U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

25–888 PDF 2006

THE CHALLENGE OF BROWNFIELDS: WHAT ARE

THE PROBLEMS AND SOLUTIONS IN REDEVELOPING PENNSYLVANIA’S LEHIGH VALLEY COMMUNITIES?

HEARING

BEFORE THE

SUBCOMMITTEE ON FEDERALISM

AND THE CENSUS

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

OCTOBER 25, 2005

Serial No. 109–117

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

CHARLES W. DENT, Pennsylvania

VIRGINIA FOXX, North Carolina

JEAN SCHMIDT, Ohio

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. DUTCH RUPPERSBERGER, Maryland

BRIAN HIGGINS, New York

ELEANOR HOLMES NORTON, District of

Columbia

———

BERNARD SANDERS, Vermont

(Independent)

MELISSA WOJCIAK, Staff Director

DAVID MARIN, Deputy Staff Director/Communications Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON FEDERALISM AND THE CENSUS

MICHAEL R. TURNER, Ohio, Chairman

CHARLES W. DENT, Pennsylvania

CHRISTOPHER SHAYS, Connecticut

VIRGINIA FOXX, North Carolina

——— ———

WM. LACY CLAY, Missouri

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

JOHN CUADERES, Staff Director

SHANNON WEINBERG, Counsel

JULIANA FRENCH, Clerk

(III)

C O N T E N T S

Page

Hearing held on October 25, 2005 .......................................................................... 1

Statement of:

Ferdas, Abraham, Director, Hazardous Site Cleanup Division, U.S. Environmental Protection Agency, Region III; Eugene Depasquale, deputy

secretary for community revitalization and local government support,

Pennsylvania Department of Protection; James M. Seif, vice president,

corporate relations, PPL Corp.; Paul Schoff, esq., Feinberg and Schoff,

LLP, CEO of Brownfield Realty, Ltd.; and Robert Colangelo, executive

director, National Brownfield Association .................................................. 30

Colangelo, Robert ...................................................................................... 72

Depasquale, Eugene .................................................................................. 42

Ferdas, Abraham ....................................................................................... 30

Seif, James M. ........................................................................................... 48

Schoff, Paul ................................................................................................ 57

Michalerya, William, associate vice president, government relations, Lehigh University ............................................................................................. 1

Wrobel, Kerry, president, Lehigh Valley Industrial Park, Inc.; Chad Paul,

Jr., chief executive officer, Ben Franklin Technology Partners; Ray

Suhocki, president and CEO, Lehigh Valley Economic Development

Corp.; and Stephen Donches, president, National Museum of Industrial

History ........................................................................................................... 86

Donches, Stephen ...................................................................................... 116

Paul, Chad, Jr. ........................................................................................... 93

Suhocki, Ray .............................................................................................. 109

Wrobel, Kerry ............................................................................................ 86

Letters, statements, etc., submitted for the record by:

Colangelo, Robert, executive director, National Brownfield Association,

prepared statement of ................................................................................... 74

Dent, Hon. Charles W., a Representative in Congress from the State

of Pennsylvania, prepared statement of ...................................................... 14

Depasquale, Eugene, deputy secretary for community revitalization and

local government support, Pennsylvania Department of Protection, prepared statement of ........................................................................................ 44

Donches, Stephen, president, National Museum of Industrial History,

prepared statement of ................................................................................... 118

Ferdas, Abraham, Director, Hazardous Site Cleanup Division, U.S. Environmental Protection Agency, Region III, prepared statement of ............ 32

Michalerya, William, associate vice president, government relations, Lehigh University, prepared statement of ...................................................... 3

Paul, Chad, Jr., chief executive officer, Ben Franklin Technology Partners, prepared statement of ......................................................................... 95

Schoff, Paul, esq., Feinberg and Schoff, LLP, CEO of Brownfield Realty,

Ltd., prepared statement of ......................................................................... 60

Seif, James M., vice president, corporate relations, PPL Corp., prepared

statement of ................................................................................................... 50

Suhocki, Ray, president and CEO, Lehigh Valley Economic Development

Corp., prepared statement of ....................................................................... 11

Turner, Hon. Michael R., a Representative in Congress from the State

of Ohio, prepared statement of .................................................................... 7

Wrobel, Kerry, president, Lehigh Valley Industrial Park, Inc., prepared

statement of ................................................................................................... 89

(1)

THE CHALLENGE OF BROWNFIELDS: WHAT

ARE THE PROBLEMS AND SOLUTIONS IN

REDEVELOPING PENNSYLVANIA’S LEHIGH

VALLEY COMMUNITIES?

TUESDAY, OCTOBER 25, 2005

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON FEDERALISM AND THE CENSUS,

COMMITTEE ON GOVERNMENT REFORM,

Bethlehem, PA.

The subcommittee met, pursuant to notice, at 10 a.m., in rooms

291, 292, 293 of Lehigh University Rauch Business Center, Hon.

Michael Turner (chairman of the subcommittee) presiding.

Members present: Representatives Dent and English.

Staff present: Shannon Weinberg, counsel; Juliana French, clerk;

and Erin Maguire, Rep. Dent/LC.

Mr. TURNER. Good morning. We will call to order the hearing of

the Government Reform Subcommittee on Federalism and the Census, and this hearing is entitled ‘‘The Challenge of Brownfields:

What are the Problems and Solutions in Redeveloping Pennsylvania’s Lehigh Valley Communities?’’ We have this morning William

Michalerya to welcome us to Lehigh University and we want to

thank him and Lehigh University for hosting us today.

STATEMENT OF WILLIAM MICHALERYA

Mr. MICHALERYA. Thank you very much. Congressman Dent,

Congressman English and Chairman Turner: On behalf of President Greg Farrington and Lehigh University, I would like to welcome you to Lehigh University, Bethlehem and the Lehigh Valley.

You could hopefully pick up on the university’s emphasis on partnerships, since it was mandatory to welcome you to the university,

the city and the region, and for Congressman Turner from Ohio, to

the Commonwealth.

At Lehigh, we consider ourselves a ‘‘medium-sized’’ university

with approximately 4,700 undergraduate, 2,000 graduate students,

430 faculty members and 1,200 staff. Our campus is approximately

1,600 acres. Our annual operating budget is approximately $330

million, with research expenditures of approximately $45 million.

Lehigh University was founded and initially grew to support the

railroad, steel and manufacturing industries. We are now playing

a key role in developing the ‘‘knowledge economy’’ and transforming the economic landscape in the region and the Nation.

We have another strong commitment in our research and education mission and that is industry partnerships and economic deVerDate 11-MAY-2000 12:55 Apr 24, 2006 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 D:\DOCS\25888.TXT HGOVREF1 PsN: HGOVREF1
2

velopment. On our campus we host the Ben Franklin Technology

Partners, the Manufacturers Resource Center and, in this building,

the Small Business Development Center.

In addition, we have a tradition of developing major research

centers, including the Center for Advanced Technology for Large

Structural Systems, the Center for Optical Technologies and the

Center for Advanced Materials and Nanotechnology. These centers

are anchored by a strong industry partnership program. They also

have assisted with the missions of many Federal agencies, including the National Science Foundation, the Department of Defense,

Department of Transportation, and NASA.

We are also very committed to the revitalization of the former

Bethlehem Steel property and the south side of Bethlehem, so your

hearings on ‘‘brownfield sites’’ is especially appropriate to us today.

Finally, I just want to acknowledge the hard work and expertise

of your staffs, especially Erin Maguire, Juliana French, and Shannon Weinberg. It was a pleasure to work with them to organize

this hearing.

Again, welcome to Lehigh University and we are proud to help

with the important work of this committee. Thank you.

[The prepared statement of Mr. Michalerya follows:]

3

4

5

Mr. TURNER. Thank you so much. Before we begin, I want to recognize the Members that we have on the panel today. With us we

have Representative Phil English, who I know that you all know.

He is from Erie, PA. We are very honored to have him here. He

is a leader in the House on the Ways and Means Committee. He

is also a member of the Speaker’s Saving America’s Cities Working

Group where he has been recognized for his expertise in urban

issues, the Speaker having turned to 24 Members of the House Republican Conference who have experience in local government and

looking to them for ways in which an urban policy can assist in

economic development in urban areas.

Representative English is also a leader in the issues of protecting

our manufacturing base. He was kind enough to come to my district in Dayton, OH for a manufacturers’ forum where we listened

to manufacturers in my community and the challenges that they

face and ways in which they can be assisted, and was the author

and the lead on recent action by the House to encourage the floating of China’s currency that has long been an issue of dispute for

manufacturers with the fear of their undervalued currency providing them an edge in our economy. We are very excited to have him

here today. He is also a cosponsor of my brownfields redevelopment

bill, a tax credit bill, that when you look at these economic development opportunities in brownfields, could provide some Federal

funding in an unprecedented level. We appreciate having you here

today and I will recognize you soon for an opening statement.

And of course, we have Representative Charles Dent. I greatly

appreciate being asked to bring the hearing to your district to look

at the successes that are here. We had an opportunity to tour the

Bethlehem Steel site this morning and what a great incredible opportunity and an example of a private/public partnership, a community that has a plan and is working diligently and has economic

successes. It is great today to get on the record some of the elements that have caused that success, but also to look at the issues

that I know are very close to Mr. Dent’s heart as he works in the

House. He has been recognized because of his leadership in Pennsylvania as Vice Chair of this committee.

It is very unusual for a freshman to be named vice chair to a

subcommittee, but Mr. Dent was named Vice Chair of this subcommittee, which is again Federalism and the Census, looking at

the interrelationship between State, local and Federal Governments, so he brings his expertise in the Pennsylvania government

as we look to the issues of how the Federal Government can work

more effectively for communities.

And with that, I would again like to welcome you all to our subcommittee on Federalism and the Census and this field hearing entitled, ‘‘The Challenge of Brownfields: What are the Problems and

Solutions in Redeveloping Pennsylvania’s Lehigh Valley Communities?’’ This is the fourth in a series of hearings held on the issue

of brownfields and brownfield redevelopment. Our hearings in D.C.

are informative and helpful, but all too often we get the inside-thebeltway view and these field hearings allow us to reach out to the

public and interact with individual communities on a more personal basis and to learn firsthand of their concerns, their suggestions and their successes. We have had great response to this hearVerDate 11-MAY-2000 12:55 Apr 24, 2006 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 D:\DOCS\25888.TXT HGOVREF1 PsN: HGOVREF1
6

ing and I would like to again express my appreciation to the city

of Bethlehem and to President Gregory Farrington of Lehigh University and his staff for sharing these facilities and for their accommodating efforts.

We have a great number of witnesses present and we are here

to listen to you. In the interest of time, I will submit my complete

comments for the record, a copy of which is available at the press

table.

[The prepared statement of Hon. Michael R. Turner follows:]

7

8

9

10

Mr. TURNER. We have two panels of witnesses before us to help

us understand the state of brownfield redevelopment and the impact of the EPA’s Brownfield Program across the Commonwealth of

Pennsylvania. We also hope to hear your ideas for improving or

complementing the EPA Brownfields Program in order to encourage more aggressive redevelopment. And as I identify the members

of the two panels, if I should slaughter anyone’s name, please reintroduce yourself to us as you come to be recognized.

On our first panel we have Abraham Ferdas, Director of the Hazardous Site Cleanup Division with the U.S. Environmental Protection Agency’s Region III office. We have Eugene DePasquale.

Mr. DEPASQUALE. Very good.

Mr. TURNER. They wrote it phonetically, that helps. Deputy Secretary for Community Revitalization and Local Support with the

Pennsylvania DEP. Jim Seif, vice president of corporate relations

with PPL Corp. Mr. Seif was also Secretary of the Pennsylvania

DEP under Governor Tom Ridge. Paul Schoff, Feinberg and Schoff,

LLP and Robert Colangelo is going to be on our second panel. He

is currently stuck in traffic and he is the executive director of the

National Brownfield Association.

Our second panel of witnesses consists of representatives from

the Pennsylvania State core community. And we have Kerry

Wrobel, President of the Lehigh Valley Industrial Park. Chad Paul,

Chief Executive Officer of the Ben Franklin Technology Partners.

Ray Suhocki, president and CEO of Lehigh Valley Economic Development Corp. And Stephen Donches, president of the National Museum of Industrial History.

I look forward to hearing all of your testimony. In addition to

your testimony, we will have a series of questions. Everyone will

be given 5 minutes for their presentation. I do want to tell you that

we are going to attempt to end the hearing today by 12:30. We all

have to return back to Washington today for votes in hearings and

so we are going to try to catch an earlier train. And with that, I

would like to recognize the vice chair of the subcommittee, the Representative for the 15th District of Pennsylvania, for his opening

comments and remarks.

Mr. DENT. Thank you, Chairman Turner, for holding this important hearing and thank you, too, Congressman English for coming

from the other end of the State to be with us today. I truly appreciate that. Thanks again to Bill Michalerya, Greg Farrington and

the entire staff at Lehigh University for providing this wonderful

facility for this hearing. This proceeding does provide us with a

wonderful opportunity to address the issues surrounding

brownfields clean-up as they exist around the country and more

specifically, as we have to confront them within the Commonwealth

of Pennsylvania.

