w5 Brownfields 1997 Revolving Loan Fund Pilot Fact Sheet Sacramento, CA EPA Brownfields Initiative EPA's Brownfields Program empowers states, communities, and other stakeholders to work together to prevent, assess, safely clean up, and sustainably reuse brownfields. A brownfield site is real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. On January 11, 2002, President George W. Bush signed into law the Small Business Liability Relief and Brownfields Revitalization Act. Under the Brownfields Law, EPA provides financial assistance to eligible applicants through four competitive grant programs: assessment grants, revolving loan fund grants, cleanup grants, and job training grants. Additionally, funding support is provided to state and tribal response programs through a separate mechanism. 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: abandoned junk yards, 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 Project 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 program may add other Redevelopment Project Areas with a significant number Vvrr»wnfif*1Hc cit^c +r» tlif* rvrr\crrcim Pilot Snapshot Date of Announcement: 09/01/1997 Amount: $350,000; $150,000 supplement funding awarded May 1999 Profile: Sacramento's Redevelopment Project Areas: North Sacramento, Oak Park, Stockton Boulevard, and the R Street Corridor. Contacts For further information, including specific grant contacts, additional grant information, brownfields news and events, and publications and links, visit the EPA Brownfields Web site (http ://www .epa.gov/brownfields). EPA Region 9 Brownfields Team (415)972-3091 EPA Region 9 Brownfields Web site (http ://www .epa.gov/region9/brownfields) Grant Recipient: City of Sacramento,CA (916)264-8196 Objectives 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. Activities Fund Structure and Operations 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 United States Environmental Protection Agency Washington, DC 20450 Solid Waste and Emergency Response (5105T) EPA 500-F-99-051 May 99 ------- Vi L/1UH 1111V1UJ J1IV J IV U1V pivgiuill. . approval. The City of Sacramento will act as the Lead Agency. The Sacramento Housing and Redevelopment Agency (SHRA) will serve as the Fund Manager. Loan applicants will be required to conduct cleanup under the California Department 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-year terms, 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. Leveraging Other Activities 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. The information presented in this fact sheet comes from the grant proposal; EPA cannot attest to the accuracy of this information. The cooperative agreement for the grant has not yet been negotiated. Therefore, activities described in this fact sheet are subject to change. United States Environmental Protection Agency Washington, DC 20450 Solid Waste and Emergency Response (5105T) EPA 500-F-99-051 May 99 ------- |