Getting Brownfields Off Your Books
Keeping ownership of environmentally impaired properties carries significant financial risk, particularly in a downturned economy. With the right strategies, you can successfully divest your company of these real estate liabilities.
Rayomand Bhumgara, President, Sustainable Strategies 2050 LLC and Christopher Steele, Global COO and North American President, Investment Consulting Associates (Oct/Nov 09)
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Reverse Site Selection
A good strategy for re-use begins in understanding the strengths of the site as it might have appeared in its original, unimpaired state. Understanding and reversing the site selection process provides important insight into how these properties might be re-used and can, in the best of cases, even point to new users for this excess property.
The site selection process normally begins with an examination of the problem to be solved; i.e., the goals that the new facility will be expected to fulfill. These goals will include such straightforward items as the functions to be accommodated within the facility and how they fit in with the user's value chain(s) or production strategy, etc. The process will then move to examine the staffing, skills, logistics access, market proximity, regulatory, quality of life and features needed to make the operation successful.
The same process is being used in reverse to help companies, communities, and public agencies re-use abandoned, vacant, and underutilized properties. Labor, market access, infrastructure, climate, cost, utilities, regulatory, and other data provide the clues to determine who might be a prospective new user for the site or facility and give insight into the packaging and marketing that can be used to make that site more attractive and competitive.
Industry and use-specific profiles coupled with weighting schemes can add substance to marketing plans to demonstrate the location's and community's strengths relative to competitive alternatives - as well as into incentive plans later. Essential items such as market access or infrastructure requirements - one-day drive to "n" markets, proximity to international shipping, etc. - facilitate filtering and removal of candidate communities that are unable to deliver them. From this point forward, the site selection process becomes a weighting game.
No candidate location will completely match the prospective user's ideal location profile, and some preferred criteria, such as access to key markets and the availability of highly trained labor, may negatively correlate with others, such as low cost of operations. The user must find the balance that will ensure the success of the enterprise by providing a location that will respond to the user's needs now and during a reasonable range of downstream scenarios.
Finally, the company or community must be able to look into the future to determine which of the industries or uses best suited to the site are likely to have a need in the near future. What are the dynamics of the industry? Who are the major players? What pressures is the industry facing, and what will this likely force the companies to do? Is it possible to influence these decision factors to make the site at hand more attractive? State and local government agencies can also be enlisted - through incentive, credit, or other programs - and become active partners in bringing economic vitality to what would otherwise be drain on the community. Rayomond Bhumgara has over 20 years of experience in the real estate acquisition/development and environmental consulting business. He can be reached at email@example.com. Christopher Steele is president of CWS Consulting Group, a business consulting firm specializing in location strategy, site selection, industrial development, and business attraction. Contact him at firstname.lastname@example.org.