What Works: P3 Serves as Catalyst for Brownfield Redevelopment, Local Economic Growth in Waterbury

Objective: This What Works for Cities case study highlights how support across multiple levels of government and the private sector led to the remediation and redevelopment of a former brownfield site – a property that had been underutilized for decades – into a thriving Industrial Commons that now provides badly needed new revenue and jobs for the city of Waterbury, CT.

Major Participants: City of Waterbury, Waterbury Development Corporation, U.S. Department of Defense, U.S. Environmental Protection Agency; various community volunteers and advocates.

Background: Like many New England communities, Waterbury has a long industrial legacy. At the turn of the 19th century, this mid-sized city established itself as an industrial powerhouse when companies began to manufacture brass. As production grew, workers flocked from all over the world to fill positions in the factories. In fact, Waterbury produced such an abundance of metal products that it was eventually nicknamed the “Brass Capital of the World.” One of the city’s largest manufacturing companies was Chase Brass & Copper. As Chase grew, it opened new facilities: Chase Metal Works, a brass mill connected by private railway line to a nearby Chase facility, opened in 1912 and later expanded its factory in 1914. The Chase Companies were eventually acquired by Kennecott Corporation, the largest copper producer in the world, though the Chase manufacturing facilities were still critical to the Waterbury economy until operations ceased in the 1970s.

When Chase Metal Works closed its doors, many real estate developers tried to take over the site and lease it out to no avail. The 600,000 square foot “Mile-Long Mill,” as the property was nicknamed, was so heavily contaminated that large portions were uninhabitable; much of the building was structurally unsound. Private developers had tried to revitalize the property with little success. Site remediation and redevelopment proved too costly for investors so for many years the property sat underutilized, proving a costly drain on city resources. By 2007, only one major tenant remained but was threatening to leave if conditions were not improved.

How it Happened: The City and local stakeholders recognized the disincentives for the private sector (including the extent of contamination and future liability) could not easily be overcome. Waterbury is a distressed community as it is; investors had little incentive to take on the risks associated with this project. As such, a cross-sector approach was needed, and the City would need to serve as the catalyst for the site’s redevelopment. In 2010, the City obtained the site through tax foreclosure proceedings. Original plans called for the retention of existing businesses and the renovation of the rest of the building in a way that could house a new Waterbury Department of Public Works (DPW). The property’s largest tenant, Luvata, urged the City to think more strategically about the creation of an “Industrial Commons.”

Plans for the DPW site eventually changed, and the Industrial Commons idea moved forward. The project was largely a result of a $15 million grant from the U.S. Department of Defense (DOD). The DOD recognized that the Chase Metal Works property had been an important industrial facility during several major wars; the site produced equipment such as casings for bullets. Receipt of this grant marked a turning point that allowed this project to realize its potential as a new hub for manufacturing.

In 2010, the project began, with a portion of the complex left intact for rehabilitation and the remainder demolished to create space for new construction. Luvata signed a long-term lease in newly-built offices and other spaces were rehabbed to bring in four new manufacturing tenants. Then King Industries, a manufacturer of specialty additive products, reached an agreement with the City, bringing in another major tenant. Today, King Industries is in the midst of constructing an 80,000 square foot state-of-the-art facility. The City continues to remediate other portions of the Chase Metal Works lot and will eventually market or sell these portions of the property, as well.

So far, in addition to the U.S. DOD grant, the project has leveraged more than $1 million in brownfield funding from the U.S. Environmental Protection Agency (EPA), $3.8 million through Water Pollution Control and $23.5 million through a City bond.

Results for Local Economy: In addition to the rehabilitation of the Chase Metal Works site, the project has also resulted in the construction of 48,000 square feet of new manufacturing space and 14,400 square feet of office space for Luvata alone. In total, Luvata now occupies 170,000 square feet at the Waterbury Industrial Commons. The company has signed a long-term lease with the City of Waterbury; more than 180 employees were added or retained.

Atlantic Steel, Precision Wire Cut and Jovek are among the manufacturing companies that have elected to remain or expand in the space, adding or retaining dozens of jobs. Once the $50 million investment in the King Industries facility is complete, there will be at least another 100 industrial workers within the complex. By 2020, the City expects to bring in $1.1 million annually from Luvata, Atlantic Steel and Precision Wire Cut leases alone; an additional $2 million in taxes will be generated annually from the King Industries parcel.

Remaining Challenges: While the City has made significant strides toward the remediation of its highly contaminated brownfield sites, further remediation is still necessary. Similarly, the city is already very dense and its industrial legacy has left it with a number of contaminated sites; in order to realize economic growth in other areas, additional remediation will be required.

Longer term, the City must determine whether it wants to be in the business of serving as a commercial landlord or whether it should sell the Industrial Commons to a private owner. As the property expands, its management becomes increasingly complex, leaving questions about whether the site is better off owned and operated privately.

Lessons Learned: Looking back on the project, consultants have noted that the project may have moved forward more smoothly if a more comprehensive plan for the site had been in place from the beginning. But the reality is that the various stakeholders had a unique opportunity to move the project forward through the $15 million DOD grant; in many ways the project was completely facilitated by that initial grant. As such, it required significant time and energy for municipal leaders to gain the confidence of the tenants and community. It’s likely that the project would have moved forward more quickly, and stakeholders’ fears would have been allayed, had there been a more well-established plan at the beginning.

City officials also recognize that this project could not have happened without the support and collaboration of both the public and private sector. The U.S. EPA and DOD were critical partners, and provided the desperately-needed funding to get the redevelopment project off the ground. At the same time, the City needed the buy-in of the private sector—specifically, of Luvata and the few other tenants that remained at the beginning of the redevelopment process. To gain that buy-in and build trust with the private sector, the City needed to leverage its own capital (the $23.5 million bond) and to work with tenants to understand their needs and provide a facility in which the tenants would agree to long-term leases. The long-term leases provided the City with a critical stream of revenue, and helped the City to market the remaining space in the Industrial Commons to prospective tenants. Support from stakeholders across multiple levels of government and the private sector is what has led this project’s evolution from a piecemeal effort into an Industrial Commons that serves as an economic engine for the City of Waterbury.