Fleeing Factories, Superstores Demand Performance Bonds

 For a half century and more, there’s been an ugly abandonment scene across America – factories, malls, gas stations, superstores abruptly closing and fleeing sites in cities and towns. 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, and 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 industrial or 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 clean-up 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 windows on Amtrak’s Northeast corridor. Worst of all are 7 miles of Amtrak’s line 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, with foreign visitors numbering among the passengers witnessing the carnage from train windows.

Thousands of other dereliction sites languish across urban and suburban America. Hundreds of shopping malls, as a website named deadmalls.com has amply documented, have become vacant and indebted hulks. And the trend is accelerating. Analysts suggest 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 retailers’ failed big boxes – litter the landscape from sea to shining sea.

And it’s not just the buildings – it’s the parking lots. Contaminated with brake fluid, hydraulic fluid, gas and crankcase oil – everything that drips out of cars – acres of parking space generate runoff that must 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 or a museum.

But those are relatively isolated cases. The basic big box form – a single-use structure surrounded by a sea of parking space, isolated from town and community centers, rarely connected to public transit – is emblematic of the sprawl and waste that plagues urban development in America.

And big-lot superstores often abuse localities. Dangling the possibility of jobs and commerce before 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 help undercut historic downtowns.

All that 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) “walking away” from their privately held parcels, forcing local governments (and taxpayers) to pay for 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 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 – 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 times and bad, it should be the least the public demands.