Revitalizing Southeastern Communities , flftr -f Working with Universities Universities cart play a prominent role in local brownfields initiatives. Universities often have the means not only to research, but to implement brownfields cleanup and redevelopment plans. Universities often have the scientific knowledge and equipment to assess possible contamination and to plan and complete revitalization projects. Universities also can provide training for residents of communities affected by brownfields, to facilitate cleanup of sites and to prepare trainees for future employment in the environmental field. Universities are eligible to apply for federal and state grants and can assist in the coordination of redevelopment efforts with local governments. A university may also cleanup and redevelop brownfields on neighboring sites. Universities can work closely with local governments throughout the cleanup and revitalization process, from grant application to drawing up redevelopment plans. More importantly, universities may be able to utilize a former eyesore by integrating it into their grounds as open space or needed buildings. University Finance Centers The EPA funds nine regional university finance centers that provide technical assistance and training to maintain and improve environmental conditions. Technical Assistance to Brownfields Communities (TAB) and Technical Outreach Services for Communities (TOSC) are two programs that link communities with professors and environmental specialists at the Hazardous Substance Research Centers (HSRCs). Based at universities within each region, the HSRCs provide assistance with the support of EPA grant funding. In Region IV, the EPA funds two finance centers at the University of Louisville and the University of North Carolina Charlotte. The EPA also funds Environmental Finance Programs at the University of Southern Maine, Syracuse University, University of Maryland, Great Lakes EFC at Cleveland State University, New Mexico Institute of Mining and Technology, California State University at Hayward, and Boise State University. The Center for Environmental Policy and Management Brownfields/Smart Growth Research Group at the University of Louisville (Center) works to develop more environmentally and economically sustainable alternatives to unmanaged growth in order to improve the efficiency of environmental infrastructure service delivery. The Center has prepared resource and practice guides for state and local officials who are interested in brownfields, smart growth, and environmentally sensitive but economically efficient land use and development policies. In addition, two of the Center's current projects focus on the use of environmental insurance for brownfields cleanup and public sector-led brownfields redevelopment. ------- University of Louisville practice guides are available within the Toolkit. Learn more about the Center at http://cepm.louisville.edu. The Environmental Finance Center at the University of North Carolina assisted the City of Charlotte in implementing its brownfields revolving loan fund for brownfields cleanup (BCRLF). As part of the partnership, the EFC held a planning charrette with the City of Charlotte on July 22, 1999. EFC issued a report on the charrette and its outcomes. See www.efc.unc.edu/ for more information about the Environmental Finance Center at the University of North Carolina. Other examples of partnerships with universities include: The City of Homestead, Florida, a 2005 brownfield cleanup grantee, is working with the University of Florida to remediate a brownfield site. A team of scientists from the University will use phytoremediation to clean contaminants from the soil. Deborah Gallagher, a Nicholas School faculty member at Duke University, was awarded one of six two-year $150,000 EPA Brownfields Training, Research, and Technical Assistance (BRTRA) grants. BRTRA grants fund projects that measure environmental and human health conditions in primarily low-income communities. Gallagher will examine ways to increase public participation in brownfields decision-making in socio-economically disadvantaged communities. http://www.nicholas.duke.edu/news/ns-gallaghergrant.html The University of Hawaii in Honolulu received a 2005 EPA job training grant. Honolulu Community College will train sixty students on the handling of hazardous materials, environmental health and safety, and the hazards present at hazardous waste sites. In-class instruction will be followed with on-the-job experience under the supervision of potential employers. Learn more about this partnership at http://tech.honolulu.hawaii.edu/oesm/brownfields.html North Carolina's Forsyth Technical Community College, Wake Forest University, and Winston- Salem University, in conjunction with local environmental practitioners, were awarded an EPA Pilot grant to design and implement a Job Training Program. Winston-Salem's Liberty Street Corridor was once home to a booming manufacturing center, centered around R.J. Reynolds, one of the world's largest manufacturers of tobacco products. After World War II, however, industries expanded elsewhere, leaving many unemployed. The unemployment rate for area residents reached 83 percent, with 91 percent living in poverty. The course provided technical and safety training, which prepared students for employment in the waste management, private or public infrastructure, construction, demolition, and environmental consulting and contracting industries. For more information contact: U.S. EPA Region 4 at 404-562-8660 or http://www.epa.gov/swerosps/bf/success/winston_salem.pdf. Website www. e pa.gov/ efi n page/efc. htm ------- Revitalizing Southeastern Communities , flftr -f Technical Assistance to Brownfields Communities and Technical Outreach Services for Communities Technical Assistance to Brownfields Communities (TAB) and Technical Outreach Services for Communities (TOSC) are two free programs