a

GAO

United States Government Accountability Office

Report to Congressional Committees

October 2005 ECONOMIC 

DEVELOPMENT 

ADMINISTRATION

Remediation Activities 

Account for a Small 

Percentage of Total 

Brownfield Grant 

Funding

GAO-06-7
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

October 2005

ECONOMIC DEVELOPMENT 

ADMINISTRATION 

Remediation Activities Account for a Small 

Percentage of Total Brownfield Grant 

Funding 

Highlights of GAO-06-7, a report to

congressional committees 

The Economic Development 

Administration (EDA)

Reauthorization Act of 2004 (P. L. 

108-373) included a requirement 

that GAO evaluate grants made by

EDA for the economic 

development of brownfield sites.

More than 450,000 brownfield

sites—properties where 

redevelopment or reuse may be

complicated by real or perceived 

environmental contamination—are 

scattered across the United States. 

This report discusses specifics of 

grants made by EDA at brownfields 

sites, including (1) the types, 

extent, and amount of EDA funds 

used for remediation activities; (2) 

the environmental standards and 

agencies involved; and (3) the 

economic development activities, 

standards, and impact. 

What GAO Recommends

GAO recommends that the 

Secretary of Commerce (1) require 

all EDA regional offices to use 

special conditions concerning the

remediation of hazardous 

substances and (2) ensure that

EDA staff verify the estimated jobs

and private-sector investment for

proposed projects. 

In commenting on a draft of this 

report, the Department of

Commerce agreed with the report’s

findings and provided technical 

comments on the 

recommendations which are 

discussed at the end of the report. 

Remediation activities conducted at EDA-funded brownfield sites appeared 

to be incidental to the purpose of the overall project and most often 

consisted of the removal and disposal of asbestos containing materials, 

underground storage tanks, or lead-based paint. We estimate that

remediation activities were conducted at 54 percent of EDA-funded 

brownfield sites from fiscal year 1998 through 2004. Overall, we estimate 

that EDA used $4.8 million or about 1.4 percent of its grant funds to pay for 

remediation activities at 28 percent of the brownfield sites during this 

period. Grantees, former property owners, or other agencies generally were

responsible for most environmental remediation costs at these sites. 

EDA regional environmental officers prepare environmental assessments to

document a project’s compliance with federal environmental requirements. In 

three of six EDA regional offices, we noted that the regional environmental 

officer routinely recommended various types of special conditions be added to 

grant awards concerning the remediation of hazardous substances that provide 

more specific assurance on a project’s compliance with environmental 

standards. EDA requires grant recipients to certify that contractors will comply

with applicable environmental requirements and works with federal, state, and

local environmental agencies to ensure compliance. 

EDA grants to brownfield sites most often funded infrastructure 

improvements, such as upgrades to water and sewer lines, construction of 

streets and curbs, or installation of signage and lighting. EDA evaluates 

proposed projects competitively based on standard guidelines that 

emphasize increased numbers of relatively high-skill, high-wage jobs or 

private sector investment; strong leadership and project management 

experience; and matching funds from local governments or nonprofits. Data 

were not available on the reported economic development impact for most 

of the grants that GAO reviewed. Where data were available, the reported 

economic development data varied significantly when compared with initial 

project estimates for some grants. In some instances, permanent jobs or 

private sector investment estimates for proposed projects did not appear to 

be verified. 

Before and after Photographs of EDA-Funded Business Incubator (Philadelphia, PA) 

www.gao.gov/cgi-bin/getrpt?GAO-06-7.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact William B. 

Shear at (202) 512-8678 or shearw@gao.gov. 
Page i GAO-06-7 EDA Brownfield Remediation

Contents

Letter 1

Results in Brief 4

Background 7

EDA Has Provided Limited Funding for a Variety of Remediation 

Activities at Brownfield Sites 9

Some EDA Regions Have Developed Processes to Better Ensure 

Compliance with Environmental Remediation Standards 15

Grants Were Used for a Variety of Economic Development Purposes, 

but Data on the Projects’ Impact Were Largely Unavailable 20

Conclusions 27

Recommendations 28

Agency Comments and Our Evaluation 28

Appendixes

Appendix I: Objectives, Scope, and Methodology 30

Appendix II: Examples of EDA Grants to Brownfield Projects 36

Appendix III: Comments from Department of Commerce 41

Appendix IV: GAO Contacts and Staff Acknowledgments 45

Tables Table 1: Types of Remediation Activities Conducted at 

EDA-Funded Brownfield Sites, Fiscal Years 1998-2004 10

Table 2: EDA’s Investment Policy Guidelines 23

Table 3: Initial Estimates and 6-Year Data on Jobs Created and 

Retained 25

Table 4: Initial Project Estimates and 6-Year Data on Private Sector 

Investment 25

Table 5: GAO Sample of EDA Grants to Brownfield Sites 31

Table 6: Grants Reviewed at EDA Regional Offices 32

Table 7: 95-Percent Confidence Intervals for Numeric and 

Percentage Estimates 33

Figures Figure 1: EDA Grants to Brownfield Projects Compared with Total 

EDA Grants, Fiscal Years 1998-2004 8

Figure 2: Remediation at EDA-Coded Brownfield Sites, Fiscal 

Years 1998-2004 11

Figure 3: Analysis of EDA Funding to Brownfield Sites, Fiscal Years 

1998-2004 14
Contents

Page ii GAO-06-7 EDA Brownfield Remediation

Figure 4: Purposes and Project Goals of EDA Grants with 

Brownfield Coding 21

Figure 5: EDA Grant to the City of Atlanta and Northyards Business 

Park, LLC 36

Figure 6: EDA Grant to Philadelphia Authority for Industrial 

Development 37

Figure 7: EDA Grant to City of Chester, Chester, Pennsylvania 38

Figure 8: EDA Grants to Greater Kelly Development Corporation, 

San Antonio, Texas 39

Figure 9: EDA Grant to FAME Assistance Corporation, Los 

Angeles, California 40

Abbreviations

CERCLA Comprehensive Environmental Response, Compensation and 

Liability Act

DOD Department of Defense

DOE Department of Energy

EDA Economic Development Administration 

EPA Environmental Protection Agency

HUD Department of Housing and Urban Development 

NEPA National Environmental Policy Act of 1969

OPCS Operation and Planning Control System

REO Regional Environmental Officers

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Page 1 GAO-06-7 EDA Brownfield Remediation

United States Government Accountability Office

Washington, D.C. 20548

A

October 27, 2005 Letr

The Honorable James M. Inhofe

Chairman

The Honorable Jim Jeffords

Ranking Minority Member

Committee on Environment and Public Works

United States Senate

The Honorable Don Young

Chairman

The Honorable James L. Oberstar

Ranking Democratic Member

Committee on Transportation and Infrastructure

House of Representatives

This report responds to a requirement in the Department of Commerce’s 

Economic Development Administration (EDA) Reauthorization Act of 2004 

that GAO evaluate grants made by EDA for the economic development of 

brownfield sites.1

 Brownfield sites—areas where redevelopment or reuse 

may be complicated by real or perceived environmental contamination—

including former industrial and commercial properties, gas stations, and 

military sites. More than 450,000 of these sites are scattered across the 

United States. Because of the stigma of existing or potential contamination, 

brownfield sites often remain unproductive, blighting communities while 

developers resort to the use of “greenfields,” or open spaces outside of 

cities. However, brownfield sites often offer a number of redevelopment 

advantages, including competitive locations, established infrastructure, 

untapped customer and labor markets, easy access to multiple modes of 

transportation, and unique development opportunities, such as historic and 

culturally significant buildings. For the past 40 years, EDA has provided 

support for the redevelopment of brownfield sites as a core component of 

its mission to aid the nation’s most economically distressed communities.2

1

Pub. L. No. 108-373, § 603, 118 Stat. 1756, 1769-1770 (2004).

2

According to EDA, distress may exist in a variety of forms, including but not limited to the 

following: high levels of unemployment, low-income levels, large concentrations of lowincome families, significant declines in per capita income, substantial loss of population 

because of the lack of employment opportunities, large numbers (or high rates) of business 

failures, sudden major layoffs or plant closures, trade impacts, military base closures, 

natural or other major disasters, or depletion of natural resources.
Page 2 GAO-06-7 EDA Brownfield Remediation

Historically, EDA’s brownfield redevelopment activities have focused on 

sites after assessment and remediation (cleanup of contaminated or 

hazardous materials) have taken place. However, EDA has stated that 

current statutory authorities allow it to provide support for site assessment 

and incidental remediation activities at brownfield sites. 

To evaluate the grants made by EDA for the economic development of 

brownfield sites, we (1) determined the types of remediation activities 

conducted, the extent to which projects funded by EDA at brownfield sites 

included remediation activities, and the amount of EDA grant funds used 

for those activities; (2) identified the environmental standards applied to 

projects, the role of environmental agencies (federal, state, and local), and 

the amount of public participation; and (3) identified the economic 

development activities conducted, the economic development standards 

applied to projects, and the reported economic development impact.

The EDA Reauthorization Act of 2004 directed GAO to evaluate EDA grants 

for the economic development of brownfield sites during the 10 years 

before the law came into effect [1994 to 2004]. As agreed with the 

committees of jurisdiction, we limited our analysis for this report to the 

grants EDA awarded to brownfield sites from fiscal years 1998 through 

2004, because EDA did not begin coding these grants in its data systems 

with a special brownfield code until 1998. The act also directed GAO to use 

the term “brownfield site” as defined in the Comprehensive Environmental 

Response, Compensation and Liability Act of 1980 (CERCLA). CERCLA 

defines a brownfield site as real property that is or may be contaminated by 

a hazardous substance that could complicate redevelopment efforts.3

CERCLA does not include, under the brownfield definition, sites listed on 

the Environmental Protection Agency’s (EPA) National Priorities List; sites 

subject to environmental enforcement actions; and sites under the custody 

or control of the federal government. However, EDA codes certain grants 

as brownfield sites, even though the sites are not included under the 

CERCLA definition. These grants are primarily for projects at former 

military or Department of Energy (DOE) installations that were still under 

the control of the federal government when the grant was made. In some 

cases, the federal government transferred ownership of the brownfield site 

before the project was completed. As a result, this report presents separate 

analyses of (1) all grants EDA coded as brownfield sites and (2) grants EDA 

3

Sec. 42 U.S.C. § 9601(39)(A).
Page 3 GAO-06-7 EDA Brownfield Remediation

coded as brownfield sites that are specifically included under the CERCLA 

definition.

