1. The Michigan Advantage Michigan’s Extraordinary Brownfield Laws, Programs, and Partnerships National Brownfield Conference May 5, 2008

2. The Michigan Advantage Liability relief for new purchasers of contaminated properties- Liability relief for new purchasers of contaminated properties- Causation Based Liability, Land Use Baseline Environmental Assessments and Due Care Obligations Financial incentives- Financial incentives- Brownfield Redevelopment Financing Act, State Funded Cleanups, Refined Petroleum Fund, Grants and Loans Cleanup and Redevelopment Assistance Cleanup and Redevelopment Assistance

3. Baseline Environmental Assessments What is a BEA? What is a BEA? Who has to complete a BEA? Who has to complete a BEA? How long to How long to conduct the BEA? conduct the BEA? Categories of Categories of BEAs BEAs What are Due Care obligations? What are Due Care obligations?

4. Baseline Environmental Assessments Since 1995 – 11,411 BEAs Conducted at over 8000 individual properties Since 1995 – 11,411 BEAs Conducted at over 8000 individual properties

5. Michigan Brownfield Program Environmental Funding Sources Federal Superfund Program Federal Superfund Program EPA Grants/Loans to Communities EPA Grants/Loans to Communities Brownfield Redevelopment Assessments Brownfield Redevelopment Assessments Leaking Underground Storage Tank Program Leaking Underground Storage Tank Program Michigan Contaminated Site Cleanup Program Michigan Contaminated Site Cleanup Program State-Owned Sites Cleanup Program State-Owned Sites Cleanup Program Michigan Brownfield Redevelopment Grants and Loans Michigan Brownfield Redevelopment Grants and Loans Tax Increment Financing Tax Increment Financing Local Revolving Loan Funds Local Revolving Loan Funds

7. DEQ Brownfield Redevelopment Assessments Free 148 completed since 1995 148 completed since 1995 80 communities 80 communities

10. Brownfield Grant and Loan Program 1988 Environmental Protection Bond $10 Million Site Assessment $ 35 Million Site Reclamation 1996 Revitalization Revolving Loan Program 1998 Clean Michigan Initiative $ 37.5 Million Brownfield Redevelopment Grants $ 37.5 Million Brownfield Redevelopment Loans $50 Million Waterfront Redevelopment Grants

11. Grand Rapids $500,000 Area-Wide SAF Canal Street Park BeforeAfter Site Assessment Area-Wide Grants

12. Grand Rapids $500,000 Area-Wide SAF Brass Works BeforeAfter Site Assessment Area-Wide Grants

13. Grand Rapids $500,000 Area-Wide SAF Cutie Pie’s Party Store Site Assessment Area-Wide Grants

14. _ Project Totals County# $ Awarded Alger1 $75,000 Alpena4 $449,500 Barry1 $213,000 Bay10 $2,949,773 Benzie1 $985,387 Berrien7 $6,533,146 Branch1 $1,000,000 Calhoun4 $1,061,500 Cheybogan1 $23,500 Chippewa1 $180,000 Crawford1 $280,000 Delta3 $870,000 Dickinson4 $404,980 Emmet1 $900,000 Genesee7 $1,904,435 Gogebic1 $183,000 Grand Traverse7 $6,722,978 Gratiot1 $154,000 Houghton6 $607,600 Ingham6 $4,113,713 Ionia1 $100,000 Isabella 2 $369,690 Jackson5 $1,172,000 Kalamazoo6 $1,678,805 Kent9 $7,489,300 Lenawee1 $100,000 Livingston1 $585,000 _ Project Totals County# $ Awarded Mackinac3 $101,600 Macomb1 $1,400,000 Marquette5 $1,266,260 Mason3 $1,235,700 Menominee2 $323,000 Monroe4 $4,890,000 Montcalm1 $50,000 Montmorency1 $390,000 Muskegon13 $7,423,051 Oakland10 $2,278,100 Ogemaw1 $60,000 Ontonagan2 $751,000 Oscoda1 $100,000 Ottawa3 $2,620,000 Presque Isle2 $278,230 Saginaw19 $1,724,833 Saint Clair3 $582,000 Saint Joseph2 $865,700 Sanilac1 $138,000 Schoolcraft2 $700,000 Shiawasee5 $1,931,000 Tuscola1 $50,000 Van Buren3 $2,428,500 Washtenaw6 $2,228,410 Wayne32 $17,707,285 Wexford2 $836,733 TOTAL 223 $94,132,109 Michigan Department of Environmental Quality Brownfield Redevelopment Grant and Loan Awards by County Facilitating an estimated $3.1 billion in private investment Helping create an estimated 18,000 jobs