Brownfields are both an important environmental and economic

issue. How we decide to clean up and reuse brownfields across the

country will be an important question to resolve as we go about the

task of promoting industrial redevelopment, especially in those

areas that were once dominated by traditional manufacturing concern, such as automaking, steel fabricating and ship building.

These parcels of land typically contain hazardous substances, pollutants or contaminants and that is where the problem lies. The

11

presence of these foreign substances sometimes makes it more costeffective to abandon the land rather than pay the bill to have the

property properly cleaned up and remediated. There are many disincentives to remediating a contaminated property, the first and

foremost of which is price. To this effect, sometimes the cost of

clean-up may be more expensive than the value of the land itself.

Here on the south side of Bethlehem, right here in Pennsylvania,

lies one of the largest brownfield sites in the country. It is the

former manufacturing facility of the Bethlehem Steel Corp. This

old plant contains railroad tracks, abandoned mills and left-over

plant equipment on some 1,800 acres of land that run along the

banks of the Lehigh River. Steelmaking began here in 1857 and expanded greatly during the early part of the 20th century. By the

1950’s the company had become the Nation’s second largest steel

producer and much of that work was done on the Bethlehem site.

In fact, I was at a meeting last week of the Winston Churchill

Society and it was brought up about Winston Churchill’s deal with

Charles Schwab in front of a very distinguished Washington group

about the history of Winston Churchill and Charles Schwab and

Bethlehem playing an important role in that discussion, just as a

parenthetical. This area also played a vital role in the national defense. During the Second World War the steel that formed the

basis of the 16-inch armor plating on battleships such as the Missouri and the Wisconsin was rolled at this site. For many years, it

was the economic backbone of the Lehigh Valley.

By the 1990’s, however, Bethlehem Steel Corp. found that it

could no longer effectively compete against foreign steel products

and in 1995 the plant closed its doors, leaving 375 tons of soil contaminated with arsenic and lead at the site. During the last years

of its existence, the company operated the plant on what has been

classified as a brownfield site under guidelines set up by the Federal Resource Conservation and Recovery Act [RCRA]. This act permitted operation of the plant only if the company could demonstrate that it was capable of managing and cleaning up the hazardous wastes that accompany steel production.

While the steel company is no longer with us, the environmental

clean-up of this site has proceeded and the future of this piece of

property appears bright. Local developers, several of whom will be

testifying shortly, have put forth plans to build a conference center,

technology center and retail shops. Further, there is a move afoot

to commemorate the actions of the great employees who worked

here by establishing the Smithsonian Institution’s National Museum of Industrial History on the site.

These great accomplishments are the result of the Environmental Protection Agency and the Pennsylvania Department of Environmental Protection working together to establish State and

Federal RCRA clean-up requirements with one plan. Pennsylvania

was the first State to sign an MOA, a Memorandum of Agreement,

with the EPA that included three Federal program areas: the Comprehensive Environmental Response, Compensation and Liability

Act; the Resource Conservation and Recovery Act; and the Toxic

Substance Control Act.

I think this type of State and Federal partnership should be encouraged throughout the country, an alliance that ideally would

12

bring together not only the EPA and a particular State’s environmental agency, but other Federal agencies as well, all with a commitment to redevelopment.

Pennsylvania’s Land Recycling Program has had an astounding

turnaround effect on brownfields that has not only promoted environmental protections, but also created economic opportunities for

thousands of families. It has also rejuvenated the tax bases of dozens of communities across Pennsylvania. I applaud the fact that

Pennsylvania’s Land Recycling Program has transformed abandoned, inactive pieces of land into places of economic revitalization.

Over 30,000 jobs have been created or retained as a result of the

many business opportunities engendered by the recovery of

brownfields in Pennsylvania.

It is clear that we must continue to work at cleaning up and redeveloping America’s brownfield sites. This is imperative in order

to encourage job growth, promote the development of transportation and infrastructure on these inactive urban industrial areas

while at the same time saving greenfields. While many strides

have been made, there is still much to be done.

That said, it is important to acknowledge future legislative proposals that will move us toward our goal of complete brownfields

remediation. Last Congress, Chairman Turner introduced the

Brownfields Revitalization Act of 2004, H.R. 4480, which proposed

a tax credit of up to 50 percent for qualified remediation expenses

performed at brownfield sites in certain poverty-rated areas. Chairman Turner expects to reintroduce a similar piece of legislation

this Congress. This bill will be similar to its predecessor, but it will

also more explicitly define the roles and obligations of some of the

major governmental entities or parties involved, including the

State’s development agency and the environmental protection organization.

It will also explicitly set out the requirements that need to be fulfilled in order for a developer to enjoy a tax credit in return for remediating a brownfields site. In addition, my colleague and fellow

member of the Pennsylvania delegation, Representative Melissa

Hart, has proposed the Pennsylvania, excuse me, the Brownfield

Redevelopment Assistance Act, H.R. 1237. This bill would provide

grant moneys earmarked through the Department of Commerce for

promotion of economic projects on brownfields’ sites. Specifically,

the goal of this legislation is to provide funding that would target

those projects that have the potential to both restore employment

and bring new income and private investment to distressed communities.

Congresswoman Hart has also proposed the Financing of

Brownfields Activities through Government Bonds Act, H.R. 3451,

which would amend the Internal Revenue Code to allow the use of

tax-exempt redevelopment bonds to finance the costs of environmental remediation at brownfield sites. Permitting the use of these

bonds for the purpose of clean-up will provide much needed capital

that will not only make for a healthier environment but will also

promote needed economic redevelopment in areas that would clearly benefit from the same.

Again, thank you, Chairman Turner, for acknowledging the importance of this issue and I look forward to hearing the testimony

13

of our knowledgeable panelists, all of whom have a distinguished

background, either at the State or National level or, later on, people at the local level who are just as experienced. So again, thank

you, Chairman Turner and Mr. English for your presence.

[The prepared statement of Hon. Charles W. Dent follows:]

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

Mr. TURNER. Thank you. And I would like to recognize the Honorable Phil English.

Mr. ENGLISH. Mr. Chairman, I would like to submit my statement for the record. I am very enthusiastic to hear the testimony

today of these two panels, which are truly extraordinary, but having submitted my formal statement for the record, I would like to

thank you and Mr. Dent for bringing your subcommittee here to

Lehigh and allowing me to sit in on it. The fact finding that you

are doing today is particularly significant for our National policy.

It is important, I think, that you are coming to Pennsylvania because, as Mr. Seif will attest, Pennsylvania has a long track record

of programmatic commitments to economic development that I

think can give us a perspective that would be useful for our National efforts to strengthen communities. At the same time, coming

to this community, I think, is particularly important because I

think looking at this from a Pennsylvania perspective, this community has done an extraordinary job making maximum use of its industrial space and reclaiming old sites for productive use.

The tour that we had this morning, for me, was a real eye opener. And finally, I would like to say that I think you and I agree

on this—Jane Jacobs was right. I think the health of our National

economy is ultimately tied to the health of our urban communities

and one of the pillars of our effort to create opportunities in urban

communities has to be an aggressive brownfields policy. I want to

congratulate both of you, as a colleague, for the extraordinary

groundbreaking effort you are doing to focus Congress on this issue

and I just want to say we on the Ways and Means Committee, Representative Hart and myself, representing Pennsylvania, are

strongly committed to joining with you on this effort. So I thank

you for the opportunity to be part of this proceeding today.

Mr. TURNER. Thank you. We will now start with the witnesses.

Each witness has kindly prepared written testimony which will be

included in the record of this hearing. Each witness has also prepared an oral statement which summarizes their written testimony. Witnesses will notice that there is a timer, a light on the

witness table. The green light indicates that you should begin your

remarks and the red light indicates the time has expired. In order

to be sensitive to everyone’s time schedule, we ask that witnesses

cooperate with us in adhering to the 5-minute time allowance to

their oral presentation. We will follow that with a question and answer period. It is the policy of this committee that all witnesses be

sworn in before they testify, so we will now swear in panel one of

the witnesses.

[Witnesses sworn]

Mr. TURNER. Please let the record show that all witnesses have

responded in the affirmative and we will begin with you, Mr.

Ferdas.

30

STATEMENTS OF ABRAHAM FERDAS, DIRECTOR, HAZARDOUS

SITE CLEANUP DIVISIONS, U.S. ENVIRONMENTAL PROTECTION AGENCY, REGION III; EUGENE DEPASQUALE, DEPUTY

SECRETARY FOR COMMUNITY REVITALIZATION AND LOCAL

GOVERNMENT SUPPORT, PENNSYLVANIA DEPARTMENT OF

PROTECTION; JAMES M. SEIF, VICE PRESIDENT, CORPORATE RELATIONS, PPL CORP.; PAUL SCHOFF, ESQ.,

FEINBERG AND SCHOFF, LLP, CEO OF BROWNFIELD REALTY, LTD.; AND ROBERT COLANGELO, EXECUTIVE DIRECTOR,

NATIONAL BROWNFIELD ASSOCIATION

STATEMENT OF ABRAHAM FERDAS

Mr. FERDAS. Good morning, Mr. Chairman, and members of the

subcommittee. My name is Abraham Ferdas. The chairman pronounced it right. I am Director of the Environmental Protection

Hazardous Site Cleanup Division in Region 3 and I am responsible

for all brownfield, superfund, oil line and emergency response.

More than a decade ago, EPA identified a large problem. We saw

local communities who were having a hard time dealing with properties that were contaminated or potentially contaminated by hazardous wastes. The private and public sector were very hesitant to

get involved in those sites which are now known as brownfields. So

10 years ago, EPA began providing seed money through grants to

local communities to identify and assess contamination of

brownfields properties. Over the years EPA added grants for revolving loan funds to clean up properties. The agency also provided

job training grants to promote employment opportunities in

brownfields communities.

Since EPA’s earliest efforts, States, tribes, local governments and

nonprofit organizations are now focusing on brownfields cleanup

and development. The landmark 2002 brownfields legislation

brought into EPA’s program and provided liability protection to

promote private sector participation in brownfields cleanup and development. Under the new law, EPA now awards direct cleanup

grants to public sector and nonprofit property owners. The 2002

law also broadened the definition of what could be considered a

brownfields property. EPA can now award its brownfields grants to

petroleum contaminated properties, mine-scarred lands and sites

contaminated by controlled substances.

The National brownfields effort has produced successful results.

Since EPA awarded its first grant, EPA and its grants recipients

have conducted more than 7,400 assessments. Brownfield grantees

have leveraged $7.2 billion in cleanup and redevelopment money,

creating more than 33,000 jobs. Brownfields have proven to be a

good public investment. For every public dollar spent in

brownfields leveraging, for every public dollar the leverage is $2.50

in private investment. Every acre of reused brownfields save 4.5

acres of green space. The brownfields initiative has become a National effort that links environmental protection and economic development with the ultimate goal of breathing new life in local

communities.

The Commonwealth of Pennsylvania and some 61 communities

and nonprofits so far have received $19 million in EPA brownfields

31

funding. This represents one of the Nation’s largest concentration

of EPA brownfield resources.

Before the 2002 brownfields law, Pennsylvania was one of the

first to receive an EPA brownfield grant to address contamination

from mine-scarred lands. This paved the way to include the sites

in the National Brownfields Program. Since passage of the

Brownfields Law, all the Region 3 communities have received funding to address mine-scarred land projects. This includes the recent

award of a second EPA cleanup grant to a nonprofit organization,

Earth Conservancy, to clean up mine-scarred sites in the Nanticoke

area.

Last year EPA and Pennsylvania Department of Environmental

Protection signed the Nation’s first One-Cleanup Memorandum

Agreement, as Congressman Dent described better than me. This

agreement provides a one-stop shop approach where contaminated

communities, builders, lenders and businesses can get what they

need from the coordination of an EPA-DEP program to ensure they

are satisfying the State requirements in ways that are consistent

with EPA cleanup programs. And that is very important. I mean,

we want to be one-shop. The developer has to only see Pennsylvania. It doesn’t have to see EPA, if we can help it.

So in conclusion, EPA Brownfields Program provides valuable

tools needed to protect and clean our environment, reduce neighborhood blight, generate tax revenues and create jobs. Our continued success will require even more interaction and teamwork in all

levels of government, the private sector and non-government organizations. EPA is committed to reach out to our partners and the

administration is committed to continue to strong funding for the

program. Thank you very much.

[The prepared statement of Mr. Ferdas follows:]

32

33

34

35

36

37

38

39

40

41

42

Mr. TURNER. Mr. DePasquale.

STATEMENT OF EUGENE DEPASQUALE

Mr. DEPASQUALE. DePasquale. Thank you, Mr. Chairman. First

of all, I want to thank you for highlighting this issue for

brownfields. I went to college at the College of Western Ohio, which

is about an hour to the east of Dayton and I am sure one of the

reasons why you are highlighting this is Dayton, Wooster and cities

all across Pennsylvania, if we are truly going to get our cities moving forward, brownfields has to be considered a critical piece of

that, of the tools to make that happen. Congressman English and

Congressman Dent, thank you for being here, as well. Special

thank you to Congressman Dent for when we passed the Land Recycling Program in Pennsylvania, the Congressman was then a

member of the General Assembly and was a critical leader in that

effort and also Congressman English, from the local effort in Erie

for the International Paper site and the Erie Gunite site, those are

critical excellent brownfield projects and we respect all of your

leadership on those issues.

