Brownfields Redevelopment Existing Policies and Programs

Existing Policies and Programs

Redeveloping a brownfield is usually a balancing act between the public and private sector, often necessitating creative partnerships to acquire land, funding, clean-up, and construction. It is a process that is often regulated through several levels of government, which only recently has become streamlined. Private practitioners have found niche markets within the process, and non-profit agencies have supported efforts when the government could not. This section aims to overview the various levels of government policy and programs in play in our region, the perspective of the private practitioner, and the roles of the regional non-profits. Several local programs are also described.

Overview of Brownfield Policy

In 1980, the Federal government passed the Comprehensive Environmental Response and Liabilities Act (CERLCA, 42 U.S.C. §§ 9601-9675), also known as Superfund. (US Code) In addition to providing funds for clean-up, CERCLA essentially gave governments the power to require clean-up costs from whoever they deemed responsible for the environmental contamination. In response, investors and banks, afraid of being held liable for costly environmental clean-ups, halted their support of redevelopment efforts that had a perception, however slight, of being a brownfield.

All levels of government soon realized that CERLCA, and the risk of liability that it created, was preventing redevelopment. In 1995, the US EPA introduced the Brownfields Action Agenda to help clarify the government's role, to make funds available for pilot projects to test redevelopment approaches, and to provide direct assistance to those interested in redeveloping high-risk sites (DeSousa, 2006b).

Around the same time, Illinois and the US EPA Region 5 were at the cutting-edge of a group of state and local governments who began implementing strategies for encouraging remediation and redevelopment. Section 128(a) of CERCLA authorizes a grant program to establish state response programs, and allowed Illinois to create the Site Remediation Program (SRP), a voluntary clean-up program which provides participants the opportunity to receive IEPA review, technical assistance, and "No Further Remediation" (NFR) letters. The NFR letters guarantee that the participant has successfully demonstrated that environmental conditions at their remediation site do not present a significant risk to human health or the environment. Due to a memorandum of agreement with the US EPA, the NFR letter from IEPA serves as a release from liability and/or further responsibilities under the Illinois Environmental Protection Act (IEPA).

In addition, Illinois has adopted a unique Tiered-Approach to Corrective Action Objectives (TACO), which allows for flexibility in site remediation objectives. Rather than demand a one-size-fits-all remediation requirement for all brownfield sites, TACO allows site owners and developers to clean up the site to the appropriate tier based on risk (e.g., a site redeveloped to a daycare center would have to meet higher standards than a site redeveloped to a parking lot). Baseline objectives exist, but time and remediation cost can be saved by cleaning up the site to an appropriate level.

These efforts were bolstered by the 2002 passing of the federal Small Business Liability Relief and Brownfields Revitalization Act, referred to as the Brownfields Law, which expanded US EPA's assistance. With the Brownfields Law, US EPA currently utilizes four grant programs targeted towards brownfield redevelopment:

In addition, US EPA also administers the Targeted Brownfields Assessment (TBA) program, which is designed to give technical assistance to municipalities dealing with brownfields, but haven't received US EPA grant funding. The program is focused on minimizing the uncertainties of brownfield remediation. It offers assistance with (Phase 1) screening, including a background and historical investigation and preliminary site inspection, and (Phase 2) environmental assessment, including sampling the site, determining clean-up and redevelopment options, and estimating costs.

Other federal agencies also support brownfields redevelopment, especially the Department of Housing and Urban Development (HUD), through the Brownfields Economic Development Initiative (BEDI). This competitive grant program targets its funding to brownfield redevelopment projects that provide economic stimulus through job and business creation/retention and increases in the local tax base.

In addition to its successful SRP, Illinois has other brownfields programs and clean-up programs which can be utilized for remediation efforts. IEPA administers:

  • Municipal Brownfields Redevelopment Grant Program – provides financial assistance to municipalities for brownfields clean-up and redevelopment activities (Note: this has not been funded since 2006);
  • llinois Brownfields Redevelopment Loan Program – offers low interest loans to support efforts by local governments and private parties to clean up brownfield sites that have already been assessed for contamination;
  • Leaking Underground Storage Tanks (LUST) Program – provides support and funding to tank owners and operators for site investigations, clean-up costs, and other services; and
  • State Response Action Program – provides financial and administrative resources for clean-up of environmental contamination which presents a threat and isn't addressed by other federal or state clean-up programs.

All of these programs can all be used in concert with several other traditional economic development tools such as CDBG funds or TIF districts. In fact, most successful projects rely upon a mixture of funding sources and government assistance. The federal Brownfields Tax Incentive allows for environmental cleanup costs at properties in targeted areas to be fully deducted in the year incurred, rather than having to be capitalized, as long as they were not responsible for the contamination. The Illinois Environmental Remediation Tax Credit allows a company or an individual to obtain an income tax credit for certain environmental clean-up costs. Municipalities throughout the region may also grant property tax relief to entice developers to redevelop specific brownfield sites. Furthermore, some local governments operate their own grant programs. Lake County is an example of this, as it operates a county-wide Brownfield Fund, established in 2000, which provides another source of grant funds to communities within the county.

The challenges of brownfield redevelopment include the risk of liability, uncertainty of cost and time-frame for environmental testing and clean-up, and the uncertainty of cost and time-frame for government intervention. Several government policies and programs have creatively managed these hurdles, limiting liability with NFR letters, providing a variety of grant and loan options and tax breaks to reduce costs, providing technical assistance and streamlining involvement with government agencies as much as possible to save time. However, each brownfield site is unique, and presents unique challenges. In addition, government efforts are focused on remediation, whereas redevelopment usually falls to the private sector or non-profits. Therefore, the following explores the roles of the private sector and non-profit groups, and how several local governments have established their own brownfields initiatives and pilot programs.

Has your community utilized any of these brownfield redevelopment programs? How successful was it?