Unlike EPA and the Department of Housing and Urban Development 

(HUD), which administer specific grant programs targeted at brownfields 

site redevelopment, EDA does not have a specific brownfield program. 

Instead, the agency provides grants for brownfield-related activities under 

three programs:

• The Public Works Program empowers distressed communities to 

revitalize, expand, and upgrade their physical infrastructure to attract 

new industry, encourage business expansion, diversify local economies, 

and generate or retain long-term private sector jobs and investment. For 

example, the program has provided grants for investment in industrial 

and business parks, port facilities, and rail spurs as well as for the 

redevelopment of brownfields.

• The Economic Adjustment Program helps state and local interests 

design and implement strategies to adjust or bring about change to an 

economy. This program focuses on areas that have experienced or are 

under threat of serious structural damage to the underlying economic 

base–for example, from foreign trade competition, the actual or 

threatened closure of a principal industry or company, a catastrophic 

natural disaster, or a terrorist attack.

• The Defense Adjustment Program, a subset of the Economic Adjustment 

Program, helps communities impacted by base closures, defense 

contract reductions, or both to rebuild and diversify their economies. 

EDA receives funding for this program through direct appropriated 

funding or transfers of funds for defense projects from the Department 

of Defense (DOD) Office of Economic Adjustment.

To meet our objectives, we reviewed the project files for a random sample 

of 140 of the 257 construction-related grants that EDA coded as brownfield 

sites from fiscal years 1998 through 2004.4

 We visited EDA regional offices 

in Atlanta, Austin, Chicago, Denver, Philadelphia, and Seattle to conduct 

4

According to EDA, regional office staff use the basic CERCLA definition and professional 

judgment in coding grants as brownfield sites. As a result, our estimates regarding the 

number of brownfield sites where remediation activities were conducted and the dollar 

amount and percentage of EDA funding used for remediation activities might be 

underestimated if EDA staff did not properly code certain grants as brownfield sites.
Page 4 GAO-06-7 EDA Brownfield Remediation

our file reviews. During these reviews, we obtained information on the 

remediation activities conducted and the amount of EDA grant funds used 

for these activities, economic development activities conducted and 

economic development impacts, and amount of public participation in the 

projects. We used the 140 construction-related grants in our sample to 

make estimates about the entire population of EDA grants coded as 

brownfield sites and the subpopulation of EDA grants with brownfield 

coding that were included under the CERCLA brownfield definition. We 

interviewed officials from EDA to obtain a better understanding of the 

economic development and environmental standards applied to projects 

and the role of federal, state, and local environmental agencies in the 

projects. We also interviewed officials from EPA and HUD for information 

about each organization’s brownfield redevelopment activities. 

We conducted our work from January 2005 through September 2005 in 

accordance with generally accepted government auditing standards. 

Appendix I contains a detailed description of our scope and methodology.

Results in Brief We found that remediation activities at EDA-funded brownfield sites 

appeared to be incidental to the purpose of the overall projects and 

included cleanup activities such as the removal and disposal of asbestoscontaining materials, underground storage tanks, lead-based paint, and 

contaminated soil. Overall, we estimated that of the 257 constructionrelated grants with brownfield coding that EDA made from fiscal years 

1998 to 2004, approximately 139 (54 percent) of them included some kind 

of remediation activity.5

 However, EDA contributed funding for 

remediation activities at only an estimated 72 (28 percent) of these 

brownfield sites. Grantees, former property owners, or other agencies 

generally were responsible for most remediation costs. We also estimate 

that of the 257 construction-related grants, 191 (74 percent) met the 

CERCLA definition at the time the grants were awarded, and remediation 

activities were conducted at 100 (52 percent) of the sites. Further, our 

review of a sample of 140 construction-related EDA grants with brownfield 

5

Estimates based on our sample of EDA grants are subject to sampling error. Different 

results could have been obtained with a different sample. Unless otherwise noted, all 

percentage estimates in this report have 95 percent confidence intervals of plus/minus 8 

percentage points or less. Other estimates, such as dollar estimates, have 95 percent 

confidence intervals that are within plus/minus 50 percent of the estimate itself. Appendix I 

contains additional information on the sample design and reliability of estimates.
Page 5 GAO-06-7 EDA Brownfield Remediation

coding showed that EDA did not provide a significant amount of funding 

for remediation activities and that projects funded through the Defense 

Adjustment Program generally required more funding for remediation 

activities than projects funded through EDA’s Public Works or non-Defense 

related Economic Adjustment Programs. Total funding for all constructionrelated grants with brownfield coding that EDA awarded in fiscal years 

1998 through 2004 was $341.2 million. Of this amount, an estimated $4.8 

million (or about 1.4 percent) was used for remediation activities, including 

$3.7 million for remediation activities EDA funded primarily at former 

military or DOE sites under its Defense Adjustment Program and $1.1 

million for remediation activities funded through regular EDA 

appropriations. Similarly, we estimate that EDA provided about $226 

million to brownfield sites that met CERCLA standards and used $3.3 

million (or about 1.5 percent) of it for remediation activities, including $2.3 

million for remediation activities under the Defense Adjustment Program 

and $1 million for remediation activities funded through Public Works or 

non-Defense related Economic Adjustment Programs. 

EDA is required to ensure that environmental assessments of its brownfield 

projects comply with all federal environmental statutes and regulations. In 

turn, EDA requires that grant recipients certify that their contractors and 

subcontractors will comply with all applicable environmental laws and 

regulations and works with federal, state, and local environmental agencies 

to ensure that these requirements are met. EDA regional environmental 

officers (REO) prepare an environmental assessment to document a 

project’s compliance with federal environmental requirements. As part of 

the assessment, the REO evaluates whether the project site contains any 

hazardous substances that might require remediation, using documentation 

submitted by grant applicants. We noted that three of the six REOs (in 

Atlanta, Chicago, and Seattle) routinely recommended adding special 

conditions to grant awards that grant recipients provide evidence to the 

government that hazardous substances had been remediated in accordance 

with environmental standards not identified in the standard terms and 

conditions of the awards. The REO in EDA’s Chicago office told us that 

special conditions, while not required, provided EDA with more specific 

assurance that a project complied with standards for the remediation of 

hazardous substances. EDA does require that grant applicants provide 

evidence that the public is aware of proposed projects, but does not impose 

a specific public participation requirement for grants. For most of the 

grants we reviewed, we found evidence that efforts were being made to 

inform the public of proposed projects through venues such as newspaper 

articles, public meetings, and public notices.
Page 6 GAO-06-7 EDA Brownfield Remediation

EDA brownfield grants were used for various economic development 

purposes, most often for infrastructure improvements and building 

demolition or renovation that resulted in the development of industrial and 

business parks, business incubators, training facilities, and tourism and 

recreation facilities. EDA evaluates proposed construction projects 

competitively based on standard investment policy guidelines that 

emphasize increased numbers of relatively high-skill, high-wage jobs or 

private sector investment, strong leadership and project management 

experience, and matching funds from local governments or nonprofits. 

EDA grant applicants are required to demonstrate how proposed projects 

will meet or exceed these guidelines. We found that data were not available 

on the reported economic development impact for most of the grants that 

we reviewed because the projects either had not been completed or had 

not been completed long enough to establish results. However, the 

reported economic development data that were available sometimes varied 

significantly from the initial project estimates. Further, while regional staff 

are required to verify permanent job and private sector estimates, we found 

that in some instances the estimates for proposed projects did not appear 

to be verified. For example, one EDA grant we reviewed for the 

development of a biotechnology center estimated that the project would 

generate 400 permanent jobs. But this estimate included 300 students who 

were expected to graduate from the center within 5 years and whose jobs 

would therefore not be a direct result of the project.

To better ensure that remediation activities are conducted in accordance 

with applicable regulations and to obtain better economic development 

impact data, this report recommends that the Secretary of Commerce (1) 

require all EDA regional offices to use special conditions concerning the 

remediation of hazardous substances and (2) ensure that EDA staff verify 

the estimated jobs and private-sector investment for proposed projects.

In commenting on our draft report, the Deputy Secretary of Commerce 

wrote that the report accurately reflects EDA’s role in supporting 

brownfield revitalization projects and that remediation activities are a 

small part of EDA’s activities. Two of the comments addressed our 

recommendations. The first stated that adding special conditions would 

not change grantees’ and EDA’s obligations to ensure that projects comply 

with applicable laws and regulations. However, we found that half of EDA’s 

regional offices were using special conditions with some success and 

believe it would be beneficial if all EDA regional offices adopted this best 

practice. The second comment questioned our recommendation that 

verification of projected jobs and private investment in initial applications 
Page 7 GAO-06-7 EDA Brownfield Remediation

be strengthened, noting that the data for completed projects after 6 years 

were too limited. This recommendation is based on our findings that some 

initial estimates did not appear to be effectively substantiated. We continue 

to believe that substantiating these estimates would help EDA make more 

accurate funding decisions and increase the chances of EDA funding 

projects with the greatest potential impacts.

Background EDA was established in 1965 within the Department of Commerce to 

generate jobs, help retain existing jobs, and stimulate industrial and 

commercial growth in economically distressed areas of the United States.6

EDA fulfills its mission through grants to state and local governments, 

Indian tribes, educational institutions, nonprofit organizations, and others. 

EDA grants, including those in support of brownfield redevelopment, are 

intended to create wealth and minimize poverty by promoting a business 

environment that attracts private capital investment and creates relatively 

higher-skill, higher-wage jobs.

EDA grants to sites coded as brownfields represent a small portion of the 

agency’s total grants portfolio. EDA awarded 363 grants totaling $358.8 

million to sites coded as brownfields (including construction and planning 

grants) from fiscal years 1998 through 2004. EDA grants to sites coded as 

brownfields represented 13.6 percent of the $2.6 billion of the agency’s total 

grants portfolio of 6,826 grants EDA awarded during this period (fig. 1).

