Brownfields redevelopment typically occurs under one of three scenarios:
Private-Led – this scenario occurs when a brownfield site is located in an area with high development potential, a strong market demand and developers can reasonably anticipate a return on their investment.
Public-Led – this scenario occurs in an area where private sector interest is lacking due to market factors, as well as site factors (i.e., parcel size and/or configuration) limit potential development options.
Public-Private – this scenario occurs when there is an agreement between at least one public-sector and one private-sector entity to combine each of their resources to achieve a goal that is beneficial to each of them.
Regardless of the scenario, there are three stages of redevelopment:
Pre-Development – Includes activities such as conducting due diligence, environmental analysis, identifying fatal flaws, development of pro-forma and purchase agreement, use of pro-forma to refine the site design, preparing redevelopment plan, identifying funding and financing sources, and acquiring environmental insurance.
Development – includes activities such as obtaining permits and approvals, site cleanup and preparation, marketing and pre-leasing activities, and construction and opening.
Management – includes activities such as holding the property (developer/owner assumes Operation & Maintenance responsibilities [O&M}), or the property is sold in which the purchaser assumes O&M responsibilities.
Some of the key players in the brownfields real estate development process include:
