United States
Environmental Protection
Agency
Office of Water
(4204)
EPA-832-F-01-007
October 2001
Brownfield Remediation
Through The
Clean Water
State Revolving Fund
          State

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                                     BROWNFIELD USE  OF THE  CWSRF
Brownfields - The Water Pollution
Control Challenge

The USEPA finances brownfield remediation through many
programs and funding sources. One of these sources is the
Clean Water State Revolving Fund (CWSRF) loan program.
Brownfields are abandoned, idle, or under-used industrial
and commercial sites where expansion or redevelopment is
complicated by real or perceived environmental contamina-
tion. The General Accounting Office estimates that there are
nearly 500,000 brownfield sites in the United States. This
includes small sites such as abandoned gas stations and dry
cleaning facilities as well as larger sites like idle industrial/
manufacturing complexes.  Brownfield sites can be in urban,
suburban, or rural areas.
    Brownfield sites are often polluted by a variety of con-
taminants such as fuels, metals, solvents, and volatile organ-
ic compounds. These contaminants, typically found in stor-
age tanks or in a property's soils, can impair a community's
water quality if they seep into groundwater or run off into
surface water.
    Remediation of brownfield sites can address these water
quality concerns and also prepare the sites for other uses.
States are creatively addressing the challenges of brownfield
remediation, including the challenge of financing these
efforts.  As one piece of a funding solution, many states are
considering the use of the USEPA's CWSRF-a funding tool
that addresses threats to and impairments of water quality.
The Clean Water State Revolving Fund

The CWSRF program is a state-operated program that pro-
vides low-interest loans to communities, municipalities, indi-
viduals, businesses, citizen groups, and nonprofit organiza-
Annually, CWSRF
in assistance to water
quality projects.
tions to finance projects that address water quality problems.
The CWSRF program funds a wide range of projects, includ-
ing wastewater treatment plants, septic systems, agricultural
best management practices, and brownfield remediation.
   Today, all 50 states and
Puerto Rico have more than   	
10 years of experience oper-
ating CWSRF programs.
Each state CWSRF program    programs provide
receives annual capitaliza-
tion funding from both  the     between $3-4 billion
federal government and
state government. States
use this funding to make
low- or no-interest loans for
water quality projects. As
the loans are repaid, states
make new loans to other water quality projects.
   Annually, CWSRF programs provide between $3-4 bil-
lion in assistance to water quality projects. Total assets in the
CWSRF program exceed $34 billion.


What Projects are Eligible for CWSRF Assistance?

States are given great flexibility in the management of
CWSRF programs, so CWSRF project eligibility may vary
according to the priorities of each state. Examples of brown-
field projects that may be eligible for CWSRF funding
include:
• Phase I, II and III site  assessments (for brownfields with
  water quality impacts)
• Excavation and disposal of underground storage tanks
• Excavation, removal, and disposal of contaminated soil or
  sediments
• Capping of wells or soil
• Remediation of stormwater runoff (including the use of
  constructed wetlands)
• Monitoring of groundwater or surface water for brownfield
  contaminants


Advantages of CWSRF Loans

The CWSRF has been a highly popular program for financ-
ing water quality projects since 1987.  Advantages of the
CWSRF include:

• $3-4 billion of funding available annually
• Low interest rates (zero to market rate)
• Repayment terms up to 20 years
• Repayments begin up to 1 year after project start-up date
• Loans cover 100 percent of eligible costs - no local,
  up-front match

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                                      BROWNFIELD  USE OF  THE CWSRF
CWSRF Brownfield Case Studies

Many states are considering using the CWSRF to finance
brownfield remediation projects related to water quality.
Ohio and Wisconsin have already made loans to brownfield
projects. CWSRF programs in Maryland, New Mexico, and
New York are planning to fund brownfield projects, as well.
The following case studies show how several states are
funding brownfield projects.
Ohio
Ohio was the first state to use its CWSRF program to
finance brownfield remediation that impacts surface water
and groundwater quality. Since 1996, Ohio's Voluntary
Action Program (VAP) has helped 11 brownfield projects
receive CWSRF loans for more than $10 million.

