The $250 million Worcester County (Mass.) Retirement System is ready to invest in a fund that would develop polluted real estate known as brownfields in Massachusetts, said Michael J. Donoghue, county treasurer and pension board chairman.
Brownfields are abandoned land parcels that are or may be contaminated because of prior uses; Massachusetts claims more than 7,000 of them.
"Nearly all of these properties have problems in the soil, but nearly all have one thing that is consistent," Mr. Donoghue said. "They have an infrastructure in place: roads, sidewalks, public utilities all ready to be hooked up.
"They also have railroad tracks beside them."
The properties thus have potential for redevelopment for new businesses, he said.
A bill in the Massachusetts House Ways and Means Committee would establish a $60 million fund to provide low-interest loans to developers to test and clean up polluted sites, as well as protect new owners from lawsuits.
Mr. Donoghue said he also plans to ask the $22 billion Massachusetts Pension Reserve Investment Management Trust, Boston, to invest in a fund to spur development of these parcels in Massachusetts.
He has asked his fund's consultant and its real estate manager to identify firms with expertise in handling brownfields.
At least two real estate firms offer pension funds the opportunity to invest in them. The Brookhill Group, New York, and CB Commercial/Westmark Financial Group, Los Angeles, have been using the strategy since the mid-1990s.
The strategy became feasible because of an initiative started by the federal government in the early 1990s that allows developers to clean up properties to standards consistent with their future uses, said Ron Bruder, president of The Brookhill Group.