Abe, who preceded me, we have the role that most environmental

regulators are jealous of and that is we get to create jobs and clean

up the environment, sort of one of the few jobs that people get jealous when you are an environmental regulator. And to my left is

Jim Seif. Mr. Seif was the secretary that preceded this administration and the reason why, one of the key reasons why, the grid work

is happening in this district in brownfields is his leadership on the

issue. The Pennsylvania Land Recycling Program is a model for the

Nation and without that, you would literally have thousands of

people that would not have jobs today, you would have hundreds

and thousands of acres that have not been cleaned up and you

would have jobs that would not have been brought into Pennsylvania. Mr. Seif deserves a huge amount of credit for that, so I

thank him for his efforts, as well.

Before we go—or before I go—into recommendations, it might be

good to talk about a little bit of how we got here today. Pennsylvania, prior to 1995, was, because of several brownfields, it would

be the steel mills in this district to where I grew up in Pittsburgh,

you are talking about hundreds and hundreds of acres of sites and

thousands of jobs that were lost and in many ways businesses were

prepared to give up on those sites. Pennsylvania passed through

the first, or Act II of 1995 that Governor Ridge signed into law, the

Land Recycling Program that offered the liability relief and also

the cleanup standards that would be site specific to the sites, depending on what you wanted to use, whether it be housing, which

would have very strict standards, to whether it be a parking lot,

which would have lower standards, without compromising public

health. That bill has helped spearhead the brownfield movement

across the country.

Moving forward, when Governor Rendell took office, one of the

first things he did as Governor, was put together a stimulus package. A critical piece of that stimulus package was a $300 million

investment called Business in Our Sites and that money was used

to help local economic development corporations acquire sites,

mainly brownfields, clean them up and also revitalize the infraVerDate 11-MAY-2000 12:55 Apr 24, 2006 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 D:\DOCS\25888.TXT HGOVREF1 PsN: HGOVREF1
43

structure. That program has been put in place across the State now

and they have now invested close to $200 million in revitalizing old

industrial sites to prepare them to be pad-ready so Pennsylvania

can bring jobs into them.

Another issue that we have done is the Brownfield Action Team

program. The Brownfield Action Team program has been a critical

addition to the Pennsylvania brownfield arsenal. In fact, the Bethlehem site was the first Brownfield Action Team site in Pennsylvania. What we aim to do with the Brownfield Action Team is to

equal the playing field between brownfields and greenfields by

streamlining our permits so that we cut the permitting time in half

and when communities designate a site as a priority site, we move

those sites through the permitting process as fast as the law will

allow.

We also have a Memorandum of Agreement with EPA so that we

become a one-stop shop. Pennsylvania is right now the only State

in the country and while we are happy about that, because it has

given us a competitive advantage, the reality is that we think every

State in the country should at some point have that agreement

with EPA so that we can move projects forward across the country

on brownfields.

What the Federal Government can do—and obviously we have

talked about some legislation that is in before you, whether it be

from the tax credit side or from bonding from Congresswoman

Hart—the big picture is keeping in mind that we have to level the

playing field, so whether it be from the permitting side—maybe

EPA and DEP could look at how we can bring our model of an

MOA to the rest of the country—providing, perhaps, a streamlined

permitting process for priority brownfield districts at the Federal

level, or, also, perhaps some more flexibility on our EPA funding

for the brownfields. I will commend Region 3 because they have

been very cooperative with us on those programs, but we need to

continue to work at ways to equalize that playing field from the

funding side and the permitting side, because if the sites are not,

if people that are investing feel that they are going to have too long

a time of getting their permitting up or the funding will be too difficult to achieve, they will simply not invest in those sites, so we

all have to work together to come to that common ground.

[The prepared statement of Mr. DePasquale follows:]

44

45

46

47

48

Mr. TURNER. Thank you. Mr. Seif.

STATEMENT OF JAMES M. SEIF

Mr. SEIF. Mr. Chairman, welcome to Pennsylvania and Mr.

English, welcome to the Lehigh Valley and Charlie Dent, welcome

home. It is good to have you. I will correct the record at the risk

of not being gracious of the nice things that have been said. It was

Tom Ridge that was responsible for the brownfields program in

Pennsylvania, not Jim Seif.

Mr. DEPASQUALE. But you are sitting to my left.

Mr. SEIF. Tom Ridge was occasionally to my left, as well, but

that is another—let me talk about what, I am going to depart from

my testimony. It has that little anecdote about representing National Cash Register, which was an unfortunate event, where the

adversarial system was used in a totally inappropriate place, which

was to try to solve an environmental problem. That says it all

about Superfund.

Let me talk about what I think a successful recipe for brownfield

statutes would be. First, you have to start with the recipe itself,

a piece of paper and that piece of paper needs two things. They are

mentioned in the bullets at page three of my testimony. You have

to have a real cleanup, an actual, transparent-to-the-community,

safe cleanup. This is not just paving stuff over and wishing for jobs.

It has to be, the community has to agree to it. The risk standards

have to be set sometimes State by State. I would not favor a Federal approbation of risk standards.

Second, you need a piece of paper from the State or other authority that says you have done what you are supposed to do. That is

what puts the property back in the stream of commerce. It has

been prevented from being there by so many things, the long dissertation I have done about Superfund’s failings as the principle

example. It became legally toxic and people just let it go and that

can’t happen.

The next thing you have to do is clear out the kitchen. There is

some stuff in there that shouldn’t be there. One, you have to administer the laws that are in place that are not toxic waste laws

so that you create no more Superfund sites. To stop creating

brownfields we have to conduct ourselves economically and environmentally the way the public wants us to, whether we are a company or whether we are administering statutes.

And then you have to clean out Superfund. I think that has been

done. I am among, you know, EPA has done a great job, like any

reform center does and I was among the sinners. I was talking

with Abe this morning when we worked together on Superfund. We

did have to chase around a lot of people and with all the dysfunctions in the Superfund statute and the incentives to fight instead

of get the job done, it didn’t work. And I think the Federal Government got off to a wrong start administratively. It also got off to a

start at a time when we didn’t know what the dimensions of the

problem were. There were thousands of these, not 128, which is

what Jimmy Carter once thought. Thousands of them. We also

didn’t have ways to clean up stuff, technologies or money or administrative techniques and they had to be invented and since the

Superfund program used litigation to invent, it took awhile.

49

Looking more positively on what it takes, then you have to have

not just the piece of paper and a clean kitchen, but a lot of stuff,

a lot of ingredients, lots of cooks—lots of people like the second

panel who get it about there is economic opportunity in land, that

it is a commodity and it has value and it is not just something to

stay away from. You have to have new technology and these people

are good at inventing it. I think Mr. Colangelo will talk about his

group which consists of hundreds of people in Pennsylvania, alone,

who have an incentive economically and from the community point

of view to make this thing work. Contrast that to Superfund, who

had hundreds of lawyers whose career depended on making it not

work. And this is a far more important bunch of people in terms

of getting things done.

You would have to have a sensitivity to land use. I think the

sprawl debate has helped prevent some greenfields from being used

and tipped the balance a little bit toward using land in Erie or

Dayton or Bethlehem or Allentown. That has been helpful. You

have to advertise like hell. Frankly, I have used the Henry Ford

analogy. He didn’t make better or more cars than anybody else, but

he sure got out and sold a lot of cars. And people are concerned

about these toxic sites. I think that concern has been considerably

less over the last few years, but you have to do what we have

heard Gene DePasquale talking about: get out and tell people

about it. Use the Business on Our Sites program that Rendell has

used or the Site Finding program that we instituted and just get

out and make it happen, just as you would push any other asset

in a State—good land, close in.

You have to have good quality control. The sites have to be really

cleaned up. You have to have KOZ kinds of items available. You

have to have flexibility. You can put a playground where an old

factory was if you do it right. You have to have a deal where you

can get it wholesale, like our multi-site agreements. You have to

have State variation. Not every State deals with risk the same

way, deals with economic incentives the same way and if the 10th

amendment is as strong as we have recently learned that it is, that

will be a good thing.

And into the mix comes tax policy, for which I commend the committee for looking at. There will be revenue consequences and there

will be difficulties over how do we simplify the code and still do all

these things and I will let Congressman English worry about that

in his other committee. The fact is that it is not only Federal taxes,

but local taxes that are a problem or an opportunity with

brownfields. KOZ has solved, in some respects, the local problem,

Keystone Opportunity Zone, which is a tax-free zone. But more

could be done in those areas. I would be happy to talk about more

war stories or more parts of the recipe if there is interest.

[The prepared statement of Mr. Seif follows:]

50

51

52

53

54

55

56

57

STATEMENT OF PAUL SCHOFF

Mr. SCHOFF. Thank you. My name is Paul Schoff and I know

that I am definitely to the left of Mr. Seif. It is my pleasure to address the members of the Subcommittee on Federalism and the

Census and in particular, I am pleased and privileged that you

would send an invitation to me to talk about brownfields here in

the Commonwealth of Pennsylvania. My company, Brownfield Realty, LTD handled the first brownfield transaction under Pennsylvania’s then new voluntary cleanup program [VCP], the Land

Recycling Act, known colloquially as ‘‘Act 2.’’ Pennsylvania’s VCP

or brownfield law has provided a tremendous boost to the Pennsylvania economy by allowing a common sense approach to the handling of environmentally challenged properties.

That first site, the Delta Truck Body site, if you take a look at

exhibit A to my materials, had been on the list maintained by the

Pennsylvania Hazardous Sites Cleanup Act [HSCA], for more than

3 years when we negotiated that first Consent Order and Agreement, with Pennsylvania’s DEP Office of Chief Counsel. That

order, which was dated October 31, 1995 was the first step in getting this property back into productive use and generating tax revenue and providing employment for the local community.

Since that first site, Pennsylvania’s DEP has approved the cleanup reuse of hundreds of sites and now 10 years later, it is clear

that the Pennsylvania VCP is not only an unqualified success, but

a model for other States to follow.

As noted in my article written for ‘‘Business Law Today’’ in May

1997, at the time of the Delta Truck Body site transaction there

was no Federal law allowing for risk-based cleanups. There was no

Federal VCP. Since that time, Congress has passed legislation

which provides for no Federal involvement, a process commonly

called ‘‘overfiling,’’ on a State brownfield site, which is being remediated under a State brownfields program unless the State requests EPA action or the EPA determines that a continuing release

presents an imminent and substantial endangerment to human

health or the environment or where certain new information regarding the extent of contamination is perceived by the EPA as requiring further remediation. Notably, however, this law only limits

EPA overfiling under CERCLA, the Federal Superfund law, while

the EPA is free to pursue claims and enforcement under Federal

environmental laws such as RCRA, TSCA and the like. Fortunately, in April of last year, Pennsylvania and the EPA executed

a Memorandum of Agreement, or Memorandum of Understanding,

which covers Federal involvement where CERCLA, RCRA and

TSCA legislation is implicated and clarifies how sites remediated

under Act 2 may also satisfy requirements for these three key Federal environmental laws.

Since inception, Pennsylvania’s Act 2 has allowed the cleanup

and reuse of at least 1,712 sites. In addition to the enviable record

which Pennsylvania has behind it, DEP has not rested on its laurels. The formation of the Brownfield Action Team, the Low-risk

Sites Process, the Clean Fill Policy are all outgrowths of the original VCP program. Together with the Pennsylvania SiteFinder

which has listed 485 properties since its creation in 2001, DEP has

awarded 50 Brownfield Inventory Grants. These grants, together

58

with the grants and low interest loans under the Industrial Sites

Reuse Program, have all contributed to making Pennsylvania an

extremely hospitable venue for new and existing businesses.

It is also important to mention the use of environmental insurance products, such as stop-loss coverage, environmental impairment liability protection and cap cost policies, which have allowed

questionable transactions to proceed with the assurance that financial resources will be available in the event unexpected contamination is found at a later date or if remediation costs end up exceeding preliminary estimates. These policies, together with the Pennsylvania brownfield initiative have permitted transactions to proceed in situations where uncertainty and speculation abounded regarding a particular site.

It should also be noted that Act 3, which was part of the original

package—Acts 2, 3 and 4—under Pennsylvania’s VCP legislation

adopted in 1995 provides protection for economic development

agencies, lenders and fiduciaries. In my written materials I have

gone into an analysis of exactly what that protection is for economic development agencies, lenders and fiduciaries. I don’t know

that it is necessary for me to go into that at great detail at this

time, but suffice to say that a lot of the economic development

agencies which Mr. DePasquale had referenced in his remarks

would not have taken title to these properties, or acted as conduits,

if this legislation had not been passed. Act 3 provides that protection. Act 3, as well as Act 2, is a model for other States.

These protections for economic development agencies, lenders

and fiduciaries, they all add up to providing key relief to an area

which was fraught with danger. To that end, I believe Act 3 has

been an unqualified success in providing the comfort required by

these third parties in order to maintain reasonable control over

their respective situations.

If there is one bugaboo in the system, it is the increasingly popular policy of State environmental agencies seeking compensation for

natural resource damages. While Pennsylvania has taken a common sense approach and has not proceeded to follow this path. Our

sister State, New Jersey, has embarked upon an aggressive campaign to obtain financial recompense for responsible parties for the

overall damage done to the State’s natural resources as a result of

migrating pollution.

