vvEPA
Region 2
U.S. Environmental Protection Agency
Brownfields Quarterly Community Report
VOLUME 1 NUMBER 3
Tax Incentive to Help
Brownfields
A Brownfields Tax Incentive is being
implemented which will help bring
thousands of abandoned and under-uti-
lized industrial sites back into produc-
tive use. On August 5, 1997, President
Clinton signed the Tax-
payer Relief Act (HR
2014/PL 105-34) which
included a new tax incen-
tive to spur the cleanup
and redevelopment of brownfields in
distressed urban and rural areas. In the
past, many environmental remediation
expenditures had to be capitalized over
time, and could not be fully deducted in
the year incurred. This left property
owners and prospective purchasers of
brownfields properties at a disadvantage
in terms of environmental remediation
expenditures.
Under the new Brownfields Tax Incen-
tive, environmental cleanup costs for
properties in targeted areas are fully
deductible in the year in which they are
incurred, rather than having to be capi-
talized. This significantly increases the
economic value towards cleanup of
brownfields. The value of the incentive
is estimated at $1.5 billion dollars and
is expected to leverage $6 billion in pri-
Inside
vate investment and return an estimated
14,000 brownfields to productive use.
The Brownfields Tax Incentive expires
after 3 years, covering eligible costs
incurred or paid from August 1997
through December 31,2000.
The tax incentive is applicable to prop-
erties that meet specified land use, geo-
graphic, and contamination require-
ments. Both rural and urban sites may
qualify for this tax incentive, but sites
on EPA's National Priorities List are
excluded. To meet the geographic re-
quirement, the property must be located
in one of the following categories:
1) EPA Brownfields Pilot areas desig-
nated prior to February 1997;
2) Any Empowerment Zone or Enter-
prise Community (and any supple-
mental zone designated on Decem-
ber 21, 1994);
3) Census tracts where 20 percent or
more of the population is below the
poverty level; and
4) Census tracts that have a population
under 2,000, have 75% or more of
their land zoned for industrial or
commercial use, and are adjacent to
one or more census tracts with a
poverty rate of 20% or more.
(continued on Page 6)
WINTER 1997-1998
New Pilot Project Grants
Available
Two new rounds of site assessment
grants under the EPA Brownfields Ini-
tiative are expected to add more than
100 additional municipalities to the na-
tional program over the coming year.
Like the earlier pilot projects, these
grants will provide up to 5200,000 in
assistance to communities to assess va-
cant or under-utilized industrial proper-
ties which have languished because of
suspected environmental contamination.
An announcement of the new site as-
sessment pilot grants appeared in the
Federal Register on October 9, 1997.
Application deadlines for the two
rounds of the 1998 assessment pilot
award are December 15, 1997 and
March 23, 1998. Previously unsuccess-
ful applicants are advised to revise and
resubmit their applications to be consid-
ered for the 1998 national assessment
pilot competition.
Lawrence D'Andrea, EPA Region 2
Brownfields Coordinator, urges inter-
ested municipalities to begin formulat-
ing their project plans early in the appli-
cation process. He is available to pro-
vide assistance to first time applicants
in understanding the requirements and
process for these grants.
EPA Region 2 Brownfields Contacts:
Brownfields Hotline, (800) 225-7044
Lawrence D'Andrea, Brownfields
Coordinator, (212) 637-4314
Chelsea Albucher, Brownfields
Support, (212) 637-4291
Robert Alvey, Assistant Coordinator,
(212)637-3258 ~
Camden's Pilot; A Job Well Begun 3
Rome, NY: Assets in an Industrial Past 4
EPA's Showcase Community Program 5
U.S. Senate Grant for Perth Amboy 5
Niagara Falls Redevelopment 6
Industry
Community
BQCR Vol. 1 No. 3 Winter 1997-1998
Brownfields Redevelopment through Partnerships
-------
EPA NEWS RELEASE
EPA Joins Representative
Robert Menendez and
Mayor Chris Boliwage in
Elizabeth for Brownfields
Award, January 15,1998
U.S. Environmental Protection
Agency (EPA) officials joined Rep-
resentative Robert Menendez and
New Jersey Department of Environ-
mental Protection Commissioner Bob
Shinn today to present Mayor Chris
Boliwage and the City of Elizabeth a
$200,000 check under EPA's na-
tional Brownfields Pilot Program.
