Environmental Protection: Agencies Have Made Progress in Implementing the Federal Brownfield Partnership Initiative

Published by the Government Accountability Office on 1999-04-09.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to the Chairman, Committee on
                 Commerce, House of Representatives

April 1999
                 Agencies Have Made
                 Progress in
                 Implementing the
                 Federal Brownfield
                 Partnership Initiative

      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Resources, Community, and
      Economic Development Division


      April 9, 1999

      The Honorable Thomas Bliley
      Chairman, Committee on Commerce
      House of Representatives

      Dear Mr. Chairman:

      Since the early 1990s, federal, state, and local governments have focused
      much attention on the cleanup and economic redevelopment of
      “brownfields”—abandoned, idle, or underused industrial and commercial
      facilities where real or perceived environmental contamination is a barrier
      to redevelopment. In some cases, rather than face the potentially high
      costs to clean up the contamination at brownfields and any future liability
      for it, businesses have looked to greenfields—undeveloped sites in rural
      and suburban areas—for expansion and new development. However, this
      trend contributes to urban blight, “suburban sprawl,” and a reduced tax
      and employment base in traditional urban centers. In response to
      communities’ requests for federal assistance to address brownfields, in
      May 1997 the administration announced the Brownfield National
      Partnership Action Agenda, a 2-year initiative to bring federal, state, and
      local agencies together to clean up and redevelop these sites.

      Under the Partnership initiative, more than 20 federal agencies were to
      better coordinate their brownfield resources and activities, specifically
      carrying out more than 100 action items involving brownfields that would,
      among other things, generate $469 million in federal financial
      assistance—$304 million predominantly in grants to local communities,
      and $165 million in loan guarantees. These actions and this investment
      were to result in three specific economic outcomes—leveraging an
      additional $5 billion to $28 billion in private investments in brownfields,
      creating up to 196,000 new jobs, and protecting up to 34,000 acres of

      Reflecting congressional interest in brownfields, you asked us to
      (1) compare federal agencies’ planned financial assistance to brownfields,

       The federal agencies included in the initiative were the departments of Agriculture; Commerce,
      including its Economic Development Administration and its National Oceanic and Atmospheric
      Administration; Defense, including its U.S. Army Corps of Engineers; Education; Energy; Health and
      Human Services, including its Agency for Toxic Substances and Disease Registry and its National
      Institute for Environmental Health Sciences, and Office of Community Services; Housing and Urban
      Development; the Interior; Labor; Transportation; Treasury, including its Office of the Comptroller of
      the Currency; and Veterans Affairs and the Environmental Protection Agency, the General Services
      Administration, and the Small Business Administration.

      Page 1                                                GAO/RCED-99-86 Environmental Protection

                   as stated in the Partnership Agenda, to their actual spending for
                   brownfields in fiscal years 1997 and 1998; (2) describe the purposes of
                   these obligations; and (3) determine the extent to which agencies met the
                   Partnership’s goals and objectives. We collected financial data and
                   documentation of brownfield activities and met with the senior managers
                   involved with brownfields from 10 Partnership agencies that are involved
                   in these activities: the departments of Agriculture, Defense’s U.S. Army
                   Corps of Engineers, Energy, Health and Human Services, Housing and
                   Urban Development, and Transportation, the Economic Development, the
                   National Oceanic and Atmospheric, and the General Services
                   Administrations, and the Environmental Protection Agency. Eight of these
                   10 agencies were responsible for 100 percent of the planned financial
                   assistance outlined in the Partnership Agenda. Appendix I includes a more
                   detailed discussion of our scope and methodology.

                   During fiscal years 1997 and 1998, the 10 federal agencies we examined
Results in Brief   reported that they provided about $413 million in assistance to
                   brownfields, as compared to the Partnership’s planned financial assistance
                   of $469 million. Brownfield managers at the Department of Housing and
                   Urban Development (HUD) also told us that the agency may have provided
                   more financial assistance for brownfields than it reported to us because it
                   provided most of its financial assistance through its Community
                   Development Block Grant program. Under this program, communities
                   have wide discretion on how they use these funds, and while the agency
                   does track communities’ use of the funds, it does not separately track if
                   the funds were used for brownfield activities. About one-half of the total
                   assistance that agencies provided for grant programs was from new funds
                   made available for brownfields. The remainder represented funds that the
                   agencies had traditionally been providing to low-income and depressed
                   communities under their community and economic development grant
                   programs, not new or reprogrammed funds for brownfields.