6

Public Works and Economic Development Act of 1965, Pub. L. No. 89-136, 79 Stat. 552 

(1965) codified at 42 U.S.C. § 3121 et seq.
Page 8 GAO-06-7 EDA Brownfield Remediation

Figure 1: EDA Grants to Brownfield Projects Compared with Total EDA Grants, 

Fiscal Years 1998-2004

In 1998, EDA began coding grants to brownfield sites with a special 

initiatives code, 1 of more than 100 such codes EDA uses to categorize its 

grants.7

 EDA generally uses the same CERCLA definition of a brownfield 

site as EPA, but it also codes as brownfield sites some venues that are not 

included under the CERCLA definition of a brownfield site, primarily 

former military or DOE installations that are still under the control of the 

federal government at the time the grant is awarded. Under its current 

statutory authorities EDA can make grants to these sites without requiring 

7

For example, EDA has also developed special initiative codes for eco-tourism, enhanced 

regional competitiveness, the Alaska fisheries disaster of 1998, and Hurricane Floyd in 2001.

0

200

400

600

800

1,000

1,200

0

100

200

300

400

500

Brownfield projects

All investment dollars

Total EDA investment projects

Brownfield investment dollars

1998 1999 2000 2001 2002 2003 2004

Number of projects Dollars in millions

Source: GAO analysis of EDA data.
Page 9 GAO-06-7 EDA Brownfield Remediation

that the grant recipient have title to the property.8 In such cases, EDA 

generally requires that the grant recipient provide evidence that the 

property will be transferred at a future date or obtain a leasehold interest in 

the property until it transfers.

EDA has six regional offices across the United States that administer its 

grant programs. Each regional office accepts preapplication investment 

proposals from prospective grantees. Based on established regulations, 

EDA regional officials encourage only those investment proposals that will 

significantly benefit areas experiencing or threatened with substantial 

economic distress to continue with the application process. Before 

receiving a grant, an entity must submit a preapplication proposal to an 

EDA regional office responsible for that area. After preliminary reviews by 

various EDA regional office staff, each preapplication proposal is 

considered by the regional Investment Review Committee, which consists 

of the division chiefs and other regional office staff, to ensure that the 

entity is eligible to receive funds and that the project is likely to provide 

benefits meeting EDA’s criteria. The committee decides whether the entity 

should be invited to submit an application, but EDA headquarters reviews 

the committee’s recommendation action for quality assurance. Grant funds 

are awarded upon completion of the application.

EDA Has Provided 

Limited Funding for a 

Variety of Remediation 

Activities at 

Brownfield Sites

We found that remediation activities at brownfield sites typically included 

the removal and disposal of materials containing asbestos, underground 

storage tanks, lead-based paint, and contaminated soil. Generally, these 

activities have been a small part of much larger projects that involved 

infrastructure improvements, renovations of buildings, or complete 

demolition of existing structures that do not meet current building codes. 

Overall, we estimate that remediation activities were conducted at about 

half of the 257 construction-related grants that EDA coded as brownfield 

sites from fiscal years 1998 through 2004. EDA provided funding for 

remediation activities at only about a quarter of the sites, using an 

estimated 1.4 percent of its funding to pay for these activities because these 

costs were generally covered by grantees, former property owners, or other 

agencies. Our estimates showed similar percentages for the subset of 

brownfield sites meeting CERCLA standards and indicated that EDA spent 

more for remediation activities on projects funded through the Defense 

8

42 U.S.C. § 3142.
Page 10 GAO-06-7 EDA Brownfield Remediation

Adjustment Program than for projects funded through its other programs 

(Public Works or non-Defense related Economic Adjustment Programs).

Although remediation activities took a variety of forms, removing and 

disposing of materials containing asbestos was the primary activity (table 

1). 

Table 1: Types of Remediation Activities Conducted at EDA-Funded Brownfield 

Sites, Fiscal Years 1998-2004

Source: GAO analysis of EDA data.

a

Percentages do not add to 100 percent because some projects required multiple types of remediation. 

b

Other remediation activities included removing and disposing of contaminated soil or polychlorinated 

biphenyl materials and cleaning up contaminated groundwater. 

EDA officials said that remediation activities were often necessary to the 

redevelopment of brownfield sites. For example, asbestos-containing 

materials are often found in buildings constructed before 1970 and must be 

removed if the structures are to conform to EPA standards. EPA has 

regulated the use of asbestos since 1973 through various laws such as the 

Clean Air Act and the Toxic Substances Control Act.9

On the basis of our sample of 140 EDA grants made to brownfield sites 

between 1998 and 2004, we estimated that remediation activities were 

conducted at 54 percent of the sites EDA coded as brownfields and at 52 

percent of the sites that met the CERCLA definition. We also estimated that 

EDA provided funding for remediation at 28 percent of all the sites coded 

as brownfields (fig. 2). 

Remediation activity conducted Estimated percent of projectsa

Asbestos abatement 84

Underground storage tank removal 35

Lead-based paint abatement 17

Otherb 46

9

Clean Air Act, Pub. L. No. 88-206, as amended, codified at 42 U.S.C. § 7401 et seq. and Toxic 

Substances Control Act, Pub. L. No. 94-469, as amended, codified at 15 U.S.C. § 2601 et seq.
Page 11 GAO-06-7 EDA Brownfield Remediation

Figure 2: Remediation at EDA-Coded Brownfield Sites, Fiscal Years 1998-2004

EDA officials said that they generally tried to limit the amount of grant 

funds that were used for remediation activities, per an EDA Directive 

effective July 1992 and later clarified in a memorandum from the Acting 

Assistant Secretary of EDA in June 2000, which states that EDA typically 

participates in hazardous waste cleanups as part of a larger economic 

development project, but not as the principal activity of the EDA funded 

activity. As previously stated and further shown in the examples presented 

below, we generally found this to be true for the projects we reviewed. EDA 

officials explained that they were in business to redevelop blighted areas in 

order to create higher paying jobs and promote private investment and that 

remediation was an incidental EDA activity. They noted that former 

property owners or other federal agencies, such as EPA or HUD that have 

specific brownfield grant programs, should help fund remediation at sites 

requiring a significant amount of environmental cleanup. Specific examples 

0

50

100

150

200

250

300

CERCLAdefinedAll

Type of brownfield site

Number of sites

257

139

(54%)

72

(28%)

100

(52%)

53

(28%)

191

Estimated brownfield sites that did not include remediation activities

Estimated brownfield sites that included remediation activities

Estimated brownfield sites for which EDA funds were spent on remediation activities

Source: GAO analysis of EDA data.
Page 12 GAO-06-7 EDA Brownfield Remediation

where EDA funded remediation activities that appeared to be incidental to 

the larger projects include the following:

• A project in Cumberland, Maryland, funded in 2002, that met the 

CERCLA definition of a brownfield site required environmental 

remediation work to renovate an existing building for use as a microenterprise business incubator and training facility. From EDA’s 

investment of $900,000 in the project, about 2 percent of EDA’s funds 

were used to remove asbestos and lead paint found throughout the 

building being renovated. 

• A 1999 project in Atlanta, Georgia that met the CERCLA definition of a 

brownfield site received EDA grant funds to help construct a proposed 

business park, including a roadway, and a water line and sanitary sewer 

line. During the project, the contractors discovered the buildings 

scheduled for demolition contained asbestos, and the soil underneath 

the path of the road was contaminated with lead and petroleum. EDA 

agreed to participate only in cleanup activities associated with 

demolition of the buildings that were in the footprint of the EDA 

improvements (asbestos and removal of contaminated soil). Of EDA’s 

investment of $1.2 million, about 7 percent of the funds were used for 

remediation. 

Other federal agencies and grantees played a larger role than EDA in 

cleaning up some sites:

• EDA provided $1.57 million to the Lawrence Economic Development 

Corporation in 2002 for infrastructure improvements (water lines, 

sanitary sewers, and roads) to a brownfield site in South Point, Ohio, 

that was listed on EPA’s National Priority List. EDA’s project, located on 

about one-third of this Superfund site, required removing contaminated 

soil, burying the soil onsite, and covering it with a clay cap. EDA did not 

provide any funding for these remediation activities. Instead, the 

previous owner paid about $1 million for the remediation. The federal 

and state EPAs were responsible for monitoring the remediation. 

Although the site was completely remediated, it did not meet the 

CERCLA definition for a brownfield site because it remains on EPA’s 

National Priority List since EPA plans to continue performing 

groundwater testing for an extended period of time, possibly another 20 

years. 
Page 13 GAO-06-7 EDA Brownfield Remediation

• In 2000, EDA provided $1.1 million funding through the Defense 

Adjustment Program to develop infrastructure (storm drains, new 

streets and sidewalks, street lights, sewer lines, and water lines) for an 

industrial park in Pomona, California. This site required removal of 

asbestos, underground storage tanks, and lead paint. Because the 

project was located on the former Naval Industrial Reserve Ordnance 

Plant and the Navy still legally owned the land, the Navy paid for all 

remediation costs. The California Department of Toxic Substance 

Control provided documentation to EDA that it had provided regulatory 

oversight for the necessary remediation activities. This project did not 

meet the CERCLA definition of a brownfield site since the land was still 

owned by the Department of the Navy. 

Appendix II contains additional details on the Atlanta project and examples 

of remediation at other EDA sites coded as brownfields.

Overall, we found that of the $341 million EDA provided to sites coded as 

brownfields from fiscal years 1998 through 2004, an estimated 1.4 percent 

of its funding, or $4.8 million, was used for remediation activities. Similarly, 

of the estimated $226 million for sites coded as brownfields meeting the 

CERCLA definition, we estimate that EDA used about 1.5 percent, or $3.3 

million, of its funding for remediation activities (fig. 3).
Page 14 GAO-06-7 EDA Brownfield Remediation

Figure 3: Analysis of EDA Funding to Brownfield Sites, Fiscal Years 1998-2004 

We also analyzed EDA grant funds spent on remediation activities through 

regular EDA appropriations and appropriated or transferred DOD funding. 

EDA receives direct appropriated or transferred funding under the Defense 

Adjustment Program for projects at former military or DOE installations 

that have closed and are in the process of being redeveloped. These sites 

often require extensive remediation. Our analysis demonstrated that EDA 

has spent more for remediation activities on projects funded through the 

Defense Adjustment Program than for projects funded through its Public 

Works or non-Defense related Economic Adjustment Programs—$3.7 

Brownfield

sites

meeting

CERCLA

criteria

All

All brownfield sites

Remediation

activities

Brownfield sites

meeting CERCLA criteria

$4.8

$1.1

$3.7

$1.0

$2.3

$3.3

Estimated EDA funding used for nonremediation activities

Estimated EDA funding used for remediation activities

Public Works or non-Defense related Economic Adjustment Program funding

Defense Adjustment Program funding

Source: GAO analysis of EDA data.

