Advanced Environmental Interface

What's a brownfield?

A site, or portion thereof, that has actual or perceived contamination, but also has a good potential for redevelopment or reuse. Many areas across the country that were once used for industrial and commercial purposes have been abandoned -- some are contaminated. Because lenders, investors, and developers fear that involvement with these sites may make them liable for cleaning up contamination, they are naturally more attracted to developing sites without such problems.

Is it risky to get involved with a brownfield site?

Maybe. The main risk we've seen is underestimating the cleanup cost and overestimating the value of the property once cleaned up. The things that reduce risk are:

Objectivity in examining the site's problems.
Thoughtful analysis of expected value (both on the cost side and income side).
Good location.
Creative financing and education of lenders.
Taking advantage of federal or state grants or tax abatements.

Tax incentives, grants?

Sure, this is a federal and state government priority. A number of them exist:

Federal Brownfields Economic Redevelopment Initiative (BEDI) funds can support a wide variety of brownfields activities. For example, a local government may use BEDI fund to address site remediation costs, or use a combination of Section 108 and BEDI funds to acquire a brownfield property and convey the site to a private sector party at a discount from its purchase price.
Federal EPA has a Brownfields Cleanup Revolving Loan Fund (BCRLF) Demonstration Pilot program to capitalize revolving loan funds to safely clean up brownfields so as to facilitate their sustainable reuse. EPA provides financial assistance to an eligible entity (e.g., a municipality) to establish its own revolving loan fund to make loans for these purposes. A revolving loan fund charges interest at a low rate, and uses loan repayments to make new loans for the same purpose. EPA awarded 23 BCRLF Pilots in fiscal year 1997. Each BCRLF Pilot was funded at $350,000. EPA expects to award up to 60 BCRLF Pilot grants in fiscal year 1999 at up to $500,000 each.
The federal Brownfields Tax Incentive (part of PL 10534 in 1997) included a tax incentive to spur the cleanup and redevelopment of brownfields in distressed urban and rural areas. Under the tax incentive, environmental cleanup costs for properties in targeted areas are fully deductible in the year in which they are incurred, rather than having to be capitalized. The tax incentive is applicable to properties that meet specified land use, geographic, and contamination requirements. Sites on EPA's National Priorities List (NPL) are excluded.
The Connecticut DEP has had an Urban Sites Remedial Action Program since 1993. It provides for expedited remediation of polluted property and enables the private sector to invest in property development with lessened concern for past environmental contamination. It applies bond funds (currently $30.5 million) to address the environmental issues at underutilized or abandoned urban industrial facilities. Eligible sites must be located in either a distressed community or a target investment community and the site must have a high economic development potential as determined by DECD.
The Connecticut DECD and DEP jointly administer the new Special Contaminated Properties Remediation and Insurance Fund (SCPRIF). This program was created as a vehicle to redevelop commercial and industrial property that is underutilized due to possible site contamination by providing assistance to quantify remediation.

Where can I find more information on brownfields?

Extensive and detailed information on brownfields is available on the web:

Federal EPA information and programs.
Region 1 EPA information and programs.
Federal HUD information and programs.
Connecticut DECD Special Contaminated Properties Program.
Connecticut DEP Urban Sites Remedial Action Program.
Links to other brownfield websites.

Hot Topic Archive