Gcrec and Brownfields Gcrec 2012 Conference --

GCREC and Brownfields

GCREC 2012 Conference -- Revisiting Brownfield Redevelopment

The 4th Annual Conference of the Global Chinese Real Estate Congress (GCREC) was held on July 3-5, 2012 at the Grand Hyatt, Macau SAR, in China. The event was hosted by the Faculty of Business and Administration of the University of Macau and served as a platform for the brainstorming among scholars, practitioners and government officials on the latest developments in the real estate field and challenges faced in the sector. Participants came from across the globe.

A central component of the event was the "Revisiting Brownfield Redevelopment" presentation which focused on the reuse and reclamation of land that has real or perceived contamination. Brownfield sites are typically abandoned or underused industrial and commercial facilities available for re-use, which are very prevalent in China and can be a major boon to the local economy.

Expansion or redevelopment of such a facility may be complicated by environmental threats, however. This is a timely and relevant topic for China because of its limited use of land and history of traditional industry. Long abandoned manufacturing or warehousing facilities or currently operating plants and railroad yards often show signs of pollution. There are many formerly industrial areas that have now become desirable real estate locations in an age of rapid urban growth. For example, an abandoned gas station that has since been excavated could be valuable piece of property, but could also have significant contamination from underground storage tanks that have been removed. Scenarios such as this can be a hindrance to the land development process.

As brought out during the conference, population growth and an increased need for space is a driving force behind much of the interest in land re-use. Still, new regulations emphasizing environment concerns, especially after 2008 the Beijing Olympics, have spurred concerns that redevelopment projects incorporate due diligence in safeguarding public health and safety. Land re-use is possible if land levels are only contaminated by low to moderate concentrations of hazardous waste or pollution. More severely contaminated land falls out of the scope of brownfield classification. Done properly, brownfield redevelopment in China can relieve environmental pressure and resolve the glaring contradiction between urban land idleness and urban sprawl.

The conference emphasized the tremendous rate of urbanization in the country in recent years. It seems that the long-awaited changes and land reforms have spurred development and opened the door to rectifying and rejuvenating the economy and urban zones. Much of China's real estate resources were highly damaged due to socio-political circumstances and civil wars. After years of urban decline, China is now entering an era of urban renewal and over the past three decades, the country has achieved enormous economic growth, accompanied by a growing number of large and quite livable cities. In the coming years, urbanization will continue to be an opportunity as well as a challenge to the country's effort to sustain rapid growth and maintain harmonious development.

The urban challenges include high-density populations, overcrowded housing, and deteriorating environmental quality. In addition, defining "clean" can be difficult. Standards are strict and redevelopment is often expensive. The conference was held in part to address the growing need to disseminate information to land developers and potential buyers about legal standards and everyone's responsibility to protect human health and the environment. Failure to fall into compliance in this area can have marked repercussions for potentially every part of the land and thus, every home in close proximity to the land (Knowlton & Minier 2001). When soil is toxic, it can lead to water toxicity and hazards to children. The magnitude of such problems warrants further discussion and the conference proved a solid forum for addressing these possibilities and the associated health risks.

It seems that redevelopment is a difficult, but not an impossible process. Two common themes and what appear to be major challenges to brownfield restoration, for instance, include cost and community support. If the site is heavily contaminated, the fees for removing dangerous chemicals can cost developers a great deal. The cost of hiring an environmental consultant and testing for contamination is also high. Further, community support must be rallied to ensure the success of such undertakings. At times there is a lack of cooperation from businesses that may own brownfield land. Still, there have been successes in communicating the benefits of redevelopment to local communities. This is usually accomplished through the emphasis of rewards which are far greater than the costs -- the creation of new businesses, a larger tax base, improved housing, and pleasant recreational facilities, open spaces and parks.