their submission to the Government and all of nine of these were accepted in the Government’s response, several of which were confirmed in the ‘Housing Green Paper Homes for the future: more affordable, more sustainable‘, 2007. This Green paper emphasised the necessity for local authorities “to prioritise brownfield land in their plans and to take stronger action to bring more brownfield land back in to use.” (Syms P, Land Remediation Yearbook, 2008)

This document claims that around three quarters of new development takes place on brownfield land compared to less than 60% ten years ago in 1998. Furthermore a year on year reduction in derelict and/or vacant brownfield land is highly promising and hence the stock of this land is diminishing. This relates back to a concern raised by English Partnerships, about the continuing problem of PDL, its growth as land becomes naturally derelict or unused, and the necessity to address this.

A Developer’s Considerations and Perspective:

The prime concern for any private developer and their company is unashamedly profit maximisation, and the amount of time before that profit is realized. (Ratcliffe J, Stubbs M, 1996) The property development industry is risky which is why there are both high levels of profit and loss that can occur to developers. Risk carries great significance for the developer of any scheme, and can be the factor that decides whether to pursue the intended development or shelve the plans all together. The process of property development can be split in to a five stage process according to John Ratcliffe and Michael Stubbs, they write that from the initial idea to the disposal of the property at the end, the stages can be divided thus:

1. Concept and initial consideration
2. Site appraisal and feasibility study
3. Detailed design and evaluation
4. Contract and construction
5. Marketing, management and disposal

(Ratcliffe J, Stubbs M, Urban Planning and Real Estate Development, 1996)

Developers and Brownfield Land

Brownfield land varies greatly in its character in terms of size, location and the severity of contamination, while the constant and only common consideration for the developer is profit. The same point can be stressed about greenfield or greenbelt land too although realistically only in terms of size and physical characteristics, and not contamination severity. There are of course a number of other considerations; planning regulations and whether permission will be granted carry great importance, as the project may have to be altered due to planning constraints.

The second stage of property development, ‘site appraisal and feasibility study’ as called by Ratcliffe and Stubbs, during which the developer must research the land thoroughly weighing up its credentials. At this stage the brownfield site or PDL may be rejected on the basis of infeasibility in the developer’s eyes. This rejection may lead to a different site needing to be considered and utilized, or a change in the scale or intended use of the proposal.

When deliberating where to construct their new planned and profitable scheme, the obvious, most simple and least time consuming option, would be a greenfield site. There would have been no previous uses of the site, apart from perhaps agricultural, and highly unlikely a use that would have contaminated the site and thereby demand high clean up costs, or demolition of previous structures. Greenfield sites are very often on land of sole ownership making the task of purchasing the land far more straightforward, than having to trace and, or, consolidate ownership to bring together the parcel of land required and desired for the project.

Case Studies:

This chapter introduces the case studies of brownfield regeneration that has occurred and relating the projects to some of the measures taken by the Government to encourage development of brownfield sites or PDL.

Norwich Riverside Re-development

The Norwich Riverside development is a fine example of a successful project on contaminated brownfield land. It is a large site very near to the city centre, and was the largest and most significant site that had become available for redevelopment for years. Therefore it was highly important the best possible use was made of the opportunity.

Historical Context

The site was originally industrially used, it was close to both the railway and river providing good transport and supply links. As long ago as the early 20th Century the firm Boulten and Paul had located their ironmongers on the site, making many things from agricultural tools to aircraft during the war periods. By the mid 1980s however, owing to deindustrialisation, many of the industrial uses had declined or ceased operations and the majority of the site had become vacant and derelict. Other uses included the Harrington oil and gas works and timber yards were also present. Another user of the site was British Rail and their sidings were too left unused and derelict, leaving the site looking forlorn and unsightly. (David Simmonds Consultancy, 2004, Sargent P, A Place in History)

The Site

The site itself is large in size, 17 hectares or 42 acres, and is located south east of Norwich city centre on the banks of the river Wensum next to the railway station and Norwich City football club. Due to its previous heavy industrial use, it was highly contaminated and carried a tidal flood risk, therefore much work was necessary to rectify these issues. The site did not have good access either both by road, and for pedestrians and cyclists.

