Polluted sites seeing new life.

Concerns about cleaning up polluted sites and new federal legislation is continuing to spark interest in "land recycling" among developers and others.

According to a study conducted by environmental insurance provider XL Environmental in Exton, Penn., there has been a 43% increase in land reuse activity over the past year.

"Growing problems with suburban sprawl- combined with advances in remediation technology and environmental insurance -- make brownfields redevelopment an increasingly attractive solution to an array of land use and economic problems," said Bob Hallenbeck, XL Environmental senior vice president.

XL Environmental partnered with the International Economic Development Council in Washington, D.C., to do the media analysis -- called the 2002 XL Environmental Land Reuse Report - for the third consecutive year. The IEDC analyzed 331 newspaper and business journal articles published from July 2001 to June 2002.

LandBank, a Lakewood, Colo.-based company that specializes in the acquisition and repositioning of environmentally damaged properties, can attest to the growing interest in land reuse projects. The company has worked on 37 sites in the past few years, some of which are in the metropolitan New York area, said president Bill Lynott.

"We identify assets that are good real estate to begin with, but are encumbered by environmental impairment," Lynott said.

As an example, Lynott mentioned a site in Copiague, Long Island that had been impaired by fuel oil tanks used at a dairy processing facility. LandBank transformed the site into a senior assisted living facility.

He stressed, however, that LandBank is not a clean-up firm. In fact in most instances, they are the developers of a project planned for the environmentally impaired site.

"We are first and foremost a real estate company," he said.

Lynott cited new Security and Exchange Commission rules that require companies to detail the environmental impairments of a site more completely.

"There's increasing pressure on companies to expose environmental liability," he said. "Corporate America is looking a little harder at surplus assets and a lot of corporate assets have environmental problems."

The increased attention is often a catalyst for redevelopment plans, he said.

Also, President Bush's signing of the $1.25 billion Small Business Liability Relief & Brownfields Revitalization Act is an example of expanded federal support for brownfields redevelopment. The new legislation provides increased funding for assessment, new funds for cleanup and provides incentives for states to adopt brownfields programs, according to the XL Environmental report.

"This year's report may also show some effects of the passage of the Small Business Liability and Brownfields Revitalization Act earlier this year," said Hallenbeck. "Whatever the combination of reasons for increased land reuse activity, it is clear that sites once considered real estate eyesores are now viewed, through a completely new lens, as exciting opportunities."

A range of former land uses were mentioned for the 428 sites studied in the report. Of the 428 sites, former uses were discussed for 385 sites, or nearly 90%. Industrial uses account for 268 sites, heavy industry for 135 sites, light industry for 91 sites, warehouse/distribution for 19, and mixed industrial use for 23 sites. About 15%, or 61 sites, were former public facilities and 48 were military uses, according to the report.

LandBank is always looking for new sites to acquire, particularly large pieces that are well positioned for warehouse, retail or multi-family use, Lynott said.

"We're better financed than we've ever been and we're in a better position to acquire assets," he said.