Estimated grant funds (in millions)

1.41% 1.48%

98.59% 98.52%
Page 15 GAO-06-7 EDA Brownfield Remediation

million and $1.1 million, respectively (fig. 3). From fiscal years 1998 

through 2004, EDA received $135 million in direct-appropriated or 

transferred funding for construction-related projects under the Defense 

Adjustment Program, or about 40 percent of the total grant funding 

provided to sites coded as brownfields during this period.

Our sample of 140 grant awards contained 46 grants funded through the 

Defense Adjustment Program. For seven of these grants, more than 10 

percent of the funding was designated for remediation activities, including 

two grants made to brownfield sites that were included under the CERCLA 

definition at the time the grants were awarded. For one of these grants, 

$1.46 million or 29 percent of the funding was earmarked for remediation 

activities (see the Philadelphia case study in app. II). For projects funded 

through direct appropriations under the Defense Adjustment Program, 

EDA has the discretion to choose and administer the projects in 

accordance with their Economic Adjustment Program authority. However, 

according to EDA officials, the majority of EDA projects in the Defense 

Adjustment Program are undertaken with transferred funding pursuant to a 

memorandum of understanding between EDA and DOD’s Office of 

Economic Adjustment. The officials added that these projects are often 

funded pursuant to a targeted DOD appropriation, and EDA is generally left 

with little or no up-front decisional authority over which projects should 

receive funding. In addition, the officials stated that in these projects, 

DOD’s Office of Economic Adjustment provides EDA with a general 

framework for the project; and EDA, which primarily serves as the grant 

administrator, works directly with the grantee to establish the specific 

scope of work and controls the disbursement of funds for eligible 

expenses. 

Some EDA Regions 

Have Developed 

Processes to Better 

Ensure Compliance 

with Environmental 

Remediation Standards

EDA is required to ensure that environmental assessments of its projects 

coded as brownfields comply with various federal environmental 

requirements. EDA relies on federal, state and local environmental 

agencies to ensure that grant recipients and their contractors and 

subcontractors comply with applicable environmental standards. REOs 

prepare environmental assessments to document compliance with federal 

environmental requirements and determine whether the project site 

contains any hazardous substances that might require remediation. We 

noted that the REOs at three of EDA’s six regional offices routinely 

recommended adding special conditions to grant awards concerning the 

remediation of hazardous substances in order to provide EDA with more 

specific assurance that projects were complying with environmental 
Page 16 GAO-06-7 EDA Brownfield Remediation

standards. We also noted that while EDA requires grant applicants to 

provide evidence that the public is aware of proposed projects, it does not 

have a specific public participation requirement. 

Environmental Assessments 

Document That Projects 

Comply with Applicable 

Environmental Laws

Under the National Environmental Policy Act of 1969 (NEPA), EDA 

generally evaluates the likely environmental effects of brownfield projects 

it is proposing using a relatively brief environmental assessment or, if the 

action will be likely to significantly affect the environment, a more detailed 

environmental impact statement.10 These environmental assessments are 

conducted in accordance with federal environmental statutes and 

regulations.11 To document a project’s compliance with this act and other 

federal environmental requirements, REOs prepare environmental 

assessments to help ensure that adverse environmental impacts are 

mitigated or avoided to the extent possible. As part of the assessment, the 

REO reviews documentation from grant applicants to determine whether 

any hazardous substances are present at the project site that may require 

remediation activities. For example, grant applicants are required to certify 

on the Applicant Certification Clause (Form ED-536) whether a project site 

is contaminated by toxic or hazardous substances. The form includes 

questions related to the presence of asbestos-containing material, 

underground storage tanks, equipment (such as electrical transformers) 

containing polychlorinated biphenyls, and other hazardous substances. 

Grant applicants are also required to submit copies of any environmental 

surveys or inspection reports conducted for the project site and 

documentation from any investigations by federal, state, or local 

environmental agencies that are related to it.

In three regional offices (Atlanta, Chicago, and Seattle), we noted that 

REOs routinely recommended adding special conditions on the 

remediation of hazardous substances to grant awards. For example:

10NEPA, Pub. L. No. 91-190, as amended, codified at U.S.C. §§ 4321 et seq.

11These statutes and regulations include, among others, CERCLA (Pub. L. No. 95-510, as 

amended, codified at 42 U.S.C. §§ 9601 et seq.); the Safe Drinking Water Act of 1974 (Pub. L. 

No. 92-523, as amended, codified at 42 U.S.C. §§ 300f et seq.); the Clean Air Act (Pub. L. No. 

88-206, as amended, codified at 42 U.S.C. §§ 7401 et seq.); and the Resource Conservation 

and Recovery Act of 1976 (RCRA) (Pub. L. No. 94-580, as amended, codified at 42 U.S.C. §§ 

6901 et seq.).
Page 17 GAO-06-7 EDA Brownfield Remediation

• In 1998, EDA attached a special condition to a $668,500 grant made to 

the city of Cleveland, Ohio and the Shorebank Enterprise Group for the 

renovation and expansion of an existing business incubator building to 

be used by new and emerging companies at a brownfield site that met 

the CERCLA definition. The condition stipulated that before the project 

closed and EDA made the final disbursement, the recipient would 

provide evidence satisfactory to the government that all asbestos had 

been disposed of in a manner that complied with applicable state and 

federal regulations.

• In 1999, EDA attached a special condition to a $750,000 grant to the city 

of Marquette, Michigan for infrastructure improvements to facilitate 

business revitalization in the central business district, including the 

replacement of water mains, sanitary sewer mains, sidewalks, and curbs 

at a brownfield site that met the CERCLA definition. The condition 

stipulated that the recipient agreed to remediate any soils found to 

contain regulated levels of contamination as defined by the Michigan 

Department of Environmental Quality, using procedures approved by 

the department.

• In 1999, EDA placed another condition on a $1,085,200 grant to Lenoir 

City and Loudon County Tennessee for the demolition of existing 

structures and construction of a new two-story building in the central 

business district at a brownfield site that met the criteria in CERCLA. 

The purpose of the new building was to house a satellite campus that 

included a community college, career center, city library, and business 

development center. This special condition required the recipient to 

furnish evidence satisfactory to the government that all asbestos and 

lead-based paint materials had been removed or contained from the 

property before construction started, in accordance with the National 

Emission Standards for Hazardous Air Pollutants and other appropriate 

standards and regulations.

The REO at EDA’s Chicago regional office told us that special conditions 

concerning the remediation of hazardous substances provided EDA with 

more specific assurance that a project would comply with environmental 

standards not identified in the standard terms and conditions of EDA grant 

awards. The Chicago REO also told us that special conditions could be 

used to protect the government from liability if individuals were injured by 

exposure to hazardous substances at EDA-funded brownfield sites. The 

Chicago REO added that while such conditions were not required, they 
Page 18 GAO-06-7 EDA Brownfield Remediation

were useful in emphasizing the grant recipient’s responsibilities for sitespecific environmental issues. 

EDA’s Seattle regional office routinely attaches specific assessments and 

additional documentation requirements of environmental hazards to 

Defense Adjustment Program project deeds. According to the Seattle 

office’s regional counsel, while the environmental restrictions are often 

benign and unobtrusive, they promote efficiency by calling attention to the 

restrictions and placing the onus on the grantee to meet the additional 

requirements in the deed. The REO at EDA’s Denver regional office also 

agreed that special conditions concerning the remediation of hazardous 

substances were more effective than EDA’s standard terms and conditions, 

although we did not identify any grants to which the Denver REO attached 

such conditions. According to officials at EDA headquarters, as part of its 

due diligence under NEPA and depending upon the project facts and timing 

for remediation, the agency may make its financial assistance conditional 

on the grantee’s providing evidence that a remediation plan has been 

approved at the state level or of actual compliance with a state process.

EDA Works with Federal, 

State, and Local 

Environmental Agencies to 

Ensure That Grant 

Recipients Comply with 

Applicable Environmental 

Laws

As we have seen, EDA requires grant recipients and their contractors and 

subcontractors to comply with all applicable federal, state, local, and 

territorial environmental laws as part of the standard terms and conditions 

of its grant awards. EDA works with environmental agencies at all levels of 

government to ensure that grant recipients comply with environmental 

requirements, but state environmental agencies (along with EPA) generally 

take the lead in ensuring such compliance. For example:

• In 2000, EDA funded a project in Kansas City, Missouri to demolish 

blighted structures, rehabilitate combined sewer lines, and replace 

catch basins at an existing industrial park site. This site also met the 

criteria of a brownfield under CERCLA. About 9 percent of the $1 

million awarded to the project was used for the removal of material 

containing asbestos found in the structures. The project file showed that 

the Missouri Department of Natural Resources issued a permit to the 

firm that completed the asbestos remediation in accordance with the 

state’s asbestos regulations.

• EDA funded another project that met the criteria of a brownfield under 

CERCLA in Newport, Rhode Island in 2002, for infrastructure and site 

work on a former naval housing site that was being redeveloped as a 

community college, preschool program, and office complex. EDA 
Page 19 GAO-06-7 EDA Brownfield Remediation

funded $26,394 of the remediation costs for soil contaminated with 

arsenic (about 3 percent of the $1 million awarded to the project). The 

project file showed that the Rhode Island Department of Environmental 

Management provided oversight of the cleanup of the contaminated soil 

to ensure compliance with the state policy for the remediation of 

arsenic contaminated soil.