While the policy has surface appeal, if you take the argument to

its logical conclusion, each one of us could and should be prosecuted for driving vehicles which contribute to the deteriorating

condition of the air we breathe. My question becomes where does

it end? In my humble opinion, while the States are free to govern

their own affairs, U.S. Congress could require, by statute or regulation, that any existing or future MOUs or MOAs with States require prohibition on the recovery of NRDs except in the case of

willful or malicious intentional acts.

Notwithstanding the controversy of NRD recovery, my opinion is

that the Pennsylvania program Acts 2 and 3 and 4 has been one

of the finest legislative products produced by the Commonwealth

and the fact that we are holding these hearings in the city containing this country’s largest brownfield site, serves as further testimony as to the viability and vitality of the Pennsylvania program

59

and the cooperation between the Commonwealth and the Federal

Government. Thank you for extending the invitation to speak before your subcommittee. I thank you for offering me the opportunity to share my views with the members of the subcommittee.

I look forward to any questions you may have.

[The prepared statement of Mr. Schoff follows:]

60

61

62

63

64

65

66

67

68

69

70

71

72

Mr. TURNER. Mr. Colangelo.

STATEMENT OF ROBERT COLANGELO

Mr. COLANGELO. Thank you. Good morning, Mr. Chairman and

members of the subcommittee. Thank you for inviting me here

today and I really commend each of you for tackling this brownfield

issue and looking at alternative financial incentives to attract private sector investment. Government can’t do it alone. It has to be

a public/private partnership and now a lot of the easy brownfield

sites have been done and in order to attract the private sector, we

need more innovative financial solutions.

The National Brownfield Association is a nonprofit educational

organization and we have more than 900 members, property owners, developers, investors, service professionals and representative

governments who are all dedicated to the responsible redevelopment of brownfields. And one of my pleasures is that I get to travel

the country working with a lot of States on their brownfield programs, so I think I can offer you a unique perspective on what is

happening in the brownfield market.

The NBA has a longstanding relationship with the State of Pennsylvania. Pennsylvania DEP was one of our founding members

under Governor Ridge and Secretary Seif, and you know, we

learned firsthand just the quality of people that are involved in the

agency and the innovativeness that has come out of the agency and

its programs. And also, just recently, we launched our NBA Pennsylvania chapter working with Secretary McGinty and Deputy Secretary DePasquale. And that has been a great success. That chapter started out with 100 people. There is a very strong interest here

in Pennsylvania and you have a very sophisticated market with a

number of highly skilled specialists.

I can attest that the Land Recycling Program, through Act 2, 3

and 4 is innovative and it is innovative because owners can secure

liability relief. The program is unique because it has flexibility. The

applicant can choose the type and level of cleanup based on end

use. And it also requires the Department have timely response so

that they can move at the speed of business, which is very important in the development community. And then last, it provides an

array of financial incentives and technical insistence.

Additional program innovations under the current administration include the MOU that Deputy Secretary DePasquale mentioned and it is so important that you can offer a broad range of

brownfield sites, such as RCRA, CERCLA and TSCA to be included

under the brownfield program. And so this MOU, I think, is a

model that other States will start to emulate. And then last, the

formation of a department of revitalization, local government support, which really gives an emphasis to making brownfields a redevelopment issue is very important and we strongly support this

and we hope that hits a trend that other States will soon follow.

The act program incubated under Governor Ridge and Secretary

Seif was nationally recognized for its innovative solutions, but

probably one of the most important things that happened under

that time was that they marketed that program very aggressively

and not only did that raise public awareness in Pennsylvania, but

it really raised public awareness of the whole brownfield issue.

73

They were the tide that floated all brownfield boats and it really

increased the level of interest out in the National marketplace and

now I could say that there is 5,000 to 10,000 people that make

their livelihood in brownfields. And so again, I really commend

Congress. I am not sure if they knew they were creating an industry, but there is a whole industry out there of people that make

their livelihood out of redeveloping these sites and a lot of that

stemmed, you know, through the Pennsylvania Department of Environmental Protection’s aggressive efforts to market their program

and it had National repercussions. And that effort has been continued now under this administration. But the State can’t, you know,

tackle brownfields alone. It requires a partnership with the private

sector. And the government’s role, I think, is best as a facilitator

and the administrator of programs that reduce risk and attract private investment.

For government incentives to be meaningful to the private sector,

they need to be predictable and consistent, be easy to understand

and administer, applied to a wide type of projects, allow flexibility

in the use of funds and provide meaningful funding amounts. And

I think Pennsylvania has many of those elements. As time goes on,

fewer easy-to-develop brownfield sites are available, and so cities

are going to be left with the harder, more complicated sites and

these have to have financial incentives to attract private sector investment.

Chairman Turner, I personally commend your efforts to look for

a financial solution and support the legislation similar to H.R.

4480, which allows a Federal tax credit program to deduct demolition and remediation expenses. As you draft language for the bill,

I encourage you to consider allowing for these credits to be traded

on a secondary market. I think this would further enhance their

value and would stimulate more private sector investment. And

again, thank you very much for asking me to present my comments. Also, the NBA has recently created an analysis of State voluntary cleanup programs and recognizing that no State has the

best program, but many States have great elements, we put that

forth in our analysis and I encourage you to look at that as a resource. Thank you.

[The prepared statement of Mr. Colangelo follows:]

74

75

76

Mr. TURNER. Excellent. Thank you so much. We will go to Mr.

Dent for the first questions.

Mr. DENT. OK. Thank you, Mr. Chairman. Thank you all for

your testimonies. It is very helpful. Secretary DePasquale, you

talked a bit about the allocation of Federal moneys and how they

are too restrictive and that States with established programs

should be afforded greater flexibility with those Federal dollars.

Explain how this increased flexibility would assist in a greater efficiency in rebuilding communities and you know, what we should

do, you know, legislatively to help you get that flexibility?

Mr. DEPASQUALE. Here is, I mean, the simplest answer is that,

you know, some of the money that we are allocated needs to go into

marketing of brownfields or even of the program, and that is

money that we think, at this point, we have significantly marketed

the brownfields program. I mean, people that are doing economic

development in Pennsylvania know about the tools that we have

and we certainly can go out to forums like this and use those efforts to market what we have. We think that, for States that have

established programs and people already have a familiarity with

what we do, that money would be more effective going straight into

remediation. So if you have an economic development deal you are

trying to put together and you already know about our brownfields

program, but one of the pieces is you need $250,000 of remediation

money to make the project go and so again, when we talk about

leveling the playing field between greenfield and brownfield sites,

and this is one that Region 3 has been working with us to increase

the flexibility of what we can do in Pennsylvania, but we do know

that is something that if we could use all of our money for remediation and that would be very helpful.

Mr. DENT. So OK, you would just like to be able to use all that

money for remediation?

Mr. DEPASQUALE. To have the ability to use it.

Mr. DENT. OK.

Mr. DEPASQUALE. There may be some instances where we would

need to use it for marketing, but I can tell you that if we were able

to use all of our money for remediation, that would be something

that we would likely do.

Mr. DENT. Do you think that would require an administrative

change or a legislative change?

Mr. DEPASQUALE. I think it would be more, my sense is it would

be more administrative. That would be my sense.

Mr. DENT. And my second question, final question for you, Mr.

DePasquale, deals with liability relief. What can the State and Federal Government do to get on the same page with respect to liability relief?

Mr. DEPASQUALE. Again, with the MOA, between EPA Region 3

in Pennsylvania, I think we are getting pretty close to nailing this,

you know, threading that needle. But I do, possibly what we could

do, you could even have, whether it be Abe and myself taking a little road show out to other States or simply using this forum with

your committee to inform other States as to what, and other regions, as to what is happening. And you know, I don’t know if that

is taking place on from a larger level, from EPA headquarters, but

I do know that is, that I think sometimes at some level, it is just

77

letting people know what we are doing, because when you talk

about a one-stop shop, we were in a situation where we were trying

to, you know, nail down an economic development deal in the north

central part of our State and we were in the process of losing it

and then during the conference call, I informed them that we had

an MOA with EPA for the brownfield program and the tenor of the

discussion immediately changed. They didn’t realize how quickly

you can go through the EPA and DEP process on a brownfield site

and so that enabled us to secure it.

Now, there is somebody at a pay grade higher than me that will

announce that project in the near future, so I don’t want to be taking away any of their gusto, but I do, I can tell you, without the

project’s name, that is something that happened within the last

week in a conference call. And so that is a project that easily could

have gone and they would have just bought 50 acres of a greenfield

site and gone there as opposed to reusing an old industrial site.

Mr. DENT. And quickly, to Jim Seif, in your testimony you almost

go as far as to say that Superfund should not have been passed.

You didn’t quite go that far, but what led you to such a conclusion

and just tell us again what your thoughts are with respect to the

distinctions between what we have done here in Pennsylvania,

what you did, largely, in Pennsylvania with brownfields and contrast that to the Superfund experience.

Mr. SEIF. I think Superfund is one of the least successful Federal

environmental statutes of my professional lifetime, which goes back

to the founding of the agency. And it simply took the wrong premises about the nature of the problem and about the sub-decisions

you would have to make to get it to work right, you know, how

clean is clean and so on and miscalculated what, how large the

task was. Like prohibition, there were certain wrong premises

about the public response to the prohibition that was settled upon.

But we sort of had to do it that way to learn what the right way

was. We had to go down some wrong paths to decide, wait a

minute, how can we make this faster, you know, time is money,

when they learn that you can get a State and Federal judgment at

the same time. That took 25 years after the passage of Superfund.

How can we decide how clean is clean, can it vary by site? We concluded that it could. Can we just cap stuff? We concluded that we

can. But those were big fights.

And I guess we had to have those fights to learn that the answer

should have been we didn’t have to have those fights. That is the

way policy gets made, I guess, in a democracy, disjointed

incrementalism it has been called. But I think the Superfund

taught us a lot of lessons. It gave us a lot of expertise as physical,

chemical, medical risk expertise that is now part of the tools that

go together to make a good brownfield program. Yes, I would have

passed it. I guess I would have. It might have been that we could

have made it worse so that it would have taught us faster, but we

didn’t and here we are. I think all is well that ends well.

Mr. DENT. And one more.

Mr. TURNER. Sure.

Mr. DENT. And finally, Jim, same question that I gave to Mr.

DePasquale. What do you think we should be doing at the Federal

level to give you greater flexibility or funding? What, specifically,

78

do you think we ought to do to make the efforts we have seen in

Pennsylvania even better on brownfields?

Mr. SEIF. In Pennsylvania, not very much. I think that with tax

relief, Federal or property tax, which we know is a huge debate in

our Commonwealth right now, there might be a few more dollars

added. And when you are dealing with a decision between this

piece of land or that piece, $12.50 can swing a deal. It can be the

lubrication that is needed to make a decision go faster and the tax

element is always part of a deal. I would not wish to see the tax

element become so large that deals are made because of it. I think

deals have to be good deals, good cleanups, good commercial outcome and so on, and tax can help. Again, with reference to the revenue implications of it all and the simplification issues that I think

would be helpful to everybody, we probably ought to be doing that.

Property tax abatement is not a Federal Government issue, but

there should be some encouragement, possibly even Federal grants

to communities that provide that abatement so that it is less painful and they get a quicker payoff on the bringing of the jobs and

the redeveloped property back onto the tax rolls.

Mr. TURNER. Thank you. Mr. English.

Mr. ENGLISH. Thank you, Mr. Chairman. One of the things I

found most encouraging about the evolution of brownfields policy is

that since we got started, there were new technologies available

that are actually bringing down radically the costs of doing cleanups. There have been some examples. For example, biologicals that

are now being used to break down poisons in the ground rapidly

and allow for what would have been fantastically expensive cleanups with huge movement of earth to be achievable in a fairly

unintrusive way. What sorts of changes need to be made in the

Federal program to make it easier to introduce these new technologies? Mr. Seif.

Mr. SEIF. You are right, and Superfund engendered those technologies as capitalists desperately looked for ways not to dig up

thousands of tons of Earth, burn it and bury it somewhere else,

which was often required, even in these big landfills where NCR

got caught in.

We have since learned that a variety of new techniques can be

used, many of them developed in the private sector, which is the

best place to develop anything, in my view. It saves the taxpayers

a lot of money, but in the energy area, and because of the most recent energy bill, there will be a lot of investments in clean coal

technology and that will have an enormous benefit in Pennsylvania

and Ohio and elsewhere because you have a lot of old abandoned

coal sites, or grayfields, if you will. The coal that we used to throw

away is now, has enough BTUs in it to make it worthwhile going

after and you can make diesel fuel out of it. That is what we have

done in Schuylkill County shortly here and do other things. The

Federal Government has really stepped up to the plate in the most

recent energy bill in helping that happen.

You can also prevent more grayfields from being formed if there

were more nuclear power. That is way off the topic of this meeting,

I understand, but it is clear that if nuclear power came to us now

with the global warming effort, the enviros would be saying what

a great thing. And we perhaps ought to turn in that direction for

79

the variety of reasons that we are all familiar with. But the Federal Government can incentivize at fine universities, especially like

this one, the development of more technology, but not be the developer itself, obviously, and let the private sector judge which one

makes it in the market and which ones don’t.

