State Program Highlights
FORWARD

Community revitalization and brownfields redevelopment is vital to our

Nations future and is an EPA priority. EPAs Brownfields Grant Program

assists our state and local government partners in funding redevelopment by

providing seed money for assessment and cleanup of contaminated

properties. The revitalization of our nations land resources also requires

that government at all levels partner with the private sector to meet our

redevelopment and environmental protection goals. State governments play

a major role in assisting communities as they work with the private sector

through regulatory oversight and financial assistance.

Most states demonstrate their commitment to community revitalization by

establishing flexible regulatory programs that encourage voluntary cleanups.

In addition, state governments often offer public funding and financial

incentives for brownfields redevelopment efforts to demonstrate public

sector commitment to community revitalization and encourage private sector

investment. This report provides an overview of the types of financial tools

and incentives offered by state governments to bridge financial gaps and

encourage private sector investment in the revitalization of our communities.

Susan Parker Bodine

EPA Assistant Administrator for

Solid Waste and Emergency Response

Prepared by:

ICF International (Contract No. 68-W-07-054)

9300 Lee Highway

Fairfax, VA 22031

Prepared for:

U.S. Environmental Protection Agency

Office of Solid Waste and Emergency Response

Office of Brownfields and Land Revitalization

Washington, D.C. 20460
Table of Contents

Background..................................................................................................................................... 1

Report Organization........................................................................................................................ 2

Part I: Overview............................................................................................................................ 3

Introduction..................................................................................................................................... 3

State Incentives for Brownfield Reuse ........................................................................................... 4

Part II: Individual State Programs ............................................................................................. 9

Arizona.......................................................................................................................................... 10

California ...................................................................................................................................... 11

Colorado........................................................................................................................................ 14

Connecticut ................................................................................................................................... 16

Delaware ....................................................................................................................................... 19

Florida........................................................................................................................................... 22

Illinois ........................................................................................................................................... 25

Indiana .......................................................................................................................................... 28

Kansas........................................................................................................................................... 32

Kentucky....................................................................................................................................... 33

Louisiana....................................................................................................................................... 36

Maryland....................................................................................................................................... 38

Massachusetts ............................................................................................................................... 39

Michigan ....................................................................................................................................... 42

Minnesota...................................................................................................................................... 47

Missouri ........................................................................................................................................ 50

New Jersey.................................................................................................................................... 53

New York...................................................................................................................................... 58

North Carolina .............................................................................................................................. 61

Ohio............................................................................................................................................... 64

Oregon........................................................................................................................................... 67

Pennsylvania ................................................................................................................................. 70

Texas............................................................................................................................................. 76

Washington ................................................................................................................................... 77

Wisconsin...................................................................................................................................... 79
Page 1

Financing Brownfields:

State Program Highlights

Background

Public financing is often essential for encouraging the assessment and cleanup of brownfields.

Without public financing or government-backed financial incentives, many brownfields would

remain idle and potentially contaminated. The costs associated with the redevelopment of

brownfields include costs associated with demolition, site preparation, and construction. In

addition to these costs, capital is required for specific assessment and cleanup activities such as

conducting environmental site assessments, developing a property remediation plan (which the

owner needs to take the site through a state voluntary cleanup program to get finality on liability

concerns), and conducting cleanup.

Because of these costs, public financing or financial incentives are often needed to jump-start a

brownfield reuse project. Public financing may help balance the economic scale between

greenfields and brownfields. Increasingly, states are stepping in to assist communities and the

private sector in bridging the financing gap associated with brownfields redevelopment. States

offer a variety of incentive programs, often to meet one of several objectives:

Reduce the lenders risk by providing off-setting incentives such as loan guarantees,

insurance, or property-specific legal clarifications, in order to make capital more readily

available;

Reduce the borrowers cost of financing by subsidizing loan carrying costs or by

providing assistance that reduces loan underwriting and documentation expenses. Such

assistance may increase the economic viability of smaller projects;

Ease a purchasers financial risk by providing incentives that can help improve the

projects cashflow, such as tax credits or abatements; and

Provide direct financial assistance, including loans or grants to help pay for site

assessment or cleanup activities and support broader redevelopment needs.

States offer an array of financial tools and incentives that focus on various aspects of the

brownfield redevelopment process, including site assessment, cleanup, site preparation

(including demolition), and redevelopment. State brownfield financing programs are becoming

more common, as well as more diverse. Although brownfields financing incentives vary

considerably across states, they can be roughly organized into three categories:

Tax incentives linked to site reuse;
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Direct financing assistance; and

Offsets to brownfield financing needs, including technical assistance, process facilitation,

and project support.

Report Organization

This report provides a summary of a variety of current state financing initiatives designed to

advance brownfield property cleanup and reuse. It is not a compendium of all current state

efforts; rather, it identifies and explains a diverse set of available incentive programs that

prospective purchasers and redevelopers of brownfields may want to consider or use to promote

brownfields revitalization.

The initial section of this report provides an overview of three categories of public financial

incentives for brownfields redevelopment. This section includes a brief analysis of each

category, along with a brief listing of key state initiatives.

Following the overview, the report features a more detailed look at more than 50 financial

incentive programs offered by 25 states. Many of these programs are directly linked to

brownfields revitalization. Other programs support brownfields revitalization indirectly, by

providing assistance for overall cashflow management for brownfields projects or enticing

investment in brownfields properties. This report focuses on state-driven, state-financed

efforts. EPA brownfields grants for the assessment and cleanup of brownfields, EPA and HUD

grants for capitalizing revolving loan funds (RLFs), and EPAs targeted brownfields assistance

(TBA) programs are not addressed (although state-directed but federally capitalized clean water

revolving loan funds are included because of the special opportunities they offer). Mostly, this

report targets newly implemented programs. However, some successful older initiatives also are

profiled, with new impact information. Each state program summarized in this report is laid out

according to the following template:

Type of program;

Role in meeting brownfield financing;

Type of benefit;

Analysis of brownfield opportunities it offers stakeholders within the state;

Lessons and ideas for other states;

Detailed description and examples; and

Program contact information.
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Part I: Overview

Introduction

State brownfield financing programs are becoming more common, as well as more diverse.

These state incentives recognize that no specific type of public-private partnership or single

financing approach can meet the needs of every brownfield project. More states are channeling

resources to brownfields properties where the owner has a specific end use or economic

development activity in mind. Many states are attempting to dedicate scarce resources to

properties with cleanup-and-reuse strategies in place instead of properties targeted only for

cleanup. In addition, a growing number of states are focusing financial incentives by targeting

specific property types, such as discarded tire piles or abandoned dry cleaners. For example, a

2006 Connecticut statute focused brownfield financing incentives on owners of operating

manufacturing sites. Other states, including Kentucky, are encouraging local governments to use

traditional public financing tools such as tax increment finance (TIF) to address brownfield sites.

Pennsylvania has gone one step further; in 2006, it authorized a state loan guarantee program

linked to local TIF efforts.

Many state financing incentives show considerable creativity in promoting brownfield

assessment, cleanup, and redevelopment. Wisconsin, for example, links property tax forgiveness

and expedited tax foreclosure for brownfield sites to the willingness of a new owner to complete

site cleanup under the auspices of the states voluntary response program. New Yorks

brownfields program includes an array of cleanup and redevelopment tax credits, including site

preparation credits and an environmental remediation insurance tax credit. Florida offers lowinterest loans to redevelopment agencies and nonprofit corporations to purchase contractor liens,

tax certificates, and similar property claims in order to expedite reuse. Indiana adopted a just in

time Phase II site assessment program, offering $50,000 grants to expedite projects at

brownfields where a company or developer is imminently interested in reusing a property.

Also, a number of states  such as Missouri and Connecticut  established dedicated funds to

address the cleanup and redevelopment of operating and abandoned dry cleaner sites.

What does all of this state activity mean at the community level? Across the country, states are

reporting significant benefits from the brownfield redevelopment resources they provide to

public and private owners and developers of brownfields. These state incentive programs

represent important returns on public investment in brownfields revitalization. A sample of the

returns some states are deriving from brownfields incentive programs includes:

Wisconsin attributed more than 4,000 new jobs to 88 brownfield projects;

Minnesota estimates that its VCP leveraged almost $1 billion in private investment,

including construction of nearly 5,700 housing units; and

Florida claims cumulative creation of 3,274 direct jobs and 2,600 indirect jobs, as well as

$172 million in new investment in its designated brownfield areas.
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State Incentives for Brownfield Reuse

As of mid-2007, nearly two-thirds of states had some type of program in place to help finance

the cleanup and reuse of brownfields either directly or indirectly. States are putting many

different approaches in place to meet the diverse challenges associated with the cleanup and

revitalization of brownfields. These challenges include paying for environmental site

assessments, financing the potentially complicated planning and transaction costs that

brownfields typically require, addressing the needs and concerns of surrounding neighborhoods,

and providing the resources to carry out the necessary cleanup. These state incentives recognize

that no specific type of public-private partnership  and no single approach  fits the financing

needs of all brownfield projects. Nevertheless, they can be grouped into three broad categories,

as indicated below:

(1) Tax incentives

Tax incentive programs  such as credits, abatements, or forgiveness  can increase a projects

cashflow by allowing available sources of revenue to be used for brownfields revitalization

purposes rather than for tax payments. The cashflow cushion from a tax break also can make a

project more attractive to a lender. State and federal tax incentives have historically been used to

make investment capital available in economically challenging situations and to promote specific

types of economic development. The use of economic tax incentives for brownfields

redevelopment is a natural evolution of this type of program tool. Most tax incentives are used to

offset cleanup costs or to provide a buffer against increases in property value that may result in

an increase in tax assessments before the site preparation costs are paid off.

Approximately 23 states offer some sort of tax incentive to support brownfield project financing,

such as:

Deferral of increased property taxes  Connecticut and Texas;

Remediation tax credits  Illinois, Ohio, and Wisconsin;

Cancellation of back taxes  Wisconsin and Massachusetts;

Rebates of sales taxes to offset cleanup costs  New Jersey;

Tax incentive menu to enhance reuser financial flexibility  Missouri;

Environmental insurance tax credit  New York;

Business tax offset  Michigan; and

Tax bonus refund pegged to job creation  Florida.

In addition, virtually every state offers some type of tax incentive to retain or attract business,

and many states link their programs to federal incentives. Such incentives can help channel

investment capital and promote economic development in areas of need. Some states, such as
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Wisconsin, are especially skillful in linking state tax incentives (such as forgiveness of back

taxes) with federal tax credits. At the Sherman Perk project in Milwaukee, which is an

abandoned but historically significant gas station dating back to the 1930s, forgiveness of 9 years

of back taxes attracted a small community developer to the site. With the property site title in

hand, the developer then used federal historic rehabilitation tax credits and city business

development loan funds to bring the site to vitality.

In Rhode Island, Iowa, and Vermont, state historic rehabilitation tax credits are used in

conjunction with federal credits to create a powerful incentive for cleanup and reuse of older,

historic brownfield properties. Such tax credits may be worth up to 40 percent of the total

rehabilitation expenditures (which often include some structural remediation as part of the

restoration). Illinois offers a redevelopment loan program that provides low-interest loans to

local governments and private parties for site assessment, remediation, and demolition costs.

This is complements the states existing brownfield grant program, which gives cities up to

$120,000 to pay for site assessments and preparation of cleanup plans. The Mississippi River

town of Rock Island used these programs, in conjunction with federal transportation funds, to

transform a derelict riverfront manufacturing site into a mixed-use commercial and residential

development. Historic rehabilitation tax credits helped fund site preparation and construction of

infrastructure needed to serve the new uses. Kansas City tapped into Missouri state business tax

incentive programs as part of a larger financing package needed to clean and transform the

former Kansas City Terminal Railway yard into unique office space, creating 600 new jobs.

(2) Direct financing

Lack of available capital for assessment and cleanup of potentially contaminated properties is

one of the biggest barriers to brownfield reuse. States attempt to address this issue by providing

financing assistance in the form of loans or grants. These programs meet several objectives.

Some are targeted to help finance specific parts of the project, such as site preparation. Others

can be used to increase the lenders comfort with these projects, by limiting the risk of potential

losses or loan defaults. These programs also can ease the borrowers cashflow and make money

available for the costs associated with environmental assessments, sampling and analysis, and

site cleanup.

In recent years, more states focused on this aspect of brownfield financing than any other. More

than a dozen programs match financial resources to brownfield needs, usually in places where

the private sector may be reluctant to invest. In total, nearly half of states now offer some sort of

direct brownfield financing assistance, including:

Forgivable remediation loans for newly expanded to petroleum sites  Indiana;

Low-interest loans for contractor/tax lien purchases - Florida;

Low-interest cleanup loans  Delaware, Indiana, and Wisconsin;

Remediation grant funds  New Jersey and Minnesota; and
Page 6

State revolving loan or redevelopment funds  Indiana, Michigan, Wisconsin, and

Massachusetts.

State financing programs tend to follow two approaches: 1) Brownfield program dollars targeted

to property cleanup and redevelopment, and 2) Use of other economic or community

development programs to meet brownfield reuse needs.

In the case of the former, states earmark funds directly for specific brownfield initiatives.

Wisconsin, for example, has adopted a state Brownfield Environmental Assessment Program,

known as BEAP. Under BEAP, the state Department of Natural Resources has funding to

conduct Phase I and II assessments at city- or county-nominated sites. Many of the properties

assessed with state BEAP resources were redeveloped with no further public subsidy  the

information from the assessment proved to be incentive enough to encourage private investment.

An example of the second approach is state use of clean water revolving loan funds. The federal

Environmental Protection Agency provides funding annually to each state to capitalize Clean

Water State Revolving Loan Funds (CWSRFs). States have considerable latitude in identifying

priorities  including brownfields  for this funding.

This tool has considerable potential at brownfield sites where water quality is an issue. States

can use their clean water SRFs for low- or no-interest loans for terms of up to 20 years to fund

brownfields cleanup activities that promote improvements in water quality, if the project helps

implement the states Non-point Source Management Plan or is consistent with the priorities in a

National Estuary Program Comprehensive Conservation Management Plan. For example, a

brownfields cleanup that corrects or prevents water quality problems can be considered eligible

if it focuses on abatement of polluted runoff, control of stormwater runoff, correction of

groundwater contamination, or remediation of petroleum contamination. CWSRFs can cover the

costs of activities such as excavation and disposal of underground storage tanks; capping of

wells; excavation, removal, and disposal of contaminated soil or sediments; or Phase I, II, or III

site assessments. Each state determines who may use its revolving loan fund resources. For

projects other than the construction of publicly-own treatment works, EPA allows individuals,

citizen groups, and nonprofit organizations, as well as municipalities, states and inter-state

agencies to be loan recipients. Usually, loans are repaid through sources such as fees paid by

developers; recreational fees; dedicated portions of state, country, or local government taxes;

stormwater management fees; or wastewater user charges.

To date, only a few states encourage brownfield-related projects to use these resources, with

Ohio recognized as a national leader in this regard. For example, in Cleveland, the Grant Realty

Company used a clean water revolving loan from Cuyahoga County to clean contaminated

groundwater and soils at a 20-acre industrial site in Cleveland and prepare it for commercial use.

Repayment will be made using the income stream from a tank cleaning operation, and a personal

loan guarantee and second mortgage is being used as collateral.

States also can use Federal Highway Administration (FHWA) funding to support brownfields

related transportation improvement protects. FHWA funds can be used for brownfields

redevelopment projects that include transit enhancement projects, transit projects that will reduce

traffic congestion, and projects that will reduce air emissions. States can leverage federal
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highway funds to promote brownfields revitalization by using FHWA programs such as:

funding provided under the Surface Transportation Program (STP) to support infrastructure

improvements on brownfields properties; using Congestion Mitigation and Air Quality

Improvement (CMAQ) funding to pay for brownfields-related improvements that will result in

reduced air emissions in designated air quality non-attainment and maintenance areas;

Transportation Enhancement (TE) activities funding to expand investments in alternative

transportation choices (e.g., bike trails, pedestrian paths, scenic routes); and using

Transportation, Community and System Preservation (TCSP) pilot grants to fund the

development of transportation strategies associated with brownfields redevelopment (e.g.,

upgrading existing transportation systems, improving access to redeveloped brownfields

properties).

Kansas City, Missouri used FHWA program funding, including CMAQ funds, to help finance

the design and construction of a bicycle and pedestrian trail along the Missouri River. The

Riverfront Heritage Trail links the downtown business districts of Kansas City, KS and Kansas

City, MO, and is part of the redevelopment of 9 previously idle brownfields properties.

Portland, Oregon used over $14 million in FHWA funding to complete its North Marine Drive

Brownfields Project, that involved the relocation of a road through contaminated land to

improved access from Interstate 5 to the citys deepwater terminal. The project resulted in the

revitalization of almost 3,000 acres of the Rivergate Industrial District, and the relocation of the

roadway protected nearby wetlands from encroachment.

In addition to federal funding programs, nearly every state offers its own package of financing

programs that often can be applied to brownfield project situations. These include economic

development loans, issued either directly or through development agencies, authorities, or

corporations, that may provide excellent leveraging opportunities if properly coordinated with

and targeted to the special financing needs of a brownfields project. These programs are

capitalized from a variety of sources  general appropriations, fee collections, or repayments

from previous federal or state project loans. Many states also offer loan guarantees to minimize

the various risks that make financial institutions hesitant to lend on brownfield properties. Small

businesses, startups, and new technology ventures typically are viewed as especially risky and

are often addressed in state programs; environmental risks are rarely addressed but could be the

focus of a guarantee effort if better linked to existing programs. In particular, loan guarantees

could help attract private capital specific developments at sites that also tap into federal

infrastructure or site improvement programs. For example, Florida added a loan guarantee

program to its state economic development tool box that provides five years of guarantees or

loan loss reserves for primary lender loans made to redevelopment projects located in defined

brownfield areas.

(3) Offsets to brownfield financing needs  technical assistance, process

facilitation, and project support

Insurance subsidies  Massachusetts and Wisconsin;

Brownfield Redevelopment Authorities  Michigan; and

Focus on agricultural-related contaminants  Kansas.
Page 8

States are promoting innovative efforts to support brownfield financing by leveling the economic

playing field between greenfield and brownfield sites to expedite the financing process, attract

other program resources, and save money in the long run. Approximately three-fourths of the

states have some type of program in place to facilitate financing with minimal cash outlays.

These programs include tools to facilitate property transfers of orphan sites to new purchasers as

part of an agreement to clean up contaminated property, or programs that allow the use of

institutional controls to safely contain contamination rather than clean up a property to

background or residential-use levels. Such programs reduce the necessary level of capital

investment, making projects more economically viable.

These approaches also may include encouraging property owners to enroll in state VCP

programs and informing them about ways in which brownfield programs can facilitate access to

other financing tools. Cleanup under a state VCP program can provide finality to the cleanup

process via liability relief, a level of comfort due to state oversight, and notices of no further

action. Most of these programs were enacted to leverage private investment while limiting

public spending.