EDA Grants Do Not Include 

A Specific Public 

Participation Requirement

We found that EDA required grantees to provide evidence of any efforts 

they had made to ensure that the public was aware of proposed projects, 

but it does not have a specific public participation requirement. Grantees 

could use newspaper articles, public meetings, or public notices as 

evidence of public awareness efforts. We found this type of evidence in the 

project files for an estimated 81 percent of the projects coded as 

brownfields. In some cases, the public might have been aware of projects, 

but we did not find evidence that grantees had tried to disseminate 

information in the project files; in some cases, EDA officials could not 

locate the evidence. EDA also requires grant applicants to fully describe 

any public controversy surrounding or objections to the proposed project, 

including the steps that were taken to resolve any issues, and submit a copy 

of the transcript if formal public hearings were held. Our analysis showed 

that most of the projects were not controversial and that public hearings 

were held for an estimated 27 percent of the projects with brownfield 

coding. For example:

• A project funded in 2002 in Trenton, New Jersey involved moving 

industrial park businesses from a flood prone industrial area to a flood 

protected area. The property contained asbestos, underground storage 

tanks, and contaminated soil, but much of the remediation had been 

done prior to this EDA grant.12 The project met the criteria of a 

brownfield site in accordance with CERCLA. According to the 

environmental assessment, the project was discussed at open city 

council meetings, and EDA officials said that they were not aware of any 

objections to the project. 

• Another project funded in 1998 in Los Angeles, California involved 

converting an abandoned four-story building into a business incubator. 

The project met the criteria of a brownfield site in accordance with 

12A second grant for this project was made in 2003 to cover asbestos remediation costs of 

which EDA funded $454,055 or 60 percent of the total estimated costs.
Page 20 GAO-06-7 EDA Brownfield Remediation

CERCLA. EDA spent less than $100,000 of a $1.8 million grant on 

remediation. The project details were posted in the California Areawide 

Clearinghouse, a biweekly public review and comment process, and 

sent to the Southern California Association of Governments. The project 

also received widespread newspaper coverage. 

• A project funded in 2002 in Boston, Massachusetts involved renovating 

an industrial building in a shipyard and purchasing a boat lift to help 

attract new business. The project met the criteria of a brownfield site in 

accordance with CERCLA. At the time of our review, EDA had spent just 

over $1,000 of a $1 million grant on asbestos removal. According to the 

project file, public hearings were not held on this specific grant, but over 

20 public meetings were held on planned renovations of the entire 

shipyard over a 3-year period. The file also documented that there was 

no controversy involving the project. 

Grants Were Used for a 

Variety of Economic 

Development 

Purposes, but Data on 

the Projects’ Impact 

Were Largely 

Unavailable

We found that EDA brownfield grants were used for various economic 

development purposes that resulted in the creation of industrial and 

business parks, business incubators, training facilities, and tourism and 

recreation facilities. The guidelines EDA uses to evaluate proposed 

projects emphasize a variety of factors, including the following:

• The number of relatively higher-skill, higher-wage jobs the project will 

generate;

• private sector investment in the project;

• strong leadership skills and project management experience; and

• the amount of matching funds that are available from local governments 

or nonprofits. 

We found that data were not available on the reported economic 

development impact for most of the grants that we reviewed because the 

projects either were not complete or had not been completed long enough 

to establish results. However, we found during a review of project files that 

some estimates of the permanent jobs or private-sector investment a 

project would create did not appear to have been properly verified. 
Page 21 GAO-06-7 EDA Brownfield Remediation

EDA Grants Supported a 

Variety of Economic 

Development Purposes 

For our analysis, we reviewed EDA grants to sites coded as brownfields to 

determine the grants’ purposes and project goals. We found that the most 

common purpose of EDA grants to brownfield sites was to make 

infrastructure-related improvements, such as upgrading water and sewer 

lines, constructing streets and curbs, and installing signage and lighting. 

EDA’s development activities supported a variety of projects. Figure 4 

shows the most common purposes of EDA grants, along with the goals or 

types of projects—most commonly industrial parks and other commercial 

developments—that were planned for former brownfield sites.

Figure 4: Purposes and Project Goals of EDA Grants with Brownfield Coding 

a

Percents do not sum to 100 because some of the projects had more than one purpose, goal, or both. 

b

Other purposes included transportation development, financial assistance, and waste water treatment 

upgrades.

c

Other project goals included providing low-income housing and upgrading transportation.

Commercial development

Business incubators

Educational or training development

Harbor development

Commercial airfield development

Tourism and recreational development

Otherc

Industrial park development

33

14

11

5

5

4

2

34

Grant purpose Estimated percentagea Estimated percentagea Project goal

Renovation of existing building 33

Demoliton of buildings and structures 16

Construction of new building 13

Landscaping 10

Site preparation 8

Otherb 13

Infrastructure improvements 56

Source: GAO analysis of EDA data.
Page 22 GAO-06-7 EDA Brownfield Remediation

When eligible grant applicants submit preapplication proposals for 

construction projects, EDA must first determine whether the project area 

is eligible for assistance.13 Project areas eligible for EDA assistance 

generally include those that have one of the following: 

• an unemployment rate at least 1 percentage point higher than the 

national average for the most recent 24-month period for which data are 

available;

• per capita income that is 80 percent or less of the national average for 

the most recent period for which data are available; or

• a special need, as determined by EDA, arising from actual or threatened 

severe unemployment or economic adjustment problems resulting from 

severe short-term or long-term changes in economic conditions.14

After determining that a project area is eligible for assistance, EDA 

evaluates project proposals competitively, based on five investment policy 

guidelines (See table 2). These guidelines are intended to focus on results 

rather than processes and encourage investment in U.S. communities 

based on risk and the expected return on the taxpayer's investment. EDA's 

investments through these guidelines also aim to attract private sector 

investment, have a higher probability of success, and ultimately result in an 

environment where relatively high-skill, high-wage jobs are created. 

13Eligible applicants for, and eligible recipients of, EDA financial assistance include 

Economic Development Districts; Indian tribes or consortia of Indian tribes; states; cities or 

other political subdivisions; institutions of higher education or consortia of institutions of 

higher education; public or private nonprofit organizations or associations acting in 

cooperation with officials of a political subdivision of a state. EDA is not authorized to 

provide grants directly to individuals or to other for-profit entities seeking to start or expand 

a business.

14A special need can include substantial outmigration or population loss; underemployment 

(the employment of workers at less than full time or at less skilled tasks than their training 

and abilities permit); military base closures or realignments, defense contractor reductionsin-force, or DOE defense-related funding reductions; natural or other major disasters or 

emergencies; extraordinary depletion of natural resources; closure or restructuring of 

industrial firms that are essential to area economies; or destructive impacts of foreign trade.
Page 23 GAO-06-7 EDA Brownfield Remediation

Table 2: EDA’s Investment Policy Guidelines

Source: EDA.

EDA currently gives further priority to proposed projects that enhance 

regional competitiveness and support long-term development of the 

regional economy. EDA considers the following as strategic investments 

that enhance regional competitiveness and support long-term development 

of the regional economy, including projects that

• upgrade core business infrastructure, including transportation, 

communications, and specialized training programs;

• implement regional strategies that involve all stakeholders and support 

regional benchmarking initiatives;

• encourage institutional collaboration, reflect strong leadership 

commitment, and encourage a formalized structure to maintain 

consensus;

• cluster development establishing research and industrial parks that 

encourage innovation-based competition and recruitment efforts;

Investment policy guidelines Description

Be market based and results driven Investments should capitalize on a region's competitive strengths 

and positively move a regional economic indicator measured on 

EDA's Balanced Scorecard—for example, by increasing the number 

of relatively high-skill, high-wage jobs; increasing tax revenue; or 

increasing private-sector investment in the local community.

Have strong organizational leadership Projects need to demonstrate strong leadership capabilities, 

relevant project management experience, and a significant 

commitment of human-resources talent to ensure their success.

Advance productivity, innovation, and entrepreneurship Projects should embrace the principles of entrepreneurship, 

enhance regional clusters and leverage and link technology 

innovators and local universities to the private sector to create the 

conditions for greater productivity, innovation, and job creation.

Look beyond the immediate economic horizon, anticipate economic 

changes, and diversify the local and regional economy

Any investment must be part of an overarching, long-term 

comprehensive economic development strategy that enhances a 

region's success in achieving a rising standard of living by 

supporting existing industry clusters, developing emerging new 

clusters, or attracting new regional economic drivers.

Demonstrate a degree of commitment Projects should exhibit (1) high levels of local-government or 

nonprofit matching funds and private sector leverage; (2) clear and 

unified leadership and support by local elected officials; and (3) 

strong cooperation among the business sector, relevant regional 

partners, and local, state, and federal governments.
Page 24 GAO-06-7 EDA Brownfield Remediation

• help communities plan and implement economic adjustment strategies 

in response to sudden and severe economic dislocations;

• support technology-led economic development, and reflect the 

important role of linking universities and industry and technology 

transfers; and

• advance community and faith-based social entrepreneurship in 

redevelopment strategies for areas of chronic economic distress.

Given its funding resources, EDA invites successful project proposals to 

submit full applications. 

Insufficient Time Has 

Elapsed to Assess the 

Economic Development 

Impact of Brownfield 

Projects

We found that insufficient time had elapsed to assess the economic 

development impact of most of the grants that we reviewed, either because 

the projects had not been completed or had not been completed long 

enough to establish results. EDA has two primary measures of the 

economic development impact of construction-related projects—(1) the 

number of permanent jobs a project creates or retains and (2) the amount 

of private-sector investment that a grant generates. Because the typical 

project is completed 3 years after the grant is awarded, EDA monitors 

performance results at 3, 6, and 9 years after the award. Data for jobs 

created after 3 years were available during our review for 32 percent of the 

257 construction-related grants that EDA coded as brownfield sites, while 

data for jobs created after 6 years were available for 11 percent. Data on 

private-sector investment generated 3 years after grants were awarded 

were available for 25 percent and after 6 years for 9 percent of the grants. 

EDA officials stated that the most reliable data on economic development 

impact are those from 6- and 9-year evaluations.

EDA officials said that they relied to a certain extent on applicants’ 

estimates of job creation and private investment in determining whether to 

fund a brownfield project. To evaluate the initial estimates, we compared 

12 of the 140 grants that had both data on estimated job creation in the 

original application with data on job creation at the 6-year evaluation. 

Because of the limited data, we were not able to project our results to all 

construction-related projects coded as brownfields. For the 12 grants that 

had both types of information, we found that the reported jobs created or 

retained differed substantially from the initial project estimates for more 

than half of the grants (table 3). 
Page 25 GAO-06-7 EDA Brownfield Remediation

Table 3: Initial Estimates and 6-Year Data on Jobs Created and Retained

Source: GAO analysis of EDA data.