                   HUD, the Environmental Protection Agency (EPA), and the Economic
                   Development Administration (EDA) within the Department of Commerce
                   were responsible for $409 million, or 99 percent of the assistance
                   provided. The three agencies used most of the funds to make grants and
                   loan guarantees to communities, which used the funds for activities such
                   as assessing contamination at sites, cleaning up sites and planning
                   redevelopment, demolishing old buildings, constructing new ones,
                   developing and upgrading infrastructure, and accomplishing real estate
                   transactions for brownfield sites.

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             The 10 federal agencies in our review reported achieving better
             coordination and accomplishing their brownfield action items but do not
             have comprehensive data to determine the extent to which this will result
             in the expected economic benefits of jobs and private investment in
             brownfields. The agencies reported that they increased their ongoing
             coordination as a result of the Partnership initiative, most noticeably
             through their “showcase community” projects—agencies’ efforts to
             provide 16 select communities with federal funding and technical support
             for cleaning up and redeveloping brownfields. The agencies also
             completed about 89 percent of their action items in the Partnership
             Agenda, such as revising policies that were barriers to brownfield
             redevelopment and providing communities more information about
             available assistance, predominantly as part of their ongoing programs.
             However, the extent to which the Partnership initiative is meeting the
             economic goals—creating new jobs, leveraging additional private
             investments in brownfields, and preserving greenfields—cannot be
             determined because most agencies are not tracking all of these outcomes
             or collecting data specific to brownfields that would allow them to do so.

             In 1993, in response to calls from local communities and professional
Background   associations representing them—such as the U.S. Conference of
             Mayors—to provide more and better coordinated federal support for
             brownfields, EPA began providing grants to select communities to conduct
             assessments of the potential contamination at brownfield sites. EPA got
             involved because lenders’ and developers’ fear that contamination would
             lead to long and costly cleanups was often one of the first barriers to
             redeveloping these sites. But communities wanted more help than EPA
             could provide with its assessment grants. Therefore, in July 1996, EPA
             created the Interagency Working Group on Brownfields, with staff from
             more than 20 federal agencies, and the Interagency Steering Committee,
             with senior management representatives from these same agencies.
             According to EPA, both groups were created to provide a forum for federal
             agencies to exchange information and develop a coordinated national
             strategy for brownfields that focused on both environmental and
             redevelopment issues.

             Subsequently, while developing this strategy, EPA asked the members of
             the Working Group to identify specific actions that the federal agencies
             would take to support brownfield redevelopment and the funding they
             would obligate for these activities for fiscal years 1997 and 1998. EPA
             collected this information from the agencies, which totaled more than 100

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                        action items and plans to invest about $469 million—$304 million
                        predominantly in grants and another $165 million in loan guarantees. On
                        May 13, 1997, the administration publicly announced the planned financial
                        assistance and more than 100 action items as part of its Brownfield
                        National Partnership Action Agenda initiative, along with the goals of
                        improving agencies’ coordination of their brownfield activities and
                        achieving specific economic benefits for communities.

                        One of the major actions under the initiative is the brownfield Showcase
                        Communities project. In fiscal year 1998, the Working Group selected 16
                        pilot communities from eligible applicants. The agencies intended for
                        these communities to demonstrate to other communities how they can use
                        federal support to successfully clean up and redevelop brownfields.
                        According to EPA’s Director of Outreach and Special Projects, the agencies
                        hope to develop models of how 16 very different types of communities,
                        such as those in rural, urban, and coastal areas, successfully worked with
                        federal agencies to redevelop their unique brownfield properties.

                        The 10 agencies in our review reported that they provided about
Agencies Were           $413 million —$272 million primarily through grants and $141 million in
Successful in           HUD loan guarantees in financial assistance for brownfield activities in

Providing Funds for     fiscal years 1997 and 1998. EPA, HUD, and EDA within the Department of
                        Commerce were responsible for $409 million, or 99 percent of this
Brownfield Activities   assistance.

                        Table 1 below outlines the planned federal investment for brownfields as
                        stated in the Partnership Agenda, and actual obligations2 and loan
                        guarantees for fiscal years 1997 and 1998 that agencies reported went for
                        brownfield-related activities.

                         An “obligation” is a definite commitment on the part of a federal agency to disburse funds at a later
                        time. Grants are one type of obligation.