Finally, across the country, more creative leveraging is taking place within state departments of

economic development, focusing on traditional economic and community revitalization and

business development programs. States are especially well positioned to promote brownfield

reuse projects by making slight alterations to their existing economic development finance

programs. Accordingly, proponents of brownfield reuse should consider the potential benefits of

these programs when putting their project financing packages together. As with federal

programs, many state efforts were designed and their rules were defined before brownfield

concerns became a priority. Therefore, states could enhance existing economic development

incentive programs to include brownfield initiatives, in a manner similar to what the federal

Department of Housing and Urban Development (HUD) is doing with its Community

Development Block Grant program. HUD is simply recognizing site assessment and remediation

needs as legitimate project development activities within the context of their common financial

assistance initiatives.
Page 9

Part II: Individual State Programs

This report focuses on state-level brownfield financing initiatives, and includes descriptions of

more than 50 programs offered by 25 states. It features programs that are truly state-based in

origination, and does not include state-administered Revolving Loan Funds or targeted

brownfield assessment activities if they are funded by EPA, HUD, or other federal sources (an

exception is made for federally capitalized state clean water revolving funds, which offer

significant but largely untapped brownfield opportunities). This report generally emphasizes

newly implemented or significantly enhanced efforts put in place over the past 18 to 24 months,

although this analysis also revisits a few older programs that have experienced substantial

changes or particularly innovative programs that offer important lessons or models for

replication.

The analysis of each state program includes:

Type of program: Framed to the extent possible by the four categories laid out in the

overview;

Role in meeting brownfield financing: How it facilitated project development and

completion;

Type of benefit;

Analysis of brownfield opportunities that it offers: What stakeholders within the state

might consider;

Lessons and ideas for other states: What evidence it offers for possible program

growth;

Detailed description and examples; and

Program contact for additional information.

* * * * * *
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ARIZONA

In Arizona, county boards of supervisors may reduce liens assessed for delinquent taxes,

penalties, and interest against brownfield properties contaminated with hazardous substances or

petroleum. Starting in 2002, the state authorized a tax reduction of up to the total costs of

activities needed to address the brownfield conditions, including:

Conducting removal actions;

Undertaking site assessments;

Preparing and carrying out cleanup plans; and

Preparing and implementing a corrective action plan.

For property acquired after December 31, 2001, the brownfield-related expenses must be

incurred by the owner within five years of taking title.

For additional information:

Web site: http://www.azdeq.gov/environ/waste/cleanup/brownfields.html

Program: Contaminated Property Tax Reduction

Program type  Tax levy reduction

Role in meeting brownfield financing challenges  Reduces taxes owed to free up capital for

site assessment and cleanup

Type of benefit to Arizona program users  Brings cashflow advantages to new users of

brownfields properties

Brownfield revitalization opportunities for Arizona participants  Makes brownfields more costcompetitive for cleanup and reuse

Lessons and ideas for other states  Value of using tax levy process to encourage cleanups by

addressing upfront costs, to help equalize their appeal with undeveloped sites
Page 11

CALIFORNIA

The California Orphan Site Cleanup Account became effective on January 1, 2005, and is

scheduled to sunset at the end of 2007. It was created to provide grants to clean up brownfield

sites where the principal source of contamination is petroleum and where there is no financially

responsible party available to pay for the site cleanup.

Sites may receive either or both of two types of grants:

Assessment grants to characterize and assess the sites; and

Cleanup grants to pay for remediation and verification monitoring.

Assessment grants support information gathering regarding releases at petroleum underground

storage tank (UST) sites, including preliminary site assessment, soil and water investigations,

and preparation of a corrective action plan. Assessment grants also may be used to fund UST and

free product removal, as well as limited soil excavation activities.

Cleanup grants are used to help carry out cleanup activities, including implementing a corrective

action plan and verification monitoring. They can be awarded once an applicant shows that

either a corrective action plan is complete and approved by the regulatory agency overseeing it,

or when response actions are necessary during the site development process to protect human

health, safety, and the environment.

To be eligible for orphan site cleanup grants, applicants must show that they did not cause or

contribute to the contamination and are not affiliated with any person who did. Applicants need

not own the property to obtain an assessment grant. Therefore, prospective purchasers can

arrange to conduct a site assessment and evaluate site risk and economic opportunity before

making a decision to purchase a property. Prospective purchasers must be able to show that they

can gain access to the property to conduct the site assessment. Private parties must acquire title

prior to obtaining a cleanup grant; however, public agencies need not do so.

Program: California Orphan Site Cleanup Account

Program type  Grants targeted to abandoned petroleum brownfield sites

Role in meeting brownfield financing challenges  Channels critical funding for assessment and

cleanup to petroleum properties having no viable owner to ready the sites for reuse

Type of benefit to California program users  Communities can bring abandoned petroleum

properties, typically vacant gas stations, to a shovel-ready condition for new owners

Brownfield revitalization opportunities for California participants  Idle petroleumcontaminated sites, in particular, small properties such as former gas stations, can be prepared for

reuse as part of urban infill or blight elimination strategies

Lessons and ideas for other states  Targeting abandoned petroleum properties can remove

urban blight and round out a revitalization area
Page 12

To be eligible for assistance, properties must be located in urban areas formerly used for some

type of economic activity and vacant for at least 12 months prior to application. In addition,

properties currently or formerly owned by the federal government, or on the federal Superfund

list, may not participate. In addition, applicants are required to make a reasonable effort to

contact former property owners and other potentially responsible parties, and determine how

much (if anything) they are able to contribute towards cleanup costs.

The total maximum reimbursement allowed under the orphan site program is $1.5 million per

eligible site. No more than $3 million may be awarded in grant agreements to any one applicant

in a fiscal year. There is no program deductible. The total program authorization is $10 million

annually.

Applicants are competitively evaluated to determine grant awards. Proximity to a drinking well

or other water source is a top priority, followed by environmental justice and low-income

population concerns. Smart growth factors such as development of affordable inner city

housing or other infill development also are considered.

For additional information:

Web site: http://www.waterboards.ca.gov/cwphome/ustcf/osca.html

Contact: Judy Reid, Orphan Site Cleanup Subaccount (OSCA) Program Contact, 916/341-5760,

jreid@waterboards.ca.gov

Contact: Pat Preslar, OSCA Program Contact, 916/341-5756, ppreslar@waterboards.ca.gov

The Polanco Redevelopment Act is a widely used tool by California redevelopment agencies to

promote redevelopment of brownfields. It was enacted to help redevelopment agencies respond to

brownfield opportunities. The Polanco Act prescribes a process for redevelopment agencies to

follow when cleaning up a hazardous substance release in a redevelopment area. It also provides

redevelopment agencies and subsequent property owners with immunity from liability if the

properties are cleaned up according to a cleanup plan approved by the states Department of Toxic

Substances Control (DTSC) or a regional water control board. Redevelopment agencies seeking

approval of their cleanup plans must reimburse DTSCs and the water boards oversight costs.

Program: Polanco Act

Program type  Liability relief linked to redevelopment agency brownfield activity

Role in meeting brownfield financing challenges  Increases comfort via a cleanup/revitalization

process that helps attract capital

Type of benefit to California program users  Process-based incentive to encourage

redevelopment agencies to promote public-private financing partnerships aimed at property reuse

Brownfield revitalization opportunities for California participants  Time-saving cleanup

process expedited by local redevelopment agencies

Lessons and ideas for other states  Linking environmental and redevelopment goals can help

generate interest in site reuse
Page 13

Californias Polanco Redevelopment Act incentives are available only in designated

redevelopment project areas. The act allows a redevelopment agency to order parties responsible

for contaminating property in the redevelopment project area to perform the necessary cleanup;

alternatively, the redevelopment agency can perform the cleanup itself or arrange for a third

party to clean up the property according to an approved remedial action plan (RAP) and seek to

recover its costs later.

When the cleanup is complete, anyone who enters an agreement to redevelop the property, any

subsequent purchaser, or any lender for redevelopment of the site may obtain immunity from any

liability stemming from contamination cleaned up according to the RAP under the Act.

The Polanco Act is credited with jump-starting brownfield projects across California by

encouraging prospective purchasers and private lenders to take on these properties because of the

process certainty and related cost savings that it brings to the process.

Success Story

The Emeryville Redevelopment Agency is using the authority provided under the Polanco Act to

expedite the cleanup of a 12-acre industrial site contaminated with pesticides, heavy metal, and

volatile organics. A redevelopment environmental process that frequently takes five to 10 years

will be completed in less than three years. Polancos immunity provisions are facilitating

financing for the $200 million redevelopment project, and the Acts cost-recovery provisions

shifted the cleanup costs to the responsible parties.

For additional information:

Web site: http://www.calepa.ca.gov/Brownfields/PolancoAct.htm
Page 14

COLORADO

Colorado passed a Brownfields Cleanup Tax Credit in 1999 as part of the governors smart

growth initiative to make brownfield redevelopment more attractive and viable. Properties must

be located in a municipality with a population of at least 10,000 and be eligible for inclusion

under the states Voluntary Cleanup and Redevelopment Act. The bill provides a state income

tax credit of up to $100,000 per property to offset up to $300,000 in cleanup costs.

In 2006, the legislature extended the incentive as part of the states smart growth initiative to any

tax year ending before December 31, 2010. Now, the credit is available on a staggered basis.

Applicants may get credit for:

50 percent of the first $100,000 spent on cleanup;

30 percent of the next $100,000; and

20 percent of the third $100,000.

To the extent the allowable credit exceeds the net tax liability, the excess may be carried forward

for up to five years. The Colorado Department of Public Health and Environments Voluntary

Cleanup Program reviews the sites cleanup plan and associated costs to provide the certification

required to obtain the tax credit from the Colorado Department of Revenue.

A variety of cleanup-related costs are eligible for the credit provided that costs were incurred

after January 1, 2000. These include direct cleanup costs, permitting costs specifically required

to undertake the cleanup actions, administrative costs related to cleanup (such as state voluntary

cleanup program fees), and expenses related to cleanup monitoring and verification.

Procedurally, taxpayers carrying out a brownfield cleanup and seeking a state credit submit a

report of their remedial actions and costs to the Department of Public Health and Environment,

which has 45 days to review it. The Department will certify the results, issue a letter stating that

the cleanup is complete, and declare the amount of costs that are approved to calculate the tax

credit. The tax credit is a one time per project incentive, and it can be applied to eligible project

costs only at the completion of the cleanup.

Program: Brownfield Cleanup Tax Credit

Program type  Sliding-scale tax credit to offset brownfield cleanup costs

Role in meeting brownfield financing challenges  Provides funding to identify sites and carry

out cleanup, to make properties shovel ready for reuse

Type of benefit to Colorado program users  Positive cashflow impacts can make brownfield

cleanups, especially smaller ones, more economically feasible

Brownfield revitalization opportunities for Colorado participants  Given their structure and

flexibility, cleanup tax credits can encourage cleanup of a wide range of properties

Lessons and ideas for other states  Sliding-scale tax credits can encourage cleanups and make

smaller projects more attractive in a more revenue-friendly way
Page 15

For additional information:

Web site: http://www.cdphe.state.co.us/HM/rpbrownfields.htm#tax

Contact: Joe Vranka, Superfund and PA/SI Unit Leader, Colorado Dept of Public Health and

Environment, 303/692-3402, joe.vranka@state.co.us

Contact: Dan Scheppers, Hazardous Materials and Waste Management Division of CDPHE,

303/692-3398, daniel.scheppers@state.co.us
Page 16

CONNECTICUT

As a result of a 1 percent sales tax on dry cleaning services, every shirt cleaned in Connecticut

supports brownfield financing. The tax supports the Dry Cleaner Establishment Remediation

Fund, which provides grants of up to $50,000 per year for three years, totaling up to $150,000, to

dry cleaner business operators. Funds are awarded to help them address the unique

environmental problems caused by dry cleaning solvents and chemicals. The grants may be used

for site cleanup, containment, and mitigation of pollution from releases of dry cleaning

chemicals, and for the prevention of such pollution.

To be eligible for the funding, applicants must prove that at least two banks have refused to

provide them with conventional financing on reasonable terms or in reasonable amounts. They

also must currently operate the establishment, be current in filing all state and federal taxes, and

certify that they are involved in no outstanding litigation proceedings. Grant applications are

evaluated based on risk to public health, the magnitude of the problem, cost and environmental

effectiveness of the proposal, and the availability of funds. So far, the state has awarded grants

totaling about $3 million to some 40 applicants. Approximately 10 sites are in the monitoring

stage and will complete remediation within the next two years.

In 2006, the Connecticut legislature made several changes to the Dry Cleaning Remediation

Fund program. For example, the program now allows, instead of requires, the Department of

Economic and Community Development to provide grants from the account to mitigate pollution

from dry cleaning chemicals. This will provide program administrators with more flexibility.

For additional information:

Contact: Dimple Desai, Program Manager, Connecticut Department of Economic & Community

Development, 860/270-8151, dimple.desai@po.state.ct.us

Program: Dry Cleaner Remediation Account

Program type  Direct financial assistance targeted to a specific brownfield type

Role in meeting brownfield financing challenges  Provides capital directly to address

brownfield situations  and prevent them

Type of benefit to Connecticut program users  Direct, bottom-line cash for dry cleaner

brownfields

Brownfield revitalization opportunities for Connecticut participants  Makes dry cleaner

brownfield sites, especially those affecting adjoining commercial or residential areas, more

economically viable for cleanup and reuse

Lessons and ideas for other states  Value of providing direct capital for targeted brownfield

types and for brownfield prevention strategies
Page 17

In mid-2006, the Connecticut legislature adopted new brownfield program changes that took

effect on July 1. Key among these was creation of a state office of Brownfield Remediation and

Development within the state Department of Economic and Community Development, and

mandated cooperation between DEP and the Connecticut Development Authority. The new

statute created a source of funding for the new brownfield office, stemming from the sale of

properties that use state funds for cleanup.

The new office will provide outreach and assistance related to other portions of the state statute.

For example, the 2006 law authorizes a brownfield pilot program in four towns. It places the

office within the Department of Economic and Community Development for administrative

purposes, which will underscore the states focus on brownfield property development. It also

creates a task force to develop long-term solutions for cleaning up and redeveloping brownfields.

In addition, the statute also allows owners of existing manufacturing facilities to qualify for state

cleanup funds, as of October 1, 2006. According to the conditions laid out in the law, this

provision will focus on older plants, and their owners who are trying to cope with regulatory

changes; in other words, it targets property owners who ran into difficulties because of

regulatory changes contained in CERCLA and other rules that affected their operations that had

been ongoing long before the rules were adopt. At the same time, these same owners cannot

knowingly have contributed to the contamination according to existing laws in place.

The new office will play a key role in informing property owners of the laws provisions.

Finally, the new law provides a mechanism to encourage parties to acquire and clean up

contaminated properties from towns or economic development agencies that may exclude such

parties from the states Transfer Act.

Success Story  Norwich

The Connecticut Office of Brownfield Remediation and Development will be providing

technical assistance at properties comparable to the former Roto Print site in Norwich, which

was cleaned and reused as a community park. In Norwich, state outreach was key to the citys

efforts to develop the redevelopment plan for the property and identify the financial support

needed to carry it out at this facility located on the Shetucket River, which had burned down in

1986 and was long abandoned.

Program: Office of Brownfield Remediation and Development

Program type  Technical assistance support

Role in meeting brownfield financing challenges  One source of brownfields information,

development of state-level technical capacity to support local financing strategies

Type of benefit to Connecticut program users  Visible point of contact for states program

efforts

Brownfield revitalization opportunities for Connecticut participants  Process support

structure, useful for local marketing efforts

Lessons and ideas for other states  Value of backing a statewide technical assistance support

structure with a dedicated source of funding
Page 18

Before After

For additional information:

Web site: http://www.ctbrownfields.gov/ctbrownfields/site/default.asp

Contact: Connecticut Office of Brownfield Remediation and Development, 860/270-8095,

obrd@ct.gov
Page 19

DELAWARE

Delaware offers employment and capital investment tax credits to parties that clean up

brownfields and encourage new business activity on them. Companies that locate on

brownfields, invest at least $200,000 in a facility located on a brownfield, and also create at least

five new jobs are eligible to receive tax credits, including:

$650 per each $100,000 of new investment;

$650 for each new job created; and

A 15-year graduated gross receipts tax credit.

Credits for employees and investment are increased by $250 if the business locates on a

brownfield in a targeted distressed area.

For additional information:

Web site: http://dedo.delaware.gov/business/brownfield/programs_and_resources.shtml

Contact: Shannon Marchman, 302/577-8742, shannon.marchman@state.de.us

Program: Brownfield Tax Credit Program

Program type  Employment and investment tax credits targeted to brownfield redevelopment

Role in meeting brownfield financing challenges  Helps cashflow by reducing tax liabilities for

activities generating brownfield benefits

Type of benefit to Delaware program users  Reduces tax liabilities

Brownfield revitalization opportunities for Delaware participants  Makes investing in

brownfield properties, and generating jobs on them, financially advantageous

Lessons and ideas for other states  Strategy to encourage desired social and economic benefits

of brownfield cleanup and reuse through the tax code
Page 20

The Delaware Economic Development Office (DEDO) administers a brownfield matching grant

program to help owners and developers address initial brownfield property needs and encourage

the redevelopment of environmentally distressed sites in the state. This is in addition to the

Department of Natural Resources and Environmental Controls (DNREC) brownfield assistance

program.

DEDO offers the lesser of up to $100,000 or 50 percent of the costs associated with the more

advanced investigation and cleanup of a brownfield site; as such, Phase I costs are excluded from

the program. And given its economic development focus, this program requires that each project

generate at least five permanent full-time jobs.

To be eligible for DEDOs program, the owner, prospective owner, or developer must first

obtain a brownfield certification from DNREC that recognizes the site as a brownfield. After this

is done, the site user can send an application to DEDO for evaluation and processing.

Reimbursement occurs when DEDO gets copies of paid receipts for the investigation and

remediation costs incurred.

Success Story  Wilmington

The brownfield assistance program helped with the costs

associated with the redevelopment of eight acres of land on the

Wilmington riverfront. The property, which is being

transformed into Christina Landing, had a long history of

dumping commercial and industrial wastes. Plans for this site,

which are beginning to be implemented, call for construction

of 63 luxury townhouses, 273 upscale apartment units, and a

280-space parking garage.

