Brownfields Financing Basics Opportunities for San Diego Presentation by: Charles Bartsch The Northeast-Midwest Institute January 26, D Street SE Washington, DC ph fax

Brownfields Definition What are Brownfields? EPA defines brownfields as abandoned, idled, or under-used facilities where expansion or redevelopment is complicated by REAL or PERCEIVED contamination. A “brownfield site” typically has active potential for redevelopment or reuse…residential and recreational uses as well as commercial or industrial facilities.

Summary of Key Provisions as Passed by Congress Title II – Brownfield Revitalization and Environmental Restoration Subtitle A – Funding y$200 million per year (thru ‘06) for grants to states, tribes, local governments, and non-profit/quasi public redevelopment agencies and authorities yfor site assessment and cleanup grants (direct remediation grants to governments or non-profits as well as capital for RLFs) y$50 million (or 25% of appropriation) may be used for sites with petroleum contamination insurance premiums permitted as eligible use of funds authorizes EPA brownfield program that includes training, research, and technical assistance activities Subtitle B – Liability Clarification Provides Superfund liability relief to: ycontiguous property owners yprospective purchasers yinnocent landowners Subtitle C – State Response Programs Authorizes $50 million per year (thru ‘06) for grants to states and tribes: yto establish and enhance state VCPs/response programs ystates must maintain a “public record of sites” addressed yfinality – for sites addressed thru state programs, except.… yre-openers – EPA ability to come back is preserved in specifically defined situations yEPA must consult with the state on re-opener situations ycitizens may request a state to conduct an assessment at a specific site, and a state must “appropriately” respond

Lender Concerns The Need for Local Financing Initiatives Why Do Bankers Act the Way They Do When You Say Brownfields? òMarket policy-making structure òSphere of activity or market niche òLevel of sophistication and knowledge òPast experience ò“Trigger” issues òComfort level with new remediation technologies

Federal Financing Programs Loans òEDA’s Title IX (capital for local revolving loan funds) òHUD funds for locally determined CDBG loans and “floats” òEPA capitalized brownfield revolving loan funds òSBA’s microloans òSBA’s Section 504 development company debentures òEPA capitalized clean water revolving loan funds (priorities set/ programs run by each state) òHUD’s Section 108 loan guarantees òSBA’s Section 7(a) and Low-Doc programs Grants òHUD’s Brownfield Economic Development Initiative (BEDI) òHUD’s Community Development Block Grants (for projects locally determined) òEPA assessment pilot grants òEDA Title I (public works) and Title IX (economic adjustment) Grants (continued) DOT (various system construction and rehabilitation programs) DOT’s transportation and community system preservation (TCSP) pilot grants Army Corps of Engineers (cost-shared services ) Equity capital SBA’s Small Business Investment Companies Tax incentives and tax-exempt financing Targeted expensing of cleanup costs (through 12/31/03) Historic rehabilitation tax credits Low-income housing tax credits Industrial development bonds Tax-advantaged zones HUD/USDA Empowerment Zones (various incentives) HUD/USDA Enterprise Communities (various incentives) Federal Financial Assistance Programs Applicable to Brownfield Redevelopment Activities

An Overview of Key Features and Characteristics 47 programs in place today y10 programs changed significantly in 2000 and 2001 y23 programs less than 6 years old ySeek to provide predictability and finality to the brownfield process Eligibility yTypically, open to any contaminated site yMost permit allow petroleum, asbestos, or PCB-contaminated sites in yMost do not let PRPs volunteer Oversight yOlder programs -- sign-off on remediation plans, review of cleanup activities yRecent approaches -- state oversight varies by level of cleanup required, type of site (I.e., or orphan or prospective purchaser), “privatized” programs Financial assistance/incentives y13 states offer direct grants or loans y22 states provide tax credits or abatements y19 states offer targeted financial assistance or tax incentives State Voluntary Cleanup Programs

Project Examples zThe Albina Corner is located on a three-quarter-acre site adjacent to a bus line and near a major light rail station. The area is a main street to several inner-city neighborhoods, where for several years small scale contaminants have deterred reuse. zToday, the Albina Corner is being redeveloped into a mixed-use area that includes 48 units of low-income housing built over 12,000 square feet of commercial space. Some of the features include a child care center and a second floor courtyard and play lot. Albina Corner -- Portland, Oregon

Project Examples zChicago is making a major commitment to revitalizing the Kinzie Corridor, a west side area that was once a declining industrial hub. zChicago’s strategy includes acquiring former manufacturing parcels and assembling a 70 acre trac that could be used to meet modern manufacturing needs. Kinzie Industrial Corridor -- Chicago, Illinois

Project Examples Buffalo, NY -- LTV Steel Plant Site zA site that once produced millions of tons of steel will soon be producing millions of pounds of tomatoes thanks to a public / private partnership to redevelop the south side of the city. zThis was accomplished through a cooperative effort on the part of LTV, the former owners of the steel plant, and state and federal agencies including the EPA and NYSDEC. A specific voluntary cleanup plan for the site was worked out. Cleanup tasks were completed in about three months. Since the site is within a New York State Economic Development Zone and a Federal Enterprise Zone, tax incentives were able to be applied to help the economic viability of the project.

Web Site zFederal Legislative Proposals to Promote Brownfield Cleanup and Redevelopment - what’s happening in Congress zState of the States - profiles of state VCPs, including new information on financing incentives, economic benefits, eligible contaminants, cleanup standards, and institutional controls zGuide to Federal Brownfield Programs - detailed information on programs throughout the federal government that can promote and support brownfield cleanup and redevelopment zFinancing options for brownfield cleanup and redevelopment zContacts in state and federal brownfield programs zLink to EPA brownfield home page zLinks to brownfield databases and organizations