United States
Environmental
Protection Agency
Washington, D.C. 20460
Solid Waste
and Emergency
Response(5101)
EPA500-F-99-051
May 1999
www.epa.gov/brownfields/
&EPA Brownfields Cleanup
Revolving Loan Fund Pilot
Sacramento, CA
Outreach and Special Projects Staff (5101)
Quick Reference Fact Sheet
EPA's Brownfields Economic Redevelopment Initiative is designed to empower states, communities, and other
stakeholders in economic redevelopment to work together in a timely manner to prevent, assess, safely clean up, and
sustainably reuse brownfields. A brownfield is a site, or portion thereof, that has actual or perceived contamination and
an active potential for redevelopment or reuse. EPA is funding: assessment demonstration pilot programs (each funded
upto $200,000 overtwo years), to assess brownfields sites and to test cleanup and redevelopment models;job training
pilot programs (each funded up to $200,000 over two years), to provide training for residents of communities affected
by brownfieldstofacilitatecleanupofbrownfieldssites and preparetrainees for future employmentintheenvironmental
field; and, cleanup revolving loan fund programs (each funded up to $500,000 over five years) to capitalize loan funds
to make loans for the environmental cleanup of brownfields. These pilot programs are intended to provide EPA, states,
tribes, municipalities, and communities with useful information and strategies as they continue to seek new methods
to promote a unified approach to site assessment, environmental cleanup, and redevelopment.
BACKGROUND
The City of Sacramento has many low-income
neighborhoods characterized by dilapidated
commercial strips, substandard housing, inadequate
infrastructure, and general blight. Many of these
neighborhoods contain: abandonedjunkyards, former
plating and metal-working shops, closed dry cleaners,
and vacated auto repair operations. Pursuant to a
state redevelopment law, Sacramento has designated
nine impoverished and deteriorated neighborhoods as
Redevelopment Project Areas. The city uses tax
increment financing, and partners with city agencies,
prospective developers and project area committees
(comprising neighborhood residents, property owners,
and businesses) to revitalize these distressed areas to
best meet community needs.
Sacramento has selected four of these Project Areas
as targets for the BCRLF Pilot, including North
Sacramento, Oak Park, Stockton Boulevard, and the
R Street Corridor (a portion of the Downtown Proj ect
Area). The median household income in each target
area is at least 20 percent lower than the average
income in Sacramento County. Each of the target
areas contain many brownfields sites, and their
redevelopment is being vigorously pursued. Following
the first round of lending, the Sacramento BCRLF
PILOTSNAPSHOT
Sacramento, California
Date of Award:
September 1997
Amount: $350,000;
$150,000 supplement
funding awarded May 1999
BCRLF Target Area :
Sacramento's Redevelopment
Project Areas: North
Sacramento, Oak Park,
Stockton Boulevard, and the
R Street Corridor.
Contacts:
City of Sacramento
(916)264-8196
Regional Brownfields Team
U.S. EPA- Region 9
(415)744-2237
Visit the EPA Region 9 Brownfields web site at:
http://www.epa.gov/region09/waste/brown/index.html
For further information, including specific Pilot contacts,
additional Pilot information, brownfields news and events, and
publications and links, visit the EPA Brownfields web site at:
http://www.epa.gov/brownfields/
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program may add other Redevelopment Proj ect Areas
with a significant number of brownfields sites to the
program.
BCRLFOBJECTIVES
The Sacramento BCRLF program will leverage the
EPA grant money with other financial tools available
to the city for use in the target areas. The city will use
the revolving loan fund as a source of short-term
financing for environmental cleanup prior to sale or
development of the property. A BCRLF loan will be
offered as part of a redevelopment package approved
by both the city and the community, whereby the city
can provide additional incentives to facilitate cleanup
and redevelopment. This approach will ensure that
the property is cleaned up and put to productive reuse
consistent with the community's needs.
FUNDSTRUCTUREANDOPERATIONS
The city anticipates making up to six loans from the
original loan pool. The initial round of lending is
expected to be closed within three years of grant
approval.
The City of Sacramento will act as the Lead Agency.
The S acramento Housing and Redevelopment Agency
(SHRA) will serve as the Fund Manager. Loan
applicants will be required to conduct cleanup under
the CaliforniaDepartment of Toxic Substances Control
(DTSC) Voluntary Cleanup Program. The DTSC
will serve as Site Manager, ensuring compliance with
CERCLA and other applicable environmental laws.
SHRA will evaluate the borrower's financial capability
and credit history, as well as his/her ability to manage
the cleanup, as part of the underwriting process.
Similar to many construction loans, the BCRLF loans
will be structured with interest-only payments until
cleanup is complete. Loans will be written for no
more than three-yearterms, with repayment expected
from sale or refinancing of the property. A post-
cleanup appraisal of the property will be required to
insure the loan-to-value ratio will not be greater than
85 percent, including the BCRLF loan and all prior
financing.
LEVERAGINGOTHERRESOURCES
By coupling the revolving loan program with other
redevelopment initiatives and funds, including programs
established for financing environmental assessment,
the city hopes to put together packages that address
a spectrum of brownfields problems—both the
contamination and the underlying economic issues. In
some cases, other sources of cleanup and/or
redevelopment funding may be available (e.g., the
state underground storage tank fund, responsible
party contributions, city tax increment financing, and
non-profit grants).
Use of BCRLF Pilot funds must be in accordance with
CERCLA, and all CERCLA restrictions on use of funding
also apply to BCRLF funds.
Brownfields Cleanup Revolving Loan Fund Pilot
May 1999
Sacramento, California
EPA500-F-99-051
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