Program: Brownfield Assistance Program

Program type  Grants to reimburse property owners for site assessment and cleanup of

brownfield sites

Role in meeting brownfield financing challenges  Provides upfront funding to address initial site

feasibility, carry out renovation and construction

Type of benefit to Delaware program users  Assists small communities finance upfront property

redevelopment costs; encourages informal links between environmental and economic development

activities

Brownfield revitalization opportunities for Delaware participants  Encourages cleanup and

reuse of vacant, often mothballed properties

Lessons and ideas for other states  Practical strategies to link vacant properties and other

brownfield-type situations to funding sources that can achieve comparable brownfield cleanup and

redevelopment goals
Page 21

For additional information:

Web site: Delaware Economic Development Office (DEDO),

http://www.state.de.us/dedo/business/brownfield/programs_and_resources.shtml#Tax_Credits_S

tate

Web site: Delaware Department of Natural Resources and Environmental Control,

http://www.dnrec.state.de.us/dnrec2000/Divisions/AWM/sirb/brownfield.asp
Page 22

FLORIDA

The 1998 Florida Legislature created the original Voluntary Cleanup Tax Credit program to

provide tax credits for up to 35 percent of the costs of voluntary cleanup activities that are

integral to site rehabilitation in order to encourage voluntary cleanup at brownfield sites in

designated Florida brownfield areas. One key to the programs success is that the credits are

transferable, so that local governments and nonprofit developers that cannot use the credits may

transfer them to businesses as an incentive to reuse brownfield sites or to mitigate costs incurred

to perform brownfield site rehabilitation. In the fiscal 2005-2006 biennium, the state issued 10

tax credit certificates to brownfield property users worth just over $1 million in credits.

The program has been substantially expanded. In August 2006, Florida modified its brownfield

incentives, targeting additional corporate income tax credits available for brownfield

redevelopment. Now, property reusers can get credits for up to 50 percent of cleanup costs per

year (up to $500,000), and in the final year of the project, they may recover 25 percent of the

total cleanup costs for all years of the project, up to $500,000. This means that up to $1 million

in tax credits may be available in the final year of cleanup. In addition, if the projects end use is

affordable housing, then the developer my claim up to 75 percent per year, up to $500,000, with

an additional 25 percent of all cleanup costs available during the last year of the project; housing

credits are also capped at $1 million total.

In other words, if a developer spends $1 million a year in cleaning up a contaminated site and

completes the project in the second year, he or she could recover $500,000 the first year and

$1 million the second, which equals 75 percent of the total two-year cost.

The following chart summarizes the credits available under the voluntary tax credit program:

Program: Voluntary Cleanup Tax Credit

Program type  Transferable tax credit

Role in meeting brownfield financing challenges  Frees up capital, provides flexibility in capital

allocation choices to help property owners address specific brownfield needs

Type of benefit to Florida program users  Brings cashflow advantages to new users of

brownfields and obsolete properties, now encourages targeted capital investment in projects to

create affordable housing

Brownfield revitalization opportunities for Florida participants  Makes brownfields,

abandoned and obsolete properties more cost competitive for reuse, and provides communities with

a tool to market to developers to promote socially responsible investments

Lessons and ideas for other states  Value of targeting incentives to specific types of brownfield

properties (such as affordable housing) to address unique upfront costs to help equalize their

appeal with undeveloped sites
Page 23

Tax Credit Type

Prior to July 1,

2006

Effective July 1,

2006

Site Rehabilitation 35% $250,000 50% $500,000

No Further Action

(i.e., SRCO)

10% $50,000 25% $500,000

Affordable Housing N/A N/A 25% $500,000

Solid Waste N/A N/A 50% $500,000

The Miami-based Cornerstone Group plans to be one of the first developers to take advantage of

the new incentives, mapping out an affordable housing project on a brownfield site. The Harbor

Cove development, planned as a $30 million, 212-unit residential complex in Broward County,

was originally an auto body shop with environmental concerns. Through Floridas brownfields

program, Cornerstone remedied the site and plans to open the complex by the end of 2007.

For additional information:

Web site: http://www.dep.state.fl.us/waste/categories/vctc/default.htm

Contact: Beth Walker, beth.walker@dep.state.fl.us, 850/245-8933

Floridas Brownfield Redevelopment Bonus encourages redevelopment and job creation in

designated Brownfield Areas through a tax refund of up to $2,500 for each new job, or 20

percent of the average wage of the jobs created, whichever is less. Of the $2,500, $500 is a fully

optional match, so that the bonus often functions as a $2,000 per job bonus. All tax refunds can

be applied to many tax categories, including corporate income, ad valorem, intangible personal

property, insurance premium, and sales and use taxes.

The refund is available to any business that locates at a brownfield site in a designated

Brownfield Area and qualifies under Floridas Qualified Target Industry (QTI) tax refund

program. This program provides a tax refund of at least $3,000 per job created to businesses in

targeted industries that create at least 10 jobs and pay an average annual wage of at least 155

percent of the local, state, or MSA average.

Program: Brownfield Redevelopment Bonus/Tax Refund for Job Creation in

Brownfield Areas

Program type  Transferable tax credit

Role in meeting brownfield financing challenges  Provides money to support brownfield

activities through business tax refunds pegged to numbers of jobs created

Type of benefit to Florida program users  Provides cash via tax refunds to new users of

brownfields, $2,500 for each job created

Brownfield revitalization opportunities for Florida participants  For new site uses that will be

labor intensive, a substantial incentive

Lessons and ideas for other states  Incentive value of linking job creation to brownfield

revitalization strategies
Page 24

Applicants that do not qualify under the QTI program may still qualify for the brownfield bonus

by creating at least 10 jobs (with benefits) in a designated Brownfield Area and making a fixedcapital investment of at least $2 million in mixed-use business activities. Applicants also must

show that the project will diversify and strengthen the local economy and promote capital

investment in the area surrounding the rehabilitated site.

For additional information:

Contact: Patrick W. Kennedy, Incentive Manager, Enterprise Florida, Inc., 850/487-2157,

pkennedy@eflorida.com

Floridas Brownfield Area Loan Guarantee Program targets primary lenders that finance

brownfield cleanup and redevelopment. Originally, the program provided coverage of up to

10 percent of the original loan balance or the outstanding balance, whichever is less. In August

2006, the state legislature made the incentive much more attractive, increasing the maximum

ceiling on loan guarantees from 10 percent to 50 percent of the outstanding loan balance, as well

as up to 75 percent guarantees for projects resulting in affordable housing.

The program covers losses from default due to environmental and other causes for up to five

years, but the state council that approves applications may consider a request to renew or issue a

new guarantee for up to five additional years for loans and/or projects that demonstrate

continued prospects for ultimate success.

For additional information:

Contact: Mary Helen Blakeslee, Executive Office of the Governor, OTTED, 850/922-8743,

maryhelen.blakeslee@myflorida.com

Program: Brownfield Area Loan Guarantees

Program type  indirect financial support (guarantees against loan losses)

Role in meeting brownfield financing challenges  provides additional comfort/credit

enhancement by reducing risk for brownfield project lenders

Type of benefit to Florida program users  offsets perceived risk of environmental contamination

to project viability, which makes capital for brownfield-related project needs more available

Brownfield revitalization opportunities for Florida participants  expands capital availability for

brownfield projects

Lessons and ideas for other states  value of providing a guarantee that helps lessen perceived

investment risk and stimulates capital flow by limiting potential lender losses on brownfield projects
Page 25

ILLINOIS

Just authorized in August, 2006, Illinois new River Edge Redevelopment Initiative includes the

designation of redevelopment zones that will be eligible to receive tax credits and exemptions to

support remediation and redevelopment efforts that will lead to economic revitalization in

riverfront areas. This initiative combines resources across state agencies and will be

administered primarily by the Illinois Department of Commerce and Economic Opportunity

(DCEO) and the Illinois Environmental Protection Agency (IEPA).

Once designated, the River Edge Redevelopment Zones would consist of brownfield-type

contaminated areas that adjoin a river, that have economic development potential. The zone tax

incentives are intended to offset the environmentally related costs of redevelopment that have

made attracting investment to these areas difficult. These zones would be structured similarly to

the states current enterprise zone program, in which municipalities apply directly to the state to

become a River Edge Redevelopment Zone. Once a zone is designated, companies or developers

in the zones would be eligible for an environmental remediation tax credit for certain cleanup

costs. In addition, developers and businesses locating within its boundaries could be eligible for

a variety of tax incentives, including an exemption from sales tax on building materials, an

investment and jobs tax credit, and other state tax deductions.

Program: River Edge Redevelopment Initiative

Program type  Geographically targeted tax credits and exemptions

Role in meeting brownfield financing challenges  Recognizes the cross-agency, cross-sector

role of a blend of incentives to help property owners address specific brownfield needs in specific

types of brownfield situations (i.e., riverfronts)

Type of benefit to Illinois program users  Brings cashflow advantages to new users of

brownfields, encourages a comprehensive focus  cleanup, construction, job creation  on riverfront

brownfields

Brownfield revitalization opportunities for Illinois participants  Focuses efforts on riverfront

brownfields, a common situation in Illinois, especially in many smaller communities

Lessons and ideas for other states  Value of targeting a range of cleanup and redevelopment

incentives to specific types of brownfield properties (in this case, riverfront parcels) to encourage

interagency cooperation for the mutual goal of brownfield restoration
Page 26

Communities like Moline, Illinois, with its new residential and commercial developments, will be able to

take advantage of these new River Edge Redevelopment Initiatives.

For additional information:

Contact: Illinois Department of Commerce and Economic Opportunity (DCEO),

http://www.commerce.state.il.us/dceo

Contact: Illinois Environmental Protection Agency (IEPA), http://www.epa.state.il.us

The Illinois Environmental Protection Agency administers a brownfield redevelopment grant

program to provide financial assistance to Illinois municipalities for brownfield redevelopmentrelated activities that need to be carried out at an early stage in order to demonstrate that projects

can be viable and how property cleanup can and should be undertaken. Eligible activities

include:

Brownfield site identification, investigation, characterization, and inventory;

Development of remediation objectives; and

Development of remedial action plans.

Program: State Brownfield Redevelopment Grants

Program type  direct financial assistance through grants and loans

Role in meeting brownfield financing challenges  provides capital to help communities

determine site priorities and viability, and meet up-front site assessment and cleanup planning

needs

Type of benefit to Illinois program users  direct, bottom-line cash for initial brownfield

assessment and cleanup planning activities

Brownfield revitalization opportunities for Illinois participants  offers resources to address

initial brownfield activities, to make properties shovel ready for reuse

Lessons and ideas for other states  value of providing initial capital investments, and first-stage

project gap financing support, needed to make
Page 27

Illinois brownfield redevelopment grants focus on activities needed to jump-start a project 

helping communities determine where potential sites are and to what extent they may be

contaminated. Grant funds may not be used to fund actual cleanup activities or to prepare

remedial action completion reports. The grant amount can be up to $240,000, and grants are

awarded to reimburse for eligible costs that a recipient municipality may incur. For each project,

grant funds can cover up to 70 percent of the costs; the municipality pays for the remaining

30 percent.

Success Story  Blue Island

The state provided $119,977 in brownfields redevelopment grant funding to the city of Blue

Island in July 2006. This funding is being used to conduct site assessment activities at the former

90-acre, multi-use industrial/commercial site located at 119th and Vincennes Streets to determine

the nature and extent of contamination throughout the property. A cleanup plan will be designed

based on the findings of the investigation.

For additional information:

Contact: Steve Colantino, Manager, Illinois Office of Brownfields Assistance,

steve.colantino@epa.state.il.us
Page 28

INDIANA

Indianas state environmental remediation revolving loan fund (commonly known as the

brownfields fund) promotes brownfield reuse by paying for site assessments and cleanup. Created

by the state legislature in 1997, the fund is administered by the Indiana Finance Authority (IFA) in

cooperation with the Indiana Department of Environmental Management (IDEM).

Initially, the law provided $10 million over three years to eligible cities, towns, and counties for

grants and loans for several programs, including assessments and remediation (including

demolition). According to IFA program guidelines announced in March 2007, most of these

program components have specified levels of funding for this year. The fund supports six

brownfield incentives:

Site assessment grants;

Site remediation grants;

Low-interest loans;

Voluntary remediation tax credits;

Federal grant matching funds; and

Petroleum remediation grants.

Additional information about these incentives includes:

Site assessment grants of up to $100,000 are available to cities, towns, and counties (with

$1 million available in fiscal year 2007). Nonprofits and other private parties may be coapplicants. The grants pay for environmental investigation (Phase I or Phase II

assessments) at identified brownfield sites, including asbestos and lead-based paint

surveys, and cleanup plan development.

Program: State Environmental Remediation Revolving Loan Fund

Program type  Comprehensive package of tax incentives, loans, and grants targeted to a range of

brownfield properties and situations

Role in meeting brownfield financing challenges  Provides tax relief, targeted gap financing,

access to capital

Type of benefit to Indiana program users  More accessible, affordable brownfield financing

resources, along with the cashflow impacts that tax credits provide

Brownfield revitalization opportunities for Indiana participants  Addresses various brownfield

preparation costs through a flexible package of incentives that can provide direct assistance or help

with cashflow over the long term

Lessons and ideas for other states  Flexibility and breadth of incentives can make more types of

brownfield situations attractive for reuse
Page 29

Site remediation grants of up to $300,000 are available to cities, towns, and counties

(with $2 million available in fiscal year 2007). Private parties may be co-applicants. The

grants pay for environmental cleanups at all types of sites (except properties solely

contaminated by petroleum), including cleanup work plan development, soil and

groundwater remediation, and asbestos abatement. Cleanup must be done in accordance

with Indiana state standards.

In each case, applicants are evaluated according to several criteria, including available

matching funds or related investment capital (with levels pegged to a jurisdictions

population and median income, which may be offset by the number of new jobs created,

with a $1,000 credit per job), and their economic development potential  such as impact

on the local tax and jobs base. Half of the funding is allocated to small jurisdictions with

fewer than 10,000 people.

Low-interest loans with interest rates of 2.5 to 3.0 percent can be made to cities, towns,

and counties to cover the costs of property acquisition, remediation (including asbestos

abatement), demolition and disposal of structures, and state program fees at brownfield

sites.

Loan limits depend on the resources available in the Indiana program at any given time,

and applicants may not get more than 10 percent of the total available. Loan recipients

can re-loan proceeds to nonprofit or for-profit companies. Loan proceeds may be used for

soil and groundwater cleanup, demolition activities, asbestos and lead paint abatement,

and additional investigation. In addition, the state may forgive up to 20 percent of the

loan amount if specific economic and community development goals are achieved, such

as numbers of jobs generated, green space created, abandoned gas stations addressed, or

brownfield cleanups that take place within 0.5 mile of schools or child care centers.

Those voluntarily cleaning up brownfield sites may receive a voluntary remediation tax

credit against Indiana tax liabilities, which equals the lesser of 10 percent of the

remediation cost or $100,000.

In addition, each year the brownfields fund sets aside $50,000 for Just-In-Time Funding 

available outside of the normal grant rounds  for Phase II site assessments that are

needed to meet immediate economic development opportunities. A city, town, or county

must match these grant dollars one for one and certify that a company or developer is

imminently interested.

For additional information:

Web site: www.idfabrownfields.com

Contact: Sara Westrick Corbin, Indiana Development Finance Authority, swestrick@idfa.in.gov

Contact: Michelle Oertel, Indiana Department of Environmental Management,

moertel@dem.state.in.us
Page 30

In late 2006, Indiana changed the way in which its long-time petroleum remediation grant

program was administered to make it easier and more efficient for communities to use. The state

was divided into seven regions, and an environmental consulting firm was assigned to each

region.

Grants go to local governments, who work with the designated consulting firms to identify sites;

the consulting firms are responsible for carrying out cleanup work. These changes were intended

to take the mystery out of choosing an environmental consultant, particularly for smaller

communities with little experience with the brownfield redevelopment process. Each Indiana

region has been given $750,000 to carry out the program.

Eligible sites include those brownfield sites not eligible for the states Environmental Liability

Trust Fund. They must be owned by the applicant, or be acquired at the time of award, and the

owner must not have been responsible for the contamination. Priority for assistance is given to

properties with long-term plans for reuse in place, and the likely impact the project will have on

the overall economic and situation of the community, including potential increases to its tax

base, additional jobs created, and increased private investment in project property. Other

community benefits, such as creation, preservation, or addition to a park, greenway, or

recreational facility, are also considered.

Grants, which may be as large as $300,000, can be used for:

Assessing petroleum brownfield sites;

Removing petroleum underground storage tanks; and

Remediating petroleum-contaminated soil or groundwater.

The state issues an NFA letter once work is complete. No cash match is required for this grant,

and this grant can be used in conjunction with other Indiana brownfields program assistance

programs. October 2006 funding awards include:

Program: Petroleum Grant Program

Program type  Grants targeted to petroleum brownfield sites

Role in meeting brownfield financing challenges  Provides funding to identify sites and carry

out cleanup to make properties shovel-ready for reuse

Type of benefit to Indiana program users  Communities can bring petroleum properties to a

shovel-ready condition for new users, working with consultants pre-identified for this task

Brownfield revitalization opportunities for Indiana participants  Petroleum-contaminated sites,

in particular, small properties such as former gas stations, can be readied for new uses as part of

infill or blight eradication strategies

Lessons and ideas for other states  Targeting petroleum properties, and linking qualified

technical support to communities needing it, can enhance reuse opportunities
Page 31

Sites like this one, comparable to

the one in Dugger, are taking

advantage of the Indiana

Petroleum Grants Program.

Wabash, which received $111,000 for petroleum

contamination cleanup at an abandoned gas station

site near downtown, which will be readied for new

commercial use; and

Dugger, a small town of fewer than 1,000 residents

in southwestern Indiana, received $9,228 to clean up

a former gas station, located on State Road 54 just

west of Dugger. The site, abandoned for more than

15 years, will be cleaned and converted to an auto

repair and carwash facility.

For additional information:

Contact: Andrea Robertson, 317/234-0968, aroberts@ifa.in.gov

The goal of Indianas federal grant matching incentive is to increase the competitive standing

and success rate of Indiana applicants for EPA brownfields funding. No application process is

required, but applicants for federal brownfield funding must notify the Indiana Finance

Authority (IFA) of their plans to apply for federal grant funding.

After IFA notification, eligible EPA brownfield grant applicants (including nonprofits) can

stipulate the matching grant as a pre-committed source of funding in their federal grant

applications. The Indiana matching grant program will provide a 20 percent match for revolving

loan fund and cleanup grant applications; applicants must provide their own 5 percent match.

For additional information:

Contact: Sara Westrick, Corbin, Financial Resources Coordinator, Indiana Finance Authority,

317/234-1688, swestrick@ifa.in.gov

Program: Brownfield Federal Matching Grants

Program type  Matching grants to facilitate receipt of federal EPA grants

Role in meeting brownfield financing challenges  Leverages federal funding

Type of benefit to Indiana program users  Increases their opportunities to secure federal grant

funding for brownfields

Brownfield revitalization opportunities for Indiana participants  Increases opportunities to

compete for and win federal EPA grant funding

Lessons and ideas for other states  Enhances access to federal grant funding, especially for

small and disadvantaged communities not able to meet federal program matching requirements
Page 32

KANSAS

The Kansas agricultural remediation reimbursement program was put in place in 2000 to help

owners of contaminated properties used for agricultural purposes recover the cleanup costs

incurred after July 1, 1997 (now, within 2 years of paying those costs). The remediation fund

was created by assessing an annual fee on pesticide products, pesticide dealers, grain storage,

fertilizer products, and custom blenders.