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Table 1: A Comparison of Agencies’
Planned Investment in the Partnership   Dollars in millions
Agenda and Obligations and Loan                                                    Planned brownfield               Obligations and loan
Guarantees for Brownfields During                                               assistance as stated in             guarantees agencies
Fiscal Years 1997 and 1998              Federal agency                         the Partnership Agenda               made for brownfields
                                        EPA                                                           $125                              $128
                                        HUD                                                            155                                    26a
                                        EDA                                                              17                               114
                                        Other federal agenciesb                                           7                                    4
                                        Subtotal                                                      $304                              $272
                                        HUD’s loan guaranteesc                                        $165                              $141
                                        Total                                                         $469                              $413
                                         The primary reason for the difference between the planned and actual financial assistance for
                                        HUD is that about $100 million of the planned assistance for brownfield-related activities was from
                                        HUD’s Community Development Block Grant program. Under this program, communities have
                                        wide discretion on how they use their funds and while the agency does track communities’ use of
                                        funds, it does not track if funds were specifically spent on brownfields. Therefore, HUD could not
                                        report an amount of obligations made for brownfields under its block grant program.
                                         The other federal agencies are the departments of Commerce’s National Oceanic and
                                        Atmospheric Administration; Energy; Health and Human Services; and Transportation and the
                                        General Services Administration.
                                         Under HUD’s Section 108 loan guarantee program, the agency may guarantee loans to local
                                        governments to conduct large-scale economic revitalization projects. Local governments must
                                        pledge Community Development Block Grant funds that they have received as partial security for
                                        financing these projects.

                                        Sources: Documentation supporting the Partnership Agenda and agencies’ brownfield managers.

                                        In making this dollar comparison, it is important to understand the basis of
                                        the planned assistance stated for the three primary agencies in the
                                        Partnership Agenda, illustrated in the middle column of the table above.
                                        About one-half of the $304 million planned assistance was funding that the
                                        agencies could actually commit to obligate on brownfields during the
                                        2-year period. For example, EPA decided to obligate $125 million because it
                                        received this amount of new appropriations available for brownfields
                                        during this time frame. While HUD’s planned financial assistance through
                                        grants as stated in the Partnership Agenda was for $155 million, agency
                                        brownfield managers clarified that the agency could only commit to spend
                                        $25 million because it received this amount of appropriations for its new
                                        Brownfield Economic Development Initiative (BEDI) program.3 Most of
                                        the remaining $130 million was an estimate of the amount of fiscal year
                                        1997 grant funds that communities might choose to use for brownfields

                                         Under this program, HUD provided competitive grants specifically for brownfield development to
                                        communities that had already received community development grant funds from the agency.

                                        Page 5                                               GAO/RCED-99-86 Environmental Protection

under the agency’s Community Development Block Grant program. HUD
could not commit to spend a specific amount of grant funds on
brownfields because under this program, grant recipients have broad
discretion in how they can use the funds. EDA brownfield managers
explained that this was also the case for the $17 million presented as the
agency’s planned financial assistance in the Partnership. EDA could not
commit to spend these funds on brownfields through its economic
development grant program because the agency responds to locally
identified economic development needs, which may or may not include
brownfield redevelopment needs. As a result, EDA cannot estimate the
amount of brownfield-related funding assistance that communities will
request or the agency will award in any given fiscal year.

In comparing these amounts in the Partnership Agenda to the amounts of
actual brownfield obligations and loan guarantees the agencies achieved,
as illustrated in the right-hand column of the table, we determined that
agencies may have obligated more than they reported but not all of these
obligations were a result of the Partnership initiative. HUD can document
the amount of BEDI funds obligated for brownfields, since this program is
dedicated to such activity. However, HUD does not separately track the
amount of its Community Development Block Grant funds spent at
brownfield sites. Consequently, we could not determine the exact amount
of federal funds the Partnership agencies were using on brownfields.

More specifically, for the Partnership Agenda, HUD estimated that grant
recipients might use up to $100 million during fiscal year 1997 in
Community Development Block Grant funds on brownfield-related
activities. On the basis of some survey and anecdotal information from
grant recipients, HUD brownfield managers estimated that recipients
probably spent more than $100 million on brownfields through this
program during that year. But the Department cannot demonstrate the
extent to which communities used grant funds for brownfields because
communities have wide discretion in using the funds and the Department
does not track them by this category. EPA and EDA can track their
brownfield obligations—EPA because it received its appropriations for
brownfields separately and EDA because recipients identify whether they
are using grant funds for brownfield-related activities in either their
application or their status report on the use of the funds.

While EDA can track that it awarded $114 million in grant funds during the
2 fiscal years to communities that used the funds for brownfield-related
activities, compared to the $17 million in planned assistance for the agency

Page 6                                  GAO/RCED-99-86 Environmental Protection

in the Partnership Agenda, EDA does not attribute its actual brownfield
obligations directly to the Partnership initiative. Rather, according to EDA
managers, since the beginning of the program in 1965, the agency had been
awarding grants for the revitalization and reuse of idle and abandoned
industrial facilities, now called brownfields, as a core component of its
mission to aid the nation’s most economically distressed communities. For
example, historically EDA had funded projects to bring about the reuse of
closed military facilities; now the agency is counting these activities as
brownfield projects.

