Last Friday, Cherrytree Group hosted our third annual seminar, “Developing a Brownfields Site: Building a Toolkit for Success”. This was a panel discussion which drew experts from several different fields together to discuss how to work together and essentially form a team to develop a Brownfields site without ‘breaking the bank’.
The overarching theme of this discussion was the importance of putting together a team for this kind of development project. Our panelists included an environmental: developer, lawyer, engineer, insurance broker, and tax credit consultant. Each panelist spoke about the role they would play in developing the site and then the floor was opened up for question and answers from the audience. Because developing a Brownfields site is inherently more complex and costly than developing uncontaminated parcels of land, it pays to have a competent development team who can work together towards a solution that is reasonable and financially beneficial for the developer.
While the logic of putting together a brownfields development team may seem obvious, we have found that this type of collaboration is something the industry is sorely lacking. The most important benefit of putting together a team is that it allows for channels of communication among people who may not otherwise speak to one another at all. For example, as the tax credit consultant, Cherrytree Group traditionally comes in at the end of the development phase, after remediation has occurred. When possible however, we speak with development team members, especially the LSP, prior to remediation and make sure the cleanup is compliant with the tax credit requirements which results in a higher tax credit in the end of the process.
Interestingly, after our event several LSPs approached me and said they enjoyed the panel discussion but that they felt it wasn’t always possible to assemble a team in time, especially for smaller deals. I heard a few comments along the lines of, “creating a brownfields development team is great for large projects with 500 units, but what about when I am doing remediation work for a 50 unit development?” I also heard multiple LSPs voice their concerns about the short timelines their clients often imposed. The practical concern seems to be that developers for smaller deals generally lack the resources and time necessary to assemble a team like the one the panel represented.
This makes perfect sense. The real world throws curveballs and clients often have hectic schedules and unrealistic expectations. Of course if a client calls an LSP and asks if they can get xyz done in two weeks they would not realistically have time to assemble a development team and determine a unified development plan. I think a much more practical approach to these types of situations is to have a trusted development team assembled BEFORE you get the client call. Although ideally, you would want to have each development team be site specific, this may not always be possible. Having relationships and dialogue with a development team can still be helpful in smaller projects with tight deadlines. This development team can still act as a sounding board for questions, recommend products and/or solutions, and potentially come on board the project as a value adding member of the team.
Projects will never be as clear cut as the mock example we used for our panel discussion. This isn’t our expectation. The takeaway from the panel discussion is that having a development team can add a level of support to you and added services for your clients. Together a Brownfields development team adds a level of value to the developer that is greater than if each professional acted alone.