Mr. Fred Hansen, EPA Deputy Ad-
ministrator, presented the grant check
at Elizabeth City Hall. "The
Brownfields program represents an
opportunity to return dormant lands
to productivity," said Mr. Hansen.
"The program helps communities
participate in making the properties
become clean, job-creating, profit-
producing, neighborhood assets once
more."
Control of these projects rests at the
community level. Local officials,
bankers, developers and community
representatives define the problems
and design the solutions. EPA's role
is to support and facilitate this pro-
cess and to act as a catalyst for
change.
EPA Region II Deputy Administrator
William J. Muszynski said, "Eliza-
beth has been and continues to be a
leader in Brownfields development
under the stewardship of Mayor
Boliwage. This pilot project will
keep EPA's Brownfields program in
the mainstream of the city's strong
redevelopment efforts."
EPA has approximately $85 million
in this years' budget, which will
include expanding the program by
100 new brownfields site assessment
pilot projects between now and Sep-
tember 30. Several hundred munici-
palities applied for brown-fields
grants in 1996 and 1997.
The findings and experience from the
Elizabeth project and other pilots will
help guide EPA's future efforts to
stimulate economic redevelopment
through environmental cleanup. ~
New York City:
Options for Financing Industrial Redevelopment
The EPA Region 2 BQCR will periodically publish information on alternative financ-
ing options in different parts of the region. This issue focuses on New York City.
The New York City Economic Develop-
ment Corporation (EDC) has compiled
information on alternative financing vehi-
cles and programs aimed at promoting
industrial development, many of which
could apply to local brownfields projects.
In New York City, financing programs
available through the New York City In-
dustrial Development Agency (IDA) in-
clude:
IDA Bonds. Low-cost, double and triple
tax exempt Industrial Revenue Bonds is-
sued by this agency allow eligible com-
mercial, industrial and non-profit corpora-
tions to finance business expansion within
the city's five boroughs. To be eligible, a
project must create or retain permanent
local jobs and must demonstrate the need
for IDA financing or for the other benefits
available through the IDA which include
abatement or exemptions from certain
taxes. IDA bond proceeds can only be
used to acquire land and/or a building,
construct or renovate a facility, or to pur-
chase machinery or equipment.
Industrial Incentive Program (IIP).
Industrial companies with annual gross
revenues over $5 million and/or having
more than 100 employees, which want to
construct, renovate or acquire facilities in
New York City may qualify for signifi-
cant tax benefits under this program. In
order to confer these benefits, IDA ac-
quires title to the subject property, leasing
it back to the participating company while
retaining nominal ownership. Benefits of
the IIP can include waiver of sales tax on
construction materials and fixtures, waiver
of mortgage recording tax if applicable,
and the IDA'S PILOT (Payments-In-Lieu-
of- Taxes) policy, which can lower real
estate taxes. The program can cover a 25
year period, conferring benefits for up to
21 years with a phase-out in years 22 to
25.
Other programs providing options to
smaller businesses and involving public-
private partnerships include:
New York City Capital Access
(NYCCA). Term loans and lines of credit
ranging from $5,000 to $50,000 may be
available from the twelve participating
banks in this public-private lending pro-
gram.
NYCCA establishes a cash reserve pool to
cover losses in a participating bank's
lending portfolio, thereby enhancing the
ability of small and medium-sized busi-
nesses that fall below the criteria for con-
ventional bank loans to obtain financing.
Real estate acquisition and physical im-
provements to real estate are among the
eligible activities covered by this pro-
gram.
Prospect Street NYC Discovery
Fund. This public-private equity invest-
ment fund, initially capitalized by EDC
and other public and private investors,
makes investments of $ I to $9 million in
growing New York City-based advanced
technology companies. The program
broadly defines such companies as "sub-
stantially involved in the research and
development or manufacturing and pro-
duction of new scientific applications,
technical process, methods and inven-
tions." Industry areas of interest to the
Fund include telecommunications, medi-
cal devices, interactive media, biotechnol-
ogy, robotics, computer-related products,
and others.
