Federal Brownfields Tax Incentive:
Fields Environmental
Bloomington, Indiana
Overview
The Federal Brownfields Tax Incentive
encourages brownfields redevelopment by
allowing taxpayers to reduce their taxable
income by the cost of their eligible
cleanup expenses. The Incentive was
originally signed into law in August 1997
as part of the Taxpayer Relief Act. It was
renewed in October 2004 through the
Working Families Tax Relief Act of 2004
and continues until December 2005. To
qualify for the Tax Incentive, three criteria
must be met:
The property must be held by the
taxpayer incurring the cleanup cost
for use in a trade or business;
Hazardous substances must be
present or potentially present on
the property; and
The taxpayer must obtain a
statement from a designated state
agency verifying eligibility for the
Tax Incentive.
Designed to spur investment in blighted
properties and assist in revitalizing
communities, the Federal Brownfields Tax
Incentive can serve as a critical tool in
brownfields cleanup and redevelopment
efforts.
Project Highlights
The Federal Brownfields Tax
Incentive enabled Fields
Environmental to expense
approximately $80,000 in cleanup
costs during the redevelopment of
a 4-acre abandoned recycling
center property near Bloomington,
IN.
The restored property, now home
to the T.R. Thickstun Glass
Company, includes economic and
greenspace redevelopment.
Upon completion of the Glass
Company project, Fields
Environmental initiated work on
two other brownfields cleanup and
redevelopment projects in and
around Bloomington. The Federal
Brownfields Tax Incentive has been
a cornerstone for both projects.
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Project Background
As a small environmental cleanup business in Bloomington, IN, Fields Environmental is
constantly looking for new opportunities. In 1997, the company became aware of the Federal
Brownfields Tax Incentive through email correspondence with other environmental
consultants. Knowing that Bloomington had several brownfields, Fields saw the chance to
put the Tax Incentive to use. The company identified an abandoned site contaminated with
foundry waste from its former use as a recycling center. In a purchase that became the first
public/private partnership to use low-interest financing under a recently enacted state
Brownfields financing program, Fields Environmental purchased the site in a tax sale from
Monroe County.
The company then hired an environmental consulting firm to complete assessments, which
revealed the presence of some hazardous substances. In preparation for redevelopment,
Fields began a cleanup of the site that involved the removal of 60 loads of contaminated soil
and the import of more than 80 loads of new soil and clay. The property is currently home to
a commercial glass company.
Benefits of the Tax Incentive
Fields Environmental's awareness of the Federal Brownfields Tax Incentive greatly assisted its
cleanup and redevelopment operations. Indeed, the Incentive is an invaluable tool that
allows businesses to perform cleanup and redevelopment projects, as some key expenditures
can be written off as tax breaks. Rudy Fields, the owner of Fields Environmental, stated that
the Tax Incentive "allows a little 'bump' to keep cash coming until the redevelopment occurs.
I have told so many people about the Tax Incentive and how it is really important for smaller
companies." According to Mr. Fields, approximately $80,000 in cleanup costs were able to be
expensed through the Federal Brownfields Tax Incentive.
Once cleanup on the Fields property was complete, the property was leased by the T.R.
Thickstun Glass Company, which created three new jobs. Since then, the Tax Incentive made
it economically feasible for Fields Environmental to initiate cleanup and redevelopment on
two other brownfields in the Bloomington area.
Process for Utilizing the Tax Incentive
Mr. Fields notes that it was a relatively uncomplicated process to have the Indiana
Department of Environmental Management (IDEM) certify that the property qualified for the
Tax Incentive. To certify the property, IDEM required a fully executed affidavit, including
Phase I and II reports. Fields Environmental sent a letter and supporting documentation to
IDEM, demonstrating that the property was a qualified site. After IDEM issued the
certification, Fields was able to expense the cleanup costs associated with the project
through the Tax Incentive. According to Mr. Fields, the Brownfields staff at IDEM was also
helpful, responding efficiently to all inquiries from Fields Environmental. Utilizing the Federal
Tax Incentive proved so easy for Fields, he went on to use it in additional cleanup and
redevelopment projects.
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Recently completed headquarters of the T.R. Thickstun Glass Company.
Community Impact of the Brownfields Tax Incentive
Along with the success of the former recycling center project, Fields Environmental's other
brownfields projects continue to offer benefits to the community. On the first of these other
projects, Fields purchased a former plating facility from a federal bankruptcy court sale.
Fields then worked with IDEM to complete Phase I and II assessments, installed four
monitoring wells on the property, and successfully used the Federal Tax Incentive for
expensing cleanup costs. The project was also assisted through a Community Development
Block Grant from the U.S. Department of Housing and Urban Development. While still in
progress, Mr. Fields believes this redevelopment project will produce new jobs when a
manufacturing or production firm chooses to locate on this soon to be cleaned up property.
The second project involved a former junkyard contaminated with lead and PCBs. Fields
Environmental purchased the site and is now conducting Phase I and II environmental
assessments. Once cleanup is complete, these costs will be expensed using the Federal Tax
Incentive. As the property is located in a lower-income area of Bloomington, the city has
taken a particular interest in the project. Following cleanup, the city plans to purchase the
property from Fields and turn it into three residential lots. Fields has also expressed interest
in moving his company's headquarters to an existing building on the property. These
projects have encouraged additional redevelopment in Bloomington's distressed areas and
continue to improve the outlook for local residents.
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Continuing Success
Fields Environmental plans to continue to use the Federal Brownfields Tax Incentive for business
opportunities that may not be possible otherwise. The Tax Incentive helps small business
owners like Fields keep cash flowing during cleanup activities. IDEM now makes other
stakeholders aware of potential brownfields property sales that they might be able to cleanup
and redevelop, further promoting the reuse of brownfields throughout the State of Indiana.
Fields Environmental continues to spread the word about the Federal Brownfields Tax Incentive
to business owners who stand to benefit from it.
For more information about the Federal Brownfields Tax Incentive, please visit
http://www.epa.gov/brownfields/bftaxinc.htm.
For more information on requirements for using the Federal Brownfields Tax Incentive in Indiana,
please visit http://www.in.gov/idem/land/brownfields/index.html.
Federal Brownfields Tax Incentive Solid Waste EPA 560-F-05-226
Case Study and Emergency May 2005
Fields Environmental Response (5105T) www.epa.gov/brownfields
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