SEPA
     United States
     Environmental Protection
     Agency
Using the DWSRF to
Support  Brownfield
Redevelopment
Introduction

The Small Business Liability Relief and Brownfields Revitalization Act defines brownfields as
"property, the expansion, redevelopment, or reuse of which may be complicated by the
presence or potential presence of a hazardous substance, pollutant, or contaminant." The Government
Accountability Office estimates that there are more than 500,000 brownfields in the United States. These sites
do not include land listed on the National Priorities List (also known as Superfund or CERCLA sites) or
facilities subject to the Solid Waste Disposal Act. States, Tribes, communities, and coalitions may designate a
site as a brownfield if it satisfies the definition. Brownfields are found throughout the country; most are
abandoned or idle industrial sites in urban and suburban areas. Examples of brownfield sites range from closed
gas stations to moth-balled manufacturing plants.

Why Revitalize Brownfields?
By redeveloping brownfields, communities can stimulate
economic development by increasing the local tax base, facili-
tating job growth, and raising property values for nearby
owners.

Revitalizing brownfields also supports "smart growth" prin-
ciples. By using existing infrastructure and previously-devel-
oped space, brownfield revitalization projects decrease the
community's impact on the environment by slowing sprawl and
by recycling expensive resources such as land and infrastruc-
ture. In addition, brownfield redevelopment can reduce the
pressure to develop the remaining urban green spaces in a
community.

Brownfields often contain unknown contaminants, such as
solvents, fuels, and volatile organic compounds, in unknown
quantities. This pollution may contaminate ground water and
surface water or pose a direct threat to public health by seeping
into pipes that deliver finished drinking water. As brownfields
are stabilized and rehabilitated, the threat of pollution is
eliminated or contained, thus protecting both the human health
and the environmental health of the community.
                            Lafayette Village
                        Residential Development:
                        Brownfield Revitalization in
                             Jersey City, NJ
                                Before
                                 After

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 Using the DWSRF to Support Brownfield Redevelopment
                                                                  2
EPA and other federal agencies have joined forces
with states and cities to revitalize brownfields. In
addition to removing potentially dangerous contami-
nants from communities, these redevelopment
projects lead to the creation of jobs, commercial
centers, and homes.

What is the  Drinking Water State
Revolving Fund?

The Drinking Water State Revolving Fund
(DWSRF) was established by the 1996 Safe
Drinking Water Act (SDWA) Amendments to
provide loans to publicly and privately owned
public water systems. The loans can be used for
infrastructure improvements needed to protect
public health and ensure compliance with the
SDWA. The DWSRF is a state-run program that
works like a bank, providing low- or no-interest
loans to communities, public utilities, and private
companies for drinking water projects that meet
	   the program's
  "There are more than
  500,000  brownfields
  in the United States. "

               Source: GAO
criteria.  Federal
and state contri-
butions capital-
ize the pro-
grams, which
exist in all 50
states and
Puerto Rico.
In addition to providing loans, states may set aside
up to 31 percent of their DWSRF grants to finance
a variety of activities, such as encouraging im-
proved water system management and perfor-
mance and helping systems prevent contamination
through  source water protection measures.

Annually, DWSRF programs provide nearly $2
billion in assistance to drinking water projects.
Using the loan fund and set-asides, state DWSRF
programs can provide financial assistance in a
variety of ways to support the rehabilitation of
brownfield sites across the country.
                                                        A redeveloped
                                                         brownfield in
                                                        Dallas, Texas,
                                                        built on the site
                                                         of former gas
                                                        stations and an
                                                        automotive and
                                                        tire center, that
                                                          is now an
                                                       environmentally-
                                                        friendly police
                                                        headquarters.
Are Brownfield Revitalization
Projects Eligible  for DWSRF Loans?

In response to a public health risk, state DWSRFs
are able to loan money to water systems for the
infrastructure costs needed to provide a brownfield
site with safe drinking  water, if certain conditions
are met. The flowchart on pages 4-5 illustrates the
criteria that states should consider (in order of
progression) when determining whether a
brownfield-related drinking water project is eli-
gible for a DWSRF loan.  Since exact project
eligibility and available funding vary by  state,
water systems should contact their state DWSRF
representative for more information. Contact
information can be found on EPA's DWSRF Web
site at http://www.epa.gov/safewater/dwsrf.html.

How Can the  DWSRF Help
Communities Revitalize
Brownfields?

There are a number of ways DWSRF programs can
assist local communities and states in redeveloping
brownfields. Exhibit 1 shows specific brownfield
activities and whether they can be funded by
DWSRF loans, DWSRF set-asides, or other EPA
sources. Since the DWSRF  program is managed
by states, set-aside funding decisions are made at
the state level. Given that each state administers its
program differently, the first step in seeking assis-
tance is to contact the state DWSRF representative.
Contact information can be found on EPA's
DWSRF Web site  at http://www.epa.gov/
safewater/dwsrf. html.