Mr. ENGLISH. Mr. DePasquale, in applying these new technologies, do you see any way that we should be refining or sharpening the Federal program to make it possible to introduce them

more quickly?

Mr. DEPASQUALE. I think that some of the tools are already there

and Don Welsh, who is the Region 3 Administrator, has shown his

leadership in being creative with the MOA. I think that across the

board, whether it be environmental protection agencies across the

country at the State level or even all the regions in EPA and Washington, you need to have a culture of creativity and, because I believe the tools are already there, and you need to have, you know,

people that are committed at the higher level of the agencies and

also at the lower level, that are committed to being problem solvers

on these issues because the tools that you raise in the question are

already there. I mean, I don’t think that you really need to pass

new legislation, I think, you know, maybe it is banging away at it

to make sure that the people who are listening both at the State

and Federal level that they need to be creative and find solutions

because, you know, in a, to be fully honest, if you think everyone

in the DEP in Pennsylvania is really throwing parties because of

what I do, it is not the case. I mean, sometimes you have to really

work to get people to come to the table and figure these things out,

but I am fortunate to have a boss like Governor Rendell and Secretary McGinty that back me up on these things. And I can imagine that for Abe doing some deals at the Federal level, he has similar issues. It is a culture of creativity that needs to be a match

from the top on down.

Mr. ENGLISH. Mr. Colangelo, do you have anything to add from

your perspective with your association?

Mr. COLANGELO. I would say training, education and outreach is,

this brownfields market is constantly changing. Each year the

USCPA hosts a brownfield conference and the numbers have grown

each year. This year they are looking at 5,000 people in Denver

and the interesting part of that is that there are so many new faces

each year as this rotates around the country. And so when you are

talking about new technologies or new processes, all these new entrants into the market need to be trained and they need to understand, you know, how they apply and what changes have taken

place. And that goes for all the stakeholder groups, too, you now,

working with the property owners, working with the developers,

you know, working with the investors. And again, you know, Pennsylvania had gone through some budget cuts and to say it politely,

but they were really a lead marketer and that hurt the whole industry when that budget got cut, so providing that constant outreach and education and training internally and to the stakeholders, I think, is something that has to be done continuously.

Mr. ENGLISH. Thank you, Mr. Chairman.

Mr. TURNER. Thank you. Mr. Seif, one of the things that you related to us when you talked about the two points that need to occur

80

is the issue of getting a piece of paper or a release and understanding of your liability. The question that I have for the panel relates

to a portion of my brownfield tax credit bill, which is No. 4480, and

that is the goal of providing that type of relief to individuals that

come in and redevelop brownfield sites or even a past polluter that

has joined in the redevelopment and the cleanup of the site.

A brief overview, again, the bill provides a 50 percent tax credit,

it doesn’t provide 100 percent of the funding, but the tax credit can

be applied to environmental remediation and building demolition to

the extent that buildings need to be removed with respect, as part

of environmental remediation. It also includes petroleum. The goal

of providing relief to individuals who utilize the tax credit, initially,

in the 108th Congress, the bill provided a release if the past polluter came to the table and funded portions of the remaining environmental remediation and the individuals that were redeveloping

it, also, were able to avail themselves of liability relief.

And in working with the Real Estate Roundtable, we have narrowed that as a result of a number of objections that people had

who, on the environmental side, were very concerned about another

form of relief or release being provided. And we were encouraged

to fashion the bill so that there is a requirement now that individuals availing themselves of the tax credit would have to go through

the volunteer cleanup program, and through the volunteer cleanup

program, they would then receive their relief from liability that

they would be seeking.

One of the issues that we have, obviously, Mr. Schoff, your summary in your testimony of your Business Law Today article where

you talk about the 2002 bill, the Small Business Liability Relief

Act, and the relief that it provides under CERCLA, but the failure

to include RCRA and TSCA that the MOA with Pennsylvania encompasses, raises an issue of there are several States that do not

have that opportunity of providing their volunteer cleanup program

developers or past polluters this type of relief.

And I would like, if you will, one, to talk about the issue of how

difficult was it to accomplish including all of those. Since the 2002

bill did not specifically include RCRA and TSCA, did Region 3 have

difficulty in coming to the table and providing that umbrella with

Pennsylvania, and from that, then, is there a need for additional

legislation to enable EPA to do that on a routine basis so that the

2002 Small Business Liability Relief and Revitalization Act would

recognize that both EPA and the States are encouraged to have a

more broader MOA? From Pennsylvania’s standpoint, how critical

has it been for it to be a full umbrella, how difficult was it to include it? And if the rest of you could talk about the issue of the

need for that relief and what you have seen and experienced. Mr.

Ferdas.

Mr. FERDAS. OK. First of all, I want to say that one of the major

events in Superfund was a realization that private people can do

the work better than us. We basically went into a so-called enforcement first, so we basically encouraged the responsible parties to do

the cleanups and Region 3 right now is 80 percent of all the cleanups are being done by responsible parties and that is what gives

the credibility and the creativity to the cleanups. And one other

point is a major development is also going on in the assessment

81

side in the sense that we are getting better and better tools to sample things in the field and that is also reducing significantly the

amount of cost of assessing aside, which is the first step for that.

And that, just following with your question, I think that what we

did in Region 3 in Pennsylvania is we figured out how to deal in

the back room in the sense that we still have the whole RCRA

structure clicking away, but it is hidden. It is basically taken care

of in the back room and if there are any problems, obviously, we

will say it and we have the authority to say it, but basically, it is

done invisibly, transparent from the person who is trying to do the

development and I think that is a key issue and we never claimed

that RCRA went away, that TSCA went away. They just, we made

it transparent to the person that is coming in and Pennsylvania

understands those laws and they can do it. So I mean, I obviously

can’t say that we should change RCRA. I mean, I am not in a position to say that, but I think what we did was actually come to a

solution, which is just make it transparent to the person that is

coming in.

I mean, TSCA has even more severe problems than RCRA, I

think, because of the different regulations and so on and so I think

that, you know, I can’t talk about changing the law, but what I am

saying is we found a way to kind of do it transparent from the people who are trying to get help to develop.

Mr. DEPASQUALE. I mean, my response would be it depends on

whether you are trying to find a way to get the yes or trying to

find a way to get to no, and in our region and with DEP, we are

trying to get the yes. So when it comes to the umbrella side, yes,

there is this Memorandum of Agreement, but as you can imagine,

when it comes to day by day, I mean, there are things that develop

that are somewhat outside of that agreement or there are problems

that you didn’t know about or you know, like Jim has been banging

away at this for a couple years more than me, maybe two or three

more than me. There are things that you need to get better at over

time and so the best way I, you know, just really would echo what

Abe has said and that is we really get in project by project sometimes to figure out some of the new challenges that come up inside

of this umbrella agreement that we have, so you know, you can

pass a law and sometimes that will make it, you know, enforce

what we are already doing, but again, sometimes I don’t want to

give people an out. There are already the tools to make this work.

Mr. SEIF. The transparency issue was the most important. The

developer doesn’t care under which statute or under which sovereign it is that he can proceed, he wishes to proceed. And it is incumbent upon public servants, if they wish to be called servants,

to figure out how to help. Forcing standards to be sure, but to

make it happen. It also occurs to me that any scheme, mix of Federal and State cleanup laws, regulations and people needs not to

make any distinction between past polluter, future user and all

that.

There is no such thing as a polluter on most Superfund sites, either in the legal sense, because they are long gone and their grandchildren are in California, or in the sense that you still have a viable company and what it did in 1942 was make products that we

all bought for less cost than they would be today because the pracVerDate 11-MAY-2000 12:55 Apr 24, 2006 Jkt 000000 PO 00000 Frm 00085 Fmt 6633 Sfmt 6633 D:\DOCS\25888.TXT HGOVREF1 PsN: HGOVREF1
82

tice was to throw it out in the back 40. Not blameworthy, maybe

not nice and neat, but the point is when we go after people, common term used in the bureaucracy or when we call people, make

the polluter pay was the congressional mantra when Superfund

was passed. Well, you are looking at a polluter and you would find

that same polluter in the mirror.

The fact is, it is a public problem most severe in States like ours

which have an industrial legacy that we ought to be proud of and

not point fingers about, so when we enable a cleanup, statutorily

or otherwise, we ought to say everybody welcome, do your part and

that excludes date cutoffs about eligibility for certain tax credits.

It includes petroleum because that was an inexplicable omission in

Superfund, well, explicable in a certain way and not explicable logically. And we also ought to, for the benefit of the public, require

the use of the program that exists in a given State because that

program was passed by the general assembly or the legislature and

it is administered in a public and, we want to hope, transparent

way, and the community ought to have whatever the other parties

are up to, some confidence that there is a procedure that is common to everybody.

And the people who are developing other sites ought to have

some confidence that no shortcuts are being made by their competitors. So there ought to be whatever the package that is developed

ought to have those characteristics, in my opinion.

Mr. TURNER. Mr. Schoff.

Mr. SCHOFF. I will keep my remarks very brief. Just two points,

Chairman Turner. One is during Mr. Ferdas’ initial testimony he

said that it was important that the consumer or the taxpayer had

a one-stop shop and I think it is very important in order to have

a one-stop shop. And before the MOU or the MOA came into effect,

you still had the concern that ‘‘Gee, if it was something covered by

RCRA or TSCA, you know, the legislation which was passed in

January 2002 is not going to cover it.’’ So you still have that potential risk. In the back of your mind you are thinking, ‘‘Well, the EPA

could still come in and do this. They could come in, they could do

an overfiling, they could say, ‘Alright, we know you are under the

Pennsylvania program, but under our auspices, now, we don’t think

that meets muster.’ ’’ To have that one-stop shop is critical from the

private sector’s standpoint, you know, to know that you have complete protection, that you only have to deal with the agency on a

one-time basis. That is very, very important.

The second point I want to make, I guess, is that the easiest

thing to do would be to amend the 2002 legislation to include protection under all Federal environmental laws, not just under

CERCLA. Like Mr. Seif had indicated, for CERCLA not to include

petroleum, I mean, I can tell you from a practical standpoint, the

vast majority of brownfields out there have some petroleum contamination, some petroleum constituent. I think everyone would

agree with that on this panel. Sure, you want to make sure that

the dioxin sites are very carefully and very detailed, examined,

that they have a very high level of scrutiny and the potential for

damage to the health, safety and welfare of the individuals and the

public is very high there. But for sheer numbers standpoint, you

have industrial solvents, you have petroleum, you have leaking unVerDate 11-MAY-2000 12:55 Apr 24, 2006 Jkt 000000 PO 00000 Frm 00086 Fmt 6633 Sfmt 6633 D:\DOCS\25888.TXT HGOVREF1 PsN: HGOVREF1
83

derground storage tanks. A lot of these are petroleum based.

CERCLA doesn’t touch that. That is RCRA and other Federal environmental statutes.

If the 2002 legislation were to be amended to include protection

for under all Federal environmental statutes, I think that would go

a long way toward easing a lot of people’s fears and putting their

fears to rest once and for all.

Mr. TURNER. Mr. Colangelo.

Mr. COLANGELO. Thank you, Mr. Chairman. According to our re- search, there is about $4 to $6 trillion of industrial property in the

United States and corporations own about 40 percent of that. And

we estimate that somewhere between 20 to 50 percent of it is environmentally impaired. And those sites aren’t coming to market because of this reason. And I think that is the next evolution for the

brownfield market is dealing with this liability relief for liability

clarity for the potentially responsible parties and you know, the

key there is, I think we all agree in polluter pays, the question is

how much and there is a whole group of companies out there that

are willing to voluntarily clean up their properties to the suggested

standards through the State voluntary cleanup programs if they

can get off the hook and right now, we have a double standard. A

developer or a perspective purchaser can buy a property, enter it

into the program, clean it up to the standard, get liability relief,

but the property owner can’t. And so I think that is the next issue

that needs to be fixed, you know, using a combination of the State

oversight insurance or a third party fiduciary to help, you know,

look at the long-term stewardship of this are all ideas that I think

have some efficacy in this area.

Mr. TURNER. Thank you. Mr. Dent.

Mr. DENT. Yes, I am just going to ask one fairly quick question

to both Paul Schoff and to Jim Seif. Paul, you mentioned the policy

of State environmental agencies that are seeking compensation for

National resource damages. You discussed the approach taken by

New Jersey, I think, in particular to obtain financial compensation

for the damages suffered by natural resources. Can you explain

your suggestions to how Congress could assist in helping this trend

with regard to existing and future MOAs?

Mr. SCHOFF. Sure, I will be happy to. It is a subject that is near

and dear to my heart. Natural resource damages is a concept

which, I am not sure exactly where it began, but I know New Jersey has taken a fairly active role where they believe that, or at

least it is the policy is such, that if there was damage to the State’s

natural resources in any fashion as a result of contamination from

a particular site—for instance, if groundwater had been affected

and migrated to a field, to a stream, to a river—if there was anything which affects the natural resources of the State, there should

be compensation paid by whoever did this pollution. Which, if you

just listen to it, it sounds like it actually makes sense except for

the fact that there is, the real question is where do you draw the

line?