HUD  anticipates an increase in the amount of funds going to brownfields in
the future. Some communities were not certain if funds under HUD’s
Community Development Block Grant program could be used to address
environmental contamination at certain brownfield properties. HUD’s fiscal
year 1998 appropriations provided that states and communities may use
Community Development Block Grant funds for the cleanup and
redevelopment of brownfields, and the agency’s fiscal year 1999
appropriations extended this change to all future fiscal years. According to
HUD officials, the agency will update its block grant regulations to add that
addressing environmental contamination is an allowable activity under the

HUD  is also considering modifying one of the three primary national
objectives under its Community Development Block Grant
program—preventing or eliminating slums or blight4 —to clarify that since
environmental contamination and economic disincentives contribute to
blight, block grant funds can be used to address these concerns. HUD
expects that this change will encourage the use of block grant funds for
brownfields. EDA has added brownfield redevelopment as a category for
which communities can receive priority consideration for grant funds.
Under EDA’s program, once an applicant meets the agency’s basic grant
criteria,5 if the applicant plans to use the funds on brownfields, the agency
can give the applicant priority for a grant award.

 Funded activities under the Community Development Block Grant program must give maximum
feasible priority to at least one of three national objectives: (1) benefiting low- and moderate-income
people, (2) helping to prevent or eliminate slums or blight, and (3) meeting other urgent community
development needs.
 According to agency officials, EDA uses three basic criteria to determine project eligibility: (1) high
unemployment, (2) low per capita income, and (3) special need.

Page 7                                                  GAO/RCED-99-86 Environmental Protection

                        EPA, HUD, and EDA distributed their funds primarily through grants and loan
Federal Agencies’       guarantees to communities that used them for activities ranging from
Funds Were Used for     assessing a site to conducting some cleanup and on-site construction. In
a Variety of            March 1998, we reported on EPA’s use of brownfield funding.6 We reported
                        that the agency obligated the majority of its fiscal year 1997 and 1998
Brownfield Activities   funds for brownfields through (1) grants to state, local, and tribal
                        governments to assess the nature and extent of contamination at these
                        properties in order to promote their cleanup and redevelopment; (2) seed
                        money to these governments to establish revolving loan funds that help to
                        pay for actual cleanup activities; (3) grants to states to develop voluntary
                        programs that provide incentives for developers to clean up and redevelop
                        brownfields; and (4) grants and funding support for pertinent research,
                        outreach to community groups, job training for performing hazardous
                        waste cleanups, and other related activities.

                        Over those same 2 fiscal years, HUD provided funds primarily through
                        (1) the Brownfield Economic Development Initiative (BEDI) grant
                        program, (2) its Section 108 loan guarantee program, (3) the Community
                        Development Block Grant program, and (4) its programs to abate the risks
                        of lead-based paint. HUD awarded its BEDI grants specifically to
                        communities to use the grants for activities such as site cleanup or
                        purchasing a brownfield property and selling it to a private party at a
                        discount price in exchange for the property’s redevelopment. HUD must
                        make economic development grants, including the BEDI grants, in
                        conjunction with loan guarantees for, among other things, the acquisition
                        and rehabilitation of properties. Communities have used their Section 108
                        loan guarantees to pursue larger-scale redevelopment activities, including
                        public facilities and physical development projects, such as acquiring a
                        failed shopping center for rehabilitation. As for its Community
                        Development Block Grant program, HUD conducted a recent survey of a
                        small number of its grant recipients, 80 out of about 1,000 recipients, who
                        voluntarily provided information on the use of their grants. On the basis of
                        these data, HUD managers stated that a majority of these recipients are
                        spending some portion of their funds on brownfield-related activities, such
                        as cleaning up contaminated soil and groundwater and removing asbestos
                        and lead from sites. During fiscal year 1998, HUD also awarded one
                        community in Boston a grant under its lead-based paint program, which
                        the community used to clean up lead-contaminated soil at approximately
                        56 parcels of brownfields that were then converted into housing units.

                         Superfund: EPA’s Use of Funds for Brownfield Revitalization (GAO/RCED-98-87, Mar. 19, 1998).

                        Page 8                                              GAO/RCED-99-86 Environmental Protection

                           In these same fiscal years, EDA provided funds for brownfield
                           redevelopment through several of its grant programs. Communities used
                           these funds for a variety of brownfield-related activities, including
                           redevelopment planning; the development of inventories of abandoned,
                           idle, and underutilized properties using geographic information systems;
                           economic assessments of brownfield parcels; building renovation and
                           repair, historical rehabilitation, demolition, and new construction; support
                           for revolving loan funds for cleanup activities; and brownfield research
                           studies. For example, one recipient used an EDA grant at a brownfield site
                           to rehabilitate half of a large building in a former industrial complex. The
                           environmental contamination had already been cleaned up prior to the
                           recipients receiving the grant. Another recipient is using its grant to
                           construct a Bioscience Park Center at a former Defense medical facility
                           site that EDA classifies as a brownfield. EDA grant recipients have reported
                           that their communities are only using up to about 10 percent of their funds
                           on actual cleanup.

