Brownfield are abandoned, idled or underutilized industrial or commercial properties where expansion or redevelopment is complicated by real or perceived environmental contamination, building deterioration/obsolescence, and/or inadequate infrastructure.

Industrial sites which are abandoned, idle or under-utilized, whether possessing issues of contamination or not, are referred to as Brownfield.

These sites are typically an urban reality and are more often found in communities with long-established manufacturing, warehousing and heavy industrial concerns. In many cases, the root cause for the contamination can be traced to a period in time when the environmental impact of certain hazardous substance handling procedure was largely unknown. Re-use of these sites bodes well for us socially as there are many attributes to these sites, both from the planning/economic development perspective.

For a variety of reasons developing numbers to quantify the degree of seriousness of the Brownfield situation is extraordinarily difficult. A number of years ago, attempts to clean up certain sites were approached on the basis of purchasing them in an “as is” state, for a very minimal amount and proceeding to remediate.  This approach created more problems than it solved as many of the purchasers were under-capitalized and failed before achieving a clean site.

In the process, parties to the transaction were negatively affected and the site often wound up back with the original owner, liability and all (which, in some instances, was worse than when work started on the project), or with the Municipality.

We now recognize that the process required to adequately clean abused sites is complex, slow and expensive.  Those parties that are unsophisticated, under-capitalized and unprepared will fail in their endeavors.  Magma has experienced and demonstrated these facts for the past decay. From an Owner’s perspective, selling it cheap and hoping to escape the liability simply does not work. Lenders do not lend on environmentally troubled sites as they themselves are sufficiently intimidated by the spectre of Liability.

As a result, most of these sites are available only to parties, which are self-financing; that is, they must have sufficiently strong Balance Sheets to undertake the entire project with no financial assistance of any kind.  Now we see that both creativity (the vision to plan alternate and higher and better uses) and capital are prerequisites to initiating Brownfield re-development.