We also compared 6 of the 140 grants that had both estimates of private 

sector investment in the original applications with data on such investment 

at the 6-year evaluation. We found that the reported private sector 

investment 6 years after grant approval differed substantially from the 

initial investment estimates for most of the grants (table 4).

Table 4: Initial Project Estimates and 6-Year Data on Private Sector Investment

Source: GAO analysis of EDA data.

We did not try to determine whether a direct causal relationship existed 

between the grants EDA made to brownfield sites and the reported 

economic development. However, as we have noted in prior reports, we 

Project Initial project estimate Reported jobs after 6 years

1 150 7

2 800 24

3 620 478

4 725 35

5 115 163

6 1,500 60

7 72 1,234

8 400 180

9 100 49

10 100 290

11 23 77

12 100 290

Project Initial project estimate

Reported private sector

investment after 6 years

 1 $30,000,000 $30,000

 2 230,000 750,000

 3 1,526,439 932,685

 4 2,000,000 1,794,000

 5 1,600,000 5,577,264

 6 15,000,000 10,000,000
Page 26 GAO-06-7 EDA Brownfield Remediation

believe that attempting to quantify the gains from economic development 

programs is difficult. Determining that a causal relationship exists would 

require (1) documenting improvement in the targeted area, (2) linking 

specific elements in the program to the economic changes, and (3) 

measuring the growth stemming from other influences on the region’s 

economy in order to isolate the impact that could be attributed to EDA’s 

program.15

Economic Development 

Estimates Outlined in 

Project Proposals Were Not 

Always Appropriately 

Verified 

We found that in some cases project proposals that provided estimates of 

the potential jobs or investment did not appear to have been verified. Grant 

applicants are required to estimate both the number of permanent jobs 

their project will create or retain and the amount of private sector 

investment the proposed projects will generate, including jobs directly 

related to the project. Regional office staff are required to verify the 

estimates before the projects begin, but we found instances in which 

verification appeared to have been insufficient. For example:

• In 1999, EDA awarded a $1.39 million grant to the city of Laredo, Texas, 

for the construction of a bridge overpass and road to connect an 

existing industrial brownfield site to an interstate highway. The bridge 

overpass was designed to span existing railroad tracks in order to 

prevent collisions between trains and tractor-trailers traveling from the 

industrial site. EDA project summary documents indicated that the 

project would retain an estimated 1,500 jobs at the industrial site. 

However, the project file contained no documentation suggesting that 

the existing tenants would vacate the industrial site if the bridge 

overpass and road were not constructed.

• In 2002, EDA awarded a $3 million grant to the Research Corporation of 

the University of Hawaii to help the School of Medicine construct a 

biotechnology center for technology transfer at a brownfield site and to 

acquire equipment for the center. EDA project summary documents 

indicated that the center would generate an estimated 400 permanent 

jobs. However, this estimate included 300 students who were expected 

15GAO, Economic Development: Limited Information Exists on the Impact of Assistance 

Provided by Three Agencies, GAO/RCED 96-103, (Washington, D.C.: Apr. 3, 1996) and 

Economic Development: Observations Regarding the Economic Development 

Administration’s May 1998 Final Report on Its Public Works Program, GAO/RCED 99-

11R (Washington, D.C.: Mar. 23, 1999).
Page 27 GAO-06-7 EDA Brownfield Remediation

to graduate from the center within 5 years—indirect jobs that should not 

have been included in the permanent jobs estimate.

• In 1998, EDA awarded a $2.25 million grant to the Fitzsimons 

Redevelopment Authority in Denver, Colorado for the construction of 

50,000 square feet of interior space in a bioscience park center at a 

brownfield site—the second grant this project had received (the first 

was used to construct the building). EDA project summary documents 

indicated that an estimated 100 jobs would result from the project. 

However, the EDA project summary documents for the first grant also 

used the same permanent jobs estimate, so that the same jobs appear to 

have been counted twice.

Officials at some EDA regional offices said that they did not have the 

capacity or resources to verify the permanent jobs or private sector 

investment estimates submitted by grant applicants for proposed projects. 

Instead, they relied largely on their professional judgment and past 

knowledge and experience when reviewing permanent job and privatesector investment data for proposed projects. However, by not effectively 

substantiating the data applicants supply, EDA may not be funding those 

projects with the greatest potential economic development impact. 

Conclusions We found that, overall, EDA grants were being used for a variety of 

economic development activities that resulted in the reclaiming of former 

brownfield sites. Although we could not measure the precise economic 

impact of these projects, potentially, they serve a purpose that is difficult to 

quantify in reclaiming previously blighted land and structures and reducing 

the need to further develop rapidly disappearing “greenspace.” During our 

review, we found (1) best practices that could usefully be emulated and (2) 

a lack of appropriate verification procedures during the grant application 

process, as follows:

• Grant recipients and their contractors and subcontractors must comply 

with all applicable environmental laws as part of the standard 

conditions of EDA grant awards. We noted that REOs at three of EDA’s 

six regional offices routinely recommended adding special conditions to 

grants involving the remediation of hazardous substances that 

emphasized the need to comply with any environmental standards that 

the grant might not specifically identify in the standard terms and 

conditions of EDA grant awards. These special conditions help ensure 
Page 28 GAO-06-7 EDA Brownfield Remediation

that projects comply with all environmental standards, promote 

efficiency, and help limit any potential liability to the government. 

• Although EDA processing procedures require that regional office staff 

verify the estimated permanent jobs and private sector investment for 

proposed projects, we found instances in which these estimates 

appeared out of line but were not questioned by EDA staff. 

Substantiating these estimates would help EDA make more accurate 

funding decisions, based on more accurate job forecast and investment 

information, and would likely increase the chances of EDA funding 

projects with the greatest potential impact. 

Recommendations We recommend that the Secretary of Commerce direct EDA to take the 

following two actions: 

• implement a standard procedure that would require regional offices to 

add a special condition to grants for brownfield sites where remediation 

of hazardous substances is required stipulating that the grant recipient 

provide evidence that remediation has been conducted in accordance 

with all applicable federal, state, and local regulations—including those 

not mentioned in the standard EDA grant forms--and 

• ensure that regional staff verify estimated jobs and private-sector 

investment for proposed projects by following existing guidelines or 

creating new ones, as necessary.

Agency Comments and 

Our Evaluation

We provided the Department of Commerce with a draft of this report for 

review and comment. The Deputy Secretary provided written comments 

that are presented in appendix III. The letter stated that the report 

accurately reflects EDA’s role in supporting brownfield revitalization 

projects and that remediation activities are a small part of EDA’s activities. 

The letter also included technical comments, which have been 

incorporated in this report, where appropriate. Two of the technical 

comments dealt with our recommendations. 

We recommended that EDA require regional offices to add a special 

condition to grants for brownfield sites that grantees provide evidence that 

remediation has been conducted in accordance with all applicable federal, 

state, and local regulations. The Deputy Secretary noted that adding a 
Page 29 GAO-06-7 EDA Brownfield Remediation

special condition did not change a grantee’s and EDA’s overarching 

obligation to ensure that a project complies with all applicable laws and 

requirements. However, we found that three of EDA’s six regional offices 

were routinely using such special conditions as a best practice. Officials in 

the regions implementing the practice told us that the special conditions 

(1) provided more specific assurances that projects were complying with 

environmental standards, (2) helped protect the government from liability 

if individuals were injured, and (3) promoted efficiency by placing the onus 

on the grantee to meet additional requirements. Given these benefits, we 

believe it would be beneficial if all six EDA regional offices adopted the 

practice.

The Deputy Secretary also questioned our recommendation that regional 

staff increase efforts to verify estimated jobs and private sector investment 

for proposed projects, because our sample size of projects with 6-year data 

was too small. We agree that the data do not allow for projections to all 

construction-related projects coded as brownfields. However, our 

recommendation was based on the fact that EDA’s processing procedures 

required EDA regional staff to verify these estimates before construction 

began. We found examples of approved estimates that did not appear to be 

effectively substantiated by EDA staff. Verifying these estimates could help 

ensure that EDA funds those projects with the greatest potential impact. 

We will send copies of this report to the Secretary of Commerce, relevant 

congressional committees, and other interested parties and will make 

copies available to others upon request. In addition, the report will be 

available at no charge on the GAO Web site at http://www.gao.gov.

If you or your staff have any questions regarding this report, please contact 

me at (202) 512-4325 or shearw@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made key contributions to this report are 

listed in appendix IV.

William B. Shear

Director, Financial Markets and

Community Investment
Page 30 GAO-06-7 EDA Brownfield Remediation

Appendix I

Objectives, Scope, and Methodology AAppenednxidexiIs

To evaluate the grants made by EDA for the economic development of 

brownfield sites, we (1) determined the extent to which brownfield 

projects funded by EDA grants included remediation activities, the types of 

remediation activities conducted, and the amount of EDA grant funds used 

for those activities; (2) identified the environmental standards that applied 

to EDA projects, examined the role of federal, state, and local 

environmental agencies, and the amount of public participation in the 

projects; and (3) identified the economic development standards that 

applied, the economic development activities conducted, and the reported 

economic development impact for the projects.

To meet our objectives, we obtained data from EDA on all grants awarded 

from fiscal years 1998 through 2004 that were coded as brownfield sites. 

For each grant, we obtained the following information from the database 

that EDA uses to track its grants:

• grant recipient’s name,

• fiscal year the grant was awarded,

• project number,

• grant amount,

• funding source,

• investment type, 

• general project description,

• state investment amount,

• jobs created or retained 3 years after approval,

• jobs created or retained 6 years after approval,

• private investment generated 3 years after approval, and

• private investment generated 6 years after approval.

We selected a sample of 140 (54 percent) of the 257 construction-related 

grants EDA awarded that were coded as brownfield sites. As table 5 shows, 
Appendix I

Objectives, Scope, and Methodology

Page 31 GAO-06-7 EDA Brownfield Remediation

our sample consisted of the 32 grants EDA awarded in fiscal year 2002 

(regardless of grant amount), the 17 grants EDA awarded from fiscal years 

1998 through 2004 for amounts greater than or equal to $2.5 million 

(excluding 2002), and a random sample of 91 grants EDA awarded from 

fiscal years 1998 through 2004 for amounts less than $2.5 million (excluding 

2002). 

Table 5: GAO Sample of EDA Grants to Brownfield Sites

Source: GAO analysis of EDA data.