And it may be a combination of things that have caused that contamination. It may be a combination of contamination from several

different sites that have caused pollution of a particular stream bed

or a river. It may be the wind blowing contaminated soil from one

84

site to another. There is three media that contamination can exist

in. There is air, there is water and there is soil, you know. Right

now, if you take a look at their policy, they are focusing on soil and

water, especially on water. But, as I said in my remarks, I mean,

everybody could be held liable for fouling the air we breathe because we drive cars that pollute the air.

The real question is where do you draw the line? I think it is sort

of taking the, taking something, an idea which has surface appeal

and then just magnifying it, saying well, we just need to get compensation for any damages which were ever done to any natural resources of the State.

As I mentioned in my remarks, one of the things that perhaps

could be considered is to have EPA institute a policy that they

won’t sign an MOU or MOA unless NRDs, natural resource damages, are excluded. That may provide some incentive. I mean, ultimately, it is a State issue, but from a Federal standpoint, I would

imagine that would be one way that the Federal Government could

get a handle on it by having the EPA say this just doesn’t make

sense.

In some ways, it is almost a throwback to the old days of

CERCLA where, you know, we are going to clean it up to pristine

Adam and Eve standards, which is just as, it is just not practical.

And you end up, you know, the people that you want to get to pay

end up being people that are not the people that did the pollution

to begin with. You know, they may be people who purchased the

site, cleaned it up for whatever was there at the time, from the previous owner and yet, they are still being hit by natural resource

damages because the site, itself, contributed to those damages. It

would seem to me that, you know, one way of dealing with that

would be through the EPA.

Mr. DENT. Finally, Jim, just a quick question for you. You participated in the MOU agreement, the signing ceremony down here,

a few blocks from here a few years ago.

Mr. SEIF. Yes, I did.

Mr. DENT. If that agreement had not been signed by DEP and

EPA at the time, do you believe that we would be able to redevelop

that 1,800 acre tract of land?

Mr. SEIF. I have it on the authority of Hank Barnett, the president emeritus of Bethlehem Steel and you will hear, I think, from

Steve Donches, that answer would be no. There are other sites that

the company owns in other States that were closed at the same

time and have had no further progress made.

Mr. DENT. So that agreement is really what facilitated all the activity we are seeing down there today?

Mr. SEIF. Essentially. Tom Ridge would say so, as well, I might

say.

Mr. TURNER. Gentlemen, I want to thank you for both the time

that you prepared for this hearing and also your participation in

it and I also thank you for your expertise that you lend to our communities as we tackle this tough issue and I want to give you one

opportunity for closing remarks. If there are things that we didn’t

ask you that you wanted to add to the record or things that you

thought of since you have heard other people’s testimony that you

would like to add to, I want to give you one opportunity for those

85

closing remarks. Would anyone like to add anything to their testimony? Mr. Seif.

Mr. SEIF. One of the most sensitive Federal/State relations areas

in the environment is the overfiling situation, whether it is a water

case, a Superfund thing. It is a really sticky thing causing lots of

disputes. I don’t know that you can legislate borders that prevent

those kind of disputes. The real solution to this and indeed, to the

problem of natural resource damage suits is to have smart Governors appoint sensible DEP secretaries and so they don’t fight

with them. I am not saying that has been done in Pennsylvania,

but I do believe that results show less strife and more progress

than elsewhere, where I have seen real blowups and in my own

history at EPA, between—Abe recall West Virginia on just about

every case and progress was not made. You really need to be sensitive in legislating not to create new opportunities for those kind

of struggles and to count on the training and other kinds of things

that people who want to make these sites work can bring to the

table and the fact that people who really want cleanups would

rather not fight, they will just figure out how to do it right. The

private sector is that way. Time is money. Fights are losers.

Mr. DEPASQUALE. Yes, under the Commerce Department there is

the Economic Development Administration and while that is maybe

not necessary for this panel here to have jurisdiction over, but it

may be something to take back to your colleagues and that is as

much the EDA/NPA has some funding to help with remediation,

Commerce has the big money to help put some deals together.

When I was director of Economic Development in the city of York,

we did a brownfield project and the key was EDA money. They

brought in $1 million and that is the whole of what we get in Pennsylvania from EDA and again, I am not saying that is bad, I mean,

but that is just where the two agencies are limited in funding.

I would take back to your colleagues that EDA, that funding,

considering the President’s priority he has put on brownfields, that

is another pot of money that when you think about that can be targeted to brownfields across the country and there is no real stipulation one way or the other right now, I mean, but that is an area

where they could really focus on helping to revitalize the cities by

using that money, also, for remediation in putting together economic development projects in the cities across the country, so that

is another piece that I wanted to make sure that I made you aware

of.

Mr. SCHOFF. Just very quickly, I just want to thank the subcommittee for taking the time to go into this and this is just, it is

one of the—Acts 2, 3 and 4 in Pennsylvania—are one of those few

pieces of legislation that really, really works and I really have to

hand it to then-Governor Ridge and to Jim Seif for putting in place

a program which really has been exemplary and from the private

sector has been a tremendous boon and as Bob Colangelo told you,

it has been a model for the country, you know, and has spurred development throughout the country, so really kudos to that administration for doing this and for following up, and with this administration for following up on Governor Ridge’s program.

Mr. COLANGELO. I mentioned earlier that this brownfield market

is growing and one of the things, as the market matures, is that

86

there is starting to be a big economic divide between the ‘‘have’’

and ‘‘have-not’’ cities and so one of the things that we need to look

at, as an industry, is how do we help some of these smaller cities

on the other side of the economic divide? As the market matures,

all the developers, investors want to do the big projects in the welllocated areas and they don’t want to tackle the smaller brownfield

sites in the cities without strong market demand. And so I think

that is something that we are going to have to collectively look at,

is there special incentives or what can we do, as an industry, to

help provide extra relief for those smaller cities, because many

times that is a harder problem for that city. They don’t have the

resources and they lost a big job base when that factory closed.

Mr. TURNER. Good point. Well, gentlemen, I want to thank you

so much again for your time here and with that, then we will be

turning to our second panel. Our second panel includes Kerry

Wrobel, president of the Lehigh Valley Industrial Park; Chad Paul,

chief executive officer of the Ben Franklin Technology Partners;

Ray Suhocki, president and CEO of the Lehigh Valley Economic

Development Corp.; and Stephen Donches, president of the National Museum of Industrial History. If you gentlemen will come

forward. To let you know, I am going to ask you to take the oath,

which means that you will be standing. If you would like to set

your materials down and remain standing, we can just proceed directly to the oath. Gentlemen, it is the policy of this committee that

all of the witnesses be sworn in to testify.

[Witnesses sworn].

Mr. TURNER. Please let the record show that all witnesses have

responded in the affirmative. Kerry, we appreciate the tour that

you gave us this morning and it was wonderful to see the site and

your success. We look forward to your testimony and we will begin

with you.

STATEMENTS OF KERRY WROBEL, PRESIDENT, LEHIGH VALLEY INDUSTRIAL PARK, INC.; CHAD PAUL, JR., CHIEF EXECUTIVE OFFICER, BEN FRANKLIN TECHNOLOGY PARTNERS;

RAY SUHOCKI, PRESIDENT AND CEO, LEHIGH VALLEY ECONOMIC DEVELOPMENT CORP.; AND STEPHEN DONCHES,

PRESIDENT, NATIONAL MUSEUM OF INDUSTRIAL HISTORY

STATEMENT OF KERRY WROBEL

Mr. WROBEL. Thank you, Mr. Chairman. Good morning. My

name is Kerry Wrobel and I am president of Lehigh Valley Industrial Park. LVIP is a private, nonprofit economic development corporation, which ironically was founded due to a 100-day strike at

Bethlehem Steel. Today LVIP is constructing its seventh industrial

park on 1,000 acres of the former Bethlehem Steel plant in the city

of Bethlehem. As in our previous six parks, we envision a premier

business center with diverse uses, manufacturing, technology, distribution, office and retail, all in this major brownfield site that we

call LVIP VII at the Bethlehem Commerce Center. LVIP’s first six

parks converted greenfields into business centers. Our success,

1,500 acres of industrial development, 370 companies and 17,000

employees, has played a supportive role in diversifying the Lehigh

87

Valley economy and ultimately, weathering the loss of Bethlehem

Steel.

While developing our greenfield park over the past 15 years,

LVIP kept a watchful eye on opportunities to redevelop an urban

brownfield site. In June 2001, Bethlehem Steel approached LVIP

with just such an offer to develop a major portion of the company’s

South Bethlehem plant. I have to give credit to Steve Donches, who

made the phone call to LVIP. We purchased 1,000 acres of the

plant in May 2004. LVIP VII at the Bethlehem Commerce Center

will cost approximately $100 million to develop, and that is just infrastructure alone. That is more than our previous six parks combined. LVIP, a land developer, will construct roads, as you saw this

morning; utilities and a 108-acre intermodal facility. We are addressing all environmental issues on the site and we are preparing

the parcels for end users.

And progress can be seen already this afternoon. In fact, I will

leave here and attend a ribbon cutting ceremony for our first tenant, U.S. Cold Storage, a firm based in Cherry Hill, NJ, and Cold

Storage has constructed a first phase 175,000 square foot facility

with 38 employees on LVIP VII’s 32 acres. At full build-out, they

expect a 625,000 square foot facility and 200 employees.

Perhaps no other issue resonates as soundly with today’s populace as the continual march of suburban sprawl. As farms give way

to residential and commercial developments, there is a clear understanding that public policy and regional planning must incent and

direct the reuse of urban sites. If we are to rebuild our cities and

prioritize brownfields, the public sector must invest public dollars

to offset the premium costs associated with brownfield development. Here are a few of my recommendations.

As Secretary DePasquale just mentioned, allocate a fixed percentage of EDA funding annually for brownfield development. LVIP

VII received a $2 million EDA grant for the construction of infrastructure in its first phase. The grant offsets the significant premium costs of trenching for utilities and roads through 20 foot

foundations and 5 foot slabs. By offsetting the premium costs, the

EDA grant has allowed LVIP to sell its land at a price that is competitive with greenfield developments. Certainly, any new targeted

brownfield funding that was mentioned here this morning would be

welcome and appreciated by the economic development community.

No. 2 would be to allow funds from the EPA’s Brownfields Revolving Loan Fund to pay for environmental insurance. Environmental insurance premiums for brownfield sites can reach seven

figures. Equally challenging, the environmental insurance premium

must be paid at the time of land acquisition, before land sales can

generate revenue of an organization. A grant from the Revolving

Loan Fund could provide critical assistance early in the project’s

life and, once again, offset a premium cost not experienced in

greenfield development.

We heard much from the previous panel about the One CleanUp Program Memorandum of Understanding and I echo their sentiments that, without that agreement, we would not be funding or

developing LVIP VII. It is that critical to the confidence of our private sector developers and users. As the developer of a 1,000-acre

site who knows that the timetable for that development will occur

88

over 10 to 15 years, my concern is in 10 years will we still have

the same fervor for brownfields as we do today? How do we codify

and how do we incent our regulators to continue to work with us

over the next decade in development?

My comments have been based on that of a practitioner, someone

who is developing the site. I will state that the legislation proposed

by you, Mr. Chairman, regarding the Brownfields Revitalization

Act of 2005, would add another weapon to our arsenal. We can provide local tax incentives, we can provide State funding, we can provide Federal funding. If we can also provide Federal tax incentives,

that is a missing link that at the moment we cannot provide. As

you know, we cannot provide Federal grants directly to private

businesses, so that is a hole in our incentive program and another

form of assistance for those taking the risk—it truly is a risk to

step on and develop and put one’s equity into a brownfield site.

In closing, LVIP VII at the Bethlehem Commerce Center is an

exciting project that has challenged and galvanized all elements of

our organization. It is extremely fulfilling to work with partners at

the local, State and Federal levels on a project that will make a difference for generations to come. On behalf of the Board of Directors, I would like to thank you for the opportunity to speak before

you today.

[The prepared statement of Mr. Wrobel follows:]

89

90

91

92

93

Mr. TURNER. Thank you. Mr. Paul.

STATEMENT OF CHAD PAUL

Mr. PAUL. Good morning, Mr. Chairman, Mr. English, Charlie.

Thank you very much for inviting me to speak about the Ben

Franklin involvement with the brownfields projects here in Bethlehem. The Ben Franklin Technology Partners was another great

idea coming from a Governor. Governor Thornburgh, in 1982, along

with legislative partners, passed legislation to create the Ben

Franklin Technology Partners. We work with early stage technology entrepreneurs to bring their companies to market and we

use technology to creatively solve problems for established manufacturers in Pennsylvania to keep those family sustaining jobs in

Pennsylvania. Our particular center is located here on the campus

of Lehigh University and my office is responsible for this activity

in the 19 counties that make up the northeastern corner of Pennsylvania.

We bring business expertise and, notably, investment in those

companies; up to a half a million dollars over 3 years can be invested in a particular company that we are working with. We bring

business, university and government links together to solve problems for those clients. What does that have to do with brownfields?

Ben Franklin Northeast has started over 300 companies, created

almost 600 new products, created almost 10,000 jobs in Pennsylvania, retained in excess of 17,000 jobs and we have done that

through our investment processes and through the operation of our

National award winning business incubator on the mountaintop of

Lehigh University’s campus.