15. TIF and the Brownfield Redevelopment Financing Act The BRFA provides a method of financing infrastructure and environmental response activities necessary to redevelop contaminated property through the use of tax increment financing The BRFA provides a method of financing infrastructure and environmental response activities necessary to redevelop contaminated property through the use of tax increment financing Provides for the creation of a brownfield redevelopment authority (BRA) Provides for the creation of a brownfield redevelopment authority (BRA) In place since 1996, amended three times In place since 1996, amended three times

16. Brownfield Plan Describes “eligible activities” on eligible properties (contaminated, blighted, functionally obsolete, Land Bank) Describes “eligible activities” on eligible properties (contaminated, blighted, functionally obsolete, Land Bank) Contains estimate of chosen tax capture options and impact on taxing jurisdictions for each project Contains estimate of chosen tax capture options and impact on taxing jurisdictions for each project Able to be amended, usually on a per site basis Able to be amended, usually on a per site basis Must be approved by local governing body Must be approved by local governing body

17. Brownfield Work Plans Brownfield Authority must approve the individual site specific work plans Brownfield Authority must approve the individual site specific work plans DEQ approval of due care activities and additional response activities if school tax capture is being utilized DEQ approval of due care activities and additional response activities if school tax capture is being utilized Can be combined work plans including non- environmental costs Can be combined work plans including non- environmental costs

18. Brownfield Authorities Today 270 Brownfield Redevelopment Financing Authorities Statewide 270 Brownfield Redevelopment Financing Authorities Statewide 57 Township authorities 162 City/Village authorities 51 County authorities authorities

19. DEQ Approved TIF Projects Estimates provided by developers and local units of government regarding private investment for Act 381 Work Plans- $2.6 billion. Estimates provided by developers and local units of government regarding private investment for Act 381 Work Plans- $2.6 billion. Acres redeveloped- 3,400. Acres redeveloped- 3,400. Temporary and Permanent Jobs created- 15,645 Temporary and Permanent Jobs created- 15,645 The DEQ has approved 290 of 369 brownfield work plans from 77 different BRAs The DEQ has approved 290 of 369 brownfield work plans from 77 different BRAs Activity costs = $138,225,000+ Activity costs = $138,225,000+ School tax capture - $219,765,612 (local- $159,151,726, state-$60,613,886) School tax capture - $219,765,612 (local- $159,151,726, state-$60,613,886)

20. Michigan Economic Development Corporation The Michigan Economic Development Corporation (MEDC) is the State of Michigan's one-stop resource for businesses seeking to grow in Michigan. The Michigan Economic Development Corporation (MEDC) is the State of Michigan's one-stop resource for businesses seeking to grow in Michigan. The MEDC has a private sector board of directors comprised of business people, local economic developers and educators, so that our policies and procedures meet the needs of the private sector. The MEDC has a private sector board of directors comprised of business people, local economic developers and educators, so that our policies and procedures meet the needs of the private sector.board of directorsboard of directors

21. Michigan State Housing Development Authority MSHDA is a quasi-state agency that provides financial and technical assistance through public and private partnerships to create and preserve safe and decent affordable housing, engage in community economic development activities, and address homeless issues. MSHDA’s loans and operating expenses are financed through the sale of tax-exempt and taxable bonds and notes to private investors, not from state tax revenues. MSHDA is a quasi-state agency that provides financial and technical assistance through public and private partnerships to create and preserve safe and decent affordable housing, engage in community economic development activities, and address homeless issues. MSHDA’s loans and operating expenses are financed through the sale of tax-exempt and taxable bonds and notes to private investors, not from state tax revenues.

22. Brownfield Redevelopment MEDC, in partnership with MSHDA, is responsible for the administration of the non-environmental Brownfield Redevelopment Program in Michigan. MEDC, in partnership with MSHDA, is responsible for the administration of the non-environmental Brownfield Redevelopment Program in Michigan. Non-environmental Brownfield Tax Increment Financing Program Non-environmental Brownfield Tax Increment Financing Program Michigan Business Tax Credits available for redevelopment of Brownfield properties Michigan Business Tax Credits available for redevelopment of Brownfield properties

23. Brownfield Redevelopment What is a Brownfield Property in Michigan? What is a Brownfield Property in Michigan? Facility (Contaminated) Facility (Contaminated) Functionally Obsolete Functionally Obsolete Blighted Blighted Property does not have to be contaminated to be eligible for Brownfield incentives in Michigan. Property does not have to be contaminated to be eligible for Brownfield incentives in Michigan.