The fund is administered by the Kansas Agriculture Remediation Board, which meets and

considers applications quarterly. The legislature set a maximum reimbursement amount at the

following levels:

If an eligible person is assessed a fee, they can receive 90 percent of their total costs

greater than $1,000 and less than $90,000 plus 80 percent of the total eligible corrective

action costs greater than $100,000 and less than $200,000; and

If a person does not pay an assessment or is a pesticides dealer who has paid the

appropriate assessment, they are eligible to receive 100 percent of their costs greater than

$1,000 and less than or equal to $10,000.

The costs eligible for reimbursement include consultant fees, soil and groundwater sampling and

analytical costs, contaminated soil removal, and groundwater remediation costs. Attorneys fees,

loss of income, and the replacement costs of spilled agricultural chemicals are not eligible for

reimbursement.

For the first three months of 2007, the program made 21 reimbursements totaling $122,082 (at an

average reimbursement of $5,813). In 2006, the program reimbursed for 70 cleanups, providing

nearly $1.15 million to property owners (averaging $16,423 per project). Most of these covered

carbon, pesticide, and nitrate contamination.

For additional information:

Contact: Kansas Agriculture Remediation Board, 785/440-0356, 785/234-2930 (fax), mjs@karb.org

Program: Agricultural Remediation Reimbursement Program

Program type  Targeted reimbursement of cleanup costs

Role in meeting brownfield financing challenges  Provides cash to agricultural property owners

to cover the costs of environmental cleanups

Type of benefit to Kansas program users  Cash reimbursements for some types of rural

brownfield sites

Brownfield revitalization opportunities for Kansas participants  Addresses cleanup costs at

agricultural-type properties, helps make them ready for reuse

Lessons and ideas for other states  Programs can be targeted to meet reuse needs for property

types that may not be conventional brownfields
Page 33

KENTUCKY

Kentucky offers tax abatements and credits to bona fide prospective purchasers of properties that

complete the states voluntary environmental remediation program (VERP). Eligible properties

are those acquired from responsible parties who are not able to carry out necessary cleanup or

are governed by Superfund requirements. Eligible prospective purchasers able to take advantage

of these incentives are those who:

Did not cause the contamination;

Have conducted an all appropriate inquiry;

Take care to prevent the environmental problem from becoming worse;

Are willing to provide access to the property for cleanup;

Have not disrupted an institutional control or violated land-use restrictions designed to

manage the contamination; and

Have no affiliation with the party responsible for the contamination.

For qualified new owners, state and local property tax rates on a remediated brownfield

property are reduced. For 3 years following the cleanup, the property will not be subject to local

ad valorem property taxes. The state ad valorem property tax rate will be reduced from 31.5

cents per $100 of assessed value to 1.5 cents. Properties eligible for property tax abatements

must have been purchased after January 1, 2005.

Qualified owners can also receive up to $150,000 worth of income tax credits for expenditures

made in order to meet the requirements of the VERP assessment and cleanup. The allowable

credit for any taxable year is a maximum of 25 percent of the total credit earned. The credit may

be carried forward for 10 successive years. Properties eligible for income tax credits must have

been purchased after March 18, 2005.

Program: Brownfield Property and Income Tax Credits

Program type  Tax abatements and credits to prospective purchasers to offset cleanup costs

Role in meeting brownfield financing challenges  Offsets the costs of site cleanup to attract

new owners to sites with few cleanup options

Type of benefit to Kentucky program users  Cashflow advantages to offset cleanup costs

Brownfield revitalization opportunities for Kentucky participants  Enhances the economic

viability of contaminated sites, orphan sites, and others with no viable responsible party

Lessons and ideas for other states  Use of targeted tax credits to attract new owners and

ensure environmental cleanup
Page 34

For additional information:

Web site: Kentucky Division of Compliance Assistance,

http://www.dca.ky.gov/brownfields

Like virtually all states, Kentucky allows tax increment finance (TIF) to be used to generate

capital to meet redevelopment needs. In March 2007, Kentucky modified its existing TIF statutes

to distinguish brownfield situations, and specifically spell out circumstances in which brownfield

projects and areas could take advantage of this financing tool. In particular, brownfield areas as

small as one acre in size are now permitted to qualify for TIF financing; other areas in Kentucky

must be at least 50 acres in size. Furthermore, TIF proceeds can now be used to finance

environmental remediation.

The new law also significantly expanded the state level of participation in so-called signature

projects, i.e., those stimulating more than $200 million in capital investment, but other

Kentucky TIF requirements remain the same, including:

Eligible costs may be covered by up to 100 percent of incremental real estate taxes,

excluding school and fire district taxes;

Development area approval is limited to 20 years, with subsequent projects in the

development area eligible for their own 20-year approvals;

The development area must initially be owned and under the control of a public entity;

and

TIF proceeds can be used for site acquisition, roads, and facilities necessary or desirable

for improvement of the real estate, including surveys site tests and inspections,

environmental remediation, removal of structures, utility installations, and other activities

related to the development.

The state continues to take several key criteria into consideration when reviewing a TIF

development area application, including:

Program: Tax Increment Financing  Expansion to Brownfields

Program type  Use of incremental additional tax revenues generated to support development

needs  program change extends this to brownfields

Role in meeting brownfield financing challenges  Provides resources to meet upfront

brownfield costs not easily covered through other sources

Type of benefit to Kentucky program users  Access to capital for brownfield assessment,

cleanup, and redevelopment

Brownfield revitalization opportunities for Kentucky participants  Expands capital availability

for brownfield projects, and brings a new program focus to brownfield situations

Lessons and ideas for other states  Value of targeting state and local TIF processes directly to

brownfields
Page 35

Nature of the proposed projects, especially those that include transportation services;

information technology; or a commercial-, industrial-, recreational-, tourism-, or

education-related project;

How the development area is tied directly to a single project or investment, resulting in a

unique contribution to, or preservation of, economic vitality and quality of life of a region

in the state;

Extent to which TIF supports new economic activity in Kentucky;

Extent of net positive economic impact to the state;

Evidence of a minimum capital investment of $10 million; and

Evidence that at least 25 new full-time jobs will be created for Kentucky residents within

2 years of final authorization.

For additional information:

Web site: Kentucky Cabinet for Economic Development, http://www.thinkkentucky.com

Contact: Brad Thomas, Kentucky Cabinet for Economic Development,

502/564-4554 ext. 3407, brad.thomas@ky.gov
Page 36

LOUISIANA

In 2005, Louisiana adopted a brownfield investor tax credit program, granting tax credits to

developers of state-certified brownfields, i.e., properties where a voluntary assessment or

cleanup is underway. These credits, based on assessment and cleanup costs, can be used to

reduce state income tax liability. The aim is to put brownfields, mostly in inner cities, back into

productive use by helping to make previously used sites more economically attractive for

redevelopment.

The credit operates in two parts:

15 percent of the total investment made to carry out a site investigation; and

25 percent of the total investment made in a voluntary cleanup action.

In both cases, the credit is triggered on the date that the Department of Environmental Quality

(DEQ) issues a certificate of completion. The total amount of tax credits associated with a statecertified site cannot exceed the total assessment and cleanup expenses at a property. The credit is

applied against income tax due in the year that the credit is earned, although it can be carried

forward for up to 10 years. Landowners responsible for contamination may not claim any credit.

Tax credit applications are made jointly to the Louisiana Department of Economic Development

(DED) and DEQ. Applicants must provide a statement of what they environmentally intend to do at

the site from an environmental perspective as well as the projected economic development benefits

to the community where the project is located. DEQ has 30 days to object to the application. DED

works with the governors office, who gives final approval to the request for a credit.

Once approval is given, the applicant proceeds with site investigation; once DEQ approves,

cleanup can commence. After cleanup is complete and the applicant secures a certificate of

completion from DEQ, the taxpayer can claim the credit, the amount of which is based on the

actual costs incurred during the assessment and cleanup processes.

Program: Brownfield Investor Tax Credits

Program type  Tax levy reduction

Role in meeting brownfield financing challenges  Reduces taxes owed to free up capital for

site assessment and cleanup

Type of benefit to Louisiana program users  Brings cashflow advantages to new users of

brownfields properties

Brownfield revitalization opportunities for Louisiana participants  Makes brownfields more

cost competitive for cleanup and reuse

Lessons and ideas for other states  Value of using tax levy process to encourage cleanups by

addressing upfront costs to help equalize their appeal with undeveloped sites
Page 37

Before After

Projects like the American Can redevelopment into mixed-income housing can now take advantage of the

Louisiana tax credits for site assessment and cleanup.

For additional information:

Contact: Louisiana Department of Economic Development (DED),

http://www.lded.state.la.us/louisiana-economic-development-department.aspx

Contact: Louisiana Department of Environmental Quality (DEQ),

http://www.deq.louisiana.gov/portal
Page 38

MARYLAND

Properties that qualify for remediation assistance from the Maryland Department of Business and

Economic Developments Brownfields Revitalization Incentive Program (BRIP) are eligible to

receive a real property tax credit as well. They must also participate in the states voluntary

cleanup program. In addition, the property must be located in a jurisdiction that has elected to

participate in the BRIP, since part of the incentive derives from the local share of state tax

revenues generated. Property owners responsible for contamination may not take advantage of

the tax incentive.

For five years after cleanup, VCP participating qualified brownfields sites can receive a real

property tax credit between 50 and 70 percent of the new increment of taxes on the increased value

of the site. Properties located in any of the states 28 designated enterprise zones may take

advantage of the tax credit for up to 10 years. The brownfield credit, combined with other available

state property tax credits, may not exceed 100 percent of the tax on the increased value of the site.

State brownfield legislative changes that took effect in October 2004 expanded VCP site

eligibility to include oil-contaminated sites, which may now also take advantage of the

brownfield tax credit. In addition, that law also expanded tax credit eligibility to properties

acquired by local governments through eminent domain or condemnation, and authorized local

governments to access private properties for environmental testing.

For additional information:

Contact: James W. Metz, Chief, Voluntary Cleanup/Brownfields Division Maryland

Department of the Environment, Voluntary Cleanup Program, 410/537-3493,

jmetz@mde.state.md.us

Program: Brownfield Tax Incentive

Program type  Real property tax credit

Role in meeting brownfield financing challenges  Linked to states brownfield cleanup program,

provides additional cashflow support for brownfield property revitalization

Type of benefit to Maryland program users  Tax credit for up to 5 years (10 years at an

enterprise zone property)

Brownfield revitalization opportunities for Maryland participants  Enhances cleanup costrecovery options for new site uses in participating local jurisdictions

Lessons and ideas for other states  Incentive value of linking state tax incentives with local

participation
Page 39

MASSACHUSETTS

The Massachusetts Brownfield Redevelopment Access to Capital Program (MassBRAC) is a

first-of-its-kind program that makes low-cost environmental insurance available to parties that

clean up or redevelop brownfield sites anywhere in the state. The MassBRAC program leverages

private capital investment in brownfield properties by using environmental insurance to

safeguard parties from the risk of excess cleanup costs and environmental liabilities associated

with brownfield redevelopment.

In addition to pre-negotiated, below-market pricing for coverage under the program, the state

further subsidizes the cost of program policies at the rate of 25 percent of the policy cost, up to a

maximum of $25,000 per policy. Administration of the program is handled by the Massachusetts

Business Development Corporation. AIG Environmental underwrites the insurance coverage.

Available coverage includes cleanup cost cap (stop-loss) protection for those involved in an

active remediation project, and pollution legal liability coverage to protect parties from unknown

or unidentified contamination on brownfield sites that are being redeveloped. Lenders to projects

involving the cleanup or redevelopment of a brownfield site also can obtain protection through a

no-cost endorsement to a borrowers pollution legal liability policy. The policy automatically

transfers all coverage to the lender in the event of a loan default/foreclosure.

Applying for insurance under the MassBRAC program is no different from applying for any

environmental policy and the program has developed simple and streamlined procedures for

obtaining program and subsidy approval as well. Since the programs inception in 1999,

$5 million in state-funded insurance premium subsidies have sparked the issuance of nearly

$1 billion in insurance coverage for nearly 250 brownfield redevelopment projects in

Massachusetts. This investment has helped to enable $143 million in environmental cleanups

and nearly $2 billion in privately funded development to take place at these former brownfield

sites. The new and expanded facilities created have generated millions in new tax revenue and

created or retained over 24,000 permanent jobs in the state.

Program: Brownfield Redevelopment Access to Capital Insurance

Program type  Financial assistance (via insurance premium subsidies) to cover environmental

insurance costs

Role in meeting brownfield financing challenges  Increases capital availability by

managing/reducing lender risk

Type of benefit to Massachusetts program users  Makes private financiers more willing to

participate in brownfield projects; property owners gain access to a basic, effective environmental

risk management tool

Brownfield revitalization opportunities for Massachusetts participants  Petroleumcontaminated sites, in particular, small properties such as former gas stations, can be readied for

new uses as part of infill or blight eradication strategies

Lessons and ideas for other states  Subsidizing environmental insurance can leverage

significant private capital investment, even in distressed areas
Page 40

The program is administered by the Massachusetts Business Development Corporation, a

state-monitored private development company that also provides loan and investment capital to

businesses in throughout Massachusetts. As of June 2004, BRAC had assisted 227 projects,

leveraging $133 million in cleanup funds and $1.7 billion in private investment.

Success Story  Boston Area

A small but growing livery business in the Boston suburbs found a centrally located property

that could serve as a hub for vehicle storage and minor maintenance and repairs; however, the

site had housed an auto repair business and the property had

contamination  a leaking underground storage tank, which would

cost approximately $100,000. While the buyer was comfortable

taking on the risk linked to the estimated cost of the cleanup of the

known pollution condition, he was nervous about potential risks

associated with possible unknown pollution conditions being

discovered during the remediation or during redevelopment

activities. The deal went forward because the buyer was able to purchase a pollution legal

liability (PLL) policy through the MassBRAC program. The expanded company created

additional jobs and tax revenue for the community.

For additional information:

Contact: Thomas Barry, Vice President, Massachusetts Business Development Corp., and

Director, Brownfields Redevelopment Access to Capital, tbarry@mass-business.com

The Massachusetts brownfield rehabilitation tax credit offers taxpayers a credit against their tax

liability for the costs incurred to rehabilitate contaminated property owned or leased for business

purposes, as long as the property is located within an economically distressed area as defined

by the state of Massachusetts. The credit first became available in 1998; however, legislative

changes in 2006 expanded and extended it. Specifically, the recent legislation:

Program: Brownfield Credit for Rehabilitation of Contaminated Property

Program type  Tax credit targeted to brownfield revitalization in distressed areas

Role in meeting brownfield financing challenges  Provides, via tax credits, an offset for cleanup

costs

Type of benefit to Massachusetts program users  Cashflow advantages linked to property

cleanup; credit transferability provides a potential source of capital for nonprofits engaging in

brownfield redevelopment

Brownfield revitalization opportunities for Massachusetts participants  Contaminated

properties in distressed areas, including sites owned by nonprofits, will become more financially

viable for redevelopment

Lessons and ideas for other states  Transferability of cleanup credits expands their impact,

enhances their benefits
Page 41

Extended the timeframe for eligibility for the credit to August 5, 2011;

Extended the time for incurring qualifying costs to January 1, 2012;

Made the credit available to nonprofit organizations; and

Allowed credits to be transferred, sold, or assigned.

In general, the amount of the credit varies according to the extent of the environmental remedy.

Effective July 1, 2000, it is either 25 percent or 50 percent of environmental response and

removal costs incurred between August 1, 1998 and January 1, 2012, as long as the taxpayer

begins the environmental response action before August 5, 2011. The maximum amount of credit

that may be taken in any taxable year is capped at 50 percent of the tax liability for that year.

Carryovers are permitted for up to five years as long as the claimant maintains the remedy

operation status or the permanent solution for which the credit was granted. Finally, taxpayers

may claim this credit even if they receive financial assistance from other Massachusetts

brownfield assistance programs (although the amount of state funds received must be deducted

from the expense base for which the credit is available).

For additional information:

Web site:

http://www.mass.gov/?pageID=dorterminal&L=6&L0=Home&L1=Individuals+and+Fa

milies&L2=Personal+Income+Tax&L3=Current+Year+Tax+Information&L4=Guide+to

+Personal+Income+Tax&L5=Credits&sid=Ador&b=terminalcontent&f=dor_help_guide

s_abate_amend_personal_issues_othercredits&csid=Ador#BrownfieldsCredit
Page 42

MICHIGAN

In 1996, Michigan authorized cities and counties to establish local Brownfield Redevelopment

Authorities (BRAs). BRAs have tax increment financing (TIF) and bonding authority, as well as

the ability to carry out site assembly and other traditional economic tasks. Structurally, they are

based on the widely recognized and popular development authority entities, which increases

their acceptance among communities and private entities that might be uncomfortable with a

strictly environmental program. The BRAs can adopt brownfield plans that identify the eligible

activities to be conducted on an eligible property and provide for the use of TIF to capture

property taxes to reimburse the costs of eligible activities.

TIF is based on the tax increment of a brownfield site. The baseline amount of tax revenues for a

property is the amount generated the year it was included in the BRAs brownfield plan. When

cleanup and redevelopment of the property increases its assessed value, and thus the tax

revenues it generates, the increased tax revenues (captured taxes) are used to pay the cost of

eligible environmental response and redevelopment activities at the site.

According to Michigan law, the categories of taxing jurisdictions that can use TIF vary with the

type of authority. In the case of BRAs, the taxing jurisdictions are separated into two categories,

school and local. The school taxing jurisdictions include the local school district operating

tax and the state education tax. The local taxing jurisdictions include the local governmental

taxing jurisdictions in addition to community college and intermediate school districts. Tax

increment revenues that are eligible for capture include all property taxes, including taxes levied

for school operating purposes (with state agency approval). Taxes already captured as part of an

existing TIF plan (under other state laws) and taxes levied to pay off other specific obligations

(such as targeted revenue bonds) are exempt, or not available for brownfields financing.

The law authorizing formation of the brownfield redevelopment financing authorities stipulates

that only a BRA can capture new property tax value from a redeveloped eligible property and

use the captured funds to reimburse those who incurred eligible expenses on that property. In

addition, the statute permits BRAs, if they choose, to establish a Local Site Remediation

Program: Brownfield Redevelopment Authorities

Program type  Financing process support

Role in meeting brownfield financing challenges  Expedites access to conventional economic

development tools  i.e., TIF, bonding, site assembly  in a brownfields project context

Type of benefit to Michigan program users  Affordable capital for site cleanup and preparation

as part of the development process; available to small towns and rural communities, as well as

urban areas

Brownfield revitalization opportunities for Michigan participants  Ability to incorporate

brownfield components into total, traditional project redevelopment financing packages

Lessons and ideas for other states  Value of focusing traditional redevelopment tools to meet

projects specific brownfield development needs
Page 43

Revolving Fund from eligible tax capture to cover eligible expenses on other eligible properties

within the BRAs jurisdiction.

As of January 2007, approximately 225 cities and towns and 11 counties had established BRAs.

They have proven especially helpful in small towns, where they spearheaded redevelopment

projects in towns with as few as 1,500 people.

