April 14, 2008

CanBUILD 2008

Hamilton consultant shares knowledge gained during brownfield redevelopment projects

SAUL CHERNOS

correspondent

Developers facing challenging brownfield projects should factor extra time into their plans, manage their cash flow with care, and work closely with municipalities.

That’s advice from Carolynn Reid, business development consultant with the City of Hamilton’s economic development department.

In a presentation to CanBUILD 2008 in Toronto this week, Reid recounted how a redevelopment of a five-acre waterfront brownfield in Hamilton is coming to fruition after seven years of planning and preparation. The initial plan to build townhouse and condominium units and a four-storey apartment building began in 2001.

“They saw an opportunity at a time when we didn’t want to touch brownfields,” Reid said, describing the Lake Ontario beachfront strip as located in a relatively low-income, mostly residential neighbourhood.

The site contained three city-owned parcels of vacant land, which the developer eventually acquired, yet there was one problem — a gas station had closed in the early 1990s, and tests revealed high levels of petroleum hydrocarbons remained in the sandy soil.

“They discovered that the gas station never cleaned the soil, and the contamination migrated offsite thanks to a high water table,” Reid said.

Initial estimates for traditional dig-and-dump remediation came in at well over $1 million, but the developer opted for on-site bioremediation, which cost $450,000, and decided with the city to enter into a partnership agreement that saw the city sell its three parcels to the developer at market rate — just under $200,000 — as if the properties were clean.

The deal was conditional on a record of site condition, and the city was indemnified of any future liability. The city agreed to pay $175,000 towards the bioremediation, and the developer also accessed city incentive programs.

“You can imagine our solicitors going through this exercise,” Reid said, explaining that the cleanup had its share of challenges and delays. A large gas tank was found buried underneath a concrete pumping island, the developer needed to obtain zoning approvals to permit medium-density residential use, and concerned neighbours raised objections.

“The opposition cost the developer eight months,” Reid said, adding that the developer participated in several community meetings, effectively losing a full construction season in the process.

Developers in situations like this should double their time and manage their cash flow in order to cope with possible delays, Reid said, adding that a municipal brownfield coordinator who can liaise between developers, neighbours and city staff is helpful.

“It’s an ongoing education not only for constituents but also for council and staff who have to help you champion this initiative.”

The city, meanwhile, benefits from a brownfield project such as this through increased tax revenues and economic development as well as cleaner land.

“We have a revitalized spot on the waterfront that will be a catalyst for future change. We can always use that,” Reid said.

She added that Hamilton might carry an industrial image, but the city is experiencing a significant transition, with 3,000 acres of parkland and 157 kilometres of natural trails.

“We have more than 60 waterfalls,” Reid said. “Companies like Dofasco and Stelco have carried the city if not the province. It’s a heritage that’s important to us, but the world is changing.”

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