24. Brownfield Redevelopment Tax Increment Financing (MEGA) Tax Increment Financing (MEGA) MEGA Board Approval MEGA Board Approval Non-Environmental Activities Non-Environmental Activities Demolition Demolition Lead and Asbestos Abatement Lead and Asbestos Abatement Public Infrastructure (Core Communities) Public Infrastructure (Core Communities) Site Preparation (Core Communities) Site Preparation (Core Communities)

25. Brownfield Redevelopment

26. MEDC and Brownfield Redevelopment Brownfield Michigan Business Tax Incentives Brownfield Michigan Business Tax Incentives Developers or Companies eligible for refundable tax credits up to 12.5% for investment made for the redevelopment of Brownfield properties Developers or Companies eligible for refundable tax credits up to 12.5% for investment made for the redevelopment of Brownfield properties Downtown Urban Redevelopment Projects in certain communities are eligible for refundable tax credits up to 20% of the investment Downtown Urban Redevelopment Projects in certain communities are eligible for refundable tax credits up to 20% of the investment

27. Brownfield Redevelopment Urban Development Area Projects include Downtowns or Traditional Commerce Centers of Qualified Local Units of Government and County Seats Urban Development Area Projects include Downtowns or Traditional Commerce Centers of Qualified Local Units of Government and County Seats Urban Development Area Project Criteria: Urban Development Area Project Criteria:  Increases Density  Promotes Mixed-Use Development  Promotes Sustainable Development (Green Projects)  Addresses Area Wide Redevelopment  Addresses Underserved Markets of Commerce

28. Brownfield Redevelopment Year Number of Projects Total Eligible Investment Total Credit Approved 200020$876,119,880$72,491,280 200146$1,428,763,331$71,536,658 200270$640,135,657$58,800,954 200380$717,259,586$60,252,381 200480$1,171,039,054$102,153,516 200568$1,091,695,389$79,845,509 200674$1,469,494,742$129,830,599 200750$1,500,521,258$80,920,466 200811$136,769,472$13,676,897 Totals499$9,031,798,369$669,508,260

29. Other Economic Development Tools Community Development Block Grants (Grant/Financing) Community Development Block Grants (Grant/Financing) Downtown Development Authorities (TIF) Downtown Development Authorities (TIF) Obsolete Property Tax Abatements Obsolete Property Tax Abatements Neighborhood Enterprise Zones (Tax Abatement) Neighborhood Enterprise Zones (Tax Abatement) Renaissance Zones (Tax Abatement) Renaissance Zones (Tax Abatement) State and Federal Historic Tax Credits (Financing) State and Federal Historic Tax Credits (Financing) Low Income Housing Tax Credits (Financing) Low Income Housing Tax Credits (Financing)

30. Other Economic Development Tools Private Activity Bonds (Financing) Private Activity Bonds (Financing) MSHDA Taxable and Non-Taxable Lending (Financing) MSHDA Taxable and Non-Taxable Lending (Financing) MDOT-Transportation Economic Development Fund (Grant) MDOT-Transportation Economic Development Fund (Grant) SmartZones (TIF) SmartZones (TIF) Property Tax Abatements Property Tax Abatements Jobs Creation Tax Credits (MEGA) (Tax Abatement) Jobs Creation Tax Credits (MEGA) (Tax Abatement) 21 st Century Jobs Funding (Financing) 21 st Century Jobs Funding (Financing) Commercial Rehabilitation Act (Tax Abatement) Commercial Rehabilitation Act (Tax Abatement) Urban Land Assembly (Financing) Urban Land Assembly (Financing)

31. Tax Increment Financing Tools Brownfield and DDAs

32. Tax Increment Financing Tools Downtown Development Authorities (DDAs) Downtown Development Authorities (DDAs) Brownfield Redevelopment Authorities (BRAs) Brownfield Redevelopment Authorities (BRAs)

33. DDAs Can capture local tax increment in approved downtown areas for public improvements Can capture local tax increment in approved downtown areas for public improvements Captures: Captures: Local unit of government millage Local unit of government millage Other local taxing jurisdictions Other local taxing jurisdictions County County Library Library Airport Airport Mass Transit Mass Transit Recreation Recreation

34. BRAs Can capture local and state tax increment on approved parcels for remediation and other improvements Can capture local and state tax increment on approved parcels for remediation and other improvements Core versus Non-core Core versus Non-core Captures: Captures: Non-Homestead Non-Homestead State Education Tax State Education Tax Intermediate School Districts Intermediate School Districts Local unit of government millage Local unit of government millage Other local taxing jurisdictions Other local taxing jurisdictions County County Library Library Airport Airport Mass Transit Mass Transit Recreation Recreation

35. DDA and BRA TIF Uses DDA can be used for: DDA can be used for: Streetscape Streetscape Road Improvements Road Improvements Water & Sewer Projects Water & Sewer Projects Public Plazas Public Plazas Street Lighting Street Lighting Street Furniture Street Furniture Public Parks Public Parks Parking Facilities Parking Facilities Recreation Facilities Recreation Facilities Marketing Marketing Wi-Fi Wi-Fi BRA can be used for: BRA can be used for: Streetscape* Road Improvements* Water & Sewer* Street Lighting* Parking Facilities* Recreation Facilities* * Directly related to project