In addition to these programs, die Re-
gional Economic Development Assistance
Corporation (REDAC) offers a mini-loan
($5,000 to $50,000) program covering real
estate acquisition and leasehold improve-
ments. Small and start-up New York City-
based contractor, manufacturing, retail
and service businesses are eligible.
For further information on these programs
contact:
New York City
Economic Development Corporation
110 William Street
New York, NY 10038
(212)312-3600 ~
m Brownfields Redevelopment through Partnerships
BQCR Vol. 1 No. 3 Winter 1997-1998
-------
Camden's Pilot: Building on a Job Well Begun
The city of Camden, New Jersey, hard hit after more than a
century of heavy industrial activity by manufacturing's de-
cline in recent decades, is now home to nearly as many acres
of vacant brownfields property as it has in productive manu-
facturing land. In 1995, with 16.3 percent unemployment and
a significant local poverty rate, the city began aggressively
seeking to redevelop its brownfields properties and turn the
tide on the local quality of life.
Camden began to identify its brownfield sites through record
searches and field surveys, and eventually focused its efforts
on the investigation and cleanup of 14 foreclosed properties.
It formed a Mayor's Environmental Committee to oversee the
process and received nearly $2 million in site investigation
grants from the state Hazardous Discharge Site Remediation
Fund. The city created a database to include all investigation
results, zoning regulations, desired land uses and financing
options and outlined a process for meeting regularly with
interested developers. Working closely with residents, neigh-
borhood groups and development planners, the city saw
success in remediating a former railroad yard (now an 18,000
seat amphitheater), a former factory site (now new housing),
an old train yard (now the New Jersey State Aquarium), and
in relocating a Lockheed Martin defense electronics facility
into new quarters at the site of a former Campbell Soup plant.
In March 1996, Camden applied for an EPA Brownfields
Pilot Project Grant to solidify what it had already begun.
Three months later EPA awarded Camden a pilot project
grant, adopting as objectives several of the city's existing
brownfields goals:
~ establishing partnerships for assessing and planning
brownfields redevelopment with community groups,
developers, and development corporations,
~ providing "one-stop shopping" for information on all
brownfields sites in the city, including their potential uses
and off-site impacts,
~ coordinating site investigations and providing an infor-
mation database accessible by the public,
~ establishing a mechanism for monitoring all site assess-
ment work, and
~ prioritizing Camden's brownfields sites for redevelop-
ment.
Camden has chosen three specific brownfields sites to assess,
clean up and redevelop as it pursues these objectives. The
sites include a former Conrail bulk material handling facility,
the site of a chemical drum cleaning facility, and the site of a
former Knox Gelatin factory. These sites are smaller than
those the city was able to remediate earlier and will be good
models in planning for the redevelopment of other smaller,
less obviously attractive brownfields properties.
Thus far, two of the site investigations are nearing completion
and the state has approved the site investigation work plan for
the third. The city plans to apply to the U.S. Economic Devel-
opment Agency for public works infrastructure funding to
redevelop the former gelatin factoiy into an industrial park.
Local developers have expressed interest in turning the
Conrail site into an assisted living facility, and the Cooper
Grant Neighborhood Redevelopment Plan identifies the
former drum cleaning site as suitable for housing.
The three pilot sites are located in a federal Empowerment
Zone, and Camden is hoping to be able to serve as an exam-
ple of a smaller city making use of opportunities provided by
Empowerment Zone legislation. The city also plans to exam-
ine ways to use Industrial Development Bonds in conjunction
with other funding sources to pay for investigations and
cleanups. According to Fred Martin, Senior Analyst with
Camden's Division of Planning, the city is looking into op-
portunities offered by the state's enterprise zone legislation,
the new New Jersey Environmental Opportunity Zone legisla-
tion, and the Landfill Redevelopment Act.
Funding for some of the work done to date has come from a
Community Development Block Grant. Camden has also
received federal support for a resident Environmental Protec-
tion Agency staff person to work solely on the city's brown-
fields redevelopment through the federal Intergovernmental
Personnel Act.