                           In May 1997, the administration announced that through its Brownfield
Federal Agencies Are       National Partnership Action Agenda, it intended to bring together the
Better Coordinating        resources of more than 20 federal agencies to better coordinate federal
and Achieving Their        support so as to empower communities to redevelop their brownfields.
                           The administration reported that the agencies would provide a total of
Action Items               $469 million in financial assistance by implementing more than 100
                           brownfield action items and that this assistance was expected to result in
                           the (1) leveraging of additional private investments in brownfields,
                           (2) creation of new jobs, and (3) protection of greenfields.

                           The 10 federal agencies in our review have improved both their internal
                           and external coordination of brownfield activities and have accomplished
                           most of their respective Partnership actions, thereby increasing the federal
                           government’s role in brownfield redevelopment. However, the
                           administration cannot tell if the initiative is meeting the economic goals
                           because most agencies are not tracking these results or collecting data
                           specific to brownfields that would allow them to do so.

Agencies and Communities   Officials of most of the 10 federal agencies in our review stated that they
Agree That Federal         are better coordinating their actions to address brownfields, both within
Coordination Has           their own agency as well as between agencies. Individual communities and
                           the professional associations that represent them also agreed that federal
Improved                   coordination had improved, although they noted that they still face the

                           Page 9                                  GAO/RCED-99-86 Environmental Protection

administrative burden of managing multiple federal grants and that some
states and counties were not included in these efforts at improved

More than half of these agencies reported that, to participate in the
Partnership, they established informal internal working groups to better
identify what programs and funding within their own agencies could be
used to address brownfields. Moreover, agencies’ involvement in the
Partnership, such as helping to select the showcase communities, has
increased their awareness of other agencies’ resources available for
brownfields. Consequently, agencies can better direct communities to the
right sources, depending on the type of assistance the communities need.
Some agencies have also signed a memorandum of understanding in which
they established joint policies and procedures for conducting brownfield
projects. For example, EPA and the National Oceanic and Atmospheric
Administration signed such a memorandum, agreeing to, among other
things, provide to coastal communities information on brownfields and
training on conducting assessment, cleanup, and redevelopment activities.
These efforts, according to the agency brownfield managers, have resulted
in a more efficient federal approach to brownfields.

In another example, the General Services Administration (GSA) helped
Denver to redevelop a major brownfield property that, according to the
agency’s brownfield managers, otherwise probably would have sat in the
agency’s inventory. The city wanted to turn the federal property, located in
a depressed area, into an industrial park that would provide jobs and
commerce. The city had already attracted grants from five different federal
agencies for the project but could not get the money unless GSA transferred
the property. Once GSA became aware of the other agencies’ support
through its involvement in the Partnership and community efforts, the
agency was able to expeditiously transfer the property. Similarly, HUD
brownfield managers reported that their coordination with other agencies
has made them more sensitive to the agencies’ requirements. For example,
these managers explained that HUD invited two EPA staff to participate on
its panel to select BEDI grant recipients, and the staff provided valuable
insights about how the grant recipients might manage contamination
issues at their sites. In another instance, brownfield managers for the U.S.
Corps of Engineers claimed that agencies were saving a significant amount
of money by better coordinating and not duplicating the support they
could bring to the showcase communities. Furthermore, several agencies
have revised or expect to revise a number of federal regulations as a result
of the Partnership. One of the more recent and significant actions that

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could promote more redevelopment, according to the EPA’s brownfield
director, was a change in the lending guidelines for Federal Home Loan
Banks that encourages lending institutions to provide financial assistance
to certain brownfield projects.