For additional information:

Web site: http://www.michigan.gov/deq/0,1607,7-135-3311_4110_23246-63521--,00.html

Contact: Darlene Van Dale, Michigan Department of Environmental Quality, 989/705-3453,

vandaled@michigan.gov

Michigan offers several tax incentives to support site redevelopment and attract private

investment to brownfields. In the context of Brownfield Redevelopment Authorities (see above),

property owners may apply for a credit against Michigan business taxes for investments made at

a brownfield property, as long as it is included in the local BRAs brownfield plan. This credit

(the Single Business Tax Brownfields Redevelopment Credit) is available to parties that did not

cause or contribute to the contamination and can total 10 percent of the development (not

cleanup) costs, or up to $1 million.

In urban communities that used state authorization to create an Obsolete Property Rehabilitation

District, property owners can receive an abatement of up to 100 percent of real property taxes for

a brownfield site for up to 12 years.

In late 2006, Michigan modified its brownfield tax credit program. These changes greatly

simplified the process for assigning brownfield credits and allowed multiple credit assignments.

The result is that the credits are assignable to anyone willing to pay for them, which will increase

their appeal and usefulness. In addition, brownfield developers of large-scale, multi-phase

projects will now be able to claim credits after each phase of a brownfield project, rather than

having to wait until the very end. Previously, in the case of multi-phase projects, developers had

to pay their Single Business Tax annually and then wait until their project is complete to claim

credits. This change will help cashflow and expedite project completion.

Program: Brownfield Tax Incentives

Program type  Tax credits, tax abatements

Role in meeting brownfield financing challenges  Frees up capital, provides flexibility in capital

allocation choices, to help property owners address specific brownfield project needs

Type of benefit to Michigan program users  Brings cashflow advantages to new users of

brownfields, obsolete properties

Brownfield revitalization opportunities for Michigan participants  Makes brownfields,

abandoned and obsolete properties more cost competitive for reuse

Lessons and ideas for other states  Value of targeting incentives to specific brownfield

properties to address upfront costs to help equalize their appeal with undeveloped sites
Page 44

Finally, a 2006 Michigan law created a new $10 million pool of credits for small brownfield

redevelopment projects, those with up to $2 million in costs. Before this change, these projects

had to compete in the same pool of credits as very large projects, which often put them at a

competitive disadvantage.

For additional information:

Contact: Michigan Department of Environmental Quality, http://www.michigan.gov/deq

The Michigan Department of Environmental Quality (MDEQ) offers grants and loans for

environmental assessments and cleanups at properties with known or suspected contamination.

This program was originally capitalized through Clean Michigan Initiative bond funds. Grants

and loans made available through this program are targeted to projects that promote economic

development and reuse of brownfield properties. These programs can attract developers to

brownfields and leverage capital for Brownfield Redevelopment Authority (BRA) projects with

loans.

Local governments, BRAs, along with other public entities such as state-funded schools and

universities, can apply for these grants and loans to finance projects at sites or facilities with

known contamination, properties with redevelopment potential and suspected contaminated, or

waterfront properties with significant redevelopment proposals. Grants or loans can finance:

Site evaluations and state Baseline Environmental Assessment (BEA) preparation,

including PCB, asbestos, and lead-based paint surveys;

Interim response activities;

Due care plan preparation and response activities;

Cleanup needed to comply with regulatory requirements and to promote redevelopment;

and

Demolition needed as a response activity.

Program: Brownfield Redevelopment Grants and Loans

Program type  Direct financial assistance

Role in meeting brownfield financing challenges  Provides capital, directly through grants or

loans, to finance brownfield property needs and attract private capital to these sites

Type of benefit to Michigan program users  Direct, bottom-line cash for brownfields

Brownfield revitalization opportunities for Michigan participants  Makes brownfields more cost

competitive for reuse; waterfront properties a key target

Lessons and ideas for other states  Value of providing direct capital investments to bring

properties back on line
Page 45

Applicants can seek up to $1 million annually for each grant or loan. Property owners must

provide access to the MDEQ and its contractors. Cleanup grants may be used at properties with

known contamination and specific redevelopment proposals, where measurable economic

benefits will exceed the grant amount. Cleanup loans may be used at properties with suspected

contamination where there is economic development potential based on a planned reuse.

When loans are used, they carry an interest rate of 50 percent of the current prime rate, with a

15-year payback period. To provide some cashflow cushion, though, loans may be structured

with a five year grace period, requiring no interest or payments. In addition, loans may be repaid

using tax increment financing through a BRA.

As of September 2006, DEQ funded the following programs at the cumulative amounts listed

below:

Funding Source Total Amount

CMI Brownfield Redevelopment Grants $20,669942

CMI Brownfield Redevelopment Loans $10,868,690

Site Reclamation Grants $39,316,054

Revitalizing Revolving Loans $6,441,998

Site Assessment Grants $12,770,385

Waterfront Redevelopment Grants $46,820,884

SOURCE: Michigan DEQ, September 2006

Success Story  Ludington

The city of Ludington received a brownfield redevelopment grant to support the redevelopment

of the former Star Watchcase property. The company manufactured the gold cases for pocket

watches, and used the facility for metal stamping, plating, cleaning, and polishing processes from

1905 to 1981. It was acquired, and then conveyed to the city by a subsequent owner in 1984.

Ludington used the building to store equipment. The $855,700 Site Reclamation Grant was

obtained to define the nature and extent of contamination, develop a remedial action plan, and

carry out cleanup.

Grant funds paid for demolition of the Star Watchcase

manufacturing building to allow access to the contaminated

soil beneath it. A pumping system was installed at the property

to direct contaminated groundwater to the citys sewage

treatment plant. Institutional controls were used at areas where

contamination remained.

Since cleanup was completed, a local development company built a residential condominium

project known as Harbor Front on the property, which is adjacent to a marina. Retail and office

buildings are being added as a demand is identified. The developers invested approximately $8

million in the project. A real attraction of this development is that Harbor Front residents and

marina users can watch the Lake Michigan Car Ferry, docked adjacent to the property, enter and

leave port.
Page 46

Success Story  Battle Creek

Battle Creek used both state site assessment and site cleanup grants to stimulate redevelopment

of the former Captain Oil Change site. The property is located on a highly developed Battle

Creek commercial corridor that is bordered by a residential area. The property, about 0.5 acre in

size, housed a quick oil change operation from 1980 to 1994. From 1950 to 1980, the building

either sat empty or was used for various commercial purposes. The building has remained vacant

since 1994 and the property tax reverted back to the city.

Battle Creek conducted environmental site assessments in early

1999, using $20,000 in site assessment grant funds. Site assessment

results indicated significant soil contamination. In addition, the

building was in very poor condition and had a variety of abandoned

containers with hazardous substances in them. There were also two

abandoned underground storage tanks (USTs). Subsequently,

$161,772 in Clean Michigan Initiative cleanup grant funds were

used to remove hazardous substances from inside the building, complete asbestos abatement,

remove the USTs, and address soil contamination.

When cleanup was complete, Battle Creek sold the property and a developer invested more than

$250,000 to construct a new commercial plaza in 2006. Currently two businesses are located

there, a Check into Cash and Papa Murphys Pizza that created 17 jobs. A third unit is available

for lease.

For additional information:

Web site: http://www.michigan.gov/deq/0,1607,7-135-3311_4110_29262---,00.html

Fact sheet: http://www.deq.state.mi.us/documents/deq-ess-bgl-factsheet.pdf
Page 47

MINNESOTA

Minnesotas brownfield redevelopment grants can help meet costs associated with redeveloping

blighted industrial, residential, or commercial properties. Eligible applicants include cities,

counties, and a range of development-authority-type entities: port authorities, housing and

redevelopment authorities, and economic development authorities. For state fiscal year 2006, the

state gave priority for funding to applicants from outside the Minneapolis/St. Paul metropolitan

area; $7.95 million in grants were distributed.

Grants can pay for land acquisition, demolition, infrastructure improvements, soil stabilization

(when infill is required), ponding or other environmental infrastructure, and adaptive reuse of

buildings, including remedial activities at sites where a subsequent redevelopment will occur.

The program can pay up to 50 percent of eligible redevelopment costs for a qualifying site, with

a 50 percent local match. Funding for the current biennium is $8.4 million, derived from state

bond funds; by law, these funds can only be used to cover costs on publicly owned land where

the end use has a public purpose.

Priority, per state statute, is given to projects that meet one or more defined characteristics,

including:

Meeting a need for redevelopment in conjunction with contamination remediation needs;

Meeting current tax increment financing requirements for a redevelopment district, and

generating tax increments that will contribute to the project;

Featuring proximity to public transit if located in the Minneapolis/St. Paul metropolitan

area; and

Comprising multi-jurisdictional projects that take into account the need for affordable

housing, transportation, and environmental impact.

Program: Brownfield Redevelopment Grants

Program type  Grants to meet a range of brownfield property needs, including related demolition

and infrastructure improvement activities

Role in meeting brownfield financing challenges  Provides upfront funding for a range of critical

site preparation needs to local governments and various development authorities

Type of benefit to Minnesota program users  Upfront financing, with the type of applicant

priority determined each year; encourages links between environmental and economic development

programs and strategies

Brownfield revitalization opportunities for Minnesota participants  Enhances property

cleanup and reuse options, including those for multi-jurisdictional projects

Lessons and ideas for other states  Value of defining eligible property preparation activities

broadly enough; use of brownfield redevelopment to promote smart growth and other social goals
Page 48

Since the programs inception in 1998 through the most recent awards made in August 2006, the

Minnesota redevelopment grant program has awarded $35 million, which has leveraged $810

million in other investments. These projects have led to 678 acres being cleaned up and

redeveloped, and facilities on these sites have created or saved more than 13,200 jobs. The eight

awards made in August 2006, included:

Chase Hotel renovation, Walker  $673,700;

Swift/Eckrich Turkey Processing Plant redevelopment, Frazee  $524,100;

Tower historic reconstruction, Tower  $1,097,000; and

Heritage Sports Center development, Duluth  $875,075.

For additional information:

Web site: http://www.deed.state.mn.us/community/RedevGrt

Contact: Meredith Udoibok, Director, 651/296-5005

Dry cleaners, a common type of brownfield property, often resulting from long-ago methods of

handling dry cleaning chemicals, before their risks were known. Now, dry cleaning shops face

the cost of cleaning up problems from their past; many of them are small, family-owned

businesses without the resources to do so.

Minnesota state leaders, working with drycleaners trade associations and the Minnesota

Pollution Control Agency (MPCA), established the dry cleaner environmental response and

reimbursement account to provide a way to pay for cleanup of soil, groundwater or surface-water

contamination at dry cleaning facilities. Most dry cleaning facilities that serve the general public

are eligible for reimbursement for their investigation and cleanup work. Cleanup can be

conducted either by MPCA or by dry cleaning facility owners or operators themselves, as long as

their response actions are approved by MPCA. To this end, an owner or operator needs to apply

Program: Dry Cleaner Environmental Response and Reimbursement Account

Program type  Direct financial assistance targeted to specific brownfield situations

Role in meeting brownfield financing challenges  Provides capital directly to address dry

cleaning brownfield situations  and prevent them

Type of benefit to Minnesota program users  Direct, bottom-line cash for to address

assessment and cleanup needs at dry cleaner facilities

Brownfield revitalization opportunities for Minnesota participants  Makes dry cleaner

brownfield sites, especially those affecting adjoining commercial or residential areas, more

economically viable for cleanup and reuse, as well as ongoing operations

Lessons and ideas for other states  Value of providing direct capital for targeted brownfield

types and for brownfield prevention strategies
Page 49

to the Minnesota brownfield voluntary investigation and cleanup program (known as VIC) and

work with its program staff.

Annual registration fees paid by dry cleaning facilities, as well as solvent fees collected from dry

cleaning chemical retailers, are being used to capitalize the dry cleaner fund. MPCA can use the

money for two primary purposes:

Emergency removals, environmental investigations, and cleanups at dry cleaning

facilities on the state Superfund list; or

Reimbursement of current or former dry cleaning owners or operators who have entered

MPCAs VIC program and whose sites require cleanup.

Under either approach, the dry cleaning facility owner or operator is responsible for the first

$10,000 of the environmental response costs. In addition, the investigation and response actions,

as well as the costs submitted for reimbursement, must be reviewed and approved by MPCA.

To qualify, response actions at a dry cleaning property must

include cleanup activities. Sites where only investigation has

been done are not eligible for reimbursement, although if the

assessment confirms the need for cleanup, then investigation

activities can also be paid back. Costs such as those associated

with actions that do not eliminate environmental risk or result

in cleanup (or those addressing non-dry cleaning

contamination), costs related to the repair, replacement or

upgrading of dry cleaning structures or equipment, or costs

covered under insurance are not eligible for reimbursement.

For additional information:

Contact: Karen Kromar, MPCA/VIC Program, 651/297-3080

Contact: Allen Dotson, MPCA Municipal Division, 651/296-7735
Page 50

MISSOURI

Missouris brownfield redevelopment program provides tax incentives to encourage cleanup and

reuse of commercial or industrial properties abandoned or underutilized due to contamination.

The program may be used to rehabilitate an existing contaminated building, or to clear existing

structures and build a new facility. The program may also be used at brownfield sites with no

existing structures. Tax incentives are available to businesses that redevelop and remediate sites

in conjunction with the brownfields voluntary cleanup program carried out by the Missouri

Department of Natural Resources (DNR).

Eligible projects must create at least 10 new jobs or retain at least 25 jobs. For projects with

multiple companies, companies must create at least two jobs and have $100,000 of qualified

investment or retain 25 jobs and have $100,000 of qualified investment. The brownfield property

must have been abandoned for at least three years from the date of the application or be

underutilized  defined as having less than 35 percent of its space being used for its most

commercially profitable and economically productive use. Properties need not be owned by a

public entity to access the tax credits, but the city or county must endorse the project.

The program authorizes several types of financial assistance for eligible projects. Remediation

tax credits are available for up to 100 percent of the costs of remediating the project property.

This includes the costs of materials, supplies, equipment, labor, professional engineering,

consulting or architectural fees, permitting fees, and direct utility charges incurred during

cleanup. The property owner must demonstrate that the credits are the least amount needed for

the project to go forward, and the total credit is limited to the net state economic benefit of the

project (roughly, the present value of new state tax revenues the project is expected to generate

over a 15-year period), as determined by the Missouri Department of Economic Development

(DED). Both direct and indirect benefits may be considered. DED issues 75 percent of the

credits upon proof that the expenses were paid; the remaining 25 percent are issued when DNR

certifies that the site has completed the voluntary cleanup program process.

Program: Brownfield Redevelopment Program

Program type  Tax credits for cleanup and demolition, as well as investment and job creation

activities undertaken at brownfield sites

Role in meeting brownfield financing challenges  Offers tax incentives for the redevelopment

of contaminated commercial or industrial sites abandoned or underused for at least 3 years

Type of benefit to Missouri program users  Offsets up to 100 percent of brownfield-related

redevelopment costs, through a flexible selection of tax credits that may be assigned to subsequent

owners

Brownfield revitalization opportunities for Missouri participants  Makes brownfields,

abandoned and obsolete properties more cost competitive for reuse

Lessons and ideas for other states  Value of offering a flexible menu of assignable tax

incentives that give property reusers a range of choices as they consider and carry out specific

brownfield projects
Page 51

Remediation tax credits may offset state income or franchise taxes and may be claimed the year

it is earned, or carried forward for up to 20 years. They are attractive because the recipient may

assign, sell, or transfer the credits to someone else. Upon completion, income-producing

businesses must occupy the majority of the property. The project may be a mixed-use facility

(residential and commercial), but the state economic impact will be based only on the

commercial operations

Other brownfield redevelopment tax credits available include:

Demolition tax credits for up to 100 percent of the cost of non-remediation demolition.

The demolition must be part of a city (or county) and state approved redevelopment plan.

These credits may be carried forward for up to 20 years.

Jobs and investment tax benefits to businesses locating at the brownfield project that

create new jobs may receive (for up to 10 years) tax credits ranging from $500 to $1,300

per year for each new job created. Companies can also claim an investment tax credit

averaging two percent of new capital investment per year at the brownfield site and a

50 percent income tax exemption. For a company to receive these benefits, the local city

or county must offer at least a 50 percent property tax abatement for 10 to 25 years.

All of these tax credits can be applied against a variety of Missouri state taxes: income tax,

corporate franchise tax, bank taxes, insurance premium taxes, and other financial institution

taxes. The total value of all incentives claimed must be less than the projected state economic

impact of the project, as determined by DED.

Success Story  Kansas City

The Butler World Headquarters facility in Kansas City was built on a 4.5-acre site used as

stockyards from the late 1800s to 1991. Most of the buildings on the site were demolished in the

early 1990s, although at the time of cleanup an old boiler plant and a brick building still

remained on the site. The property was contaminated with arsenic slag material and asbestos.

The state-approved cleanup involved asbestos removal, and construction of a parking lot to cap

the arsenic-contaminated soil. A restrictive-use covenant was put in place, along with ongoing

site monitoring.

The developer took advantage of several Missouri incentive programs, including $500,000 in

brownfield redevelopment credits and brownfield infrastructure grants. Butler invested $25

million in a new 150,000 square-foot facility and parking garage on the property, which led to

the retention of 600 jobs.
Page 52

Before After

Success Story  Cape Girardeau

The Marquette Tower Office Building in Cape Girardeau was developed in the former Marquette

Hotel. The hotel had opened in 1928, and for years served as a focal point of the community. It

closed in 1970, after Interstate 55 led to development of newer places across town. Prost

Builders bought the hotel and the adjacent building in 2002 to renovate and convert into office

and retail space. At that time, lead-based paint and asbestos were identified in the building, and

an underground fuel storage tank was also discovered on the property. These contaminants were

removed during renovation.

Marquette Tower received nearly $1.3 million in brownfields remediation tax credits. The city of

Cape Girardeau provided 25 years of tax abatement, bringing the total tax savings to about

$1.8 million. This led to a $6 million investment in renovating the Marquette Hotel into 66,000

square feet of office and retail space. Some 227 jobs have been created.

For additional information:

Web site: http://www.dnr.mo.gov/env/hwp/bvcp/hwpvcp-brownfields.htm

Contact: Business and Community Services Development Finance Office, 573/522-8004
Page 53

NEW JERSEY

One of the first financing programs ever targeted to brownfields, the New Jersey Hazardous

Discharge Site Remediation Fund (HDSRF), was established in 1993 to provide funding to local

governments and redevelopment agencies, and nonprofit organizations, as well as qualifying

private companies for assessment and cleanup of suspected or known discharges of hazardous

substances. In 2003, HDSRF received additional program funding to enable it to offer additional

loans and grants. In September 2005, HDSRF was expanded through statutory amendments to

increase the availability of those grants and loans to a wider range of beneficiaries.

HDSRF is jointly administered by the New Jersey Department of Environmental Protection

(NJDEP) and the New Jersey Economic Development Authority (NJEDA). NJDEP evaluates an

applicants preliminary eligibility requirements, the technical merits of the proposed project, and

the estimated project costs. Upon NJDEP approval, NJEDA evaluates an applicants financial

status, determines eligibility for either grants or loans, and awards funding.