By taking inventory of its sites, amassing and making critical
site information available in a consistent fashion, making full
use of new financial opportunities, and partnering effectively
with developers, residents and regulators, the City of Camden
hopes to restore much of its abandoned industrial land. In so
doing, it will provide a model for similar action in other cities
facing the same challenge. ~
PILOT SITE
FACT SHEETS -
NOW AVAILABLE
THROUGH HOTLINE!
/mrwm) 5!
EPA REGION 2 BROWNFIELDS HOTLINE
The hotline, staffed by TRC Environmental Corporation, operates
Monday through Friday from 9 a.m. - 4:30 p.m.
Within Region 2 (New York, New Jersey, Puerto Rico and the
U.S. Virgin Islands), dial 800-225-7044
Outside Region 2, dial: 212-619-7703
BQCR Vol. I No. 3 Winter 1997-1998 Brownfields Redevelopment through Partnerships Qj
-------
Rome, NY: Finding
Assets in an Industrial
Past
From adversity springs opportunity.
The EPA Brownfields pilot project now
underway in Rome, NY aims to prove
that adage true. The project focuses on
the resurrection of one 17-acre property
within a 200-acre brownfield known as
the East Rome Industrial Redevelop-
ment Project (ERIRP). Using this site as
a demonstration of site assessment and
risk-based cleanup techniques, officials
plan to engage the remaining 18 prop-
erty owners within the ERIRP in the
common goal of restoring the entire
area to a productive light industrial
park.
The ERIRP once generated ten percent
of the nation's supply of finished cop-
per. As in cities everywhere, when this
backbone industry declined, it left be-
hind a vacant, deteriorating and contam-
inated industrial zone posing serious
safety and health hazards. The 1993
realignment of Griffiss Air Force Base
further deflated the local economy. Re-
ceiving the federal brownfields pilot
project grant not only boosts the com-
munity's efforts at assessing and rede-
veloping its brownfields properties, but
will bring on board the expertise of the
Department of Defense's Rome Labora-
tories to help, applying DOD technolo-
gies to sites contaminated from prior
DOD-related contracts.
"Pilot projects help communities with
the upfront cash to clarify the issues,
assess their severity, and evaluate the
type of remediation alternatives that
exist," said Ron Conover, Director of
Planning and Community Development
for the City of Rome. "These days, that
tends to be difficult money to come by."
The pilot project began in September
1996, and in its first year has enabled
Rome to:
bp establish a Brownfields Task Force
to oversee and guide the project,
By hold two public meetings to solicit
public input and support,
w begin demolition of structures at
the pilot site,
initiate negotiations for a cleanup
agreement between the property
owner and the New York State De-
partment of Environmental Conser-
vation (NYSDEC),
ea" apply for and receive one of the
first nine investigation awards un-
der the New York State Clean Wa-
ter/Clean Air Bond Act for investi-
gating property to be used for a
new roadway at the ERIRP, and
«*¦ interest two adjacent landowners in
developing the pilot site.
The city completed the preliminary
Phase I Site Assessment at the demon-
stration site in 1995, and the site owner
is now negotiating a cleanup plan under
the Voluntary Cleanup Program with
NYSDEC. The city also expects a Re-
cord of Decision this fall from
NYSDEC outlining the necessary reme-
dial plan for the roadway property.
The Task Force has met with represen-
tatives of Rome Labs and the New York
State Technology Enterprise Corpora-
tion, New York's chief technology
transfer corporation, and continues to
plan ways to apply new testing technol-
ogies to Rome's brownfields sites. The
Task Force has retained a consulting
team which is developing the necessary
legal mechanisms for agreements be-
tween the City of Rome and ERIRP
property owners to jointly pursue
cleanup and redevelopment. The con-
sulting firm will also work with the city
to publish a regular newsletter on the
project.
Thus far, the pilot site owner has en-
tered a development agreement with the
city stating its intention to pursue a vol-
untary cleanup and then transfer the
property to the interested developers. In
addition to certain demolition responsi-
bilities, the agreement holds the city
responsible for providing infrastructure
and other services to the industrial park.
The city hopes to enter into similar
agreements with other property owners
in the ERIRP.