The problem is that those incubators can only be so big and

when companies get to a certain point, we need to move them out.

We need to create post-incubator space and we have done that on

the south side of Bethlehem. The committee had an opportunity to

see two of the three buildings that are on the Bethlehem Technology Center campus and that was, in fact, a collaboration of Ben

Franklin and our economic development partners, notably organizations represented by two other folks on this panel, showing you

that local, State and ultimately, Federal assistance can do great

things with respect to the development of technology and redeveloping brownfields all at the same time and with the same money.

We collaborated together in 1993, before the 1995 act, obviously,

was passed to build the first Bethlehem Technology Center on

Bethlehem Steel brownfields property without the protections that

came with the 1995 act. It made it much more difficult, as you can

imagine, for a nonprofit group to create an ‘‘if you build it, they will

come’’ kind of project. We were able to do that with $3.7 million

and now that facility is occupied 100 percent by one of the original

tenants, IQE, with an employment of 90 folks. Bethlehem Technology Center II followed in 1999, a $3.2 million collaboration of

the similar partners, primarily for OraSure Technologies, but also

for two other incubator graduates, CDG Technologies and SCG. All

folks that started in our incubator with one or two folks and an

idea.

Bethlehem Technology Center III is now the headquarters of

OraSure Technologies and it was built entirely with resources proVerDate 11-MAY-2000 12:55 Apr 24, 2006 Jkt 000000 PO 00000 Frm 00097 Fmt 6633 Sfmt 6633 D:\DOCS\25888.TXT HGOVREF1 PsN: HGOVREF1
94

vided by OraSure and its management. No public money was involved in the development of that facility, at all.

And finally, we are in the planning stages of Bethlehem Technology Center IV, since we are bursting at the seams, both at the

incubator and in our post-incubator facilities and it is in that area

that I would say to the committee that to the extent that you are

providing funding sources, that you can strongly consider that an

element of funding for redevelopment should be in helping local economical development organizations to do projects such as our

Bethlehem Technology Centers through grants that match what it

is that we can provide in the way of funding to make more opportunities for more of these technology companies to grow in our communities and reclaim brownfields at the same time. I think you can

see that the leverage that is being provided by these activities has

been outstanding.

[The prepared statement of Mr. Paul follows:]

95

96

97

98

99

100

101

102

103

104

105

106

107

108

109

Mr. TURNER. Thank you. Mr. Suhocki.

STATEMENT OF RAY SUHOCKI

Mr. SUHOCKI. Good morning. Good morning, Mr. Chairman,

Charlie, Congressman English. Thanks for the opportunity. Lehigh

Economic Development Corp. is somewhat unique. We are an economic development organization representing the two counties of

Lehigh and Northampton and we are what we call a one-stop shop

and part of that one-stop shop includes a function called the Lehigh

Valley Land Recycling Initiative. And we are unique in that we are

not, we don’t do redevelopment of the property, we are not a government agency, we are a facilitator between the government agencies and the property owners and the developers. So it is a somewhat unique situation and I want to offer some perspective as it

relates to our experience in dealing with both sides of the fence.

First of all, I want to note that the majority of the brownfield

sites within the Lehigh Valley are located within the urban boundaries of our three cities, Allentown, Bethlehem and Easton or

smaller, generally poorer municipalities and therefore, the proposed Federal tax credit legislation should provide incentives to

support LVEDC’s continued effort in the redevelopment of

brownfield sites in the region.

A few of the impediments that should be looked at and could

help us, and I will touch on three of them, the first, the community

perception of health risks associated with environmental impact

that remain in place as part of brownfield redevelopment projects.

Although the use of engineering and institutional controls are

widely accepted as safe, permanent alternatives to removing historical industrial impact, the public continues to fear the presence of

residual contamination. Additional education efforts are needed to

help the general public understand the use of these strategies and

their long-term impact on a community. I want to talk about the

public understanding. That public is not just the John Q. Public,

it is also folks that are developers, engineering firms, accounting

firms that are, and bankers who are advisers to potential property

owners.

The second issue, multi-layered regulatory programs that often

require numerous approvals from multiple agencies and departments within agencies. This results in increase of project costs and

time to insure appropriate approval is obtained from all parties involved. Recently, in Pennsylvania, the Department of Environmental Protection under Secretary Kathleen McGinty, announced a

new program to facilitate the review and approval process on

brownfields redevelopment project. That program, the Brownfields

Action Team [BAT] program, created a single point of contact approach to the review and approval process across the agency. Permits, plans, reports and submittals are required to demonstrate

compliance under State laws go through one point of contact. That

person is responsible for facilitating the review and approval process that ultimately reduces the cost and time to complete the

project. This effort should be extended to the Federal agencies

through the recently approved Memorandum of Agreement between

Pennsylvania and EPA such that one point of contact can be asVerDate 11-MAY-2000 12:55 Apr 24, 2006 Jkt 000000 PO 00000 Frm 00113 Fmt 6633 Sfmt 6633 D:\DOCS\25888.TXT HGOVREF1 PsN: HGOVREF1
110

signed to brownfields projects and involve both State and Federal

approvals.

Through the MOAs, a one-stop shop can be established where

both agencies agree to one lead agency and one point of contact

that is responsible, again, for facilitating all reviews and approvals

required to comply with both State and Federal environmental

laws. Our experience has been that one-stop shop through the BAT

team is extremely helpful and allows that insider to cut through

red tape, to understand how to push for approvals, etc.

And last, funding for due diligence and site assessment activities

needs to be increased. With the reduction in funding available from

State environmental cleanup programs, in this case, the ISRP, the

Industrial Site Redevelopment Program, a critical gap is developing. Although EPA brownfields assessment grants are available for

these activities, the time and administration associated make these

dollars hard to use on small and time-sensitive projects. With the

introduction of new regulations governing All Appropriate Inquiry

[AAI], and due diligence that is required to protect innocent purchasers, greater focus will be on completing due diligence and site

assessment activities before communities or innocent purchasers

take title to brownfield properties.

These investigations typically come when crucial, time-sensitive

decisions need to be made. For example, tax foreclosure or property

takings by eminent domain. Time to develop and obtain approvals

for work scopes and bid contractor workout may not be available

under the EPA funding programs and historically, State brownfield

programs filled this gap and provided the necessary funding on

time-critical schedule to complete the work. Those are a few examples of our experience and recommendations for where some

changes might be made. Thank you for your time and attention.

[The prepared statement of Mr. Suhocki follows:]

111

112

113

114

115

116

Mr. TURNER. Thank you. Mr. Donches.

STATEMENT OF STEPHEN DONCHES

Mr. DONCHES. Chairman Turner, Mr. Dent, Mr. English, thank

you for the opportunity to speak today. I would like to talk about

Bethlehem Steel’s approach to brownfields remediation during the

time I was in charge of the redevelopment of the idled former steel

plant you visited this morning. The decision to close a plant is

never an easy one and without exception, it presents hardships to

both communities and to employees. Historically, the loss of jobs

and business opportunities and tax revenues is always further aggravated by the fact that too many sites remain dormant because

existing laws and practices provided no incentive for the owner to

redevelop the property.

The steel industry, along with other old line industries, suffered

through downsizing throughout the 1980’s and 1990’s and at which

time numerous plants in many States were closed. And, depending

on the State in which a shut down facility was located, a company

may or may not have had a good opportunity to redevelop or reuse

the site. For example, Bethlehem Steel closed a plant in Lackawanna, NY in the early 1980’s and then subsequently closed the

local plant in the mid-1990’s. The Lackawanna plant in New York

under then New York law, did not provide for brownfield cleanup

and liability release and consequently, other than demolition, not

much else has taken place up there. Plans have been put in place,

but the laws restricted activity.

Contrast that, if you will, with the Pennsylvania approach. When

Governor Tom Ridge took office in 1995, he worked with the General Assembly to pass the Land Recycling Act, which we have

heard, Act 2, early that year. The law addressed two key things

from an employer-owner standpoint: that is the uncertainty associated with brownfield cleanup standards and it also brought finality

as far as liability release is concerned. Secretary Seif already commented, but it is safe to say and at the time, our chairman, Hank

Barnett did say that had Pennsylvania not had Act 2 in place at

the time, Bethlehem Steel would not have been able to take the approach it did on the 1800 acres here in Bethlehem. It would have

been a totally different project and the Beth Works now and the

LVIP projects that we see today are only possible because of the

fact that we had Act 2 in place.

There are several key factors that position the 1,800 acres for the

opportunity that exist today and one was the leadership provided

by Secretary Seif of the DEP and which is being continued by Secretary McGinty. Another was the enlightened management of Bethlehem Steel that was willing to take some measured risks and to

negotiate some uncharted waters in applying the new law to its

property. Many of the principles of both DEP and Bethlehem Steel

were the same both before the new law and after the law. The difference was that with the new law in place and with inspired leadership, instead of an adversarial approach with little or no

progress, the parties saw an opportunity to convert an inactive operation into a potentially prosperous community economic development project by jointly addressing the issues.

117

Another key factor was that DEP introduced EPA into the

project at an early date and we have heard about the agreement

that was signed between the parties. This turned out to be very

significant because throughout the negotiations, all the principle

parties, the decisionmakers, Bethlehem and its advisors, DEP and

EPA, were always at the table. And the importance of this approach was that surprises were eliminated or at least minimized

because new information was passed among the parties almost simultaneously upon being received.

Now, after completing the studies to determine highest and best

use of the land, the most important question critical to a property’s

future was how the environmental issue was going to be managed.

By choosing the brownfield remediation approach, Bethlehem was

able to prepare most of the 1,800 acres for sale or reuse, and DEP

and EPA at the time called this a National model for brownfields

redevelopment. Bethlehem had projected that when fully developed, investment of private and public dollars in the Bethlehem

Works and Bethlehem Commerce Center project would be about

$1.2 billion, would create between 7,500 and 10,000 jobs and generate some $70 million in annual tax revenues.

These projections still look good today, but now the investment looks, now looks like it will approach $2 billion and probably exceed the $2 billion. To date, there has been significant investment

in a power plant by CONECTIV Energy, about $600 million, an

intermodal facility by Lehigh Valley Rail serving Norfolk Southern,

three technology centers you have heard referred to, a skating rink,

LVIP’s new industrial park and onsite infrastructure of more than

$25 million. Site preparation and planning by Bethlehem Steel exceeded $40 million. Congressman Dent was here recently announcing funds for a new highway expansion, it will also add about $60

million to the project and the National Museum of Industrial History has about a $25 million investment in the project it is doing.

None of this would have happened had we not had the Pennsylvania brownfields law in place. Thank you, Mr. Chair.

[The prepared statement of Mr. Donches follows:]

118

119

120

121

122

123

124

125

126

127

128

Mr. TURNER. Thank you. Mr. Dent.

Mr. DENT. Kerry, thank you for the tour this morning and also,

I just was reviewing your comments once again and you made some

specific suggestions about what we ought to be doing particularly

with respect to Federal EPA funding. As you are probably aware,

Ray probably more so, many of the State programs, I believe, are

directed or there are incentives to take State program funding dollars toward brownfield sites. They give you greater incentive. I am

not sure if there is a fixed percentage. Has it been your experience,

and this is really for Kerry and for Ray, that EDA funding is not

as targeted toward brownfields sites and do we need to provide

that kind of a fixed percentage for brownfield sites of that funding?

I just always thought that most of the funding would logically go

there because that is where it is most needed.

Mr. WROBEL. LVIP was a recipient of EDA funding for three out

of its previous six industrial parks and I think the issue there is

the legislation and the environmental insurance industry catching

up that allows for private development on brownfield sites, so most

recently, I would say yes, it is my understanding that there has

been an emphasis with EDA funding on brownfield sites, but if we

can, again, codify and make sure a fixed percentage each year is

definitely allocated toward brownfield——

Mr. DENT. What would be a reasonable percentage?

Mr. WROBEL. Working in brownfields? I would say——

Mr. DENT. Because industrial site reuse at the State level, I believe there is a fixed percentage. I don’t know what it is off the top

of my head, but——

Mr. SUHOCKI. The ISRP funds are down to about half a million

dollars a year now.

Mr. WROBEL. But 100 percent allocated toward brownfields sites.

Mr. DENT. It is 100 percent?

Mr. WROBEL. Yes.

Mr. DENT. OK.

Mr. WROBEL. Yes. So I would say at least, you know, 60 to 75

percent I would assume.

Mr. DENT. Of EDA funds——

Mr. WROBEL. Should be targeted toward brownfield sites.

Mr. DENT. Great, OK. And then on the, you also mentioned the

environmental insurance.

Mr. WROBEL. Correct.

Mr. DENT. That issue, how would you, would you recommend

that EDA funds be allowed to go toward that, as well?

Mr. WROBEL. It is my understanding this is being discussed at

the staff level and at EDA currently and again, the representative

from EDA this morning, Abe, spoke about the block grants that are

being given to communities. At the moment, those block grants

must be used for remediation, which triggers another level of Federal reporting that is not required by Pennsylvania’s DEP. By funding environmental insurance premiums, it is being discussed that

Federal funding would not be triggered and because it is not actually funding remediation, it is funding the insurance premium and

an organization like us would get the benefit of having the streamlined approach that DEP’s providing as far as reporting and remeVerDate 11-MAY-2000 12:55 Apr 24, 2006 Jkt 000000 PO 00000 Frm 00132 Fmt 6633 Sfmt 6633 D:\DOCS\25888.TXT HGOVREF1 PsN: HGOVREF1
129

diation with the added bonus of a grant paying for what is a very

significant up front cost.

