Columnist: Fleeing Factories, Superstores: Time to Demand Performance Bonds

July 15, 2013

By Neal Peirce

For a half-century and more, there's been an ugly abandonment scene across America -- factories, malls, gas stations and superstores abruptly closing down, fleeing towns and cities. They leave it to mayors and councils to either suffer the scourge of abandoned territory or pay heavy demolition and cleanup costs.

Translation: Local taxpayers are obliged to pay for private industry's irresponsibility. It's a crime against civic America. It ought to be stopped in its tracks.

Some 17 years ago I wrote a column suggesting that performance bonds, covering all reasonable property recovery costs, be required of all commercial owners whose properties might constitute a future blight.

Now there's backup for that idea in a fresh report from Michigan State University that proposes not just bonds but an alternative of long-term mandatory insurance policies for cleanup of properties.

The need is as compelling as ever. My "worst" examples are the wrecks of yesteryear's industries to be seen from the train window on Amtrak's Northeast corridor. Worst of all are seven miles through north Philadelphia -- a succession of long-abandoned, decaying factories strung along the right-of-way, their carcasses slowly falling to pieces, rotten roofs caved in on tops of crumbling red brick walls.

What an embarrassment for the United States, as foreign visitors number among passengers witnessing the carnage from train windows!

There are thousands of other dereliction sites across urban and suburban America. Hundreds of shopping malls, as a website names deadmalls.com has amply documented, have become vacant and indebted hulks. And the trend is accelerating. Analysts are suggesting that 15 percent of U.S. regional malls will fail in the next five years.

Malls are just part of the problem. Thousands of abandoned facilities -- once-active steel and auto plants, gas stations, supermarkets, convenience store blocks, Walmarts, Kmarts and other failed retailers' big boxes -- litter the landscape from sea to shining sea.

And not just the buildings -- it's the parking lots. Contaminated with brake and hydraulic fluid, along with gas and crankcase oil -- everything that drips out of cars -- the acres of parking space generate runoff that needs to be treated and hauled off in an environmentally responsible way.

Can good use be made of some abandoned big boxes? Yes. In the book "Big Box Reuse" (MIT Press, 2008), author Julia Christensen documents how some imaginative communities had been able to reclaim vacated Walmarts and KMarts for such varied uses as a church, a library, a school, a Head Start center, a medical center, a courthouse, a recreation center and a museum.

But those are relatively isolated cases. And the basic big-box form -- a single-use structure surrounded by a sea of parking spaces, isolated from town and community centers, almost never connected to public transit -- is emblematic of the sprawl and waste that still plague urban development in America.

Not to mention the way big-lot superstores often abuse localities. Tangling the possibility of jobs and commerce before the eyes of local officials, they sometimes demand and get cut-rate land or outright public subsidies for coming to town. Then, by virtue of their presence (and cut-rate prices), they force locally owned stores out of business and decimate historical downtowns.

All this may have seemed inevitable during the big-box era of recent decades -- and in fact remains a serious threat. But what's most inexcusable is the practice of big landowners (retail or industrial) literally "walking away" from their privately held parcels, forcing local government (and taxpayers) to pick up the cost of removing the blight.

State governments could do a lot to correct this situation by passing laws that require bonding or removal insurance for stores -- just as parallel requirements are routinely demanded of cell towers, oil rigs and mining sites.

Of course, industry front groups such as ALEC (the American Legislative Exchange Council) would quickly mount campaigns to stop legislative action.

Another hurdle is that reform laws would be a red flag to site locators -- raising the specter, as Emily Badger notes on the Atlantic Cities website, that "states might wind up competing for jobs based on who allows industry to walk away from the biggest mess."

Let's hope there's sufficient common sense in state capitals to avert such a dog-eat-dog approach. It's tough to discern equity in an America in which both local governments and lower- to middle-income families struggle to make ends meet -- even while corporate profits rise and the stock market recovers to pre-recession levels.

Mandatory bonding or insurance to make corporations pay for the full environmental restoration of their abandoned store and plant sites would hardly be a panacea for the inequities in today's economy. But in good and bad times alike, it should be the least that the public demands.

Neal Peirce's email address is nrp@citistates.com.

(c) 2013, The Washington Post Writers Group

The opinions expressed here are not necessarily those of the National League of Cities.