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Using the DWSRF to Support Brownfield Redevelopment
                 Exhibit 1: Eligibility of Brownfield Activities for DWSRF Assistance
^^g
Eligible Under Eligible Under Eligible Under
DWSRF DWSRF Other EPA
Infrastructure Fund Set-Asides Programs
Planning Activities
Assessment of drinking water infrastructure
Legal costs
Design/engineering plans for drinking water
infrastructure
/*
/«
/*
/*
/*
/*

/

Drinking Water Infrastructure Projects
Main replacement or rehabilitation
Installation of temporary line to maintain
service (if pipe has live service connections)
Installation of other distribution system
components (e.g., valves, backflow prevention
devices, meters, service boxes, flushing
hydrants, booster pumps)
Reconfiguration and/or replacement of
service line
Looping to eliminate dead ends and improve
pressure
Expand other system components (e.g.,
storage and treatment)
/
'
'
/
/
/












Other Brownfields Rehabilitation Projects
Phase 1, II, and III site assessments
Design/engineering plans for entire site
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
Monitoring of ground water or surface water
for brownfield contaminants














/
/
'
'
/
/
'
* Certain activities are eligible for loans vtfiile others are potentially eligible for set-asides.

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Using the DWSRF to Support Brownfield Redevelopment
 Question 1
 Does the project include expansion of the system?
 • Assume the project is otherwise eligible for DWSRF funding.
 • An increase in the service population, amount of water produced, or
  amount of water delivered is not considered expansion; only an
  increase in the capacity of the assets is considered expansion.
 • If assets are replaced with those of egual size, the project should be
  considered eligible for DWSRF funding.
 • If new infrastructure  is added or assets are replaced with components
  of higher capacity, consideration of project eligibility continues under
  Question 2.                                             i
 Community A proposes replacing
 1 mile of deteriorated 8-inch main
 that runs under a brownfield site
 with 1 mile of new, reconfigured,
 8-inch main to serve the planned
 residential redevelopment.
Community B proposes replacing 1
mile of deteriorated 8-inch main that
runs under a former brownfield site
with 1.3 miles of 12-inch main to
serve the planned residential
redevelopment.
      Question 2
      Is the proposed expansion
      meant to address future
      population growth?
      • If the expansion is to meet the
       needs of the current
       population, the project is eligible
       for DWSRF assistance.
      • If the expansion is solely
       attributable to a single
       commercial or industrial
       operation, the project is not
       eligible for funding.
      • If the project includes some
       capacity for future population
       growth, consideration of project
       eligibility continues under
       Question 3.
                                                                    Eligible
 Community K proposes replacing
 6-inch mains with 8-inch mains to
 provide water  for future residents
 at its affordable housing units
 being built on  a brownfield site.
 Total cost increase of expansion is
 7% of overall project costs.
Community J proposes replc
6-inch mains with 12-inch mains.
Additional costs from this expansion
are substantial (approximately 50%
of overall project costs).
Community I is proposing a new
water system that will include a
brownfield redevelopment for housing.
The costs of this expansion are
significant.
                Question 5
                Is growth a substantial portion of the project?
                • If growth is NOT a substantial portion of a project, the project is eligible for funding.
                • If growth is a substantial portion of a project for a NEW water system, the project is
                 not eligible for DWSRF assistance.
                • If growth is a substantial part of an EXISTING system's project, the project is eligible
                 for assistance but will be moved lower on the state's funding priority list.

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  Using the DWSRF to Support Brownfield Redevelopment
                Future Population
                     Growth
 Community D proposes
 building new affordable
 housing units and sizing
 infrastructure with enough
 capacity to serve existing
 residents and to attract new
 residents in the future.
                                     Question 3
                                     Is the primary purpose of the project to supply future population
                                     growth?
                                     • The interpretation of "primary purpose" can vary by state.
                                     • If the project's primary purpose is to supply future population growth,
                                      the project is not eligible for DWSRF  assistance.
                                     • If the project's primary purpose is not  to supply future population
                                      growth, consideration of project eligibility continues under Question 4.
 Community C proposes
 building new affordable
 housing units and relocating
 residents from dilapidated units
 served by the system.
     N
o Future Population
     Growth
Substantial Costs
    Reasonable

                                  Community E proposes building
                                  a new high-rise unit on a
                                  brownfield site and replacing the
                                  existing infrastructure with higher
                                  capacity assets in hopes of
                                  stimulating residential and
                                  commercial growth in the area.