Loan Recipient: Grant Realty Company - Private Company
Project:       Remediation of Contaminated Groundwater and Soils
Loan:         $1.6 million
Interest Rate:   4.12%

Project Description: The Grant Realty Company of Ohio
received a CWSRF loan for  the cleanup of a 20-acre  indus-
trial site in Cleveland to prepare the area for commercial
reuse. The project used vapor extraction and dual-phase vac-
uum extraction technologies to remediate contaminated soil
and groundwater.

Project Financing: The cleanup was financed with $1.6 million
from Ohio EPA's Water Pollution Control Loan Fund (Ohio's
CWSRF)  and $1.0 million from another state loan program.
The 20-year CWSRF loan has an interest rate of 4.12 per-
cent.  Grant Realty used its  income stream from a tank
cleaning operation to repay the loan. Personal guarantees
and a second position mortgage on the property provided
additional collateral.

Loan Recipient: Barberton Laundry and Cleaning - Private company
Project:       Phase II Site Assessment
Loan:         $64,000
Interest Rate:   3.2%

Project Description: Barberton Laundry and Cleaning, a small
company located in Barberton, Ohio, used CWSRF financing
to undertake Phase II site assessment work. The project-
sampled soil and groundwater to determine the extent of
contamination and the scope of any remedial activities
needed to prepare the site for reuse. This assessment was a
critical first step in planning redevelopment for the site.
Project Financing: This project received a $64,000 loan from
Ohio EPA's Water Pollution Control Loan Fund. This five-
year loan bears an interest rate of 3.2 percent. Barberton
Laundry and Cleaning used the revenue stream from its
laundry and cleaning business to repay the loan.  Inventory
and cash provided additional collateral.
New Mexico
New Mexico's Voluntary Remediation Program was intro-
duced in July 1999. This program is planning to use CWSRF
funding to encourage the voluntary cleanup of brownfield
sites. Two projects are currently planned.

Potential Recipient: City of Santa Fe - Municipality
Project:          Site  Assessment, Remediation, and
                Water Quality Monitoring
Loan:           $4.0 million
Interest Rate:      3%

Project Description: In 1995, the City of Santa Fe purchased a
50-acre former railyard/industrial site that was initially
developed in the 1880s.  The city plans to improve the water
quality of the Acequia Madre (an irrigation canal that runs
through the site) and redevelop the property with a mixture
of uses. The city is completing a comprehensive environ-
mental assessment for the property with the support of an
EPA Brownfields Pilot Grant. CWSRF funding will support
water quality monitoring, environmental studies, risk assess-
ment, and remediation activities that address water quality.

Proposed Financing: This project is  expected to  cost $21 million.
The  city plans to finance approximately $4 million (20 per-
cent of the project cost) through the CWSRF. A 3-percent
CWSRF loan will allow the project  to remain financially
viable and will help keep future lease rates attractive to
developers. The city  will use residential and retail lease pay-
ments to repay the loan.

Potential Recipient: City of Deming -  Municipality
Project:          Site Assessment and Soil Remediation
Loan:           $300,000
Interest Rate:      1%

Project Description: The Peru Hill Mill site consists of 1,320
acres of abandoned zinc mining lands in Deming, New
Mexico. Uncontained tailings (refuse remaining after ore has
been processed) in a  104-acre impoundment and windblown
tailings on 161 adjacent acres have  caused elevated levels of
lead, arsenic, cadmium, cobalt, copper, iron, manganese and
zinc in soils on the site.  These contaminants threaten the
City of Den-ling's drinking water - groundwater that runs
underneath the property. The project will include  site inves-
tigation and remediation activities.

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                                      BROWNFIELD  USE OF  THE CWSRF
Proposed Financing: The City of Deming has applied for a
$300,000 CWSRF loan to assist with cleanup of the site. The
loan will have a 20-year term and an interest rate of 1 percent.
Wisconsin
Wisconsin has passed legislation that allocates $20 million
of its CWSRF funding to municipal projects that address
brownfield site impacts on water quality. The program
offers interest rates that are 55 percent of the municipal
bond market rate. To date, Wisconsin has funded two
brownfield cleanup projects for $1.9 million.