This EPA brownfields pilot project is
but one element of Rome's overall
ERIRP. Funding from the New York
State Department of Transportation, A
private property owners, and the city of"
Rome is supporting other aspects of the
ERIRP including debris disposal, demo-
lition, asbestos abatement, road con-
struction and other infrastructure im-
provements and maintenance.
"The pilot project has helped us to focus
and to provide the products we need to
put together an overall plan for redevel-
opment," said Conover. Though docu-
menting the process for replicating
Rome's approach elsewhere is one of
the later phases of the pilot project, that
information is already getting out. A
steady stream of speaking engagements
and phone inquiries are evidence of the
surrounding need to know. As Rome
moves forward on the ERIRP, it will
continue to share its experience. In the
meantime, the city is better able to un-
derstand and tackle its brownfields
challenge. ~
Finding
Federal
Grant Money
Just Got
Easier
For information on funding for
brownfields cleanup and redevelop-
ment, check out the Government
Information Service's new *1997
Guide to Federal Funding and
Nonprofits." The 1,700 page re-
source guide includes information
on how to apply for $74 billion in
federal money for pollution cleanup,
housing, community development,
job training, roads and highways,
and other projects related to brown-
fields redevelopment.
The guide describes 650 separate
programs, listing contact names
and phone numbers. Regular up-
dates and a grant deadline calen-
dar are available to subscribers.
To order your guide or find out
more about it, call 800-876-0226 or
703-528*1000 ~
Q Brownfields Redevelopment through Partnerships
BQCR Vol. 1 No. 3 Winter 1997-1998
-------
EPA Launches
Showcase Community Program
EPA is looking for ten communities to
designate as Brownfields Showcase
Communities. These communities, once
selected, will receive technical, finan-
cial and other assistance from the Na-
tional Partnership of federal agencies
supporting brownfields redevelopment.
The intention is to highlight ten com-
munities of vaiying sizes, resources,
and characters, demonstrating how they
have been able to address brownfields
challenges through collaborative rede-
velopment programs.
In an announcement issued August 19,
EPA invited communities to submit a
two-page statement of their interest,
outlining who would oversee the local
project and exactly how designation as
a Showcase Community would help the
community meet its objectives and ad-
vance the following Showcase Commu-
nity goals:
~ Promotion of environmental protec-
tion, economic redevelopment and
community revitalization.
~ Linking of federal, state, local and
non-governmental action support-
ing community efforts.
^ Development of national models
demonstrating the positive results
of public and private collaboration.
Showcase communities will receive
national visibility for their brownfields
redevelopment work, coordinated tech-
nical and financial assistance, and staff
support in the form of a federal em-
ployee to assist with coordination and
implementation.
EPA encouraged the participation of
communities already involved in assess-
ing and planning for brownfields rede-
velopment and those which have al-
ready forged relationships with federal,
state, and local government and other
public and private stakeholders. Inter-
ested parties submitted statements of
their interest in September. A Show-
case Communities Selection Board will
now narrow the field of applicants to 30
to 40 candidates which will then be in-
vited to submit ten-page proposals fully
describing their brownfields efforts.
The Selection Board will ultimately se-
lect 10 Brownfields Showcase Commu-
nities based on the following eight cri-
teria:
O Brownfields Potential
© Community Need
© Local Commitment
O Federal, State, and Local
Partnerships
© Strategic Planning
© Management Capability
© Environmental Justice
© National Replicability
For more information on the Showcase
Community Program, contact Gayle
Rice at (202) 260-8431 or Sven-Erik
Kaiser at (202) 260-5138. ~
¦
NEW BROWNFIELDS WEB PAGE
WATCH FOR IT!
EPA Region 2's new Brownfields
Web Page will soon be on-line, carry-
ing The Brownfields Quarterly Comm-
unity Report in full. The Brownfields
! Web Page will be accessible through:
Region 2 Web Page,
http://www.epa.gov/region02
or
EPA's National Web Page,
http://www.epa.gov/swerosps/bf ~
Perth Amboy, New
Jersey Gets $2 Million
Grant from the U.S.
