Pennsylvania has, as a matter of policy, historically and financially supported the commercial redevelopment of brownfield properties. “The Keystone Principles & Criteria for Growth, Investment & Resource Conservation” were developed and implemented under the leadership of Governor Edward G. Rendell to serve as an interagency approach to sustainable economic development and conservation of resources through Pennsylvania’s investments in its diverse communities.

The very first of the Keystone Principles is “Redevelop First,” which promotes the preferred use of funds in the “reuse and redevelopment of ‘brownfield(s)’ and previously developed sites in urban, suburban, and rural communities for economic activity that creates jobs, housing, mixed use development, and recreational assets…”

In the last four years alone, Pennsylvania’s strategic investment of more than $220 million in the cleanup and redevelopment of brownfields has yielded dramatic results for the state’s environment and economy. More than 900 former industrial sites have been cleaned up and put back into productive use since January 2003. Twenty-two companies have committed to locating on former brownfield sites, and more than 27,000 jobs have been created or preserved.

In “high-demand” real estate markets, like the Philadelphia/New Jersey metropolitan area, developers are becoming quite savvy and are realizing significant profits on brownfield redevelopment projects. It is a much bigger challenge to accomplish redevelopment of brownfields in the absence of such strong market drivers.

“Brownfield bundling” is an innovative concept that Pennsylvania has employed in an attempt to focus on and provide specific support for brownfield sites in its smaller cities and boroughs. The concept “bundled” several brownfield projects together in an effort to meet the investment criteria of larger developers that typically only operate in high density real estate markets, such as Pittsburgh or Philadelphia. Bundling offers developers the economies of scale they may need to realize the type of return on investment that would make a real estate deal attractive.

Several commercial real estate developers are utilizing a similar concept to provide their retail clients with attractive main street locations. Developers are buying and cleaning up portfolios of excess properties and matching those properties to the site selection criteria of their retail clients. As a result, we are seeing new businesses, such as drug stores, coffee shops and restaurants springing up on these properties every day.

Typically, state funding is focused on commercial redevelopment projects that create or retain jobs. More than ever, public funding entities (at both the state and federal level) are focused on measurable results for their investment of public monies. Job creation is an effective performance measure in justifying the investment of public money and in determining the return on that investment.

Another valuable performance measure is to determine the amount of private investment generated by the influx of public money. Pennsylvania has data that indicates that, in some cases, the state is getting 3 to 4 dollars of private investment for every 1 dollar that it puts into a redevelopment project. The amount of private investment is often higher for commercial redevelopment projects versus those that are primarily residential. So, in an effort to leverage the highest levels of private investment, public monies are invested in commercial redevelopment efforts.

As a result, very few public funding sources exist for redevelopment projects that are predominantly residential. Developers are overcoming this lack of public funding incentives for residential redevelopment by incorporating a residential component into an overall “mixed-use” site redevelopment plan that is largely anchored by commercial redevelopment.

Pennsylvania has many examples of highly successful mixed-use brownfield redevelopment projects. One such example is South Side Works in Pittsburgh. The site of a former, sprawling LTV Steel plant is now home to a model urban brownfield redevelopment, featuring office buildings, medical facilities, a manufacturing firm, retail shops, and more than 400 housing units.

Some 5,400 jobs are expected at full build out, and hundreds of people will live in this attractive “back to the city” neighborhood. In addition, the quality of life also has been enhanced by the creation of a waterfront park and river trail system. According to www.southsideworks.com, this brownfield redevelopment is truly a “shop, dine, live, work and play” success.

Jill Gaito is Brownfields Policy Specialist with the Pennsylvania Department of Environmental Protection.