Loan Recipient:  City of Plymouth - Municipality
Project:        Site Investigation and Landfill Cleanup
Loan:          $1.3 million
Interest Rate:   0%

Project Description: The City of Plymouth landfill site was
used for the disposal of construction debris, commercial
waste, and industrial waste from 1955 through 1990. This
project required a site investigation and remediation of the
landfill. The city capped and  covered the landfill and
                             installed groundwater moni-
                           -  taring equipment.
States use the CWSRF
to finance a range of
environmental projects
including projects to
                             Project Financing: The City of
                             Plymouth received a $1.3
                             million CWSRF loan for this
                             project. The 20-year loan
                             has a 0 percent interest rate.
address brownfield-related
water quality problems.
                             Maryland
                             Maryland's Voluntary
                             Cleanup Program, adminis-
                             tered by the Maryland
                             Department of the
Environment, streamlines the environmental cleanup
process for brownfield sites.  The Brownfields Revitalization
Incentive Program, managed by the Maryland Department
of Business and Economic Development, provides  economic
incentives such as loans, grants, and property tax credits
that support the cleanup and development of brownfield
properties. Maryland is planning to coordinate these efforts
with CWSRF funding to encourage more brownfield projects.
                                                           Potential Recipient: Developer/Land Owner - Private Entity
                                                           Project:           Site Assessment and Abandoned Oil Storage
                                                                           Facility Cleanup
                                                           Loan:            $1.0 million
                                                           Interest Rate:      Below Market

                                                           Project Description: An abandoned oil storage facility covers 78
                                                           acres in downtown Baltimore. There are no buildings on the
                                                           site, but vacant oil tanks may threaten groundwater and
                                                           Baltimore Harbor, and the tanks must be removed before
                                                           any redevelopment can occur. A CWSRF loan will support a
                                                           site assessment and remediation of potential petrochemical
                                                           contamination.

                                                           Project Financing: Maryland plans to offer the private develop-
                                                           er a $1.0 million loan for this brownfield remediation project.
                                                           The CWSRF may offer the funding through its linked deposit
                                                           loan program - a partnership between the CWSRF and a
                                                           commercial bank. In this program, the borrower applies to  a
                                                           commercial bank for a loan. If the borrower is creditworthy
                                                           and has a CWSRF-eligible project, the commercial bank
                                                           offers the borrower a loan at a below-market interest rate.
                                                           The loan subsidy is provided by the CWSRF program.
New York
The New York State Environmental Facilities Corporation
uses the  its CWSRF to help municipalities finance projects
that reduce or prevent water pollution from brownfields.
The CWSRF offers short-term interest-free loans and 20-
year loans at one-half of market interest rates.

Loan  Recipient: Village of Greenport - Municipality
Project:       Leaking Petroleum Tank Removal
Loan:         $300,000
Interest Rate:   0%

Project Description: A three-acre site in the Village of
Greenport, recently a marina with an engine repair facility
and a petroleum product storage area, contains underground
storage tanks and soils contaminated with petroleum and
arsenic. The village is removing the underground tanks and
excavating and disposing of the contaminated soils.  After
this cleanup, the village will redevelop the site as a water-
front park.

Project Financing: New York's CWSRF has offered the Village of
Greenport a 3-year loan for $300,000.  The loan will have an
interest rate of 0 percent.

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                             BROWNFIELD USE OF THE CWSRF    5
How Does the CWSRF Program Work?
                  .
                                                         Low-Interest
                                                           Loans
                      Seed Money
                                                            Loan
                                                         Repayments
                                                                          Brownfield
                                                                       Remediation Projects
                                        Clean Water
                                     State Revolving Fund
       State Government
CWSRF Program Benefits

• The CWSRF has money to lend.  CWSRF programs provide between $3-4 billion annually in
 assistance to water quality projects.  Total CWSRF assets exceed $34 billion.

• CWSRF loans are available to public and private borrowers. Communities, municipalities,
 individuals, businesses, citizen groups, and nonprofit organizations can all be eligible for CWSRF loans.