36. How they work together Two Ways Two Ways DDA carves out parcel DDA carves out parcel Brownfield overlay that captures state mills only Brownfield overlay that captures state mills only DDA must contribute to the project DDA must contribute to the project DDA BF

37. Tax Credit Layers

38. Brownfield- 10-20% MBT Brownfield- 10-20% MBT Federal Historic- 20% Federal Historic- 20% State Historic- 25% or 5% if Federal awarded State Historic- 25% or 5% if Federal awarded LIHTC- 4% or 9% for ten years LIHTC- 4% or 9% for ten years NMTC- 39% over seven years NMTC- 39% over seven years

39. Traverse Commons- Traverse City Former Psychiatric hospital Former Psychiatric hospital 120 Years Old 120 Years Old 400,000 Sq Ft 400,000 Sq Ft $100M Build out $100M Build out 500+ New Jobs 500+ New Jobs Mixed-use Mixed-use Residential-135,000 Sq Ft Residential-135,000 Sq Ft Commercial/Office- 26,000 Sq Ft Commercial/Office- 26,000 Sq Ft Mercado- 80,000 Sq Ft Mercado- 80,000 Sq Ft Multi-Project Project Multi-Project Project 14 year build out 14 year build out 3 Phase Main Building 3 Phase Main Building Multiple “out buildings” Multiple “out buildings”

40. Traverse Commons- Traverse City Utilized: Utilized: Brownfield TIF Brownfield TIF SBT Credit SBT Credit Renaissance Zone Renaissance Zone Historic Tax Credit Historic Tax Credit DEQ Grant DEQ Grant State Funded Cleanup State Funded Cleanup

47. Grand Landing- Grand Haven $55M Private Investment $55M Private Investment 600 New Jobs 600 New Jobs 21 acres 21 acres Hotel/condos Hotel/condos Restaurant/Retail/Office/Parking Restaurant/Retail/Office/Parking 270,000 sq ft residential/175 units 270,000 sq ft residential/175 units Various nasty uses Various nasty uses Wastewater Treatment Plant, tannery, manufacturing, petroleum storage Wastewater Treatment Plant, tannery, manufacturing, petroleum storage Waterfront Waterfront

48. Grand Landing- Grand Haven Utilized: Utilized: Brownfield TIF (MEGA and DEQ) Brownfield TIF (MEGA and DEQ) State Funded Cleanup Grant State Funded Cleanup Grant Waterfront Grant Waterfront Grant DEQ Brownfield Grant/Loan DEQ Brownfield Grant/Loan Local Incentives Local Incentives

49. Grand Landing

50. Grand Landing, Grand Haven Michigan

52. Grand Landing

53. Martineau Project

54. “The Steve Martineau Project” (Based on the Martineau Project in Grand Rapids) $20M Project $20M Project Live/work spaces for artists Live/work spaces for artists 15,000 sq. ft. of Studio/Gallery space 15,000 sq. ft. of Studio/Gallery space 5,000 square feet for Café/Gallery 5,000 square feet for Café/Gallery

55. Tax Credit Equity New Markets Tax Credit Equity $2,280,000 Federal Historic Tax Credit Equity 1,366,000 Michigan Historic Tax Credit Equity 209,000 Michigan Brownfield Credit Equity 880,000 (new 20% credit) Total Tax Credit Equity $4,735,000 Total Tax Credit Equity $4,735,000

56. Other Financing Commercial Loan $2,000,000 HOME Funds - City of Grand Falls400,000 HOME Funds – MSHDA600,000 MSHDA Façade Grant90,000 Private Contribution1,000,000 City of Grand Falls - Brownfield TIF450,000 City of Grand Falls – Corridor Improvement Authority TIF- 250,000 Internally Generated Funding 1,575,000 Total Other Funding $6,365,000

57. DEQ’s Redevelopment Assistance Contact Ron Smedley (517) 373-4805 Contact Ron Smedley (517) 373-4805 Brownfield Plans/Work Plans- Darlene Van Dale (989) 705-3453 Brownfield Plans/Work Plans- Darlene Van Dale (989) 705-3453 Grants and Loans- Sue Erickson (517) 241-8707 Grants and Loans- Sue Erickson (517) 241-8707 Website- www.michigan.gov/deqrrd Website- www.michigan.gov/deqrrdwww.michigan.gov/deqrrd Or www.michigan.gov/deq then click on Land then Land Redevelopment Or www.michigan.gov/deq then click on Land then Land Redevelopmentwww.michigan.gov/deq

58. Non-Environmental MEDC- Peter Anastor (517) 373-9014 MEDC- Peter Anastor (517) 373-9014 www.michiganadvantage.org www.michiganadvantage.org MSHDA- Joe Borgstrom (517) 241-2512 MSHDA- Joe Borgstrom (517) 241-2512 www.michigan.gov/mshda www.michigan.gov/mshda