Senate
In August, Senator Frank Lautenberg, a
senior member of the Appropriations
Committee, announced the Committee's
approval of a $2 million block grant for
the City of Perth Amboy, NJ which will
be used to fund demolition activities at
a former DuPont Industrial Site. This
block grant, which received House/
Senate Conference Committee and
Presidential approval in late fall, will
allow implementation of a key part of
the city's Redevelopment Plan "FOCUS
2000".
FOCUS 2000 is intended to create pub-
lic/private partnerships to revitalize and
reclaim vacant, underutilized properties
in Perth Amboy. Under FOCUS 2000,
the city plans to transform properties
located along the waterfront between
Buckingham Avenue and Smith Street
into a cultural area with a performing
arts center, a museum, a combined ho-
tel/office building, boutiques and eating
establishments. In April 1997, EPA
recognized Perth Amboy's efforts by
awarding the city a National
Brownfields Assessment Pilot grant.
Integration of Focus 2000 with Perth
Amboy's Urban Enterprise Zone, the
brownfields pilot, and the additional
federal block grant will provide added
impetus to property development.
The former DuPont property is located
in one of three key areas identified by
the city as having brownfields candi-
dates. Perth Amboy's Mayor Joseph
Vas sees the area as a major focal point
for redevelopment of the city. Accord-
ing to Mayor Vas, "...the grant will
serve as a catalyst in the revitalization
and beautification of the waterfront
area, as well as helping to enhance what
we consider to be the gateway for the
future Harbortown Housing Develop-
ment." ~
EPA REGION 2
BROWNFIELDS HOTLINE:
1-800-225-7044
BQCR Vol. 1 No. 3 Winter 1997-1998
Brownfields Redevelopment through Partnerships
-------
City-Assisted
Redevelopment in
Niagara Falls
While brownfields redevelopment is
important to cities everywhere, in Niag-
ara Falls, NY it is essential for future
economic growth. The city contains 17
former industrial sites, encompassing
386 acres of unused, and likely contam-
inated, land. No other undeveloped land
remains. For growth to happen, the city
must focus on these brownfields.
With the help of a new EPA brown-
fields pilot project grant, awarded last
fall, Niagara Falls is doing just that. The
city is now intent on developing the
expertise and mechanisms needed to
guide redevelopment of its vacant acres.
The pilot project will allow detailed site
investigations, cleanup plans, and cost
estimates to be developed for four sites,
and will also identify potential funding
sources to carry out these cleanups. The
priority sites will be selected through a
process involving resident and private
sector participation and considering the
expected social and economic impact
their redevelopment will have on the
surrounding community. Though final
site selection is still incomplete, it is
likely that the pilot sites will include at
least one former Union Carbide plant
and one former printing operation. They
will all represent abandoned or
underused industrial land in the state
Economic Development Zone.
In preparation for these cleanups, the
city is hiring a consultant to prepare a
Site Usage Study identifying potential
new uses for these sites and others lo-
cated in the same brownfields area of
the city. This study will tie the redevel-
opment of these sites to an overall
neighborhood redevelopment plan. The
city expects the study to be available by
March 1998 and intends to use it to help
select the final four sites for redevelop-
ment. Thereafter, the city can begin as-
sessing various funding options such as
the Clean Water/Clean Air Bond Act's
environmental restoration program, fed-
eral Housing and Urban Development
funds, and possibilities for voluntary
cleanup under the New York State De-
partment of Environmental Conserva-
tion's Voluntary Cleanup Program.
Some of the sites to be addressed under
the pilot project are city-owned, and
some are privately owned. All are cur-
rently vacant.
According to Pilot Project Director Dan
Gagliardo of the Niagara Falls Depart-
ment of Environmental Services, sev-
eral potential developers have already
expressed interest in these sites. While
many decisions have not yet been made,
planned end uses will guide cleanup
decisions wherever possible.
Deed restrictions may be required to
ensure future property uses are ade-
quately protected by cleanup measures.
In addition to the hands-on activities at
the four specific sites, Niagara Falls
will also be using its pilot project funds
to create a brownfields outreach pro-
gram and a lasting environmental edu-
cation program. The city has created a
mailing list and is planning a variety of
outreach efforts to gain community sup-
port and public input to the redevelop-
ment planning: media outlets,
door-to-door canvassing, newsletters
and direct mail. The community partici-
pated in EPA's introductory seminar on
brownfields redevelopment which was
held in Niagara Falls on November 24,
1997.