Mr. DENT. OK, thank you. And just finally, Steve, I wanted to

say I thank you to you and your colleagues at Bethlehem Steel at

the time for being enlightened. The tour that we took today, I

mean, Bethlehem Steel could have taken the approach, it could

have just locked the gate and they didn’t. They did a lot of things

very thoughtfully and they planned well and I think today we are

seeing some of the results of that planning in conjunction with Acts

2, 3 and 4 at the State level and just proud to be able to drive

through there today and just see all the activity on a dreary, rainy

morning, just to see, you know, life there, a lot of life and a lot of

action there and I just want to thank you for your leadership and

could you just quick give us a summary of where you stand with

the museum right now?

Mr. DONCHES. Well, we have raised about half the money we

need, about $121⁄2 million. We started restoration work on the

building by replacing the roof recently and we continue to raise

funds to do the rest of the construction work and exhibit work. It

is an opportunity to bring the Smithsonian Institution with our relationship to a small community, which was a major part of the affiliations program that the Smithsonian talked about, how to take

objects that have been in storage in and around Washington warehouses and bring them out to communities throughout the country.

I am proud to say that we were the first affiliate. We served as

the template for the affiliations program for the Smithsonian.

There are now about 140 in some 38 or 39 States, all different

types of purposes, so this is another opportunity that the

brownfields presented, because you would not have done this otherwise.

And if I might comment, Charlie, that I think the important

thing in this whole brownfields project was the public/private partnerships that we were able to establish early on. And it was to

know the working process with EPA and DEP literally sitting

around the table on a regular basis talking about the issues, doing

the testing and I think the reference that was made earlier about

the need to communicate to the public what brownfields are all

about. It can’t be overemphasized. It is critical because the general

consensus right off the bat, for example, the steel plant, was that

it will be so contaminated that it won’t have possible future use.

In fact, many of the sites are managed quite well from an environmental standpoint and the remediation under the options under

brownfields law can be accomplished at reasonable cost and put to

good use in the future.

But the detail work that went into the remediation plan is very,

very significant. The monitoring wells, the soil testing, over periods

of many quarters to determine what, if any, contamination exists

and then to file a Notice of Intent to remediate with the State,

which required approval. I think all that information is often just

passed over because you say brownfields and people say oh, it is

a different approach. It is different, but it is also very detailed and

it does result in a cleanup.

Mr. DENT. Thank you. Thank you, Mr. Chairman.

Mr. TURNER. Thank you. Mr. English.

130

Mr. ENGLISH. Mr. Chairman, if I could, I would be happy to yield

my time to Mr. Dent.

Mr. TURNER. Good, excellent. Gentlemen, I would assume that

many communities come to you and look at the things that you

have accomplished and look to advice as to how they can be more

successful. When those communities come or when people ask you

what do you think is essential for them to have success, what advice do you give them? Kerry.

Mr. WROBEL. Well, I think the LVIP model is very interesting.

It is a stand alone organization, nonprofit, no government affiliation, so we keep politics at the door. We say we are nonpolitical.

Our only focus is economic development, so to have an organization, and this is not simply to toot our horn, but it is something

that other communities will say we don’t have something like

LVIP, which is a group that is independent, has the ability to secure Federal and State grants and low interest funding.

It has a specific focus of infrastructure development and selling

land to end users and then really basically getting out of the way

and letting the private sector function, so I would say LVIP is certainly a model that could be shown and demonstrated to develop

brownfields successfully to other communities. And then will echo

what Steve has said. LVIP VII is possible by funding from State,

county and Federal levels, from the city of Bethlehem with timely

approvals and tax abatement, the school district and the county, as

well, with tax abatement, so it has to be—it is an overused term

now, over 15 years I have been hearing this word—the ‘‘partnership,’’ it is overused, but it is so critical. You cannot develop a

brownfield site without all governments at the table with nonprofits making this a top priority for a community.

Mr. PAUL. Well, ‘‘partners’’ is in our name. Ben Franklin Technology Partners is the most respected, most successful and most

imitated technology-based economic development organization in

the United States. As a result, we have had visits from Governors’

offices and various economic development groups from a dozen or

more States and some foreign countries. And to echo Kerry, the

partnership is what makes it work because we don’t have all the

resources that we need under our umbrella. The fact that we work

with the university, with the city, with all of the other economic

development organizations in a partnership to make something

happen has been the secret to our success. Our companies that we

are going to put into those brownfields buildings and have put in

those brownfields buildings have companies that would not exist if

these partnerships did not work.

Mr. TURNER. I will just build on that, and the partnerships are

critical and the partnerships are on a regional basis. As I mentioned earlier, I represent two counties and across those two counties, that network that Chad talked about of education, government, etc. really pulls together in setting priorities so that when

we are talking to government, we are talking from the same page.

The issues that are important to us are the issues that are important for every partner, so there is that kind of agreement that

doesn’t keep us fighting one for the other for the few dollars. It lets

us focus on the top priorities and move on those.

131

Mr. DONCHES. Mr. Chairman, I would say that it is important

that people looking at sites understand that there are voluntary

cleanup standards that they want to meet and they have the choice

as to how they want to meet those standards, so it is important to

have technical expertise as you approach the standards. Of course,

the issue that I mentioned of finality and liability release, if you

don’t have that, you are not only not going to get developers, you

are not going to get anybody to finance the projects, either.

I think communication broadly, to the community, is provided for

in the brownfields law in Pennsylvania but it is important to do

that at an early date. For example, we had a couple of open hearings, public hearings where we just invited, through newspaper advertisements, people to come and hear what the project was about

and how remediation was going to be addressed. I thought that

was very useful.

And I think I would probably say to owners or developers not to

be afraid to explore the issues and the opportunities. You find one,

you sit down today with DEP certainly in Pennsylvania and EPA.

It is a different approach. And you find that it is not as bad as it

used to be, the old adversarial days where we locked horns. I think

today openness is there, there is transparency and I would say explore the issues; the opportunities are great.

And then, finally, it has been mentioned a number of times, infrastructure funding, both onsite and offsite, is critical and to get

that into play early on. Locally here, we were fortunate to have the

county, Northampton County, push for a bond issue that resulted

in some $13 million for a road that gets into the area that Kerry

is going to be developing, but even with early support, that has

taken a long time; they are finishing it up now. But it won’t do any

good to have a remediation plan and go through the whole process

if you can’t get to the site. And in the case of this one, it is extremely large, 1,800 acres.

It has been called the largest private brownfield development.

You need not only the onsite infrastructure that the county has

helped provide, but the highway that surrounds the site, State

Highway Route 412. That funding has been under discussion for

every bit of 10 years and we are now finally getting to that point

where the funding is essentially in place. I think construction is

out to 1998 for starter, but without the infrastructure funding, all

the other work, if you can’t have access to the site, it comes up a

little bit short, so that is critical.

Mr. TURNER. Thank you. Mr. Dent for final questions.

Mr. DENT. Just to Chad Paul, actually. I believe before you arrived at the Ben Franklin Technology Partners, I guess Technology

Centers I and II were already up and running, if I am not mistaken and I believe one or, I believe maybe both of those buildings

were built prior to Acts 2, 3 and 4. Is that correct?

Mr. PAUL. We had coverage on 2, 3 and 4, I believe, Steve, right,

for Beth Tech II?

Mr. DONCHES. Yes, Beth Tech II. Only the first one was——

Mr. PAUL. But we did not have it for the first one.

Mr. DENT. I guess the question I have, and maybe it is a better,

I am not sure if I should address it to Chad or to Steve, but how

132

is it that you were able to build Tech Center I without that liability

protection when you did it?

Mr. PAUL. The board of Lehigh Valley Industrial Parks of Northampton County Development Corp. had long talks with folks from

Bethlehem Steel. They had guarantees, corporate guarantees from

Bethlehem Steel to ease the pain and Steve was involved with all

that. Perhaps you may want to address that in more detail, but it

was the, it was assurances of help from Bethlehem Steel if there

was more of a problem than what we had originally seen on the

site that allowed all of us to, and again, I am talking about my organization, not me.

Mr. DENT. So Bethlehem Steel was essentially going to assume

liability or——

Mr. DONCHES. Yes, there were dollar limits if they were exceeded, that Bethlehem Steel would step up and there was a risk involved, but it was a relatively small site and my memory is maybe

4 acres or something of that sort and since we owned the site for,

Bethlehem Steel owned the site for 100 years, pretty good records

as to what was there and what it was used for, so it was a measured risk which you might take on a small site and also, the main

thing at the time was that Bethlehem was trying to present an opportunity to help revitalize the community, so it was part of a good

citizenship thing that, with the consortium, would help to underwrite part of the costs, just to make it, just to give it a start and

with LVIP, Job Corps II, BETCO, Northampton County, it came together, again, it was a partnership that everybody helped to pull

a little bit on the oars.

Mr. PAUL. I should note as an addendum that finally this year

we are getting final clearance on that original site.

Mr. DENT. My point is that I think you can see that somebody

had to accept responsibility for a potential contamination liability;

in this case it was Bethlehem Steel.

Mr. PAUL. Correct. Since our partnership of organizations owns

those buildings through Northampton County New Jobs Corp., once

Bethlehem Steel was no longer there to back us up, we felt it prudent to spend the dollars we needed to spend to get that final work

done and get that clearance.

Mr. SUHOCKI. And we are trying to sell it, so obviously, we have

to go through those clearances.

Mr. DENT. Trying to sell Tech Center I? OK.

Mr. WROBEL. And just finally, I just want to acknowledge for the

committee here, that there were good local partners in this process.

It wasn’t just the State and the Feds, the MOA, but the—as was

mentioned—the county governments matched significant dollars on

that road that we drove on today, actually, that four lane highway—Commerce Boulevard. And also municipal government and,

of course, the economic development corporations all played leading

roles in the redevelopment of this site, so I just wanted to acknowledge that.

Mr. TURNER. Great. As with the first panel, I want to give you

an opportunity for any closing remarks or if there are questions

that we haven’t asked you that you would like to respond to or

things that you would like to add, having heard the other panel

133

members. I want to give you that opportunity if you have any additional comments.

Mr. SUHOCKI. I would just like to say that we appreciate your interest and involvement here. It is very, very important. We have

approximately 100 brownfield sites in the Lehigh Valley. They are

not all as famous and large as, fortunately, as the LVIP project,

but they are very important and each one of those, as I mentioned

earlier in my comments, are typically within an urban setting and

it is great as we look at the proposed legislation that you are preparing that the tax credit will help those kinds of properties be returned to use and useful.

Mr. TURNER. Excellent. Well, before I give you my closing comments, I want to thank Mr. Dent for having us here in his district

and for allowing us to focus on what is obviously a successful partnership and has given us some additional issues and ideas of what

we need to do on the Federal level for brownfields. It is great to

hear the past successes that you have had as a community and certainly, Mr. Dent’s participation in that is why he is so effective in

Congress and as Vice Chair of this committee because he brings

that level of experience in working with you at the community level

and his experience in the legislature to Congress so we can address

National issues. And I want to thank Mr. English for being here.

He certainly raises our profile and his leadership in being here at

this hearing.

Mr. ENGLISH. Mr. Chairman, I would also like to thank you and

Mr. Dent for being so proactive in sponsoring this hearing and in

focusing on what I think is one of the better case studies in the

country for this program and how you tackle brownfield problems,

so it has been a privilege to be part of this process today and I

think this will be immensely valuable to us when we make decisions in a number of committees in Congress.

Mr. TURNER. Excellent. Before we adjourn, Mr. Dent, do you

have any closing comments for us?

Mr. DENT. I want to thank everybody for providing testimony

today and I think what we have seen here today is, again, talking

about the Bethlehem issue in particular is interesting, but most

brownfield sites, of course, aren’t as big or as complex and that,

you know, we can take a lot of lessons out of here and apply them,

frankly, to smaller sites, that hopefully will be less complex but

nevertheless difficult and that is really what I am hoping for, that,

you know, here we are taking, really, the mother of all brownfields

in the United States and seeing a lot of success and there are lessons learned and hopefully we can take this experience, this model,

from Pennsylvania and from Bethlehem and apply it around the

country.

Mr. TURNER. Thank you. I want to thank all of our panel members, again, for your preparation today, for what you contributed in

participating and also what you do for your communities. These

field hearings are a valuable tool for us as we get to learn from

your experience and your expertise and be able to take those back

to Washington to look at Federal policies.

I would also like to express my appreciation to the city of Bethlehem and to Lehigh University for hosting us and we owe a special thanks to President Farrington and his staff, particularly, to

134

Vice President Michalerya, who has stayed here with us and for

showing your wonderful facilities and for your accommodating efforts. And in the event there may be additional questions that we

don’t have time for today, we will leave the record open for 2 weeks

for submitted questions and answers and statements for the record.

With that, I thank you all and we will be adjourned.

[Whereupon, the subcommittee was adjourned.]

Æ