For each grant in our sample, we reviewed the project file maintained by 

EDA regional offices to determine (1) whether the project site was 

included under the CERCLA definition of a brownfield site at the time the 

grant was awarded,1

 (2) the specific remediation activities conducted at the 

project site and amount of EDA grant funds used for these activities,2

 (3) 

Public Works/other

nondefense economic

adjustment

Defense

adjustment Total Sample

Grants awarded in 2002 

(any amount) 32 0 32 32

Grants awarded from 

1998 to 2004 (excluding 

2002)

 Amount <$2.5 million 6 11 17 17

 Amount < $2.5 million 146 62 208 91

Total 184 73 257 140

1

CERCLA defines brownfield sites as areas where redevelopment or reuse may be 

complicated by real or perceived environmental contamination but generally excludes the 

following: (1) sites that are on EPA’s National Priorities List or subject to environmental 

enforcement actions; (2) sites under the jurisdiction, custody, or control of the federal 

government; (3) sites contaminated with polychlorinated biphenyls that are subject to 

remediation under TSCA; and (4) sites that have had cleanup activity funded by the Leaking 

Underground Storage Tank Trust Fund.

2

To determine the amount of EDA funding used for remediation activities for each grant, we 

multiplied the total cost of any remediation activities conducted by EDA’s share of the total 

project costs. For a small number of grants in our sample, the project file did not contain 

documentation that enabled us to determine actual remediation costs. For example, these 

costs were included on invoices submitted by contractors as part of budget line items, such 

as demolition or construction. For grants for which actual remediation costs were not 

available, we used estimates provided by EDA regional office staff. 
Appendix I

Objectives, Scope, and Methodology

Page 32 GAO-06-7 EDA Brownfield Remediation

the economic development activities conducted and proposed economic 

development impact of the projects, and (4) the amount of public 

participation in the projects. We reviewed the individual project files 

because EDA does not maintain specific information on funding of 

remediation activities at brownfield sites in its automated database. 

To ensure that the file reviews were performed uniformly, we used a Webbased, data-collection instrument to gather information about each 

project’s brownfield classification, economic development activities, 

project costs, and remediation activities. To determine the purposes and 

project goals of the grants, two GAO analysts each performed an 

independent content analysis of information contained in project files. In 

cases where their results differed, the analysts obtained additional 

information from the project and redid the analysis until both analysts 

reached a consensus on each of the project’s purposes and goals. Table 6 

shows the number of grants in our sample at EDA’s regional offices.

Table 6: Grants Reviewed at EDA Regional Offices

Source: GAO analysis.

We used the 140 construction-related grants in our sample to generate 

separate estimates about the entire population of EDA grants coded as 

brownfield sites and the subpopulation of EDA grants included under the 

CERCLA brownfield definition. Our confidence in the precision of the 

results from this sample is expressed in 95-percent confidence intervals, 

which are expected to include the actual results in 95 percent of samples of 

this type. We calculated confidence intervals based on methods that are 

appropriate for our sample. All percentage estimates have 95-percent 

confidence intervals of within plus or minus 8 percentage points of the 

estimated percentage. All numerical estimates other than percentages, 

such as dollar estimates or totals, have 95-percent confidence intervals of 

Regional office location Number of grants in sample

Atlanta 26

Austin 9

Chicago 21

Denver 16

Philadelphia 55

Seattle 13

Total 140
Appendix I

Objectives, Scope, and Methodology

Page 33 GAO-06-7 EDA Brownfield Remediation

within plus or minus 50 percent of the estimate itself. Table 7 summarizes 

the 95-percent confidence intervals for the numeric and percentage 

estimates presented in this report. 

Table 7: 95-Percent Confidence Intervals for Numeric and Percentage Estimates

Source: GAO analysis of EDA data.

Note: All dollar amounts are rounded to thousands.

To identify the environmental standards that applied to projects; the roles 

of federal, state, and local environmental agencies; and the amount of 

Estimate Lower bound Upper bound

Estimates for all Brownfield sites

Number of brownfield sites that included remediation 

activities 139 123 156

Percentage of brownfield sites that included remediation 

activities 54% 48% 61%

Number of brownfield sites where EDA contributed funding 

toward remediation activities 72 58 87

Percentage of brownfield sites where EDA contributed 

funding toward remediation activities 28% 22% 34%

Amount of EDA funds used for remediation activities $4,807,000 $3,622,000 $5,992,000

Defense Adjustment program funding 3,731,000 2,617,000 4,845,000

Public Works or nondefense related Economic Adjustment 

Programs 1,076,000 574,000 1,578,000

Percentage of EDA funds used for remediation activities 1.41% 1.06% 1.76%

Brownfield sites that met the Brownfield criteria defined in CERCLA

Number of brownfield sites that met the brownfield criteria 

defined in CERCLA 191 177 205

Percentage of brownfield sites that met the brownfield criteria 

defined in CERCLA 74% 69% 80%

Number of Brownfield sites that included remediation 

activities 100 84 116

Percentage of brownfield sites that included remediation 

activities 52% 45% 60%

Percentage of brownfield sites where EDA contributed 

funding toward remediation activities 28% 21% 35%

Amount of EDA funds used for remediation activities $3,336,000 $2,492,000 $4,181,000

Defense Adjustment program funding 2,305,000 1,598,000 3,012,000

Public Works or nondefense related Economic Adjustment 

Programs 1,031,000 530,000 1,533,000

Percentage of EDA funds used for remediation activities 1.48% 1.11% 1.84%
Appendix I

Objectives, Scope, and Methodology

Page 34 GAO-06-7 EDA Brownfield Remediation

public participation in the projects, we reviewed information on the 

environmental requirements for federal agencies, EDA policies and 

procedures for complying with these requirements, and the environmental 

requirements included in the standard terms and conditions of EDA grant 

awards. We also discussed the roles of federal, state, and local 

environmental agencies in projects with officials at EDA headquarters and 

regional offices. In addition, we reviewed EDA’s grant requirements related 

to public participation for proposed projects.

To identify the economic development standards applied to projects, we 

reviewed information on the economic development standards that EDA 

used to evaluate proposed projects. We also discussed the application of 

these standards with officials at EDA headquarters and regional offices. In 

addition, we reviewed prior GAO reports about the impact of the economic 

development assistance provided by EDA.3

Our analysis of EDA grants was limited to a sample of grants provided to 

brownfield sites. EDA’s grants to sites coded as brownfields represented 

only 13.6 percent of the total amount of funding that it awarded from fiscal 

years 1998 through 2004. Therefore, we could not evaluate the overall 

effectiveness of EDA’s grant programs or determine how EDA applies its 

criteria to the broader universe of grant applications. In addition, we did 

not analyze the preapplication process, which, includes an evaluation and 

recommendations by EDA’s regional investment review committees.

To report on the economic development impact related to EDA-funded 

brownfield projects, we relied on data contained in the project files for 

estimates of jobs created and private-sector investment. We also reviewed 

EDA’s database of information on the actual numbers of jobs created at 3 

and 6 years after the grants were funded and private-sector data. However, 

we did not verify the accuracy of the estimates or actual data reported.

In assessing the reliability of EDA’s data, EDA officials, who were 

knowledgeable about the Operations Planning and Control System (OPCS) 

database used to track its grants, provided information to us; including the 

OPCS user manual. To increase our confidence in the reliability of EDA’s 

grants data, we also compared the information that we obtained from 

EDA’s database with source documents in the project file for each of the 

3

GAO/RCED-96-103, GAO/RCED-99-11R.
Appendix I

Objectives, Scope, and Methodology

Page 35 GAO-06-7 EDA Brownfield Remediation

grants in our sample. We concluded that EDA’s data were sufficiently 

reliable for the purposes of our report.

We also interviewed officials from the Department of Housing and Urban 

Development and EPA and reviewed documentation about each 

organization’s brownfield program.

Our work was performed in Atlanta, Austin, Chicago, Denver, Philadelphia, 

San Antonio, Seattle, and Washington, D.C. We conducted our work 

between January 2005 and September 2005 in accordance with generally 

accepted government auditing standards.
Page 36 GAO-06-7 EDA Brownfield Remediation

Appendix II

Examples of EDA Grants to Brownfield 

Projects ApendxiI

Figure 5: EDA Grant to the City of Atlanta and Northyards Business Park, LLC

In 1999, EDA provided $1.2 

million to the city of Atlanta

and the Northyards Business

Park, LLC for infrastructure 

improvements to a business

park that was redeveloped on 

the west side of Atlanta's

downtown. These improvements

included the construction of a

roadway into the business park, 

demolition of structures located 

in the pathway of the roadway, 

landscaping improvements

along the roadway and entrance 

to the business park, and business park signage. EDA's grant covered about 64 percent of the cost of 

the infrastructure improvements, which were completed in 2002. 

The business park was one of the first heavy industrial sites in the city-used for steel manufacturing, 

railroad maintenance, and automotive repair; however, the general area had become blighted and 

contained a mixture of incompatible residential, commercial, and industrial uses. Because of the site's

industrial nature, hazardous substances were found on some areas of the business park, including 

lead and petroleum soil contaminates, underground storage tanks, and asbestos containing materials. The city of Atlanta received $1 

million from the Department of Housing and Urban Development Brownfield Economic Development Initiative/Section 108 Program to 

remediate hazardous substances from the business park. However, asbestos containing materials also were suspected in the 

structures located in the path of the roadway to be constructed as part of the EDA grant. As a result, EDA added a special condition 

to the grant, which stipulated that the recipient shall furnish evidence satisfactory to the government that all remediation of hazardous

materials within the rights-of-way of the EDA construction elements shall be conducted in accordance with federal and state 

regulations prior to the invitation for bids. An environmental remediation firm conducted the removal and disposal of these materials at 

a cost of $127,609. EDA's share of the remediation costs totaled $82,079 or about 7 percent of EDA's grant. The six structures within 

the redeveloped 260,000 square-foot business park are currently 71 percent leased. One of the largest tenants is a technical college 

that offers programs and career training for design, business, and information technology. According to EDA, $11.5 million of private 

sector dollars has been invested in the business park as a result of this project.

