218 D Street SE
Washington, DC 20003
202.544.5200 ph
202.544.0043 fax
www.nemw.org
Brownfields Financing Basics
Opportunities for San Diego
Presentation by:
Charles Bartsch
The Northeast-Midwest Institute
January 26, 2002
Brownfields Definition
What are Brownfields?
EPA defines brownfields as abandoned, idled, or
under-used facilities where expansion or
redevelopment is complicated by REAL or
PERCEIVED contamination.
A “brownfield site” typically has active potential for redevelopment
or reuse…residential and recreational uses as well as
commercial or industrial facilities.
Summary of Key Provisions
as Passed by Congress
Title II – Brownfield Revitalization and Environmental Restoration
Subtitle A – Funding



$200 million per year (thru ‘06) for grants to states, tribes, local governments, and non-profit/quasi public redevelopment agencies
and authorities
for site assessment and cleanup grants (direct remediation grants to governments or non-profits as well as capital for RLFs)
$50 million (or 25% of appropriation) may be used for sites with petroleum contamination
insurance premiums permitted as eligible use of funds
authorizes EPA brownfield program that includes training, research, and technical assistance activities
Subtitle B – Liability Clarification
Provides Superfund liability relief to:



contiguous property owners
prospective purchasers
innocent landowners
Subtitle C – State Response Programs
Authorizes $50 million per year (thru ‘06) for grants to states and tribes:





to establish and enhance state VCPs/response programs
states must maintain a “public record of sites” addressed
finality – for sites addressed thru state programs, except.…
re-openers – EPA ability to come back is preserved in specifically defined situations
EPA must consult with the state on re-opener situations

citizens may request a state to conduct an assessment at a specific site, and a state must “appropriately” respond
Lender
Concerns
The Need for Local Financing Initiatives
Why Do Bankers Act the Way They Do When You Say
Brownfields?
 Market policy-making structure
 Sphere of activity or market niche
 Level of sophistication and knowledge
 Past experience
 “Trigger” issues
 Comfort level with new remediation technologies
Federal Financing
Programs
Federal Financial Assistance Programs Applicable to
Brownfield Redevelopment Activities
Loans
 EDA’s Title IX (capital for local revolving loan funds)
 HUD funds for locally determined CDBG loans and “floats”
 EPA capitalized brownfield revolving loan funds
 SBA’s microloans
 SBA’s Section 504 development company debentures
 EPA capitalized clean water revolving loan funds (priorities
set/ programs run by each state)
 HUD’s Section 108 loan guarantees
 SBA’s Section 7(a) and Low-Doc programs
Grants
 HUD’s Brownfield Economic Development Initiative (BEDI)
 HUD’s Community Development Block Grants (for projects
locally determined)
 EPA assessment pilot grants
 EDA Title I (public works) and Title IX (economic
adjustment)
Grants (continued)
DOT (various system construction and rehabilitation programs)
DOT’s transportation and community system preservation (TCSP)
pilot grants
Army Corps of Engineers (cost-shared services)
Equity capital
SBA’s Small Business Investment Companies
Tax incentives and tax-exempt financing
Targeted expensing of cleanup costs (through 12/31/03)
Historic rehabilitation tax credits
Low-income housing tax credits
Industrial development bonds
Tax-advantaged zones
HUD/USDA Empowerment Zones (various incentives)
HUD/USDA Enterprise Communities (various incentives)
State Voluntary Cleanup
Programs
An Overview of Key Features and Characteristics
47 programs in place today
 10 programs changed significantly in 2000 and 2001
 23 programs less than 6 years old
 Seek to provide predictability and finality to the brownfield process
Eligibility
 Typically, open to any contaminated site
 Most permit allow petroleum, asbestos, or PCB-contaminated sites in
 Most do not let PRPs volunteer
Oversight
 Older programs -- sign-off on remediation plans, review of cleanup activities
 Recent approaches -- state oversight varies by level of cleanup required, type of site (I.e., or orphan or
prospective purchaser), “privatized” programs
Financial assistance/incentives
 13 states offer direct grants or loans
 22 states provide tax credits or abatements
 19 states offer targeted financial assistance or tax incentives
Project Examples
Albina Corner -- Portland, Oregon

The Albina Corner is located on a
three-quarter-acre site adjacent to a
bus line and near a major light rail
station. The area is a main street to
several inner-city neighborhoods,
where for several years small scale
contaminants have deterred reuse.

Today, the Albina Corner is being
redeveloped into a mixed-use area
that includes 48 units of low-income
housing built over 12,000 square feet
of commercial space. Some of the
features include a child care center
and a second floor courtyard and play
lot.
Project Examples
Kinzie Industrial Corridor -- Chicago, Illinois

Chicago is making a major
commitment to revitalizing the
Kinzie Corridor, a west side area
that was once a declining industrial
hub.

Chicago’s strategy includes
acquiring former manufacturing
parcels and assembling a 70 acre
trac that could be used to meet
modern manufacturing needs.
Project Examples
Buffalo, NY -- LTV Steel Plant Site

A site that once produced millions of tons of
steel will soon be producing millions of pounds
of tomatoes thanks to a public / private
partnership to redevelop the south side of the
city.

This was accomplished through a cooperative
effort on the part of LTV, the former owners of
the steel plant, and state and federal agencies
including the EPA and NYSDEC. A specific
voluntary cleanup plan for the site was worked
out. Cleanup tasks were completed in about
three months. Since the site is within a New
York State Economic Development Zone and a
Federal Enterprise Zone, tax incentives were
able to be applied to help the economic viability
of the project.
Web Site
www.nemw.org/brownfields.htm
 Federal Legislative Proposals to Promote Brownfield Cleanup and
Redevelopment - what’s happening in Congress
 State of the States - profiles of state VCPs, including new information on financing
incentives, economic benefits, eligible contaminants, cleanup standards, and
institutional controls
 Guide to Federal Brownfield Programs - detailed information on programs
throughout the federal government that can promote and support brownfield cleanup
and redevelopment
 Financing options for brownfield cleanup and redevelopment
 Contacts in state and federal brownfield programs
 Link to EPA brownfield home page
 Links to brownfield databases and organizations