From the Ground Up

Brownfield Redevelopments Can Provide Relief for Crowded Cities—If Project Teams Effectively Manage Risk

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Rhian Greenrod, Barangaroo Delivery Authority, Sydney, Australia

BY SARAH FISTER GALE

PORTRAITS BY RYAN LINNEGAR

Battersea Power Station project site, London, England

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PHOTO BY JASON HAWKES, COURTESY OF THE BATTERSEA POWER STATION DEVELOPMENT COMPANY

In 2016, more than half of the world's 7.4 billion people lived in urban areas, according to the U.S. Census Bureau. By 2030, 1 in 3 will live in cities with at least half a million people, a 2016 United Nations report says.

Developing brownfield sites offers a promising solution. By transforming unused industrial locations, ranging from former shipyards to abandoned smelting facilities, project teams can help deliver thriving new mixed-use neighborhoods with condos, retail, office space and community gardens. Breathing new life into plots with checkered pasts helps cities meet growing housing demands—without sacrificing precious green spaces.

However, these redevelopment projects often come with controversy. Brownfield sites can be tainted with toxins left by their former owners, which can make transformations a risky endeavor. If the contamination isn't well understood, skyrocketing remediation costs can explode project budgets. And if the community isn't convinced the cleanup will get the job done, protests can delay or doom development.

Keeping brownfield redevelopment projects on track requires creating a clear multi-stakeholder communication and implementation plan from the start, says Cindy Brooks, president of the Greenfield Environmental Trust Group, an environmental remediation and redevelopment consultancy in Watertown, Massachusetts, USA.

“Brownfield sites are often stigmatized, and developers have to get local stakeholders to the table if they are going to overcome that perception and deliver a successful project.”

THE MAKING OF A MAKEOVER

While brownfield sites come with a collection of risks, they also offer unique opportunities. For instance, abandoned industrial sites might already have power, water and other urban infrastructure systems in place, which cuts projects costs. Plus, planning commissions are often eager to support projects that will reduce blight and generate new tax revenues.

Communicating the positive benefits the project will deliver to the community can help bolster public support, says Rhian Greenrod, a development director at Barangaroo Delivery Authority in Sydney, Australia. The Authority is leading a AU$6 billion, 22-hectare (54-acre) project to transform a former container wharf into a commercial, residential, retail and recreation destination on Sydney's waterfront. The Barangaroo site was previously home to various industrial facilities, and part of the site contains contaminants, such as coal tar and asbestos, that need to be removed.

These types of health and safety issues can create public concern, but Mr. Greenrod and his team have won over neighbors and other stakeholders by showcasing how cleanup of the site will benefit future generations. For example, Barangaroo aims to be the first urban community of its size to be “climate positive”—meaning it has no net greenhouse gas emissions associated with energy, waste and transportation.

“Our project plan includes goals to be carbon neutral, water positive, generate zero waste and enhance the well-being of the community,” Mr. Greenrod says.

Ms. Brooks agrees that project teams must stay focused on the benefits brownfield projects ultimately will deliver—things like revenues, jobs, new property taxes and blight elimination. At the outset of every project, her team works with key stakeholders—such as the municipality, environmental regulators and community groups—to make sure everyone is aligned on the project's goals and final deliverables. That way, when it's time to start planning the project, her team has a clear vision of how remediation and redevelopment construction will be coordinated and implemented, Ms. Brooks says.

“Stakeholder alignment at the outset of the project is crucial because overcoming the complexity and cost of redeveloping a brownfield site requires help from outside the sponsoring organization,” she says. “That help might be in the form of bonds, tax abatements or public investment in infrastructure. Public officials or other advocates can be important allies to help expedite the brownfield project.”

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“Brownfield sites are often stigmatized, and developers have to get local stakeholders to the table if they are going to overcome that perception.”

—Cindy Brooks, Greenfield Environmental Trust Group, Watertown, Massachusetts, USA

For example, she recently oversaw the redevelopment of a site in Massachusetts where the soil was heavily contaminated. The project's original goal was to put a cap on the land to protect the public from contamination. But, while protective of public health and the environment, that cap wouldn't allow the site to be reused. So Ms. Brooks and her team worked with community groups, developers and government agencies to create a new transportation hub, getting them excited about the potential benefits of redeveloping a site that had stigmatized the community for years.