"We want to reach not only potential
developers, but the populace, as well,"
said Gagliardo, "We want to build their
understanding of what we are trying to
do and their support for a clean local
environment and redevelopment."
The pilot project will also create a per-
manent Environmental Awareness Cen-
ter (EAC) which will serve as an infor-
mational clearing house on the full
range of environmental issues, includ-
ing brownfields. According to Environ-
mental Assistant Christopher Schmidt,
stakeholders including the University of
Buffalo, the Love Canal Agency, local
industry, and the Niagara Falls Aquar-
ium have already expressed interest in
supporting this effort. The project team
envisions a staffed facility, funded
through grant money and local support-
ers, which can offer classes such as Oc-
cupational Safety and Health Adminis-
tration courses and be a source of envi-
ronmental information for the public.
"The EAC will provide historical, edu^
cational and scientific assessment of
where our environment has been and
where it is headed in the future," said
Schmidt.
Niagara Falls has an extensive history
of community environmental activism,
awareness, and involvement stemming
from the Love Canal discovery more
than 25 years ago. Coupled with the
state Economic Development Zone
incentives, the city believes its brown-
fields initiative provides a powerful
incentive for redeveloping long undesir-
able sites. Over the next year, the Niag-
ara Falls pilot project will be full swing
into its planned activities, laying the
groundwork for immediate action on
four sites and preparing the community
for further redevelopment and environ-
mental improvements. ~
Tax Incentive
(continuedfrom Page 1)
Within EPA Region 2, several Brown- M
fields Pilots are eligible including Bum
falo, New York City, and Rochester in
New York State, and Camden, Newark,
and Trenton in New Jersey. Many other
areas may be eligible under the other
categories. The specified land use and
contamination criteria ensures that the
tax benefits of this incentive are not
misused. The taxpayer must get a certif-
ication from the state environmental
agency that the property is in a targeted
area. The governors of New York and
New Jersey have designated their re-
spective state environmental protection
agencies as lead agencies for their tax
incentive programs. An EPA Quick
Reference Fact Sheet on the Brown-
fields Tax Incentive is available for ad-
ditional information, and can be ob-
tained by calling the Brownfields Hot-
line at (800) 225-7044. ~
LETUS HEAR FROM YOUlT~
The Region 2 Brownfields Quarterly
Community Report welcomes your
input. Phone the Region 2 Brown- m
fields Hotline at 800-225-7044 with
your comments and suggestions. ~
Q Brownfields Redevelopment through Partnerships BQCR Vol. 1 No. 3 Winter 1997-1998
-------
Alternative Financing for
Brownfields
by Evan C. Henry, Vice President and
Manager, Environmental Services,
Bank of America and Randy A. Muller,
Vice President, Environmental Services,
Bank of America
When sources of loan repayment can be
identified beyond the real estate collat-
eral (i.e., cash flow, equipment and in-
ventory and personal guarantees), the
loan may be underwritten in a manner
that will diminish the significance of the
potential environmental concerns. Be-
yond the typical sources of repayment,
indemnifications, escrows and insur-
ance products may all provide the
means to successfully underwrite a real
estate acquisition loan.
Indemnifications to the borrower issued
by the current owner of the property, or
by the entity responsible for the envi-
ronmental conditions of concern, must
be carefully reviewed. An agreement
should be based on evaluating the fi-
nancial resources of the issuing entity,
Nlimitations in terms of scope of cover-
e or length of time that the indemnifi-
cation is available, and most impor-
tantly, the assignability. With adequate
indemnification, the lender can look
beyond the potential environmental
concerns.
In lieu of an indemnification, the seller
may escrow funds to address environ-
mental concerns - a difficult process,
as all parties must be reasonably com-
fortable that information provided re-
garding the environmental concern and
required remedial activities is objective
and accurate as to both time and costs.
The release of escrows is often trig-
gered by the issuance of documentation
by an environmental regulatory agency
attesting to the fact that it is the
agency's opinion that the environmental
concern has been adequately addressed.
