Brownfields: Bigger Is Better

"Cleanup takes cash: Big projects like the [Sacramento] railyards offer a potentially huge payday, which makes them attractive redevelopment targets and often draws public financial support. The majority of brownfields, though, are in the one- to 10-acre range, where it may be tough to earn a return on the cleanup costs... Those who have minor sites with major issues are more likely to take a 'don't ask, don't tell' stance..." Successful brownfield projects all had similar elements: (a) Remediation costs averaged 10 percent of total project cost; (b) Public subsidies averaged 20 percent of project cost; (c) Private financing was difficult to get; (d) No private remediation loans; (e) Loan-to-value ratio was generally 0.5-0.6; (f) All deals had indemnification or loan guarantee, or both.

Thanks to Alex Lantsberg