January 25, 2023

What is a "brownfield"?

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Ernie Freistat
What is a "brownfield"?

In finance, arbitrage generally happens when the same commodity has different prices in two different marketplaces. Savvy traders can take advantage of these differences in highly profitable ways if they have a sharp eye and know how to move fast. There is a great deal of opportunity for those who can spot value that others can’t - especially when it’s right in front of you.

In real estate, some of the same principles apply. In the last decade, Collier has had success finding opportunities or creating opportunities to build in places where other developers may not have been able to detect value quite so readily. 

100 @ South Broad is one early example of our work in brownfields – a term given to a heavily polluted plot of land, typically due to prior heavy industrial use. Oftentimes, state or federal governments will use the designation “brownfield” to indicate that land is not suitable for any kind of development, even with extensive remediation. 

The process that ultimately led to the creation of 100 @ South Broad was mostly an economics exercise driven by market need: our company knew that we were ready to take on a major project that would consist of many units but to realize those ambitions, we needed a significant amount of land. The kind of development we do best would fit in an urban setting, so we were focused on parts of downtown Chattanooga where demand was consistently high - but we could still afford. An extensive search eventually led us to what we felt could be the perfect parcel: near the riverfront, situated almost exactly in between the Southside and St. Elmo. 

The only problem: as it had been previously the site of a leather processing plant, the soil was so heavily contaminated that the Tennessee Department of Environment & Conservation told us that they would never allow people to reside there under any circumstances (their exact words.)

What followed were years of close collaboration, a great deal of risk, a lot of trust-building, quite a few lessons learned, and more than a little luck. We were fortunate to have partners at TDEC who overcame their initial skepticism and let us explore how we might safely remediate a site that large. To make a long story short, 100 @ South Broad is now a terrific success and an example of the kind of healthy, dynamic, walkable community in which our company specializes.

The real lessons from that experience go beyond the specific success story of that development; however, as proud as I am of what we did there. In our company’s short history, I’ve pushed myself and my team to work harder, but also smarter, and that involves looking harder and more closely as sites, neighborhoods, and opportunities that defy conventional wisdom. Nothing motivates me like a challenge, and if a bureaucrat or another developer tells me something can’t be done, I’ll make it my mission to prove them wrong.

Hard-headed? Maybe - but it’s led us to some unusual and unusually wonderful opportunities like Peak Seven in Hill City, the ongoing transformation of Mill Town at the far end of East Main Street, and the reinvention of tired, suburban retail assets into dynamic residential communities. Where others saw extraordinary expense or difficulty, we spied opportunity. 

Paying attention to what the market wants today so that we can anticipate what it wants tomorrow. Always using what we learned at our last project to make our next project better. Taking a second (or third) look at plots or parcels that others might not have the skills or appetite to take on. This is how our company improves - and how we improve our community.

Ernie Freistat

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