Perhaps the most evident example of coordination is the Showcase
Communities project. According to the city development managers from
two of the longest-running showcase communities, in Salt Lake City, Utah,
and Dallas, Texas, they are now better aware of the federal resources
available to support brownfield redevelopment and how to access them
and are getting more technical and financial help from agencies. They also
highlighted that federal agencies are now more willing to participate in
joint efforts, such as forums and periodic teleconferences, to help the
communities overcome any hurdles. The managers acknowledge that a
major reason for this success is that EPA loaned a staff person to each city,
under the Intergovernmental Personnel Act, for 2 years. For each city, the
managers report, this staff person has been invaluable in identifying
available federal resources, such as grant programs; helping the city to
apply to each relevant agency for these funds; and providing technical
assistance, such as information on the extent of cleanup required at
brownfield sites. Staff who are managing brownfield issues for four
professional associations representing cities, states, and other community
stakeholders indicated that coordination among federal agencies had
improved, especially in the 16 showcase communities.7

While federal coordination has increased, local community officials stated
that little has been done to reduce the burdensome administrative
processes involved in obtaining federal financial assistance. In fact,
according to the city manager in Salt Lake City, the rules and regulations
governing one HUD program were so onerous and time-consuming that the
city chose not to pursue the funding. The HUD brownfield managers
acknowledged that federal requirements to ensure grant and loan
guarantee recipients are financially accountable for federal funds can be
burdensome. The local managers further pointed out that cities not
participating in the showcase pilots may not be able to afford to provide
the type of staff resource that they had obtained from EPA to assist them in
applying for and managing grants from the various agencies. Two of the
associations representing state cleanup agencies and county governments
also noted that some states and counties are concerned that the federal
agencies are bypassing them by meeting with and providing funding

 These professional associations are the Association of State and Territorial Solid Waste Managers, the
National Association of Counties, the National Association of Local Government Environmental
Professionals, and the U.S. Conference of Mayors.

Page 11                                               GAO/RCED-99-86 Environmental Protection

                             directly to municipalities. The EPA brownfield manager explained that the
                             agency had met with state and local government officials when developing
                             the Partnership Agenda and that better coordination with states was
                             beginning to happen at the regional level in some areas. While the manager
                             noted that EPA has been awarding some of its brownfield assessment
                             grants to counties, the Partnership was late in inviting counties to

Federal Agencies Have        Officials of the 10 federal agencies in our review stated that their agencies
Completed Most of the        had accomplished 63 of their 71 nonfinancial action items in the agenda, or
Partnership’s Action Items   about 89 percent.8 In our meetings with them, the officials reported that
                             they conducted most of these activities within their ongoing programs and
                             had not established a formal system to separately track their progress in
                             accomplishing the action items in the Partnership Agenda. In general, the
                             action items included implementing changes to existing policies that had
                             presented barriers to brownfield redevelopment, providing technical
                             support to communities, providing information to agencies and
                             communities on federal avenues to support brownfield redevelopment,
                             and conducting brownfield research. For example, HUD issued a joint study
                             with EPA on the redevelopment of brownfields, specifically spotlighting the
                             effects of environmental hazards and regulation on urban redevelopment.
                             The Department of Transportation (DOT) issued a new policy repealing its
                             past policy of avoiding all contaminated properties when undertaking new
                             transportation projects. The new policy encourages state departments of
                             transportation, local planning organizations, and local communities to
                             address their brownfield redevelopment in their transportation plans and

                             Agencies had not yet achieved eight of the action items. Officials reported
                             that agencies did not complete two items and did not realize they had
                             made the commitments for two other items. For example, the Partnership
                             Agenda stated that HUD would fund a job training demonstration project in
                             a low-income community, but brownfield managers stated that they did
                             not meet the commitment because they were unaware that it had been
                             made. Agencies dropped the remaining four action items because they
                             were not feasible or the agencies lacked adequate funding. For example,
                             Agriculture did not complete its studies of the economic impacts of
                             revitalizing brownfields because it did not receive funding for this activity.
                             Also, EPA did not issue guidance to its regions on the process to enter into

                              The Partnership Agenda included 99 nonfinancial action items for more than 20 federal agencies, in
                             addition to the planned financial investment discussed earlier in this report. The 10 agencies in our
                             review were responsible for 71 of these items.

                             Page 12                                               GAO/RCED-99-86 Environmental Protection

                       memorandums of agreement with states regarding their voluntary cleanup
                       programs because of negative comments regarding the guidance from key
                       stakeholders, including the states.

                       EPA recently hired a contractor to take an accounting of the more than 100
                       action items in the Partnership Agenda for all 20 agencies involved. EPA is
                       asking the agencies to report which action items they achieved, which
                       they did not achieve, why they did not achieve them, how the actions
                       enhanced support for redeveloping brownfields, and what specific
                       examples of this they could provide. EPA expects a final report this

Most Agencies Cannot   The Partnership’s expected economic outcomes of new jobs, more private
Demonstrate Whether    investment, and protected greenfields were estimates of potential
Expected Economic      long-term benefits, generated from economic models, that might result
                       from the federal support for redeveloping brownfields. They were not
Outcomes Will Be       goals that the agencies could measure and achieve within the 2-year period
Achieved               of the Partnership initiative. For example, HUD brownfield managers noted
                       that it would take 3 to 5 years after construction is complete at a site
                       before all anticipated jobs are created. Similarly, EDA brownfield managers
                       stated that it may take up to 10 years beyond the completion of a project
                       funded under its grant programs for a community to realize the full
                       economic benefits from the project. While EPA brownfield managers stated
                       that the strategy of the Partnership Agenda was to achieve these long-term
                       outcomes through the action items, there was no documented strategy
                       that showed how all of these individual action items, such as distributing
                       information or providing technical support, were linked in a way that
                       would result in these economic benefits.

