New Jersey Expands Brownfield Funding
HDSRF Now More Widely Available
By Colleen Kokas

The Hazardous Discharge Site Remediation Fund (HDSRF), New Jersey’s long-standing source for brownfield loans and grants, was expanded through new legislation signed on September 15, 2005. Major changes to the fund include the expansion of eligible applicants for funding; the relaxation of ownership requirements to receive funding; and the creation of grants to public entities for the actual cleanup of a site.

Previously, HDSRF allowed only municipalities to obtain grants for the investigation of a site. Now, counties and redevelopment entities can also apply for those same investigative grants. In addition, the fund increases grant funding for municipalities, counties and redevelopment agencies to $3 million in any one year for investigation work. Previously, loans and grants to municipalities were capped at $2 million per year.

For the first time, municipalities, counties and redevelopment agencies are eligible to receive grants for the actual cleanup of a site, not just investigation. In order to obtain these cleanup grants, the site must be redeveloped into affordable housing or be preserved through an easement for open space or for recreational purposes. Grants would cover 75 percent of the cleanup for recreation or conservation uses and 50 percent of the cleanup for affordable housing developments. 

Grants are also available to businesses that want to implement an innovative technology as part of the remediation or for cleanups that do not involve capping. These grants are 25 percent matching grants that have been increased from $100,000 to $250,000. In order to qualify for these grants, a business must have a net worth of less than $2 million.

A new category of grants is available to those sites that are formally designated by the New Jersey Department of Environmental Protection (NJDEP) as Brownfield Development Areas. Munici-palities, counties or redevelopment agencies can receive grants up to $5 million per year. NJDEP’s Brownfield Development Area program works with selected communities impacted by multiple contaminated sites to coordinate remediation and reuse plans. These grants can be used for investigation or cleanup and do not require any ownership interest in the site. In addition, grants for cleanup within a Brownfield Development Area are not conditioned on a specific end use.

In consultation with the New Jersey Economic Development Authority (NJEDA), NJDEP is required under the new law to develop a pilot program to award grants to nonprofit organizations for investigation of property that has been contaminated or is suspected of being contaminated by the discharge of a hazardous substance. The total amount available for the pilot program is $5 million.
State funding for brownfield projects cannot exceed 75 percent of the total remedial costs at any one site. The bill also enables grants to municipalities, counties and redevelopment entities for the performance of a remedial action, even if the entity does not own the property. In that circumstance, a lien will be attached to the property.

The HDSRF is funded though a portion of New Jersey’s corporate business tax that is constitutionally dedicated. The fund currently has a balance of more than $85 million and is managed by NJEDA and NJDEP. Expanding available grants will help towns, counties and other parties use the fund for environmental work to spur redevelopment projects. Each year $15 to $20 million in corporate business tax funds helps replenish the fund.

DEP estimates that there may be as many as 10,000 brownfields in New Jersey. These abandoned, contaminated properties can have a devastating impact on their surrounding communities by contributing to urban decay, impairing tax bases and preventing new beneficial development. This impact is particularly severe where there are several brownfield sites in one neighborhood, creating a cumulative impact that chills revitalization. BFN

Colleen Kokas is brownfield manager, Office of Brownfield Reuse, with the New Jersey DEP.

Read more about the HDSRF:
HDSRF Program Supports Brownfield Efforts