• CWSRF loans mean real cost savings.  If a brownfield developer borrows $100,000 from the
 CWSRF, a 20-year, zero-interest loan would give annual debt service payments of $5,000. A loan
 from a bank at a commercial rate of 9 percent would have annual debt service payments of
 $10,250.  Over twenty years, a zero percent loan saves the developer more than $100,000!
• CWSRF programs have experience lending to brownfields. Ohio's CWSRF program has
 already made loans of more than $10 million to 11 brownfield projects. Other states are following
 the lead.

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                                      BROWNFIELD  USE OF THE  CWSRF
For More Information
For more information about funding water quality projects related to brownfield remediation, contact your state Clean Water
State Revolving Fund program. CWSRF program websites are listed below by state and website.
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Puerto Rico
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
http://www.adem.state.al.us/WaterDiv/SRF/SRFMainInfo.htm
http://www.state.ak.us/local/akpages/ENV.CONSERV/waterhome.htm
http://www.adeq.state.az.us/environ/water/index.html
http://www.state.ar.us/adfa/programs/wwrl.html
http://www.swrcb.ca.gov/funding/index.html
http://www.cwrpda.com/funding_programs.htm
http://dep.state.ct.us/wtr/cwa/cwfund.htm
http://www.dnrec.state.de.us/DNREC2000/Divisions/Water/Water.htm
http://www.dep.state.fl.us/water/wff/cwsrf/
http://www.ganet.org/gefa/state_revolving.html
http://www.state.hi.us/doh/eh/eiemwwOO.htm
http://www2.state.id.us/deq/water/waterl.htm
http://www.epa.state.il.us/water/financial-assistance/waste-water
http://www.state.in.us/idem/owm/fasb/srfinfo.html
http://www.state.ia.us/government/dnr/organiza/epd/wastewtr/srloan.htm
http://www.kdhe.state.ks.us/water/
http: //water, nr. state. ky. us/dow/dwprog.htm
http://www.deq.state.la.us/financial
http://www.state.me.us/dep/blwq/docgrant/srfparag.htm
http://www.mde.state.md.us/wqfa/index.html
http://www.state.ma.us/dep/brp/mf/srf.htm
http://www.michigan.gov/deq/l/1607/7-135-3307_3515—,00.html
http://www.pca.state.mn.us/water/revolvingfund.html
http://www.deq.state.ms.us/newweb/opchome.nsf/pages/surfacewater
http://www.dnr.state.mo.us/eiera/revolving_fund.htm
http://www.deq.state.mt.us/ppa/srf/index.asp
http://www.deq.state.ne.us/
http://ndep.state.nv.us/bwpc/srlf01.htm
http://www.des.state.nh.us/wwe/srf.htm
http://www.state.nj.us/dep/grantandloanprograms/ereifp.htm
http://www.nmenv.state.nm.us/cpb/cwsrf.html
http://www.nysefc.org/srf/CWSRF/CWSRFhome.htm
http://www.nccgl.net/fap/cwsrf/index.html
http://www.health.state.nd.us/ndhd/environ/mf/index.htm
http://www.epa.state.oh.us/defa/wpclf2.html
http://www.state.ok.us/~owrb/fa/fal.html
http://www.deq.state.or.us/wq/wqgrant/wqgrant.htm
http://www.pennvest.state.pa.us/pennvest/cwp/browse.asp ?A=4
http://www.epa.gov/region02/cepd/compnum.htmttJCA (Contact Phone Numbers)
http://www.state.ri.us/ricwfa/
http://www.scdhec.net/eqc/water/html/srf-cw.html
http: //www. state. sd .us/denr/DFTA/WWFunding/cle anwatersrfprogram2. htm
http://www.state.tn.us/environment/dca/swagrnt.htm
http://www.twdb.state.tx.us/assistance/financial/fin_infrastructure/cwsrffund.htm
http://www.deq.state.ut.us/EQWQ/CON_ASST/Con_asst.htm
http://www.anr.state.vt.us/dec/fed/FMS.htm
http://www.vra.state.va.us/project/wastewater.html
http://www.ecy.wa.gov/programs/wq/funding/index.html
http://www.dep.state.wv. us/item.dep?ssid=ll&sslid=220
http://www.dnr.state.wi.us/org/caer/cfa/EL/Section/clean.html
http://deq.state.wy.us/wqd/w&ww/SRF/srfloans.htm

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