A large drawback lies in the feet that
such documentation is slow in coming
and may be withheld for up to one year
after all remedial activities have been
completed. Regulatory closure infor-
mation typically contains enough "loop
holes" to leave unsophisticated lenders
very nervous.
Two cleanup liability insurance prod-
ucts have promising applications to
brownfield projects. The first type of
policy, referred to as "post-remediation"
coverage, insures that remediation has
been completed and that additional
costs will be paid by the policy if, for
some reason, further remediation must
be performed. The second type of envi-
ronmental insurance policy applicable
to brownfields is a type of "stop-loss"
policy that pays for remediation cost
overruns above and beyond an initially
established remediation cost estimate.
This allows the party undertaking the
remediation to cap or fix the costs prior
to actually beginning the cleanup.
The benefit of such policies, when af-
fordable, is that they furnish increased
certainty with respect to borrowers' lia-
bilities, and thereby provide a level of
comfort to the lender. The largest
drawback is that, in many instances -
and as a result of a lack of accurate ac-
tuarial data -- the environmental investi-
gation requirements of the insurance
underwriter may exceed those of the
lender.
Sophisticated lenders evaluate environ-
mental concerns in terms of cash flow
and reserves. Comfortable that they
have accurately identified the cost and
time required to address environmental
concerns, these lenders may look to a
borrower's projected cash flow to deter-
mine whether or not funds are available,
on an ongoing basis, to address the en-
vironmental concern.
There are a number of financial institu-
tions which have been, in essence,
lending on brownfields for a number of
years. The list of institutions includes -
but is certainly not limited to - Bank of
America, NationsBank, CoreStates,
Barnett, Wells Fargo, Union Bank,
Bank of the West, LaSalle Bank, Amer-
ican National Bank, Comerica, Home
Savings of America, Sanwa Bank,
Mellon Bank, Chemical Bank, First Un-
ion Bank and NBD. ~
EPA NEWS RELEASE
EPA Removes Last of the
Chemical Hazards from
Building at the Former
Magic Marker Site in
Trenton
The U.S. Environmental Protection
Agency (EPA) announced that the
last shipment of hazardous materials
has left the abandoned Gould Bat-
tery (a.k.a. Magic Marker) site and
is bound for a licensed hazardous
waste disposal facility. EPA began
the cleanup of the building in No-
vember 1997 because of concerns
that improperly stored hazardous
materials at the site could pose a
danger to human health and die en-
vironment. At the request of the
New Jersey Department of Environ-
mental Protection, EPA conducted a
removal action at the site, which
was formerly used to manufacture
lead-acid batteries, automobile bod-
ies and ink markers. The City of
Trenton has included die site as one
of its pilot projects under the EPA's
Brownfields grant.
EPA Administrator Jeanne M. Fox
said, "EPA coordinated its activities
with Mayor Doug Palmer's office,
and city public works and fire de-
partments. We want to thank the
residents near the site for their pa-
tience and cooperation. With the
site cleared of this potentially dan-
gerous threat, die city can now
move forward with its plans to rede-
velop the Brownfield property".
In the course of the cleanup, EPA
increased existing security measures
and made repairs to the 8-foot
barbwire-topped fence encircling
the seven-acre site to further prevent
any potential health tiueat to the
public through direct contact with
die hazardous materials until these
materials could be removed prop-
erly. As a precaution, EPA also
sampled areas of die property within
the immediate vicinity of die build-
ing and determined there was no
contamination outside the building
that needed to be addressed during
its action. The cleanup action cost
approximately $450,000 and was
financedthrough the removal au-
thority of the federal superftind pro-
gram. ~
IQCR VoL 1 No.3Wint«r 1997-1998
Brownfields R*d»v*tapm*rrt throggMtart^
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Facts from
the Field
The following information has been
drawn from EPA Region 2's database
which tracks the progress of pilot pro-
jects throughout the region.
Phase I investigations have been
completed at 14 sites.
Phase II investigations were or are
currently being performed at 8
sites.
Risk assessments were conducted at
2 sites.
Innovative technologies are being
planned or employed at 5 sites:
East Rome Business Park, Rome,
New York - Ground penetrating
radar (and possibly infra-red detec-
S
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