Grants and loans are available to public, private, and nonprofit entities that carry out cleanups

under NJDEP oversight. Eligible cleanup activities include preliminary site assessment,

additional site investigation, cleanup planning and evaluation of potential remedy options, and

the remedial action itself.

The program offers a number of funding options, depending on the activity and the applicant.

Once the applicant shows that a redevelopment plan for the targeted property is in place, and that

a realistic opportunity exists for redevelopment to take place within three years of completion of

the cleanup, public entities can apply for:

Program: Hazardous Discharge Site Remediation Fund

Program type  Grants and loans, to public and private parties, targeted to property assessment

and cleanup

Role in meeting brownfield financing challenges  Provides upfront funding to address initial site

investigation and cleanup challenges, including those at long-held privately owned properties

Type of benefit to New Jersey program users  Assists communities and private owners in

making properties ready for reuse; encourages links between environmental and economic

development programs and activities

Brownfield revitalization opportunities for New Jersey participants  Encourages cleanup and

reuse of long-held, often mothballed properties; gets critical site assessment and cleanup funding to

properties; encourages use of innovative technologies

Lessons and ideas for other states  Practical strategies for assisting private site owners,

encouraging new technologies, connecting remediation with reuse
Page 54

Grants for Brownfields Investigations, to conduct site assessment and remedial

planning

Grants are available for investigation activities at properties held by public entity,

through the tax sale certificate or foreclosure or other similar means, or when the local

government has acquired or has taken steps to acquire the property by voluntary

conveyance for the purposes of redevelopment. These grants provide for 100 percent of

the eligible costs and are capped at $3 million per municipality per year.

Grants for Brownfield Development Area assessments and cleanups

Municipalities can apply for an additional $2 million annually for assessment and

cleanup activities on contaminated property located within a designated brownfield

development area. An ownership interest in the property is not required; however, if the

public entity does not have an ownership interest, a lien in the amount of the grant used

for cleanup will be attached to the property, recoverable upon transfer to a new private

owner, and removed if the property is transferred to a public entity.

Matching Grants for Remedial Action

Various levels of matching grants are available, regardless of who ultimately owns the

property, if it will be cleaned and reused for recreation and conservation purposes

(matching grant for up to 75 percent of cleanup costs); affordable housing (up to

50 percent); employs an NJDEP-approved innovative technology (up to 25 percent,

capped at $250,000); or results in a limited restricted use or unrestricted use (up to

25 percent, capped at $250,000) as approved by an NJDEP issuance of a limited

restricted use/unrestricted use No Further Action letter.

Depending on their ownership situation and intended reuse, private parties may apply for three

different types of HDSRF assistance:

Innocent party grants

Non-responsible parties can apply for funding on properties that they acquired before

December 31, 1983, if they did not discharge the hazardous substance that needs to be

cleaned up. Qualifying private applicants may be eligible for innocent party grants to

cover up to 50 percent of their site assessment and cleanup costs, up to $1 million.

Matching Grants for Remedial Action

Private cleanups using an NJDEP-approved innovative technology may be eligible for a

matching grant of up to 25 percent of the costs (capped at $250,000) of a remedial action

using that technology. In addition, cleanups resulting in a limited restricted use or

unrestricted use (following issuance of a limited restricted use or unrestricted use No

Further Action letter) may also win matching grants for up to 25 percent of the costs (also

capped at $250,000).
Page 55

Loans

Private entities can also apply for loans for up to the entire amount needed to remediate a

site, up to $1 million per year. The interest rate, determined by NJEDA, is a minimum of

5 percent; the maximum term for any loan is 10 years.

For additional information:

Web site: http://www.nj.gov/dep/srp/finance/hdsrf

Fact sheet: http://www.nj.gov/dep/srp/finance/hdsrf/factsheet.htm

Matrix of HDSRF components, limitations, and funding levels:

http://www.nj.gov/dep/srp/finance/hdsrf/hdsrf_chart.htm

The mission of the New Jersey Brownfields Redevelopment Interagency Team (BRIT) is to

streamline and coordinate the brownfields redevelopment process for those interested in reusing

contaminated properties. Guided by New Jerseys Smart Growth office, BRIT offers brownfield

project developers, municipal officials, and others engaged in brownfield redevelopment projects

coordinated information and access to a full range of state resources in more than 24 agencies,

ranging from the Departments of Agriculture, Labor, and Treasury, to the Departments of

Commerce and Economic Development, to New Jersey Transit. Coordinated by the New Jersey

Department of Community Affairs Office of Smart Growth, the team convenes to review

specific projects and identify ways in which the incentives of various agencies can be bundled

and tailored to meeting the assessment, cleanup, and redevelopment aspects of each undertaking.

Since its inception in 2003, BRIT has fully reviewed more than 80 brownfield projects and

provided additional consultation at another 75 sites. In many cases, this coordination has shaved

considerable time off of the development process at specific brownfield projects. BRIT also

creates special task groups to find ways to improve brownfield policies and programs when its

work points to specific needs. A noteworthy achievement of BRIT, in 2005, was the creation of a

New Jersey Brownfields Redevelopment Resource Kit. This kit is the first integrated

compilation of state resources for brownfields redevelopment. The document is popular with all

Program: Brownfield Redevelopment Interagency Team

Program type  Program coordination technical assistance effort

Role in meeting brownfield financing challenges  Facilitates information exchange and crossprogram financial applications to support brownfield reuse

Type of benefit to New Jersey program users  Cost-saving technical assistance and information

outreach

Brownfield revitalization opportunities for New Jersey participants  Easier access to, and

application of, the plethora of New Jersey business, infrastructure, and economic development

programs applicable to brownfields

Lessons and ideas for other states  Time and resource savings of cross-agency collaborative

efforts
Page 56

brownfields redevelopment interest groups, providing a useful reference for state support from

initial planning stages through project design, cleanup and construction, and reimbursement.

For additional information:

Web sites:

http://www.njsitemart.com/sitemart/cwp/view.asp?a=325&Q=208449&sitemartNav=%7C,

http://www.nj.gov/dca/osg/commissions/brownfields/index.shtml

The Brownfields Redevelopment Incentive Program is a conceptually simple, yet highly

effective way to encourage developers to clean up and redevelop contaminated properties.

Developers work with the New Jersey Department of Commerce and with local officials to

negotiate agreements that allow them to recover up to 75 percent of the remediation costs

incurred at a proposed redevelopment site.

Cost recovery is achieved through reimbursement of tax revenues attributable to the new site

development and activities on the property. Revenues generated from any of eight state taxes,

including sales, business use, and corporate income taxes, are eligible to be used to reimburse the

developer for remediation costs. The program also allows for the reimbursement of sales taxes

associated with the purchase of building materials. Because reimbursement is based on tax

collections, there is no financial limitation on the total amount to be recovered. To date,

redevelopment agreements have been reached on projects ranging from $30,000 to $140 million.

Developers have the ability to secure a Covenant Not To Sue Agreement from the NJDEP that

shields developers from third-party claims if they did not cause the contamination.

Success Story

The former Camden Recycling Company property has been transformed to accommodate the

expansion of the neighboring DiNaso & Sons, Inc., building supply company. This expansion,

used for building material storage, created 30 new jobs in the community and sparked urban

revitalization. Grants that allowed DiNaso to expand also allowed for revitalization of the rest of

the Mt. Ephraim Avenue business corridor.

Program: Brownfield Redevelopment Incentive

Program type  Cleanup cost recovery through tax payment reimbursements

Role in meeting brownfield financing challenges  Offsets cleanup costs

Type of benefit to New Jersey program users  Equalizes property development costs through

tax reimbursements

Brownfield revitalization opportunities for New Jersey participants  Wide range of sites able

to take advantage of tax reimbursement incentive, because reused properties potentially generate a

wide range of taxes counted for determining refunds

Lessons and ideas for other states  Effective way for future tax revenue streams to support

present-time brownfield cleanup
Page 57

This approximately 80-acre parcel was originally developed as a drive-in theater, and later

operated as a scrap metal recycling facility from 1940 until it shut down in 1995. The site had

contaminated soils attributable to both leaking underground storage tanks and historic fill

throughout the property. The $500,000 used to remediate the site was generated by taxes from

the Citys Urban Enterprise Zone designation.

For additional information:

Web site: http://www.state.nj.us/commerce/econ_brownfield.shtml

Contact: New Jersey Department of Commerce, 609/777-0885
Page 58

NEW YORK

For tax years beginning April 1, 2005, New York is offering offer three types of tax credits to

participants in the states Brownfield Cleanup Program that have entered into a brownfield

cleanup agreement with the Department of Environmental Conservation (DEC). The tax credits

offset the costs of site preparation, property improvements, onsite groundwater cleanup costs,

real property taxes, and environmental insurance premiums. Tax credit eligibility requires a

certificate of completion, issued by DEC, stating that remediation requirements that were set

forth in the brownfield cleanup agreement have been achieved. To claim the tangible property

component of the brownfield redevelopment credit (which is similar to an investment tax credit

for development), the property must be placed in service after the certificate of completion is

issued. All three credits available under the Brownfield Cleanup Program are refundable credits.

The brownfield redevelopment credit provides business tax credit consists of three separate

and distinct credits that provide a business tax credit of 12 percent or a personal tax credit of

10 percent for the costs of site preparation, development or redevelopment (tangible property),

and onsite groundwater remediation. These percentages increase by 2 percent for sites cleaned

up to unrestricted condition and increase by 8 percent if at least half of the qualified site is

located in an area designated by the states economic development agency as an environmental

zone characterized by high poverty and unemployment.

The remediated brownfield credit for real property taxes provides a tax credit based on the

real property taxes imposed on a qualified site. The credit is available for 10 consecutive years,

beginning when a taxpayer is issued a certificate of completion. The credit is for 25 percent of

the eligible real property taxes imposed on the site, multiplied by the employment number

factor  a percentage based on the number of people employed by the taxpayer or his lessee. If

the entire qualified site is located in an environmental zone, the percentage for purposes of

calculating the credit increases from 25 to 100 percent. There is no limit on the total amount of

this credit allowed for a qualified site, which is determined by multiplying $10,000 times the

Program: Brownfield Cleanup, Real Property, and Insurance Tax Credits

Program type  Refundable tax credits for a range of brownfield redevelopment costs

Role in meeting brownfield financing challenges  Offsets the costs of site preparation, property

improvements, onsite groundwater cleanup costs, real property taxes, and environmental insurance

premiums to equalize Greenfield and brownfield development costs

Type of benefit to New York program users  Cashflow advantages to brownfield property

reusers, covering most aspects of the cleanup and redevelopment processes

Brownfield revitalization opportunities for New York participants  Extent of the tax credits,

and their availability for both redevelopment and cleanup, make most types of sites and locations

attractive for revitalization

Lessons and ideas for other states  The breadth of these refundable incentives, while

controversial (and currently under review), can promote brownfield property reuse in all types of real

estate markets
Page 59

number of employees at the site. Taxpayers also eligible to claim other state real property tax

credits must make an irrevocable choice between the two.

The environmental remediation insurance credit provides a one-time credit for the lesser of

$30,000 or 50 percent of the premiums paid for environmental remediation insurance when such

insurance is a necessary component of the brownfield redevelopment project. Insurance can

cover conditions such as onsite cleanup of pre-existing pollution, third-party claims (for bodily

injury or property damage), the cost of each policy covering onsite cleanup of pre-existing

pollution conditions, cost-coverage, and re-opener coverage.

For additional information:

Web site: http://www.dec.state.ny.us

Contact: New York State Department of Environmental Conservation, 518/402-9711

New Yorks 2004 brownfield legislation also authorized Brownfield Opportunity Area (BOA)

grants. The BOA program can fund 90 percent of the cost of planning and assessment activities

in areas that have multiple brownfields; to date, BOA money has been primarily used for

planning. New Yorks Department of State typically announces details of each years grant

program in the spring. Applications from community groups require partnerships with or letters

of support from their municipalities.

BOA is primarily a planning and technical assistance initiative designed to help communities

better plan for and promote brownfield redevelopment. BOA provides municipalities and

community-based organizations with resources to carry out area-wide brownfield redevelopment

planning, gain access to expert environmental and economic analysis, build public-private and

cross-agency partnerships, and sometimes conduct environmental site assessment for strategic

parcels.

As structured, BOA aims to provide a variety of technical assistance and support services to

complement New York state and federal brownfield tax incentive and site specific revitalization

programs. Already, dozens of awards have been made  including 10 in New York City alone,

totaling $1.85 million  to achieve the following brownfield redevelopment goals:

Program: Brownfield Opportunity Areas

Program type  Grants for brownfield planning and technical assistance

Role in meeting brownfield financing challenges  Provides basic information and planning

needed to help neighborhoods and communities make the right brownfield reuse decisions

Type of benefit to New York program users  Informed stakeholder communities, which can

expedite the brownfield reuse process

Brownfield revitalization opportunities for New York participants  Greater knowledge of

property reuse and end use options

Lessons and ideas for other states  Value of information and planning as key brownfield reuse

stimuli
Page 60

Improving community property values  Through planning/identifying complementary

infrastructure, transportation, and related public improvements, such as parks,

streetscapes, or habitat restorations.

Developing core information needed for constructive decisionmaking  Community

revitalization visions and strategies, remedy recommendations that take into account

possible future uses, site inventories, and other considerations.

Marketing to encourage developers and investors  Through site renderings,

marketing brochures, Web site postings, and site marketing profiles (to share with state

and local development agencies and others); and

Facilitating the redevelopment process  Working with consultants as liaisons among

stakeholders to explore project feasibility, and deal structure alternatives for privately

held property.

For additional information:

Web site: http://www.dec.ny.gov/chemical/8447.html

Contact: New York State Department of Environmental Conservation, Environmental

Remediation, 518/402-9764, derweb@gw.dec.state.ny.us
Page 61

NORTH CAROLINA

North Carolina has adopted an advantageous treatment of improvements to brownfield

properties, namely, easing into their fully appraised value after their cleanup and redeployment.

State law designates such improvements as special class of property, and defines specific

appraisal, assessment, and taxation processes consistent with that designation.

An owner of land is entitled to a sliding-scale partial exclusion of value for the first five taxable

years after completion of improvements made after the later of July 1, 2000, or the date of the

propertys brownfields agreement with the North Carolina Department of Environment and

Natural Resources. After property has qualified for the brownfields exclusion provided by this

section, the relevant county tax assessor is required to annually appraise the improvements made

to the property during the period that the owner is entitled to the exclusion, which is:

90 percent of the appraised value of the improvements is excluded in year one;

75 percent in year two;

50 percent in year three;

30 percent in year four; and

10 percent in year five.

This incentive encourages remediation to be undertaken as part of the overall property

construction process. Eligible improvements are those made to real property subject to a

brownfields agreement with the state. These could include renovating an existing structure,

building a new one, or installation of equipment. Completion of construction improvements are

usually determined by the date the certificate of occupancy is issued. The tax bill issued each

year will exclude the statutory percentage of the qualifying improvements.

Moreover, these tax incentives are transferable. A new owner must apply in order to qualify for

the exclusion on his own, during January, following the change in ownership. The new owner

must not be associated with the property contamination that was addressed.

Program: Advantageous taxation of improvements on brownfields

Program type  Sliding-scale property tax exclusion

Role in meeting brownfield financing challenges  Helps cashflow by reducing property taxes in

projects early years, when cash needs tend to be greatest

Type of benefit to North Carolina program users  5-year sliding-scale property valuation

exclusion (from 90 percent to 10 percent)

Brownfield revitalization opportunities for North Carolina participants  Makes improving

brownfield properties more cost competitive with comparable greenfield sites

Lessons and ideas for other states  Incentive benefits from easing in full appraised value of

cleaned and reused brownfield properties
Page 62

While actual cash savings will depend on the applicable city and county tax rates, they can be

substantial; savings approaching 50 percent over 5 years have been reported in some cases.

For additional information:

Web site: Tax Incentive FAQ, http://www.ncbrownfields.org

The North Carolina Rural Center is the states leading resource for rural people and

communities. The center has embarked on an innovative rural development initiative focusing on

vacant buildings  many of which are brownfield sites. In fact, center officials estimate that

approximately 60 percent of its building restoration grants address contaminated vacant

properties.

The centers building reuse and restoration program assists communities in transforming vacant

buildings to new uses. Grants help local governments prepare the buildings for reuse by new and

expanding businesses. The Rural Center oversees the program as part of the $20 million North

Carolina Economic Infrastructure Fund that the state created in July 2004.

The Center offers two types of grants: Predevelopment grants of $25,000 help cover the cost of

an initial study or other activity necessary to secure commitments from a business or investors.

Development grants of up to $400,000 are awarded to projects ready for renovation, and must be

matched by at least an equal amount of private and public funds. Environmental assessment is an

eligible grant activity, and a number of recipients have used funding for that purpose. Awards

are limited to local governments in rural counties or the most economically distressed urban

areas, with priority given to towns with fewer than 5,000 people.

With initial funding of $3 million, the Center awarded 17 grants: Five predevelopment grants

supported projects in Franklin, Halifax, Montgomery, Pitt, and Robeson counties. A dozen

development projects were funded in Alleghany, Bladen, Greene, Harnett, Mitchell, Nash,

Robeson, Rockingham, Rutherford, Stanly, Vance, and Yancey counties. More than half of these

involved properties that could be classified as brownfields. All together, the projects in 16

counties are expected to create nearly 1,200 jobs and leverage $66 million in private investment.

Program: North Carolina Rural Center  Building Reuse and Restoration Grants

Program type  Grants to small towns and rural communities to address vacant building situations

Role in meeting brownfield financing challenges  Provides upfront funding to address initial site

feasibility, carry out renovation and construction

Type of benefit to North Carolina program users  Assists small communities finance upfront

property redevelopment costs; encourages informal links between environmental and economic

development activities

Brownfield revitalization opportunities for North Carolina participants  Encourages cleanup

and reuse of vacant, often mothballed properties

Lessons and ideas for other states  Practical strategies to link vacant properties and other

brownfield-type situations to funding sources that can achieve comparable brownfield cleanup and

redevelopment goals
Page 63

In 2006, the Center distributed $6.8 million in grants, which are expected to leverage more than

$200 million in additional investment. These include:

Sparta, in Alleghany County, received $250,000 to help with the reuse of the Spring

Ford Manufacturing building, which has been vacant for nearly a year. The restoration

will allow for the expansion of an existing business in the community and create 25 jobs.

Clarkton, in Bladen County, received $300,000 to assist in the reuse of a vacant

manufacturing facility; it will be used by an expanding high-tech textiles business that

will create 125 jobs over the next 2 years.

For additional information:

Web site: http://www.ncruralcenter.org/reuse/index.html
Page 64

OHIO

A major environmental bond issue approved by Ohio voters in November 2000 provided

$200 million for brownfield cleanup, the largest pot of money ever advanced for brownfields.