Sources: GAO (analysis); EDA (photos).
Appendix II

Examples of EDA Grants to Brownfield 

Projects

Page 37 GAO-06-7 EDA Brownfield Remediation

Figure 6: EDA Grant to Philadelphia Authority for Industrial Development

In 1999, EDA provided $5 million to 

the Philadelphia Authority for 

Industrial Development for 

infrastructure improvements to 

convert the former Philadelphia

Naval Base, including the naval 

station and shipyard, into the 

Philadelphia Naval Business Center 

(PNBC). The infrastructure 

improvements included the 

demolition of existing structures, 

repair and improvements to the 

main gate, and landscaping and 

other aesthetic improvements within the business center. EDA’s grant covered about 50 

percent of the cost of the infrastructure improvements, which were completed in 2004. 

This grant was one of three construction grants that EDA made under its Economic 

Adjustment Defense Conversion Program for the development of the PNBC. 

The naval station and shipyard closed in 1996, on the basis of a recommendation by the 

Base Closure and Realignment Commission (BRAC). As a result of the closure, the city 

of Philadelphia lost more than 6,000 civilian jobs. The total job loss was estimated at 

more than 18,000, including directly and indirectly associated activities, which translated 

into the annual loss of more than $180 million in direct income and $56 million in state 

and local government revenues. The city developed a comprehensive strategy to convert 

the former naval station and shipyard, which comprised more than 1,100 acres of land, 

to civilian use as part of a base reuse plan. The strategy called for the PNBC to be 

comprised of four sectors—the shipyard sector, targeted to ship building and repair 

businesses; the industrial park sector, targeted to medium- and small-sized manufacturers; the commerce center sector, targeted to 

research and development businesses, as well as light industrial and office businesses; and the distribution sector, targeted to 

inter-modal transfer terminal and warehousing facilities. The infrastructure improvements funded by this grant 

were located primarily in the commerce center sector of the PNBC.

The Department of the Navy performed extensive cleanup of hazardous contaminated areas at the project site. However, per DOD 

BRAC policy, buildings scheduled for demolition in the city’s base reuse plan did not require mitigation by the Navy. Remediation 

activities conducted as part of the infrastructure improvements included the removal and disposal of asbestos containing materials, 

lead-based paint, and polychlorinated biphenyl (PCB) material at a cost of $2.9 million. EDA’s share of the remediation costs totaled 

about $1.5 million or about 29 percent of EDA’s grant. According to EDA, an estimated 800 permanent jobs and $5 million of private 

sector investment are expected to be created at the PNBC as a result of this project.

Sources: GAO (analysis); EDA (photos).
Appendix II

Examples of EDA Grants to Brownfield 

Projects

Page 38 GAO-06-7 EDA Brownfield Remediation

Figure 7: EDA Grant to City of Chester, Chester, Pennsylvania

During the early 

part of the 20th 

century, the city of 

Chester, PA, 

located 15 miles

south of 

Philadelphia, was

recognized as

one of the 

nation's greatest 

shipbuilding areas. Chester's population peaked 

in the 1950's at 66,000, but it has since shrunk 

by over 44 percent, as closings in industries

along the waterfront led to declines in other 

sectors of the local economy. 

In 2003, EDA provided $2.5 million to the city for 

infrastructure improvements for redevelopment 

of a 90 acre brownfield site along the Delaware 

River. Known as the "Wharf at Rivertown," the redevelopment project will convert the former Chester Power Station into 400,000 

square feet of office space and develop the riverfront property, including a riverwalk, for recreational uses. Preferred Real Estate 

Investments (PREI), a private sector developer, committed over $40 million to renovate the former power station under the condition 

that the surrounding public infrastructure be redeveloped. EDA's grant will cover about 80 percent of the cost of the infrastructure 

improvements, including site clearance and preparation for the construction of a parking lot and the riverwalk. The city anticipates

that the riverwalk will be a focal point of its revitalization efforts. The city also received a $200,000 grant from the Commonwealth of 

Pennsylvania, a $1.4 million Brownfield Economic Development Initiative (BEDI) grant, and a $3 million Section 108 loan guarantee 

through the Department of Housing and Urban Development (HUD) to help cover the cost of revitalizing the area. 

PECO Energy Company stopped generating power at the Chester Station in 1982 and the riverfront site has been vacant ever since. 

In 1993, EPA required PECO, the former owner, to begin site remediation. Under agreements between the Exelon Corporation 

(formerly PECO Energy Company) and PREI, Exelon/PECO expended over $5.75 million in environmental assessment, investigation 

and site remediation, and has budgeted another $5 million to complete the environmental remediation and $6.7 million for additional 

asbestos abatement, if needed. EDA has not contributed any funding for remediation at this brownfield site. 

The applicant estimates that phase 1 of the "Wharf at Rivertown" will create 1,000 new jobs, and provide private-sector investments

in the amount of $40 million. However, the U.S. Department of Commerce projects that the site could create between 2,000 to 4,000 

new jobs, producing $95 million in wages. Three tenants have already signed leases to occupy over 210,000 square feet of space in 

the converted power station. Completion of the project is currently planned for March 2006.

Sources: GAO (analysis); EDA (photos).
Appendix II

Examples of EDA Grants to Brownfield 

Projects

Page 39 GAO-06-7 EDA Brownfield Remediation

Figure 8: EDA Grants to Greater Kelly Development Corporation, San Antonio, Texas

In 1998, EDA administered two Defense Economic Conversion Assistance grants that were awarded to the Greater Kelly Development 

Corporation, a local redevelopment authority that oversees the conversion of Kelly Air Force Base. The base was officially closed by the Air 

Force in July 2001, and the Greater Kelly Development Corporation has been transforming the base into KellyUSA, a multiuse airport and 

rail-serviced business park. In the first award EDA contributed $1 million to a $5.65 million dollar project to build a new administration building 

at the complex entrance equipped with telecommunications infrastructure to attract a major telecommunications company and other local 

companies to help replace jobs lost due to the base closing. The second award was a direct grant of $2 million to help pay for concrete 

paving and replacement on the ramp (tarmac) where major aviation repair contractors, including Boeing and Lockheed, had leased space to 

perform aircraft maintenance. The Greater Kelly Development Corporation contributed an additional $700,000 to the second grant. 

KellyUSA is located approximately 5 miles southwest of downtown San Antonio, the eighth largest city in the country. When Kelly AFB was

selected to close by the BRAC in 1995, 19,500 jobs were at risk. The application for the administration building grant stated that the project 

would replace 500 of the jobs that were lost due to the base closing, primarily made up of telecommunications jobs requiring bilingual 

employees earning an average salary of just under $23,000. The application for the ramp repair contract stated that the grant would help 

retain the 850 employees of the major aviation repair contractors that were considering moving to Georgia if the repairs necessary for base 

reuse and development, including the ramp/tarmac repairs, were not made. 

The major environmental concern on the former air force base is a contaminated groundwater plume, primarily made up of residues

from the chemicals that were used to clean the engines parts over the prior decades at Kelly Air Force Base. However, the plume does not 

extend below either the area where the administration building was constructed or where the ramp repairs were made. Both projects had 

issues with contaminated soil, but the Air Force’s environmental solution of natural attenuation, i.e., leaving it in place, was accepted by the 

state environmental agency for both projects. The project files showed that in the event contractors found environmentally suspect soil not 

previously sampled that required remediation, the soil would be moved off-site by the Air Force and replaced with clean fill. Neither EDA grant 

paid for any remediation expenses. 

Since the EDA grants were made, most of the land not affected by the groundwater plume, including the Administration Building property and 

the airstrip ramp, have been turned over to the Greater Kelly Development Corporation. KellyUSA reports that as of September 2004, 63

tenants had leased 8.2 million square feet of space, 5,140 jobs with salaries averaging over $38,000 per year had been created, and 7,221 

Air Force jobs were retained. 

Source: GAO.
Appendix II

Examples of EDA Grants to Brownfield 

Projects

Page 40 GAO-06-7 EDA Brownfield Remediation

Figure 9: EDA Grant to FAME Assistance Corporation, Los Angeles, California

In 1998, EDA provided a $1.8 million grant to the FAME Assistance Corporation (FAC), a nonprofit 

corporation affiliated with the Los Angeles's oldest Black church, to renovate a four-story building 

as a business incubator. The building, an 80-year old brick structure once owned by Pacific Bell, 

contained asbestos, lead-based paint, and underground fuel storage tanks that needed to be 

remediated. EDA's grant covered $120,000 of the asbestos and lead paint remediation. 

Remediation of the underground storage tanks was done prior to EDA's grant, according to a plan 

approved by the Los Angeles Fire Department. State and local statutes comparable to federal regulations governed the remediation 

processes for the asbestos and lead-based paint. 

The completed incubator, which is based on a business model developed by the Enterprise Center in Philadelphia, is intended to 

serve inner-city minority entrepreneurs who lack access to capital and have a demonstrated pattern of unmet need for loans and 

equity investments. FAC launched the incubator along with business training and technical assistance programs in the spring of 2002. 

Since then, the completed incubator has been supporting start-up businesses in the entertainment industry, including film, video, and 

animation production companies. The start-ups are expected to create an estimated 220 jobs that will give the unemployed and 

underemployed opportunities in an area that had lost many defense jobs. FAC has received funds and technical expertise from the 

Walt Disney Company and the ARCO Foundation and has started a venture capital fund that will invest up to $1 million in the 

incubator's start-ups. 

Sources: GAO (analysis); FAME Assistance Corporation (photos).
Page 41 GAO-06-7 EDA Brownfield Remediation

Appendix III

Comments from Department of Commerce ApendxiI
Appendix III

Comments from Department of Commerce

Page 42 GAO-06-7 EDA Brownfield Remediation
Appendix III

Comments from Department of Commerce

Page 43 GAO-06-7 EDA Brownfield Remediation
Appendix III

Comments from Department of Commerce

Page 44 GAO-06-7 EDA Brownfield Remediation
Page 45 GAO-06-7 EDA Brownfield Remediation

Appendix IV

GAO Contacts and Staff Acknowledgments ApendxiIV

GAO Contacts William B. Shear, (202) 512-4325, shearw@gao.gov

Staff 

Acknowledgments

In addition to those named above, Andy Finkel, Assistant Director; 

Marshall Hamlett, Analyst in Charge; Carolyn Boyce; Mark Braza; Tania 

Calhoun; Emily Chalmers; Marc Molino; Roberto Piñero; George Quinn; 

Mark Ramage; and Rhonda Rose made key contributions to this report.

(250231)
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