  Community F proposes building
  affordable housing units on a
  brownfield site and replacing a
  deteriorated main, which is allowing
  microbial and chemical intrusion, at
  the site with a larger capacity main in
  anticipation  of the new customers.
                                                        Population Growth
                                                        Primary Purpose
                   Not  Eligible

                                                                                         Public Health
                                                                                       Primary Purpose
             Community H proposes building new
             affordable housing units on a brownfield site
             and replacing old, deteriorating mains with
             mains that are sized to accommodate a 12%
             increase in customers served over the 50-
             year expected life of the mains (based on
             U.S. Census population growth projections).
                                                                                    Unreasonable
Community G proposes building
residential townhouse units on a
brownfield site and replacing the existing
infrastructure on the site with assets that
are 50% larger to serve both the new
units and any future residential
developments on the site (based on
estimates by private developers).
                   Question 4
                   Is the project appropriately sized to accommodate a reasonable amount of population
                   growth given the useful life of assets included in the project?
                   • Estimate useful life of an asset using engineering and industry standards.
                   • The definition of "reasonable" population growth is left to the states.
                   • Population growth  estimates based on recent trends in demographics may make a better case
                     for eligibility.                                                                   ^
                   • If project is appropriately sized, taking into account the projected population growth
                     and useful life, it should be considered further under Question 5.
                   • Otherwise, the project is not eligible.

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Using the DWSRF to Support Brownfield Redevelopment
          Case Studies of Possible DWSRF-supported Brownfield
                                   Redevelopment
 The project proposals summarized on this page
 illustrate how two New Jersey water systems
 hope to use DWSRF loans to finance drinking
 water infrastructure improvements as part of
                                             brownfield redevelopment efforts. Neither New Jer-
                                             sey nor EPA have determined whether these pro-
                                             posed project are eligible for DWSRF loans.
Milltown, NJ: Residential Units, Retail
Space, and Offices
(Proposed February 2004)

Along the banks of Mill Pond and located just
outside of downtown Milltown, NJ, is a 22-acre
tract of abandoned industrial land (including the
remains of a Michelin Tire Factory)
and partially used office space. De-
velopers in Milltown are working on
a project to reuse this brownfield by
creating over 300 new residential
units and over 80,000 square feet
of retail and commercial office space
on the property. The developers plan
to relocate existing offices to new
buildings, renovate at least one of
the industrial buildings on the prop-
erty in its entirety, build a parking ga-
rage to accommodate the new uses,
and keep at least 30 percent of the
property as green space.

This project will strengthen down-
town Milltown by reusing waterfront
property, increasing investments,
and bringing new companies and residences
back to the center of town. The redevelopment
will be designed to blend with the surrounding
existing residential and commercial structures.

Milltown is applying for a DWSRF loan to fund
the installation of new water connections for
the residential development planned on the
brownfield. Over 400 new units will need con-
nections to the existing water system, which
currently serves a population of 70,000. The
cost of the needed drinking water infrastruc-
ture improvements is  estimated to be $2 mil-
lion.
                                               New Jersey City University: Performing Arts
                                               Center, Housing, Retail Space, and More
                                               (Proposed September 2004)

                                               New Jersey City University (NJCU) has applied
                                               to the New Jersey Water Supply Administration
                                               for a DWSRF loan to help finance a planned
                                                        brownfield redevelopment. The site of
                                                        the proposed project is approximately
                                                        3 square blocks on the western side
                                                        of NJCU's campus. Soil at the site is
                                                        contaminated, and groundwater has
                                                        tested positive for pollution at concen-
                                                        trations above the New Jersey Depart-
                                                        ment of Environmental Protection's
                                                        (NJDEP's) Groundwater Quality Cri-
                                                        teria.

                                                        The master plan for the site includes
                                                        building retail space, housing, a per-
                                                        forming arts center, a professional
                                                        building, parking, and new academic
                                                        space for the university.

                                                        NJCU's DWSRF application requests
                                                        funds to cover the costs of the follow-
                                               ing necessary  infrastructure improvements:

                                               • Replacing distribution pipes ($49,368)
                                               • Excavating old distribution  infrastructure
                                                ($5,736)
                                               • Installing water meters ($110,000)
                                               • Designing and planning the system ($24,766)

                                               The total DWSRF pricetag  is $189,870. NJCU
                                               envisions a well-planned, well-managed smart
                                               growth development that adds new housing and
                                               new jobs while preserving open space, farmland,
                                               and environmental resources.

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 Using the DWSRF to Support Brownfield Redevelopment
What Other Resources Are Available to Redevelop Brownfields?
In addition to the DWSRF program, there are a
number of other programs that provide tools and
financial assistance for brownfield redevelopment.
This support comes from  other federal agencies
(including other EPA programs),  state and local
governments, non-governmental  agencies, and
private sources.

In 1995, EPA joined with  multiple federal agencies
to promote and fund brownfield revitalization more
widely. In 2002, the partnership  of over 20 agen-
cies (see Exhibit 2) reiterated its  support for
brownfield revitalization in its Federal Partnership
Action Agenda.