                       Also, most federal agencies generally do not have the comprehensive data
                       necessary to determine the extent to which the economic benefits will be
                       achieved, according to the EPA managers. For example, communities
                       applying to EPA for grants to assess the contamination at a site may include
                       an estimate of the number of jobs they expect to generate if they
                       subsequently clean up and redevelop it or the amount of private sector
                       funds they will leverage, and EPA has been compiling these voluntary
                       estimates; however, EPA does not require recipients to submit such data
                       and cannot verify the accuracy of these estimates. HUD will be able to track
                       the number of jobs created at those brownfield sites addressed through its
                       BEDI grants. HUD also tracks the number of jobs created under its
                       Community Development Block Grant program. Recipients provide these

                       Page 13                                 GAO/RCED-99-86 Environmental Protection

                  data in their annual reports to HUD on their use of the grant funds. HUD can
                  determine which of these jobs were created in communities with low and
                  moderate income but cannot determine which of these jobs were
                  specifically created at brownfields or as a result of the Partnership
                  initiative. EDA grant recipients, beginning with fiscal year 1997 grants, are
                  required to report on the number of permanent jobs created or retained
                  and the private sector dollars invested as a result of brownfield projects
                  that EDA funded. The EPA brownfield managers said that they planned to
                  ask agencies to provide whatever data they have available on the
                  economic benefits achieved through their grant programs and compile this
                  information as an indicator of the success of the Partnership initiative.

                  We provided copies of a draft of this report to EPA, HUD, and EDA for review
Agency Comments   and comment, since they are the primary agencies involved in federal
                  brownfield efforts. We also provided portions of the draft that pertained to
                  the remaining Partnership agencies in our review to them for their
                  comment. The agencies generally agreed that the report accurately
                  describes their brownfield activities. Representatives from EPA, including
                  the Director of the Outreach and Special Projects Staff, the organizational
                  unit that manages all of EPA’s brownfield activities, clarified the goals of
                  the Partnership Agenda and the extent to which agencies can track
                  economic benefits, specific to brownfields, that were generated as a result
                  of the Partnership. We revised the report to more clearly lay out the goals
                  of the Partnership and clarified that the three agencies’ ability to track jobs
                  and other economic benefits generated specifically from their brownfield
                  funding varies. HUD brownfield managers, including the Director of the
                  Community Development Block Grant program, the primary program HUD
                  uses to fund brownfield-related activities, pointed out that the agency was
                  not expected to be able to report an exact amount of block grant funds
                  obligated specifically for brownfields because this program does not have
                  such a separate tracking category for this purpose; we revised the report
                  to include this point. In addition, the agency clarified the extent to which it
                  tracks the number of jobs created as a result of its grant programs. We
                  revised the report to explain that HUD can track jobs created at brownfield
                  redevelopment sites under its BEDI grant program but not under its block
                  grant program. Finally, EDA brownfield managers, including the Assistant
                  Secretary for Economic Development, provided a more detailed
                  description of the types of brownfield-related activities the agency funds
                  and reported that communities may not fully realize the economic benefits
                  from funded activities for up to 10 years after construction of a project is
                  complete. We included this expanded description of brownfield activities

                  Page 14                                  GAO/RCED-99-86 Environmental Protection

in the report and also revised the report to clarify that economic benefits
from EDA grants would accrue over the long term.

As arranged with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 14 days from the
date of this letter. At that time, we will send copies of this report to
Senator Max Baucus, Senator Christopher S. Bond, Senator John H.
Chafee, Senator Frank R. Lautenberg, Senator Barbara A. Mikulski,
Senator Robert C. Smith, Representative Sherwood Boehlert,
Representative Robert Borski, Representative John D. Dingell,
Representative Alan B. Mollohan, Representative James L. Oberstar,
Representative Michael G. Oxley, Representative Bud Shuster,
Representative Edolphus Towns, and Representative James T. Walsh in
their capacities as Chair or Ranking Minority Member of Senate and House
Committees and Subcommittees. We will also send copies of this report to
the Honorable William H. Daley, Secretary of Commerce; the Honorable
Carole Browner, Administrator of EPA; the Honorable Andrew Cuomo,
Secretary of HUD; and the Honorable Jacob Lew, Director of the Office of
Management and Budget. Copies will also be made available to others on
request. If you would like additional information on this report, please call
me at (202) 512-6111.

