SERA
United States
Environmental Protection
Agency
Office of Solid Waste &
Emergency Response
(5101)
EPA 500-F-99-167
September 1999
BROWNFIELDS TAX INCENTIVE CASE STUDY:
TRIANGLE PARK. LLC
Portland, Oregon
A new limited liability company plans the redevelopment of a brownfields located in an
Enterprise Community and along Portland's waterfront, the target communities of the
Portland Brownfields Initiative, a Brownfields National Assessment Pilot.
Triangle Park, LLC is a
standalone company created specifically to
purchase the former Riedel North Portland
Yard, in the industrial sanctuary, near
downtown Portland, Oregon. The 35-acre
site lies right next to the Willamette River,
and boasts some 2,500 to 3,000 linear feet
of waterfront that is ripe for
redevelopment. The site is also located in
a low-income area that is included in
Portland's Enterprise Community. Both
areas are targeted by the Portland
Brownfields Initiative for cleanup and
redevelopment.
A brownfields site downriver is a
strong match for marine-related
activities
When Triangle Park, LLC
first looked at the site, it realized that the
area was perfect for marine-related
activities. The waterfront location and
large size of the property made it a natural
fit for large-scale activities, such as the
construction and repair of barges, and
other marine vessels.
BROWNFIELDS AND THE TAX
INCENTIVE
Commercial developers and economic development officials
are becoming more aware of the potential redevelopment
value of brownfields, or parcels of land with real or
perceived contamination.
These sites offer advantages, such as access to existing
infrastructure and transportation systems. Moreover, they
are often close to major population centers, placing
companies near customers and potential workers. Looking
at the big picture, many developers have found brownfields
can be as attractive as undeveloped land.
Federal, state and local governments have also realized that
they can play a role in returning these brownfields sites to
new uses. A wide variety of government assistance is now
available, ranging from low-cost financing to tax incentives.
The end result has been many successful projects and
improved quality of life for nearby residents.
The Federal Brownfields Tax Incentive encourages economic
growth and brownfields redevelopment by allowing
taxpayers to immediately reduce their taxable income by the
cost of their eligible cleanup expenses in targeted areas. This
incentive creates an immediate tax advantage from these
expenses, helping to offset short-term cleanup costs.
More information is located on the EPA Brownfields
The company the began to
investigate the site's history. The former North Portland Yard site has had a variety of past uses,
many of which involved the use of hazardous substances. At various points the site served as a
lumber mill, concrete packing plant, metal working plant, dry dock, and power plant. While no
comprehensive environmental surveys have been completed, Triangle Park, LLC suspected that a
soup of hazardous substances are likely to be on the site, including methylene chloride,
pentachlorophenols (PCPs), polychlorinated biphenyls (PCBs), polynuclear aromatic
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Triangle Park, LLC Case Study for the Brownfields Tax Incentive page 2
hydrocarbons (PAHs), and total petroleum hydrocarbons (TPH).
A prospective purchase agreement paves the way for the sale
While the contamination issues were serious, Triangle Park, LLC decided that it still
wanted to buy the site, mainly because there are no other comparable large parcels of land near
Portland with such extensive waterfront acreage with the industrial sanctuary overlay.
Before buying the site, Triangle Park, LLC negotiated a Prospective Purchaser
Agreement (PPA) with the Oregon Department of Environmental Quality. Under a PPA, the
state and the prospective purchaser define and limit the purchaser's liability for environmental
cleanup. Many prospective purchasers like this type of legal agreement because it limits the
financial risk of the deal, helping them to secure private financing.
Under the PPA, Triangle Park, LLC and the Oregon DEQ split the responsibility for
the contamination at the site. The DEQ agreed to handle the groundwater contamination at the
site, while Triangle Park, LLC took responsibility for contaminated soil. In addition, Triangle
Park, LLC limits its financial liability to spend up to $750,000 to investigate and remediate the soil
contamination, and to spend $50,000 to investigate the sediment. To date, the company has
already spent $60,000 of its own funds on due diligence work to assess the site's current level of
contamination.
After the PPA was complete, Triangle Park, LLC used its own privately obtained
funds to purchase the site out of bankruptcy court for $2.2 million. At this point, the site changed
names from the Riedel North Portland Yard to Triangle Park.
With the site purchased, Triangle Park, LLC could formally enter the site into
Oregon's Voluntary Cleanup Program. Essentially, the PPA previously negotiated with the state
sets the goals and boundaries for the cleanup, while DEQ provides ongoing state oversight.
The Brownfields Tax Incentive provides an extra benefit to the company
Through its work with the Oregon DEQ, Triangle Park, LLC found out about the
federal Brownfields Tax Incentive. The company realized that it qualified on two counts. First,
the site qualified due to its location within a federally designated Enterprise Community. Second,
both the Enterprise Community and the historic Willamette River waterfront are target areas of
the Portland Brownfields Initiative. A Brownfields National Demonstration Assessment Pilot
designated prior to January 1997, the Portland Brownfields Initiative was designed to promote
cleanup and redevelopment of contaminated sites throughout these targeted communities.
Triangle Park, LLC opted to apply for the Brownfields Tax Incentive under the
brownfields pilot provision. It took the company approximately two months to assemble a
complete application, including letters of support from the City of Portland. Once the company
submitted its completed application materials to DEQ, the agency certified the site for the tax
incentive in less than a month.
The company has not yet defined the bottom line impact of the tax incentive, mainly
because the main investigation and remediation process has not yet begun. In addition, because
Triangle Park, LLC may not produce significant income in the short term, it may have to roll over
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Triangle Park, LLC Case Study for the Brownfields Tax Incentive page 3
some of its tax savings, deferring the benefit until later.
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Triangle Park, LLC Case Study for the Brownfields Tax Incentive page 4
From Triangle Park's perspective, the federal Brownfields Tax Incentive did not
make or break its decision to purchase the property, but it was a definite added benefit and a tool
to revitalize a site that has laid dormant and derelict.
The future of the site holds promise for many large and small businesses
Triangle Park, LLC's plans for the site are under development. One possible tenant
may be Zidell Marine Corporation, a company related to Triangle Park, LLC that could
potentially occupy only about 10 acres of the 35-acre site with a barge-building operation. If that
transaction works out, Triangle Park, LLC would then lease the remaining 25 acres to other
tenants as well. Ideally, the company would like to find two or three companies to lease out 5-10
acre lots, and a few smaller companies to fill out the rest of the property.
Most of the businesses likely to be interested in the property would either be involved
in marine-related activities or land-based activities such as manufacturing. If the site is developed
as planned, Triangle Park LLC estimates that it will generate more than 150 jobs. Some of these
jobs may be filled by residents in the local community.
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