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IMAGES COURTESY OF THE BATTERSEA POWER STATION DEVELOPMENT COMPANY. TOP PHOTO BY ANTHONY COLEMAN

Communicating the positive benefits the project will deliver to the community can help bolster public support.

—Rhian Greenrod, Barangaroo Delivery Authority, Sydney, Australia

“Aligned with the community, regulators and the private sector, we made the case to the state government that this [new project scope] would reduce the number of cars on the road, help the environment and catalyze job creation in a blighted community,” she says.

Ultimately, rather than capping the land, they built a central rail passenger station, a bus terminal for express service to the airport, and a 2,500-car parking facility on top of the contaminated soil, which protected citizens while adding value to the site and the community.

“If you align goals upfront, beginning with the end in mind, you run a much greater chance of success,” Ms. Brooks says.

Rigorous oversight and clear communication also can help mitigate these risks. Consistent documentation helps create accountability and allows project teams to manage surprises and navigate change—without turning sentiment against the project, she says.

“Good project governance provides top-to-bottom visibility of any deviations from a plan and allows for timely corrective actions to be considered and implemented.”

THE GREAT UNKNOWN

Brownfield redevelopment projects often require teams to grapple with a variety of risks related to environmental remediation, regulatory requirements and varied stakeholder groups. Those groups include government agencies and an array of contractors—each responsible for a different aspect of the project.

To be ready for whatever might come their way, project managers need to expect the unexpected, says Jim Hengel, senior vice president and project director in the energy business for global engineering and construction company Black & Veatch, Overland Park, Kansas, USA.

During the construction phase of a recently completed project to build a gas-fired power plant on a brownfield site, for example, his team discovered an ash landfill that the owner had not documented. The team had to assess the impact on the project schedule and budget of excavating the landfill and refilling it with clean materials—and propose a plan that pleased all parties.

[CASE STUDY]

Restoring Power

An iconic former coal plant is being reimagined for the 21st century.

The Battersea Power Station is a London landmark. Resting on the banks of the River Thames, the 80-year-old, decommissioned coal plant is one of the largest brick buildings in the world.

The 42-acre (17-hectare) site in southwest London, England has been abandoned since 1983—and it's crumbling. Massive concrete towers are rotting from years of corrosive coal smoke and need to be completely rebuilt. The brick and steel structure needs significant repairs. But given the building's status as a historic world monument, it can't be demolished.

Battersea offers a promising development opportunity in an up-and-coming neighborhood. But several previous projects have failed to transform the brownfield site.

“It is an expensive beast to refurbish. Previous developers didn't have the land mass to make the project cost feasible,” says Mike Grice, the London-based chief construction officer of Battersea Power Station Development Company. The organization, owned by a Malaysian consortium that bought the station site and adjacent land in 2012, expects its £9 billion project to be completed in 2026.

The redevelopment project will reimagine the massive power station and provide better transportation options to and from the locale. It also will add residential and retail spaces in and around the plant over eight phases of construction. By building the space out into a larger footprint, the project sponsor can use additional revenues generated to cover the cost of transforming the power station, Mr. Grice explains.

Construction of a Tube line extension and station near the site will be entirely funded by the private sector. Getting approval for this part of the project into the site plan required a lot of political lobbying in the early project design stages and was critical to the success of the project, Mr. Grice says. Easy subway access will make it easier to attract new residents to the site.

“The Tube is a game changer for Battersea. Without it, the project would not be as distinct as it is,” he says.

Still, the project faces significant obstacles. Mr. Battersea Power Station, London, England. Below, a rendering of the development Grice's team spent two years prepping the site (construction began in 2013). This included trucking contaminated soil off-site and beginning the rebuild of decaying chimneys and wash towers on the power station. The team also built a new power substation to support the increased power use and established a dedicated bus service for workers to eliminate overcrowding on public transit during construction.

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Battersea Power Station, London, England. Below, a rendering of the development

PHOTO BY RYAN LINNEGAR

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Project planners also had to factor in the impact neighboring construction initiatives could have on their project plan. Adjacent to the Battersea redevelopment site, which averages 3,000 workers on-site per day, teams are executing the Thames Tideway sewer project, including boring a tunnel along the length of the Thames. Both the Battersea and Tideway projects use the river to ship material off-site, so project leaders had to collaborate with each other to coordinate road use, site protection and access to utilities.

