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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