|
 |
By Alison Evans |
In 1997, when the U.S. EPA first awarded brownfield revolving loan fund (RLF) grants, EPA’s brownfield assessment pilots were already proving very successful. The assessment pilots allowed communities to better understand their cleanup needs. However, a lack of cleanup funding still proved an obstacle for many. Even where private financing was available, some brownfield sites, because of certain risk factors, stood little chance of securing those funds.
RLF grants were awarded to address this dearth in financing by capitalizing brownfield cleanup revolving loan fund programs. These RLF funding awards were substantial — eventually reaching up to $1 million per grant (or more when applicants applied together as coalitions).
The ample funding of these grants not only made possible multiple loans to provide gap financing, they also supplied funds to help communities build local brownfield cleanup programs and expertise.
RLF grants have come a long way since 1997. Initially, many communities, and even EPA, found the grants difficult to manage — few loans were made in the program’s first few years.
Today, it can be argued that RLF grants are hitting their stride. To date, 72 loans and three subgrants have been made using RLF funds, with dozens more loans and subgrants under development. These loans have leveraged over $499 million in other cleanup funding and related public and private investment. Over 69 percent of all loans since program inception were signed in 2003 and 2004.
Some of the credit for the increasing success of RLF grants can be attributed to the new brownfield law. Under the law, RLF administrative requirements were streamlined and, for the first time, a portion of RLF grant funds can be used for cleanup subgrants.
However, most of the credit for the rise in RLF performance in recent years is certainly due to savvy communities that have worked with EPA to create an RLF program formula that works. In EPA Region 5, Hennepin County, Minnesota, is a well-known example. With initial EPA funding in 1999 and additional funding in following years, Hennepin County has made four loans of over $400,000 apiece, resulting in four completed brownfield cleanups. These low-interest loans have generated program income and the RLF pool itself has “revolved” entirely.
Why do some communities perform so well, while others have difficulty using their grants? Brooke Furio, an RLF project officer in EPA Region 5, explains that an RLF grantee needs to have four elements to be successful:
1) A good understanding of the loan products their RLF will offer;
2) A well-defined cleanup process that satisfies state/federal laws and cleanup programs;
3) A defined loan customer market; and
4) Qualified, dedicated staff that have the time to manage it.
RLFs, simply put, require work. However, for the many grantees that find the right mix of staff and resource investment as well as favorable market conditions, they have proved particularly productive. For some local governments, the management requirements of RLF grants are excessive. For them, forming coalitions to pool resources, or turning to their state as an RLF grant manager, may be a better method.
Unlike many federal government RLFs, EPA brownfield RLFs can be “closed out” after they have completely revolved. Grantees are then able to use the funds for local brownfield activities, based on an agreement with EPA. EPA is currently negotiating two such closeouts.
EPA is committed to achieving better RLF performance, and we start by sharing the approaches of successful RLFs with new and existing RLF grantees. We also continue to fine-tune our grant competition, adjusting RLF ranking criteria to select for the skills and abilities that are needed for sound RLF management.
Additionally, we are working to deobligate underperforming RLFs that do not choose to transition to the new brownfield law.
Brownfield RLF grants have turned the corner. They are proving to be a cleanup solution for many communities. As communities and EPA continue to learn how to use them better, we anticipate the current increase in RLF loans, subgrants and completed cleanups will continue to accelerate. BFN
Alison Evans is with EPA’s Office of Brownfields Cleanup and Redevelopment. Any opinions expressed in this article are the views of the author and do not necessarily represent the views of the U.S. EPA. The author would like to thank all EPA Brownfields staff that contributed to this article.
Counterpoints
A Second Chance
Building Capacity
Market a Factor