“It's all about de-risking the project on the front end,” Mr. Grice says. “If you spend the time upfront to understand and address the challenges you face, you set yourself up for success.”

“If you spend the time upfront to understand and address the challenges you face, you set yourself up for success.”

—Mike Grice, Battersea Power Station, London, England

Mr. Hengel's team also works closely with stakeholders to identify and mitigate safety risks. The team invites the site owner and subcontractors to join a senior site safety committee to ensure everyone is focused on the health and safety project team members. The committee lays out safety objectives, discusses improvements and works together to solve problems.

For example, on one large redevelopment project, one of the subcontractor's managers was not following site safety procedures. The safety committee brought the issue to the attention of the contractor's CEO, who replaced that manager and joined the safety committee to show his team that safety was a priority. If the team hadn't taken a collaborative approach, the issue could have become a much bigger problem, Mr. Hengel says. Instead, it was quickly addressed without creating delays, and the project ended with excellent safety statistics. “This is an example of how good stakeholder management is beneficial to everyone,” he says.

FROM ALL ANGLES

Establishing strong relationships with stakeholders is key to success on these types of projects, says Chris McDonald, vice president of process operations at global engineering and consulting firm CH2M, Houston, Texas, USA. “Stakeholders play an integral role in our execution plan. Their input affects every aspect of the project.”

“Our project plan includes goals to be carbon neutral, water positive, generate zero waste and enhance the well-being of the community.”

—Rhian Greenrod

To gather that feedback, his team starts by making sure every voice is heard. It identifies all the stakeholders who will have a say in the project and brings them together for a multiday meeting to collaboratively develop a project plan, define roles and responsibilities, and identify risks.

Mr. McDonald's team often develops brownfield sites that have active businesses running on them—extending commercial or industrial operations and adding new infrastructure. In these cases, this process includes the operations and maintenance teams of the current facility, who bring unique insight to the planning process.

“Too often on these projects, you do an execution plan and send it off to engineering without ever getting input from these people,” he says. But on-site staff members have intimate knowledge of how the site works, where key equipment is located, what vendors they use and where tie-ins need to happen. “Their input can be instrumental in keeping projects on schedule and avoiding unnecessary delays.”

[CASE STUDY]

A River Runs Next to It

A decade-long project is breathing new life into a U.S. city's central waterway.

A prime chunk of the east bank of the Chicago River, in downtown Chicago, Illinois, USA, has long sat undeveloped, overgrown and littered with garbage. But soon all that will change. The US$1.5 billion Riverline development project promises to transform this lucrative stretch of land—and could fundamentally change the way the city engages with the river.

The 14-acre (5.7-hectare) site is part of a 10-year master redevelopment plan that includes the phased construction of eight new buildings that will house 3,600 residences, says Tom Weeks, general manager for Lendlease Americas in Chicago. The organization is co-developing the site with CMK Companies, a Chicago residential developer. The companies broke ground on the first building in September after a year of planning, permitting and demolition work.

One of the project's biggest challenges revolves around a long-vacant railroad terminal on the project site. Clarifying regulatory authority expectations in the planning phase has helped the project team avoid surprises that could alter the plan and increase costs later on, Mr. Weeks says.

“Addressing unique site conditions, such as part of the site having historically been where the Chicago River flowed, required upfront testing and careful oversight and coordination with the City of Chicago and regulatory authorities,” Mr. Weeks says. “This is where a lot of preparation and perhaps a bit of luck become important.”

Bulking up the planning process makes the job more complicated, but that's part of the deal when you work on brownfield sites, says CMK CEO Colin Kihnke, also in Chicago. “As with any uncertainties in business, we plan the best we can so that when any issues do arise, we can address it quickly and work towards an immediate resolution.”

Rendering of the Riverline development project, Chicago, Illinois, USA. Below, a 1920s photo of the site

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IMAGES COURTESY OF CMK DEVELOPMENT CORPORATION

While the project is far from complete, the team already has addressed one of the more complicated early issues. Initial assessments of the property showed that a large homeless population had taken up residence in parts of the abandoned lot. “This was a major challenge for the team, as we wanted to start excavation but couldn't do it safely with people on the site,” Mr. Weeks says.

Rather than quickly displacing the group, Lendlease and CMK worked closely with the city to find transitional housing for the homeless population. This approach took more time and effort, but it ensured people were safely relocated and potentially minimized any negative coverage of the project in those crucial early days.

