|
State Brownfield Programs that Work
State brownfield financing programs are becoming more common as well as more diverse, as the public sector and the private market acknowledge and act on both the responsibilities and the opportunities given to states in the federal Brownfield Revitalization Act.
Since that law took effect in January 2002, many different — but equally effective — approaches have been put into place to meet the multiple financing challenges and common objectives of brownfield reuse.
For example, in October 2003, New York adopted a statutory Brownfield Cleanup Program that authorized $135 million in site funding assistance. Other states, such as Wisconsin, have continued to provide millions of dollars to fund a range of site assessment and cleanup programs for cities of all sizes.
More states are channeling resources to sites with some end-use or economic development activity in mind — with the thinking shifting from cleanup-only to a cleanup-and-reuse strategy. This reflects the approach being taken by the federal EPA.
In addition, a growing number of states are starting to link financial resources available through programs set up to address specific needs, such as discarded tires or abandoned dry cleaners, to broader brownfield site remediation efforts.
For example, Kansas, through its Agriculture Remediation Fund, focuses on properties with agriculture-related contaminants. Others, like Tennessee, are encouraging local governments to use traditional public financing tools such as tax increment finance to address brownfields.
State financing incentives over the past two years have shown considerable creativity in meeting assessment and cleanup (as well as redevelopment) needs, while stimulating a variety of types of site reuse.
• Wisconsin, for example, now links property tax forgiveness and expedited tax foreclosure for brownfield sites to the willingness of a new owner to complete site cleanup under the auspices of the state's voluntary response program.
• New York’s new brownfields program authorizes an array of cleanup and redevelopment tax credits, including site preparation credits and an environmental remediation insurance tax credit.
• Florida offers low-interest loans to redevelopment agencies and nonprofit corporations to purchase contractor liens, tax certificates and similar claims to expedite site reuse.
• Indiana has adopted a “just in time” Phase II site assessment program, offering $50,000 grants to expedite projects at sites where a company or developer is “imminently interested.”
Over the past two years, states have devoted significant attention to the types of brownfield financing incentives that they offer. Today, a diverse offering is available across states. Successful state programs include:
• Rhode Island now offers tax credits for renovation of historic mill buildings.
• Massachusetts is one of several states with a "brownfields redevelopment fund” that offers low- or no-interest loans for site assessment and cleanup.
• Massachusetts and Wisconsin have established insurance programs to offer site owners access to volume-discounted policies; California is currently exploring a redevelopment insurance program.
• Owners of petroleum-contaminated sites in Maine can tap the state’s Groundwater Fund for help with investigation and cleanup. The fund is capitalized with fees on each barrel of oil entering the state.
• New Jersey site owners can enter into redevelopment agreements that offer state tax rebates to cover up to 100 percent of cleanup costs.
• Indiana has a new $9 million Brownfields Petroleum Remediation Grant Incentive program.
• New Mexico is one of a handful of states to make a direct link between brownfield financing needs and clean water State Revolving Fund resources.
• Florida links tax incentives to job creation on brownfield sites, and reserves 30 percent of its Quick Response Training program funding for employees of businesses that locate in locally-designated brownfield areas.
• Texas is one of several states that have adopted property revaluation tax abatements, allowing redeployed brownfield sites some breathing time before taxing them at their new, increased value.
The Results Are Clear
Finally — and critically — states are reporting significant benefits stemming from the resources they are providing to both public and private site owners and developers, important returns on the public investment. A sample of what is attributable to these program efforts:
• Rhode Island saw more than $80 million in new property value generated from 97 businesses that have located on brownfield sites.
• Wisconsin attributed more than 4,000 new jobs to 88 brownfield projects.
• Minnesota, which has one of the nation’s oldest programs, estimates that more than its VCP has leveraged almost $1 billion in private investment, including construction of nearly 5,700 housing units.
• Florida claims cumulative creation of 3,274 direct jobs, as well as $172 million in new investment in its designated brownfield areas, through the end of 2003.
Charlie Bartsch is a senior policy analyst at the Northeast-Midwest Institute. This article is based in part on a forthcoming Brownfields 2004 “State of the States” report, this year prepared jointly by the Northeast-Midwest Institute and the Environmental Law Institute