Some  of the largest federal brownfield programs
are sponsored by EPA and the Department of
Housing and Urban Development.  These programs
have already dispensed over  $236 million in grants
and loans for brownfield projects. A few of the
largest programs are listed in Exhibit 3.
                                         Exhibit 2: Other Federal Sources
                                U.S. Department of     k" National Institute of        U.S. Department of
                                    Labor        Environmental Health Sciences      Transportation
                               U.S. Small Business
                                 Administration

                                U.S. Department of
                                   Agriculture

                                U.S. Department of
                                    Energy

                                U.S. Department of
                                   Defense

                                 Bureau of Land
                                  Management

                                U.S. Army Corps of
                                   Engineers

                               National Oceanic and
                            Atmospheric Administration

                           U.S. Department of the Interior,
                              Office of Surface Mining

                            Agency for Toxic Substances
                               and Disease Registry

                            U.S. Economic Development
                                 Administration

                             Federal Deposit Insurance
                                  Corporation

                               National Park Service
    Federal Housing
    Finance Board

    U.S. Geological
       Survey

  Appalachian Regional
     Commission

   U.S. Department of
       Justice

  U.S. General Services
    Administration
    Adi
a
                                 Exhibit 3:  Other Major Federal Programs
    Federal Aaencv
  Name of Proa ram
  U.S. Environmental
  Protection Agency
                      Clean Water State
                      Revolving Fund
                      Assessment Grants
Brownfields Cleanup
Revolving Loan Fund
                      Brownfields Job
                      Training Grants
                      Cleanup Grants
             Descriotion of Proa ram
                     Low-interest loans repayable over 20 years to
                     communities, municipalities, individuals, businesses,
                     and citizen groups to finance brownfield projects that
                     address water quality problems
                     Up to $200,000 to assess, plan, and conduct public
                     outreach in preparing for revitalization of brownfield
                     sites ($350,000 with waiver)
Loans up to $1,000,000 repayable over five years to
carry out cleanup and redevelopment activities at one
site
                     Up to $200,000 over two years to support
                     environmental job training in brownfield communities
                     Up to $200,000 per site plus a twenty percent cost
                     share to fund cleanup activities
   otal Funds
  warded (2004)
 Over $136 million
    distributed
  U.S. Department of
  Housing and Urban
     Development
                      Brownfields Economic
                      Development Initiative
                     May be used to pay project costs, or as a loan
                     loss/debt reserve, in conjunction with Section 108 loans
                                                     $25 million
                                                    appropriated
Community
Development Block
Grant Program
Provides annual grants to "entitlement communities"
whose projects aim to benefit low income people,
prevent or eliminate slums, and/or meet community
development needs
   $4.4 billion
  appropriated

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 Using the DWSRF to Support Brownfield Redevelopment
Federal agencies are not the only groups that
provide funding and support for brownfield
projects.  State and local governments, private
investors, and non-profit groups also support the
revitalization of brownfields.

State and Local Governments

State and local governments often provide funds to
match or augment the grants and loans from
federal sources. Some of these funds are provided
through public works or transportation depart-
ments.  Other funds are generated by the sale of
bonds.  In addition, communities across the coun-
try are investing their staff, equipment, and materi-
als into addressing their brownfields.

Private Investors

Federal funds may be used to begin brownfield
assessments. However, depending on the findings
of the site assessment, communities may be able to
find developers who are willing to buy the land
and redevelop it. These investors might pay for
some or all  of the  site cleanup and necessary
infrastructure improvements.
     Affordable senior housing in Port Jervis,
     NY, built after the remediation of a former
     chemical manufacturing site.
Other Sources

Numerous non-profit organizations work in con-
junction with EPA and federal programs to identify
and revitalize brownfields throughout the country.
These organizations include Groundwork USA,
Habitat for Humanity International, and the
Brownfields Non-Profits Network.  There are also
many organizations that work closely with EPA to
conduct research on brownfield-related topics,
provide training, and give technical assistance to
EPA, other federal agencies, and state and local
governments. These organizations include the
Northeast Midwest Institute, Purdue University,
the U.S. Green Building Council, and the Environ-
mental Law Institute.
                                     For More Information
 For additional information the Drinking Water State Revolving Fund Program and how it may be used
 to fund brownfields revitalization projects in your state, visit these Web sites:

 DWSRF:  http://www.epa.gov/safewater/dwsrf.html

 EPA Brownfield Web Site: http://www.epa.gov/swerosps/bf/index.html

 EPA Office of Ground Water and Drinking Water: http://www.epa.gov/safewater

 CWSRF:  http://www.epa.gov/owm/cwfinance/cwsrf/index.htm
                                                                              Office of Water (4606)
                                                                                 EPA816-F-06-044
                                                                                      www.epa.gov
                                                                                       August 2006

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