Following the vote, the Ohio legislature created two programs to distribute the bond funds,

allocating $160 million to the Clean Ohio Revitalization Fund (CORF) and $40 million to the

Clean Ohio Assistance Fund (COAF).

CORF is a statewide, competitive grants program that provides grants for brownfield site

acquisition, demolition, remediation, and limited infrastructure improvement. The projects are

evaluated using a scored application based on economic benefit and environmental

improvement, criteria which focus on brownfield conditions in Ohios older communities, many

of which declined as job and economic conditions changed. The maximum project award is $3

million, and applicants must provide a minimum match of 25 percent of total project costs. So

far, Ohio has allocated about three-fourths of the CORF bond proceeds:

First round awards, announced in July 2002, included 16 projects from 12 communities,

who received $39.7 million;

Second round awards, announced in December 2003, funded 18 projects from 18

communities, who received $37.4 million;

Third round awards, announced in December 2005, supported 15 projects in 12

communities, who received $40.4 million; and

Fourth round competition will be completed during 2007; $43 million is available.

COAF is a discretionary program, available only to cities and counties that Ohio Department of

Development officials have designated as distressed, based on their employment rates, average

wages, and poverty levels. COAF provides grants for Phase I and Phase II environmental

assessments, cleanup projects, and public health projects. The cleanup grants are similar to

CORF grants, but the public health grants are used for projects in which cleanup will have no

quantifiable economic benefit, such as cleanup of groundwater. COAF grants require no match.

Program: Clean Ohio Revitalization Fund

Program type  Bond issue proceeds devoted to cleanup grants

Role in meeting brownfield financing challenges  Provides significant funding to acquire sites,

cleanup them up, and carry out necessary demolition

Type of benefit to Ohio program users  Promotes property cleanup and reuse for both largescale and small projects in communities of all size

Brownfield revitalization opportunities for Ohio participants  Provides adequate resources to

tackle large, difficult properties, which can be readied for new uses

Lessons and ideas for other states  Providing adequate resources can bring significant benefits,

return on the public investment
Page 65

As of early 2007, the entire $40 million allocated to COAF had been obligated, approximately

$10 million per year during the first four rounds of the program.

For additional information:

Web site for CORF: http://www.odod.state.oh.us/ud/CORF.htm

Contact: Amy Alduino, Brownfield Coordinator, Ohio Department of Development,

614/466-0761, aalduino@odod.state.oh.us

Ohio has used its federally capitalized, state-administered Clean Water State Revolving Fund

(CWSRF) as an important source of funding for projects at contaminated sites that threaten water

quality. Ohio has been at the forefront of these efforts, issuing loans for brownfield assessments

and cleanups through its Water Pollution Control Loan Fund (WPCLF). WPCLF makes loans to

both municipalities and private entities, particularly those participating in the states brownfield

Voluntary Action Program (VAP), although the prospective WPCLF loan recipient does not

have to be a VAP participant as long as the work performed directly benefits surface-water or

groundwater quality.

WPCLF loans for brownfields cannot exceed $3 million per project, and the loan period cannot

exceed 10 years. Eligible activities include Phase I and II assessments, and subsequent cleanup

activities. Like similar clean water programs in other states, Ohios WPCLF offers loans at

varying interest rates and durations, with lower interest rates for small and disadvantaged

communities, short-term loans, and special projects dealing with municipal compliance,

maintenance, water conservation, and construction of non-conventional technologies.

Wastewater and nonpoint-source pollution projects, including brownfields and UST fields, are

both eligible for funding as long as they benefit water quality and are listed in the states

Nonpoint Source Management Plan.

Program: Water Pollution Control Loan Fund

Program type  Water quality grants targeted to brownfield situations

Role in meeting brownfield financing challenges  Provides funding to identify site

contamination and carry out cleanup where a brownfields/water quality connection can be

established

Type of benefit to Ohio program users  Both public and private benefits  communities can

address contaminated waterfront properties; companies can expand on and address contaminated

property issues

Brownfield revitalization opportunities for Ohio participants  Flexible loan funds to address a

variety of public and private brownfield cleanup needs

Lessons and ideas for other states  Creative use of clean water RLF resources can provide

critical project gap financing, and lead to significant brownfield reuse benefits
Page 66

Success Stories  Cleveland

Liniform Services could not obtain private financing for a Phase II site assessment on property

adjacent to its dry cleaning facility that it wanted to acquire for an expansion. Ohio provided a

$60,000, five year WPCLF loan at an interest rate of approximately 3 percent. Loan proceeds

financed the needed site investigation activities, including soil and groundwater sampling. Once

the assessment and subsequent cleanup were complete, Liniform Services received a covenantnot-to-sue through the VAP, enabling facility expansion to proceed. The loan was repaid using a

revenue stream from accounts receivable, with inventory and cash as extra collateral.

In Cleveland, WPCLF funded a brownfield cleanup prior to site redevelopment. Grant Realty

purchased the 20-acre former Sunar-Hauserman Company site to build a centrally located

corporate headquarters, despite environmental assessments showing that soil and groundwater

had been contaminated with solvents. A $1.6 million WPCLF loan, at an interest rate of

4 percent, covered the cost of treating contaminated subsurface soil and groundwater. The

repayment source came from a tank-cleaning operation, with personal loan guarantees and a

second position mortgage as additional collateral.

Success Story  Toledo

The Hemisphere Corporation, a brownfield redevelopment company, obtained WPCLF loans

totaling approximately $3 million to assess and clean up a 27.5-acre brownfield site, known as

the Stickney West Industrial Park, in the heart of an area undergoing extensive redevelopment in

Toledo. The site remediation will prime the parcel for redevelopment and remove threats to

groundwater and water quality in Sibley Creek and the Ottawa River.

For additional information:

Web site: http://www.epa.state.oh.us/defa/wpclf2.html

Contact: Greg Smith, Ohio Environmental Protection Agency, 614/644-2798,

greg.smith@epa.state.oh.us
Page 67

OREGON

Oregons brownfields redevelopment fund is a direct loan and grant program created to conduct

environmental actions on brownfields. The programs primary purpose is to assist as private

owners and local governments assess, cleanup, and redevelop brownfields. This program is

capitalized by proceeds from the sale of state revenue bonds.

Any individual, business, nonprofit organization, prospective purchaser, municipality, special

district, port, or tribe can apply for financing assistance through the fund as long as they are not

under an active enforcement order relating to the contamination at the site. The program

recognizes two types of applicants:

Municipal  Cities, counties, tribes, ports, and special districts; and

Non-municipal  All other applicants.

Environmental actions funded through this program must be linked to new site uses that lead to

economic development or community revitalization. Eligible redevelopment projects include

efforts such as business development projects, industrial facility revitalization, community

facilities, and downtown or mixed-use center revitalization. Because of the economic

development requirement, projects such as market-rate housing are not eligible. Also, cleanup

projects not associated with redevelopment cannot be funded. All environmental actions

supported by the Oregon brownfields redevelopment fund must receive review or oversight by

the states Department of Environmental Quality, via the voluntary cleanup or tank programs or

other mechanisms, and applications must explain how that oversight will be performed.

Activities eligible for reimbursement from the brownfields redevelopment fund are limited to

environmental actions, specifically, actions undertaken to:

Determine if a release has occurred, and if it poses a significant threat to human health or

the environment;

Determine if additional remedial actions may be required at the site;

Program: Brownfield Redevelopment Fund

Program type  direct loans and grants to carry out various environmental actions on brownfields

Role in meeting brownfield financing challenges  Provides access to capital to meet upfront

brownfield development needs  primarily loans, but also grants (depending on applicant need)

Type of benefit to Oregon program users  More accessible, affordable brownfield financing

resources

Brownfield revitalization opportunities for Oregon participants  Access to capital for various

brownfield preparation costs that may not be available through typical private sources

Lessons and ideas for other states  Assuming this financing role can bring important benefits,

lead to significant returns on the public investment
Page 68

Conduct a feasibility study;

Plan for remedial action or removal (including engaging regulatory oversight); or

Conduct a remedial action or removal at a site (which can include site clearance and

demolition activities undertaken in conjunction with cleanup).

The brownfields redevelopment fund provides both grant and loan funding, but primarily

operates as a loan program. Grants can be awarded on a case-by-case basis, taking into

consideration applicants debt capacity and the public benefits of the brownfield redevelopment

project, such as family wage job creation or assistance to rural or economically distressed

communities.

Grants are subject to applicant need, availability of funds, and other restrictions, with limits

determined after an analysis of the application and financial information. If a grant is offered, it

must be matched. Depending on the recipient and liability considerations, this match can range

from 10 to 50 percent of the total project cost. The state also includes conditions that trigger

grant repayment, such as resale of the property or revenue generation from the redevelopment.

Low interest loans are generally made for 20-year terms, although those can be modified

depending on the needs of the project and applicant. The total loan amount per project generally

does not exceed $250,000. The department is able to offer very attractive interest rates, often

below market levels. Interest rates vary, from standard industry published rates for nonmunicipal loan recipients to interest rates that are based on market conditions for similar public

debt for municipal borrowers.

A number of funding considerations are linked to liability. Applicants that are not potentially

liable are given priority. Potentially liable non-municipal applicants, except for nonprofit

organizations, are not eligible for grant funding. Potentially liable municipal applicants are

eligible for grant funding. In addition, the level of grant match required for municipal applicants

is determined by the link to liability. Municipal applicants that are potentially liable by virtue of

taking possession of a brownfield (but who have not contributed to the contamination) are

eligible for lower match requirements.

Success Story  Amity

The city of Amity needed an environmental assessment on a city-owned right-of-way beneath

Trade Street (highway 99W) before proceeding with a planned downtown revitalization. A gas

station operated in this area from the 1930s to the mid-1960s, leaving behind half a dozen

underground storage tanks  now located under the sidewalk because of the changes in

development patterns in the area. Amity applied for and was awarded $11,000 in a brownfield

redevelopment fund grant to carry out the site assessment, which determined the number and

nature of the abandoned fuel tanks, and allowed the city to plan for their removal and

redevelopment of the immediate area.
Page 69

Before After

Success Story  Independence

In planning for its new library, the town of Independence acquired two brownfield properties in

the heart of town: an old gas station and an auto parts store. After the owners of the gas station

removed their underground storage tanks, contamination was found in an adjacent alley. Oregon

DEQ helped trace the source to the adjoining auto parts store. Independence received $800,000,

in a combination of brownfield redevelopment grants and loans, to fund demolition and library

construction. DEQ negotiated an agreement allowing the grant to incorporate site cleanup into

demolition and redevelopment. DEQ also approved foundation work for the new building after a

barrier was installed to keep petroleum vapors out of the future library. DEQ then used a formal

risk evaluation to determine that no other action was needed to protect human health and the

environment.

For additional information:

Web sites: http://www.econ.state.or.us/brownfields.htm,

http://econ.oregon.gov/ECDD/CD/programs/brownfields.shtml

Contact: Karen Homolac, Brownfields Redevelopment Coordinator, 503/986-0191,

karen.homolac@state.or.us
Page 70

PENNSYLVANIA

Pennsylvania designed its EPA-capitalized state clean water revolving loan fund (CWSRF)

program to be a key part of its efforts to promote community revitalization while also protecting

the water environment. The Pennsylvania Infrastructure Investment Authority (PENNVEST)

works to identify opportunities to use CWSRF funds and coordinate funding efforts.

In 2004, PENNVEST extended the use of its funds to include the remediation of brownfields that

pose a threat to local groundwater or surface-water sources. By dedicating a portion of its

CWSRF resources to brownfields, the program assists the states DEP in implementing the Land

Recycling Program to clean up groundwater and brownfield sites. PENNVEST sets aside

30 percent of its annual CWSRF funding to address brownfields. This set aside totaled $48

million in 2004. Two of the states 12 new CWSRF projects involved brownfield remediation

and received loans totaling $2.7 million at county-capped interest rates for a maximum term of

20 years. Under the guidelines developed by the state, loans to one municipality may total up to

$11 million per project, increasing to $20 million for projects that serve two or three

municipalities.

PENNVEST currently has several brownfield projects using CWSRF funds underway, including:

The Riverfront South brownfields remediation project in Bensalem Township received a

$5.3 million loan to clean up a 26-acre industrial site along the Delaware River. The loan

has a two year term and an interest rate below 4 percent; and

The Norristown brownfields remediation project in Norristown received $1.9 million for

2 years at a rate below 4 percent to conduct environmental assessment and site

remediation, trash and debris removal, building demolition, asbestos abatement, and site

preparation at a former asbestos manufacturing facility.

For additional information:

Web site: http://www.pennvest.state.pa.us/pennvest/site/default.asp

Contact: Beverly Reinhold, Project Management, PENNVEST, breinhold@state.pa.us,

717/783-6589

Program: PENNVEST

Program type  Direct financial assistance for water quality-related brownfield projects

Role in meeting brownfield financing challenges  Facilitates loans to meet water contamination

issues

Type of benefit to Pennsylvania program users  Loans for specific brownfield situations

Brownfield revitalization opportunities for Pennsylvania participants  Addresses a key

component of health/environment concerns to enhance property reuse viability

Lessons and ideas for other states  Value of leveraging targeted environmental finance program

to broader brownfield redevelopment strategies
Page 71

The original Growing Greener legislation was signed into law in late 1999. It allocated funds for

farmland preservation, state park and local recreation projects, waste and drinking water

improvements, and watershed restoration programs. Growing Greener II, put in place in 2005, is

a $625 million voter-approved initiative that will continue and expand programs that tie together

economic and community development with environmental initiatives.

Growing Greener II has added an emphasis on brownfields  it focuses on returning

contaminated industrial properties and other polluted sites to productive use, protecting farmland

and open space from development, reclaiming abandoned mines, and improving state and

community parks and fish and wildlife infrastructure. Growing Greener II provides up to

$5 million annually for brownfield remediation through DEP funds transferred to DCEDs

Industrial Sites Reuse Program.

Success Story  Lancaster

In November 2006, the Growing Greener II program provided $1 million to support construction

of new housing and a community recreation complex at the former Armstrong World Industries

manufacturing site in Lancaster. Plans call for replacing vacant industrial buildings with a

mixed-use neighborhood anchored by Lancaster General Hospital. The area will include an

athletic and recreational complex to be developed by Franklin and Marshall College, with

facilities available to the public. The site will link to other developments in Lancaster, including

Clipper Magazine Stadium, home to the citys new minor league baseball team, the Lancaster

Barnstormers.

The project enjoys considerable local support. Armstrong World Industries committed $8 million

to modernize its manufacturing operation at its Lancaster home, retaining 250 jobs, as well as an

additional $6 million to the overall redevelopment project. Franklin and Marshall College and

Lancaster General Hospital each pledged $6 million. The $1 million in Growing Greener funds

are being given to EDC Finance Corporation for environmental remediation of a 45-acre portion

on the 65-acre Armstrong World Industries site. The total project cost for the remediation is

estimated at $2.1 million.

For additional information:

Web site: http://www.growinggreener2.com

Program: Growing Greener II

Program type  Direct financial assistance

Role in meeting brownfield financing challenges  Provides capital grants to finance

environmental components of redevelopment projects

Type of benefit to Pennsylvania program users  Direct, bottom-line cash for brownfields

Brownfield revitalization opportunities for Pennsylvania participants  Makes brownfields

more cost competitive for reuse, connects brownfield sites to other state environmental priorities

Lessons and ideas for other states  Value of providing direct capital investments to connect

brownfield redevelopment with broader environmental goals
Page 72

The industrial sites reuse program (ISRP) provides grants and low-interest loan financing to

carry out environmental site assessment and cleanup activities at former industrial sites. Public

entities, private nonprofit economic development entities, and companies involved in reuse of

former industrial land are eligible for program support as long as they did not cause or contribute

to environmental contamination at the site. ISRP financing can be used for a range of

brownfield-related activities, including Phase I, II, and III environmental assessments, as well as

remediation of hazardous substances.

Applicants can seek up to $200,000 in either grants or loans for environmental site assessments,

and up to $1 million in grants or loans for remediation. Loans for either activity feature an

interest rate of 2 percent, with a five year payback period for assessment activities, and 15 years

for remediation projects. ISRP requires the recipient to provide a 25 percent match for both grant

and loan projects.

Since 1995, under the states Land Recycling Program, nearly 2,200 contaminated and

abandoned industrial Pennsylvania sites have been cleaned up and re-deployed, creating or

retaining nearly 76,000 jobs. About 40 percent of those 11-year totals have come in just the last

3 years  approximately 950 sites have been cleaned up and redeveloped, and 27,266 jobs have

been created or retained since 2003.

Success Story  Allegheny County

The Southwestern Pennsylvania Economic Development District, Inc., in Allegheny County

received a $17,032 ISRP grant for environmental remediation at the Glassport Industrial Center

in Glassport Borough. The property being assessed consists of a 200,000 square-foot building on

11.4 acres. The facility has been fully leased for several years and accommodates 14 tenants, for

uses ranging from manufacturing to warehousing to office space.

The ISRP funds are being used to support the removal of approximately 1,100 linear feet of

asbestos, a true brownfield prevention effort. The total project cost will be approximately

$22,000.

Program: Industrial Sites Reuse Program

Program type  Direct financial assistance through grants and loans

Role in meeting brownfield financing challenges  Provides capital to meet upfront site

assessment and cleanup activities needed to make redevelopment projects feasible

Type of benefit to Pennsylvania program users  Direct, bottom-line cash for initial brownfields

project activities

Brownfield revitalization opportunities for Pennsylvania participants  Makes more

brownfields properties shovel ready for reuse

Lessons and ideas for other states  Value of providing direct capital investments needed to

make brownfield redevelopment viable, shows return on public investment potential
Page 73

Success Story  Chester County

The Chester County Economic Development Council is using a $200,000 ISRP grant for Phase I

and II environmental site assessment at the former Lukens Steel facilities in Coatesville. The

Lukens site consists of 11 parcels totaling approximately 75 acres. The property has a 200-year

history of manufacturing use, most recently for steel manufacturing and fabrication, as well as

warehousing. The city plans to redevelop the site for commercial, housing and infrastructure use.

Site preparation activities will cost approximately $267,000.

For additional information:

Web site: http://www.newpa.com/programDetail.aspx?id=25

The Brownfield Action Team (BAT) is designed to streamline the revitalization of

Pennsylvanias Brownfields sites. BAT, administered by Department of Environmental

Protection (DEP), brings an economic development focus to brownfield environmental

strategies, and helps to accelerate redevelopment deals and gives investors the incentive they

need to clean up contaminated industrial sites. BAT projects typically get permitted in half the

usual time. Since its launch in 2004, BAT has helped 32 projects in 22 counties to redevelop

more than 4,500 acres of brownfields.