The New Development

The site was seen to provide an opportunity for major expansion of the city centre which was an aim of Norwich City Council (NCC) as their desire was to attract ‘shed’ style retailing and limit the shift to ‘out of town’. The completed scheme today is mixed use offering residential, in the form of 224 housing units combining town houses and flats most of which with secure parking. There is also a 15% allocation of affordable housing. In terms of retail, there is a food superstore, Morrisons, and 7 other retail units; Boots the chemist, JD Sports, Argos, Mamas and Papas, JJB Sports and Going Places Travel. A further 2 units with service operations, Big Yellow Self Storage Company and STS Holburn Tyre Centre are also present. There are leisure facilities provisions as well with a 14 screen UCI multiplex cinema, a bowling alley (Hollywood Bowl), nightclubs (Square, Brannigans and Time), restaurants (Frankie and Benny’, Nandos, Pizza Hut, Old Orleans), bars (Wetherspoons, Norwegian Blue), and a health club (Fitness Exchange). A major swimming and recreation centre which was particularly important to the council that it be incorporated, as there was a need for this in a central location. (riversidecentrenorwich.co.uk)

1800 car parking spaces including a new six-storey park with 740 spaces provide sufficient car parking for both leisure development and rail users. The railway station itself has been remodelled to integrate in to the adjacent project. New access links with a new inner ring road, as well as pedestrian and cycle connections to the historic King street area.

“Riverside now represents a new quarter that compliments the city centre in accordance with recent Government planning policy guidelines, in a location with existing public transport infrastructure improved by a new interchange for buses, taxis and cyclists.” (David Simmonds Consultancy, 2004)

Redevelopment Issues

There were a number of serious concerns and questions raised with the major scale redevelopment of Norwich Riverside, from infrastructure issues to planning necessities and development obligations. In 1994 the council first started work with local stakeholders and potential developers designing new planning guidelines for the regeneration of the site, but it was not until 1999 that the first phase of construction was completed. The council had originally assessed the development potential of the site in 1987 after the closure of Boulten and Paul, and their plans envisaged a fine-grain redevelopment of mixed use. Due to these problems with the site, it became well known within the country’s development industry as a difficult project with a significant commercial and investment risk which logically acted as a barrier to attracting backing.

Part of the delay, and bearing a great significance to the research question of this project, was that the council were attempting to use the redevelopment of Riverside as a major part of regenerating the city centre and providing services that were previously lacking. Naturally this objective brought with it some major development obligations for the scheme to provide. One such target was to supply a new swimming pool and recreation centre as this was lacking in a city centre location. A very well designed centre was created by Richard Jackson – intelligent engineering, and now has a value of £5.7 million. (Richard Jackson plc, 2009) Further constraints were that the council wished to steer ‘shed’ style retailing in to this area of the city to rein in the increasing move to ‘out of town’ shopping becoming prevalent. (Norwich City Council, Riverside development)

As is often the case with brownfield redevelopment the site was quite heavily contaminated, evidently this required cleaning up, which was achieved by the use of an innovative soil clean-up method called bio-remediation. Furthermore as mentioned previously, the site was at risk to flooding, and therefore the ground level had to be raised. These are both costly and time consuming processes to complete, over £5 million was spent remediating the site.

Another obstacle that can occur with brownfields and did indeed in this case was serial ownership and the difficulties involved of tracing all owners and forging agreement between them of the intended plans. The Boulten and Paul works were owned by Gazely Properties Ltd having purchased the works after its closure in the 1980s. The railway lands were owned by British Rail Property Board until its privatisation when they were transferred to Railtrack pre Network Rail. These two, Gazely Properties and Railtrack ultimately founded a joint development company on an equal partnership basis. The other land included in the site area was in the possession of NCC.

The proposed plan itself for a mix of residential, leisure and ‘shed’ style retail was acceptable to most members of the local community, some residents rallied against this form of urbanisation due to the aesthetics of the retail not fitting in with the historical city. Despite their efforts however, the council stuck with the plans and agreed that it go ahead as planned with reference to the importance of the food store which would serve the south east of the city.

When the site came to ascendancy as a hub