“Arriving at a workable plan, with cooperation from city agencies, definitely helped allow a timely start to construction while addressing the safety and welfare of those affected,” Mr. Weeks said.

AROUND THE BEND

Working on an abandoned site also offered interesting opportunities for development, particularly related to the river, says Mr. Weeks. In 2016, the City of Chicago laid out specific goals to improve the environment, infrastructure and economic potential of the Chicago, Calumet and Des Plaines rivers through 2040. (The three rivers pass through the metro area.) Riverline's project plan directly aligns with these goals by dedicating more than 40 percent of the land to public space, including a half-mile (0.8-kilometer) river walk and parks.

While the city didn't require this open space be part of the project, incorporating it helps ensure forward momentum, Mr. Weeks says. “It helped with our approvals. Everyone who understands our plan understands the benefits of it to the neighborhood and the city as a whole.”

“Arriving at a workable plan, with cooperation from city agencies, definitely helped allow a timely start to construction while addressing the safety and welfare of those affected.”

—Tom Weeks, Lendlease Americas, Chicago, Illinois, USA

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Mr. McDonald also encourages teams working on brownfield sites to consider risks related to the entire site—not just their piece of it. For example, logistical issues related to bringing in equipment, hauling out hazardous waste or accessing power and utility lines. “These projects have a lot of moving pieces, and they all need to work together within scope,” he says.

But the biggest challenge on these projects is a late discovery of contamination on the site. “You need to be diligent,” he says. “Discuss potential challenges early to align expectations.” PM

[PROJECT ROUNDUP]

Second Life

Yesterday's industrial centers are being transformed into tomorrow's neighborhoods. Here's a look at some of the world's largest urban renewal projects.

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HUDSON YARDS
Location: New York, New York, USA

Budjet: US$25 billion

Scheduled completion:
2025
The largest private real estate development project in U.S. history, Hudson Yards aims to transform a former industrial lot into an urban mecca. When completed, the multi-skyscraper project will deliver more than 18 million square feet (1.7 million square meters) of commercial and residential space, and 14 acres (5.7 hectares) of green space. All of this will exist on top of a functioning rail yard.

ZIBI

Location: Ottawa and Gatineau, Ontario, Canada

Budget: CA$1.2 billion

Scheduled completion: 2030

The project will redevelop 37 acres (15 hectares) of former industrial land on the Chaudière and Albert islands and produce 3 million square feet (278,700 square meters) of commercial and retail properties, condominiums, a hotel, waterfront parks and green spaces. The sustainable design features a district-wide energy system to provide zero-carbon energy production by 2020 and gray water applications for irrigation and toilet flushing.

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TOP IMAGE COURTESY OF RELATED-OXFORD. BOTTOM PHOTO COURTESY OF WINDMILL DEVELOPMENTS

KAI TAK

Location: Hong Kong

Budget: US$17 billion

Scheduled completion: 2021

The project will remake a 328-hectare (811-acre) former airport site into a residential hub that will, among other things, provide an overcrowded city with 44,500 new living spaces, a stadium, parks and gardens.

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BARANGAROO

Location: Sydney, Australia

Budget: AU$6 billion

Scheduled completion: 2023
The 22-hectare (54-acre) project will transform a former container wharf into a financial, residential and retail destination, 50 percent of which will be open to the public. The project plan incorporates 1,800 homes, public transportation and a 70-story integrated hotel resort. In 2015, the Barangaroo Delivery Authority opened Barangaroo Reserve, a 6-hectare (14.8-acre) harborside park on land that was previously a concrete wasteland. Last year three office towers opened on the site. The resort is expected to open in 2019.
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BATTERSEA

Location: London, England

Budget: £9 billion

Scheduled completion: 2026
The 39-acre (16-hectare) Battersea Power Station redevelopment project on the River Thames is the anchor of the Nine Elms development project, which covers 560 acres (227 hectares) of industrial land in the area. Once the Battersea project is completed, the site will feature 4,364 new homes, 1.9 million square feet (176,516 square meters) of office and retail space, a 6-acre (2.4-hectare) riverside park, a health facility, a library and a new Tube extension linking the site to the rest of the London.

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CLOCKWISE FROM TOP LEFT, IMAGES COURTESY OF KAI TAK DEVELOPMENT, WILKINSON EYRE AND THE BATTERSEA POWER STATION DEVELOPMENT COMPANY

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

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