Program: Brownfield Action Team

Program type  Technical assistance support

Role in meeting brownfield financing challenges  Streamlines permitting, facilitates the

financial process, financial packaging

Type of benefit to Pennsylvania program users  Cost savings of reduced project development

time, informational resources, cross-agency linkages

Brownfield revitalization opportunities for Pennsylvania participants  Makes brownfields

easier to redevelop

Lessons and ideas for other states  Value of providing direct an economic development

presence in state environmental agency
Page 74

BAT enhances the interaction between DEP and local communities by designating a single point

of contact within DEP for locally designated priority brownfield or abandoned mine land

redevelopment projects. In addition to expediting the permitting process, BAT also coordinates

funding with the Department of Community and Economic Development and other state

agencies, and helps owners of remediated receive liability protections available under the states

land recycling program.

For additional information:

Web site: http://www.depweb.state.pa.us/landrecwaste/cwp/view.asp?a=1243&q=462059

Contact: Dave Hess, Division Chief, landrecycling@state.pa.us

Pennsylvania recently launched a tax increment financing (TIF) guarantee program to promote

local government use of TIF as a tool for brownfield economic development, a $100 million fund

included as part of a $2.8 billion economic stimulus package put in place in late 2003. It

provides credit enhancement for TIF projects to improve market access and lower capital costs

through the use of guarantees to issuers of bonds or other indebtedness. This will allow the TIF

bonds to be sold on more favorable terms because of the reduced risk. A key goal of the program

is to facilitate the often complex TIF process in smaller and medium-sized communities. Any

entity eligible to issue TIF bonds  municipalities and their authorities, including boroughs,

townships, towns, counties and home rule areas  can participate.

The program focuses on TIF financing put in place to support infrastructure, construction, and

environmental activities for a variety of new site uses, including manufacturing, retail, hospitals,

convention centers, and associated hotels, carried out at former mining sites or abandoned or

underused industrial, commercial, or military facilities.

Through this initiative, Pennsylvanias Commonwealth Finance Authority (CFA) will guarantee

part or all of a TIF districts bond issue, making the initial financial steps easier to complete. TIF

districts can get a guarantee of up to $5 million per project, over a 20-year period, allowing them

more flexibility in planning efforts. If there is a call on the guarantee, the primary collateral for

the TIF bonds will be assigned to CFA, which will move into the place of the bondholders.

Program: TIF guarantee program

Program type  Indirect financial support (guarantees against bond losses)

Role in meeting brownfield financing challenges  Provides additional comfort/credit

enhancement for tax increment, reduces risk, and helps attract TIF bond investors

Type of benefit to Pennsylvania program users  More attractive bond investment instruments

because of guarantee against losses, which makes capital for brownfield-related project needs

more available

Brownfield revitalization opportunities for Pennsylvania participants  Expands capital

availability for brownfield projects, especially those in distressed areas

Lessons and ideas for other states  Value of providing a guarantee that helps lessen perceived

investment risk by limiting potential losses to broaden TIFs use by smaller communities
Page 75

Projects guaranteed must be located in a TIF district in a blighted area (as described in the states

urban redevelopment law). Typical TIF requirements also apply  projects must show that

comply with the TIF law prior to the issuance of bonds or other indebtedness, and that the

revenue realized from the redevelopment will be sufficient to offset the amount of the debt

service. Private sector participants must agree to create a certain number of permanent full-time

jobs within the TIF district.

Success Story  Butler

In September 2006, the state provided Butler with a $5 million TIF guarantee to back bonds that

are funding development in the towns west end revitalization area TIF district. The TIF funds

will be used primarily as a match for development projects, which include the Historic Pullman

Ball Park and surrounding areas, the Sullivan Run flood control project, and the Trinity

Brownfield Phase III revitalization project. Once completed, these projects are expected to create

or retain 1,300 jobs.

For additional information:

Web site: http://www.newpa.com/programDetail.aspx?id=45
Page 76

TEXAS

Texas offers state property tax incentives to encourage brownfield cleanup and reuse through

ad valorem property tax abatements. Municipal or county taxing authorities can provide property

tax relief for the redevelopment of brownfield properties that are located within a statedesignated reinvestment zone and have been cleaned up through the VCP.

To be eligible, the property must:

Be located in a reinvestment zone;

Not be part of an improvement project financed by tax increment bonds; and

Have received a Voluntary Cleanup Certificate of Completion from the Texas voluntary

cleanup program.

Localities or counties must enter into a tax abatement agreement with the brownfield property

owner. Once that agreement is reached, the owner can take advantage of the following levels of

tax abatement:

100 percent of the value of the property in the first year covered by the agreement;

75 percent of the value in the second year;

50 percent of the value in the third year; and

25 percent of the value of the property in the fourth year covered by the agreement.

For additional information:

Web site: http://www.tceq.state.tx.us/remediation/bsa/bsa.html

Contact: Texas Commission on Environmental Quality, 512/239-5872

Program: State Property Tax Incentives for Brownfield Redevelopment

Program type  Sliding-scale property tax abatement

Role in meeting brownfield financing challenges  Helps cashflow by reducing property taxes in

projects early years, when cash needs tend to be greatest

Type of benefit to Texas program users  4-year sliding-scale property tax abatement (from

100 percent to 25 percent)

Brownfield revitalization opportunities for Texas participants  Makes brownfield

redevelopment more cost competitive with comparable greenfield sites

Lessons and ideas for other states  Using variable tax abatements that offset early-stage project

redevelopment costs
Page 77

WASHINGTON

The Rural Washington Loan Fund (RWLF) provides gap financing to businesses that create or

retain jobs, particularly those secured by lower income persons. To capitalize this fund,

Washington has tapped some of the allocation it receives from HUD through its Community

Development Block Grant (CDBG) program for small cities. As such, only businesses in nonentitlement areas of the state (typically, communities with fewer than 50,000 population) are

eligible for these loans.

The program defines gap is defined as that portion of a project that cannot be financed through

other sources, but which is the last portion needed before the overall investment can occur. For

purposes of RWLF, this means that loans to businesses can be used to pay the difference

between total cleanup costs and all other available loans. Priority is given to timber-dependent

and distressed area projects.

State officials have defined a number of priorities for project funding, including: manufacturing,

agricultural development or food processing, aquaculture development or seafood processing,

tourism facilities, transportation or freight facilities, and/or service enterprises that will expand

the communitys economic base rather than primarily redistribute the existing customer base.

Funds can be lent for acquisition, engineering, improvement or rehabilitation (including

cleanup), construction, operation, or maintenance of any property suitable for use by an

economic enterprise. RWLF will not finance projects that directly or indirectly assist in the

development of a shopping mall.

The loan amount  the project gap to be filled  is determined by a number of factors, and cannot

exceed one-third of the total project costs. Loans of up to $700,000 can be made.

For additional information:

Web site: http://www.cted.wa.gov/site/87/default.aspx

Contact: Steve Saylor, 360/586-4046, stevesa@cted.wa.gov

Program: Rural Washington Loan Fund

Program type  Loan fund targeted to rural development gap financing, capitalized by HUD

Community Development Block Grant allocation to Washington state

Role in meeting brownfield financing challenges  Provides funding to plug critical capital gaps

in project pro formas, including the costs of brownfield cleanup

Type of benefit to Washington program users  Small communities can move forward with

brownfield projects because they have a way to address critical upfront property cleanup needs

Brownfield revitalization opportunities for Washington participants  Properties in small towns

and rural areas, where lack of cleanup financing is a barrier

Lessons and ideas for other states  Targeting brownfield redevelopment financing gaps can be

a beneficial way to allocate HUD CDBG/small city funds, and in ways which meet national program

requirements
Page 78

Washingtons remedial action grants are used to encourage and expedite the cleanup of

contaminated sites, while reducing the financial impact on communities, since the costs of

eliminating these problems are often beyond the financial means of local governments. The

grants supplement local government funding for remedial actions. The state Department of

Ecology awarded approximately $60 million through this program for the 2005-2007 budget

biennium.

The state toxics control account and the local toxics control account, which collect and disburse

grant funds, is administered by the state treasury. Funds for the remedial grant program come

from four sources: (1) revenues raised by a new tax on hazardous substances, (2) any cleanup

costs recovered as part of the program, (3) penalties paid, and (4) any other money appropriated.

Costs eligible to be covered by remedial action grants include remedial investigations, feasibility

studies, cleanup designs, pilot studies, interim actions, final cleanup actions, and capital costs

involved with installing long-term monitoring and related institutional control systems. The state

put new program rules in place, which went into effect April 23, 2007, clarifying funding and

administrative policies.

For additional information:

Web site: http://www.ecy.wa.gov/programs/swfa/grants/rag.html

Contact: Diane Singer, Washington State Department of Ecology, dire461@ecy.wa.gov

Program: Remedial Action Grants

Program type  Grants to meet cleanup needs

Role in meeting brownfield financing challenges  Provides upfront clean up funding to expedite

brownfield reuse

Type of benefit to Washington program users  Upfront cleanup financing available to a wide

range of sites

Brownfield revitalization opportunities for Washington participants  Enables local

governments to take on brownfield cleanups that are outside their normal capacity to pay

Lessons and ideas for other states  States can realize important health and environmental

benefits, and encourage more economically attractive properties, if they front the money to address

upfront cleanup costs that may be beyond the financial scope of the property
Page 79

WISCONSIN

Wisconsin has adopted tax forgiveness provisions that can help local governments achieve the

cleanup and redevelopment of contaminated, tax-delinquent properties. For many brownfield

properties, especially where local governments have used various other programs to complete

preliminary site assessments, tax forgiveness provisions have reduced the impact of the

combined barriers of contamination and tax delinquency that prevented developers from

acquiring them.

In Wisconsin, the tax forgiveness statute allows counties and the City of Milwaukee to cancel all

or part of the unpaid property taxes on a contaminated property, provided that the Wisconsin

Department of Natural Resources (DNR) has approved a written agreement with the party

receiving the tax benefit to investigate and clean up the contamination. This party can be the

current property owner or a third party proposing to acquire the property or work with the

current owner.

To develop a tax cancellation agreement, the prospective brownfield reuser first meets with the

local taxing authority to determine how willing it is to reduce or eliminate the delinquent taxes.

Then, an agreement is prepared with DNR that details the property investigation and cleanup

required in exchange for canceling the taxes. In many cases, the party receiving the tax benefit

develops a separate agreement with the local taxing authority regarding tax, schedule, and

redevelopment issues. If for any reason the tax cancellation agreement is not implemented, the

cleanup agreement with the DNR is nonbinding.

As of early 2006, taxes had been cancelled at eight Wisconsin brownfield properties, and several

had been cleaned up and redeveloped. These include the former Pingle Oil bulk plant property in

Ashland, which has been redeveloped as a towing service/auto repair business, and a

contaminated property on 1420 State Street in Racine, which has been redeveloped as a large

supermarket with adjacent parking. To encourage use of this program, the city of Milwaukee has

compiled a list of tax delinquent brownfield sites.

Program: Cancellation of Delinquent Taxes

Program type  Delinquent property tax forgiveness

Role in meeting brownfield financing challenges  Reduces the need for initial cash by

eliminating back-tax payments at the time of property transfer

Type of benefit to Wisconsin program users  Enhances the financial viability of the project due

to reduced upfront capital needs

Brownfield revitalization opportunities for Wisconsin participants  Abandoned properties,

especially small sites such as abandoned gas stations or small commercial facilities, will be

attractive for acquisition because of reduced financing needs at the time of the transfer transaction

Lessons and ideas for other states  Authorizing local flexibility in tax practices can encourage

site acquisition, help reverse blight and abandonment, links economic development with

environmental oversight
Page 80

For additional information:

Web site: http://www.dnr.state.wi.us/org/aw/rr/financial/del_taxes.html

Contact: Dan Kolberg, 608/267-7500, Wisconsin Department of Natural Resources

A second Wisconsin tax incentive related to delinquency enables counties and the City of

Milwaukee to foreclose on tax-delinquent brownfields and assign the foreclosure judgment to a

new owner for redevelopment, saving considerable time in the forfeiture process. The party

requesting assignment of the foreclosure judgment must have a written agreement, approved by

the DNR, regarding cleanup of the contamination. Before the law was enacted, municipalities

had to take ownership of foreclosed property and assume the liability for cleaning it up and

selling it. Fearing the costs of remediation, cities often chose not to pursue ownership of

abandoned properties.

In the case of Milwaukee, the city has developed a brownfield development opportunities list

of tax delinquent properties with potential or probable contamination, to encourage use of the

program. While the city routinely does not take ownership of these properties on the list, it will,

under the right circumstances, foreclose against the outstanding property taxes and assign its

right to foreclosure judgment to a new owner. At the end of this process, the property would be

conveyed, as part of an agreement that includes DNR, to get the property cleaned up and

redeveloped.

Each transaction is tailored to the individual circumstances of the property. Typically, new owners

pay the city the market value of the property if it were clean, minus a credit for environmental

cleanup; the city also generally adds an added incentive discount for risk. Especially challenging

properties with low market value are sometimes conveyed at little or no cost.

This provision has been used at six brownfield sites, and other sites are under consideration.

Program: Expedited Title Transfer Thru Foreclosure on Tax Delinquent Properties

Program type  Expedited transfer of tax forfeited property

Role in meeting brownfield financing challenges  Reduces the time needed to secure

abandoned, tax delinquent properties (with consequent cost savings)

Type of benefit to Wisconsin program users  Quick, more predicable transfers make

abandoned contaminated properties more financially attractive to new users, while ensuring cleanup

via agreements with state environmental agency

Brownfield revitalization opportunities for Wisconsin participants  Abandoned properties,

especially small sites such as abandoned gas stations or small commercial facilities, will be

attractive for acquisition because of timeframes more compatible with redevelopment

Lessons and ideas for other states  Using the state and local tax codes to expedite property

cleanup and reuse by making abandoned properties easier to acquire
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Success Story  Milwaukee

A notable example is the Sherman Perk coffee shop, located in a formerly vacated gas station,

which became a first project to use the new foreclosure provision. By 2000, the Sherman Perk

facility, which had operated as a gas station from the 1930s through 1980, had been vacant for

10 years, tax delinquent for nine years, and scheduled to be razed by city order because of

structural deterioration and fuel contamination. At that point, a local developer became interested

in reusing the property and began negotiating an agreement with the city and the state

Department of Natural Resources, under the new tax provisions, to acquire it through foreclosure

and clean it up.

The foreclosure process began in October 2000 and concluded five months later in March 2001,

with finalization in court on April 9.

The site was remediated by removing five underground storage tanks and cleaning up petroleum

contamination. The gas station building itself, a historic structure, was renovated for its new life

as a coffee shop. The owner worked closely with the city to obtain financial backing; today, the

coffee shop has 11 employees and boasts a property value increase of more than $215,000.

Before After

For additional information:

Web sites: http://dnr.wi.gov/org/aw/rr/financial/del_taxes.html,

http://www.mkedcd.org/brownfields/bfhowpurch.html
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The Blight Elimination and Brownfield Redevelopment Program (BEBR) provides grant funds

to help local governments, nonprofits, and businesses assess and clean up contaminated

industrial or commercial facilities or sites. To ensure more successful outcomes, Wisconsin

insists that a redevelopment plan be included in a BEBR application, and both economic

development and environmental outcomes are considered when applications are reviewed.

BEBR typically receives about $7.5 million in funding annually. Applications are accepted on a

rolling basis throughout the year. The maximum award is $1.25 million. Grant recipients must

put up a 20 to 50 percent match, depending on the size of their award.

Grant proceeds may be used for a range of brownfield redevelopment and associated

environmental remediation activities. Based on program awards to date, grant funds have

typically been used for the following: investigation, cleanup, and ongoing monitoring of

groundwater at the site; removal of underground storage tanks or hazardous waste containers;

and asbestos and lead paint abatement. However, some applicants have creatively linked their

BEBR award to the environmental components of brownfield site acquisition, site clearance,

building demolition, and structural renovation, as well infrastructure improvements.

For additional information:

Web site: http://www.commerce.state.wi.us/CD/CD-bfi-grants.html

Contact: Jason Scott, Economic Development Consultant, 608/261-7714

Contact: Alan Rabin, Grant Specialist, 608/267-8926

Contact: Sandy Herfel, Grant Specialist, 608/266-2435

Program: Blight Elimination and Brownfield Redevelopment (BEBR)

Program type  Grants for property assessment and cleanup, including related renovation,

clearance, and demolition activities

Role in meeting brownfield financing challenges  Provides upfront funding for a range of critical

site preparation needs to both public and private property owners, based on accompanying site

redevelopment plan

Type of benefit to Wisconsin program users  Upfront financing to help communities and private

owners in making properties ready for reuse; encourages links between environmental and

economic development programs and strategies

Brownfield revitalization opportunities for Wisconsin participants  Enhances property

cleanup and reuse options because of broad range of activities eligible for funding

Lessons and ideas for other states  Value of defining eligible property preparation activities

broadly enough; increased chances for success because of link of property remediation with

development planning
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Wisconsin has adopted an environmental remediation tax increment financing (ERTIF)

approach, which differs from other tax incremental financing districts available in Wisconsin

(and elsewhere in several important ways. While following the basic revenue raising concepts of

traditional TIF, the ERTIF approach was created specifically to allow Wisconsin jurisdictions to

address brownfields. Accordingly, environmental expenses may be recovered through the taxes

generated by an increase in property values attributable to the new development.

In addition, ERTIFs are not included in the 12 percent limit on a localitys equalized value, and

unlike other TIFs, the base value of an ERTIF may be set at zero. Property included in an ERTIF

must be contaminated, and an ERTIF area is limited to single or contiguous parcels. As a

condition of ERTIF participation, the state Department of Natural Resources (WDNR) must

approve the site investigation report and the remedial action plan before the Department of

Revenue (DOR) certifies the base value of the property in the ERTIF. The program allows local

governments to incur costs necessary to meet these conditions before DOR certifies the base

value, and those costs can be paid back through ERTIF.

Besides traditional development activities, ERTIF proceeds can also fund a range of

environmental activities, such as Phase I and Phase II site assessments, removal of underground

storage tanks and abandoned containers, environmental cleanup, demolition, asbestos abatement,

and similar activities needed to accomplish a brownfield redevelopment.

The Wisconsin legislature recently amended the ERTIF law to make the environmental TIFs

more consistent with other Wisconsin tax increment districts. The changes extended the ERTIF

reimbursement period from 16 years to 23 years, and also made cancellation of property taxes an

eligible ERTIC cost. This provision became effective October 1, 2006.

For additional information:

Web site: http://www.dor.state.wi.us/forms/govtif/erbase.html

Contact: Susan Plakus, Wisconsin Department of Revenue, 608/261-5335

Contact: Judi Gibbon, Wisconsin Department of Revenue, 608/266-5708

Program: Environmental Remediation Tax Incremental Financing

Program type  Targeted tax increment financing mechanism

Role in meeting brownfield financing challenges  Provides a way to raise upfront capital for a

projects environmental financing needs based on future tax revenues that the completed project will

generate

Type of benefit to Wisconsin program users  Increases availability of capital for upfront,

environmentally related development costs

Brownfield revitalization opportunities for Wisconsin participants  Expands capital availability

for brownfield projects without demands on other, existing funding sources

Lessons and ideas for other states  Expansion of accepted TIF revenue raising strategy, with

specific focus on environmental financing needs, makes certain that those needs are met