Sincerely yours,

Peter F. Guerrero
Director, Environmental
   Protection Issues

Page 15                                  GAO/RCED-99-86 Environmental Protection

Letter                                                                                           1

Appendix I                                                                                      18
Scope and
Appendix II                                                                                     20
Major Contributors to
This Report
Table                   Table 1: A Comparison of Agencies’ Planned Investment in the             5
                         Partnership Agenda and Obligations and Loan Guarantees for
                         Brownfields During Fiscal Years 1997 and 1998


                        DOT       Department of Transporation
                        EDA       Economic Development Administration
                        EPA       Environmental Protection Agency
                        GSA       General Services Admnistration
                        HUD       Housing and Urban Development

                        Page 16                             GAO/RCED-99-86 Environmental Protection
Page 17   GAO/RCED-99-86 Environmental Protection
Appendix I

Scope and Methodology

             To respond to our first and second objectives—to compare federal
             agencies’ planned financial investment for brownfields, as stated in the
             Partnership Agenda, to their actual obligations for brownfields in fiscal
             years 1997 and 1998, and to describe the purposes of these obligations—we
             used a structured data collection instrument to request and then review
             the fiscal year 1997 and 1998 brownfield-related obligations and activities
             of the following agencies: (1) the departments of Energy, Health and
             Human Services, Housing and Urban Development, and Transportation,
             (2) the Economic Development, the National Oceanic and Atmospheric,
             and the General Services administrations, and (3) the Environmental
             Protection Agency. The stated financial commitments pledged by the
             administration to the Partnership for these eight agencies made up the
             total $300 million federal investment as well as $165 million in loan
             guarantees. We also reviewed the fiscal years 1997 and 1998 obligations for
             the Department of Agriculture and the U.S. Army Corps of Engineers.
             While these two agencies did not have an amount of planned financial
             investment included in the Partnership Agenda, they did have a number of
             nonfinancial action items to accomplish. We determined that in
             implementing these actions, both agencies could have obligated funds for
             brownfields, so we included them in our review. We interviewed those
             managers responsible for brownfield-related activities in these 10 agencies
             to confirm that they agreed with the proposed financial assistance as
             stated in the Partnership Agenda for them. We discussed the extent to
             which the agencies achieved the planned spending, and we obtained
             corroborating documentation where available. We also discussed with
             them the primary reasons why they were not able to obligate funds equal
             to the planned amounts in the agenda.

             To respond to our third objective—to determine the extent to which
             agencies met the Partnership’s goals and objectives—we used a structured
             survey to obtain the brownfield managers’ perspectives on these issues.
             We confirmed with the managers their agency’s interpretation of the
             Partnership’s goals and objectives as stated in the May 1997
             announcement and determined the extent to which the agencies adopted
             these or other goals. We next asked them to demonstrate the extent to
             which they met these goals and to provide documentation where possible.
             Furthermore, we discussed the primary reasons for any unmet goals. We
             also selected 2 of the 16 brownfield showcase communities to review,
             ones in Salt Lake City, Utah, and Dallas, Texas. We chose these two
             because they were among the first communities selected for this pilot and
             therefore had the longest experience with it. We used a structured survey
             to obtain community officials’ views on the benefits and limitations of the

             Page 18                                GAO/RCED-99-86 Environmental Protection
Appendix I
Scope and Methodology

federal agencies’ approach to providing them brownfield assistance under
the pilot and on any ways in which the federal government could improve
this support.

Finally, we also met with representatives of several professional
associations that have responsibility for brownfield issues. We selected the
following associations because they represent community interests and
have been most active in the area of brownfields: the U.S. Conference of
Mayors, the National Association of Counties, the Association of State and
Territorial Solid Waste Management Officials, and the National
Association of Local Government Environmental Professionals. We
discussed with them their understanding of the Partnership initiative and
overall federal involvement in brownfields, the benefits and limitations
they observed from this involvement, and ways in which the federal
government could improve its support for redeveloping brownfields. We
also obtained and reviewed the results of any studies they had done on the
issue of brownfields. We conducted our work from June 1998 through
March 1999 in accordance with generally accepted government auditing

Page 19                                 GAO/RCED-99-86 Environmental Protection
Appendix II

Major Contributors to This Report

               Eileen Larence, Assistant Director
               DeAndrea Michelle Leach, Evaluator-in-Charge
               John Johnson, Senior Evaluator

(160452)       Page 20                              GAO/RCED-99-86 Environmental Protection
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