that can help community groups with cleanup and redevelopment of contaminated sites. Both programs link communities with professors and environmental specialists at the Hazardous Substance Research Centers (HSRCs), which provide assistance with the support of EPA grant funding. The South and Southwest Regional Center represents a consortium of Louisiana State University, the Georgia Institute of Technology, Rice University, and Texas A&M University. TAB and TOSC can provide valuable resources to small communities that otherwise lack access to this type of expertise. Technical Assistance to Brownfields Communities (TAB) The Technical Assistance to Brownfields Communities program was established as part of EPA's Brownfields Initiative to help communities address issues of brownfield redevelopment. TAB's specialists provide leadership training, procedural guidance, and technical expertise on "environmental assessments, land-use planning, environmental engineering, environmental law and policy, and sustainable development." TAB can review environmental site assessment reports for a particular property, in addition to field sampling data plans and sampling results. In Jackson, Mississippi, for example, TAB provided technical review and comments on Phase I assessment reports for several properties the City was interested in purchasing. TAB also assists with data management through geographic information systems. In addition, TAB can offer customized technical outreach materials, including seminars, workshops, educational materials and technical reports and web-based information. Technical Outreach Services for Communities (TOSC) TOSC provides university educational and technical resources to communities affected by hazardous substance contamination, whether or not the site is a brownfield. To support community efforts, TOSC sponsors workshops and short courses on environmental science, regulatory, and policy topics. Additionally, TOSC creates technical assistance materials and works to inform communities about existing technical assistance materials. TOSC provides In Davie, Florida, TOSC helped community leaders understand technical issues at the Florida Petroleum Reprocessors contamination site. Millions of gallons of waste oil were processed at the facility, resulting in significant groundwater contamination. TOSC was enlisted by the Southwest Coalition of Civic Associations to help residents understand environmental issues and possible remediation scenarios. TOSC participated in several community meetings, in addition to presenting a community workshop on regulations, terminology, hydrology science, and site activities. TOSC also reviewed reports and workplans, commented on several models and remediation scenarios, and provided reference material on the proposed remediation methods. ------- independent technical support and offers scientific opinions when these activities serve an educative function. South and Southwest Regional Contact: Bob Schmitter Georgia Institute of Technology 888-683-5963 bobschmitter@gtri.gatech.edu Other HSRC Websites: South and Southwest Regional Website: http://www.hsrc-ssw.org Western Regional Center (Oregon State University and Stanford University) tosc.oregonstate.edu/ Rocky Mountain Regional Center (Colorado State University and the University of Montana) www.engr.colostate.edu/hsrc/outreach.html Midwest Regional Center (Kansas State University, Michigan State University, Haskell Indian Nations University, and Purdue University) bridge.ecn.purdue.edu/~mhsrc/page_outreach ------- The Charlotte Charrette on Sustainable Urban Environments: Implementing a Brownfields Cleanup Revolving Loan Fund efc 1 efc@unc : Sustainable Urban Environments ------- Brownfield Cleanup Revolving Loan Fund : efc@unc ------- The Charlotte Charrette on Sustainable Urban Environments: Implementing a Brownfields Cleanup Revolving Loan Fund For the U.S. Environmental Protection Agency Sustainable Urban Environments Initiative Held at Charlotte's Government Center July 22, 1999 By the Environmental Finance Centers at the University of North Carolina, Chapel Hill (efc@unc) and the University of Maryland Report by Richard Whisnant, Director efc@unc September 1, 1999 3 efc@unc : Sustainable Urban Environments ------- Table of Contents Summary 5 Goals of the Sustainable Urban Environment Charrettes 6 Policy arena: Charlotte arid the Browrtfield Cleanup Revolving Loan Fund 6 Understanding the policy arena 7 The charrette process 7 Preparation for the Charlo tte charrette 7 Participants and panelists 7 Materials 8 Problems raised 10 Site Management 10 Financial Structure 10 Geo graph]/ and Community 10 Recap of discussion 10 Introductions and process 10 City's background and statement of issues 10 IRM presentation on national issues 11 EPA presentation on BCRLF 11 General discussion 11 Recommendations 13 1. Flexibility 13 2. Integration 14 3. Streamlining 15 4. Adapting to local culture and approaches 16 5. Other 16 Conclusions, implications and further research directions 18 About the efc@unc and the Environmental Finance Center Network 19 Brownfield Cleanup Revolving Loan Fund ------- Summary Implementing a BCRLF and other complex. Lessons Learned innovative, intergovernmental programs Beau Mills For policy makers trying innovative ways of service delivery across different government levels, especially from the federal to the local level'. • There is great value in integrating with existing local programs to the maximum extent possible. • Success requires some flexibility in front-line, new program administration. • Be mindful of the need to streamline and simplify grants and loans that will ultimately be just one piece of a user's larger funding package. • All implementers derive value from negotiating maximum funding flexibility at the outset, and this flexibility can be important in assuring early successes. • There is a need to honor the history and unique way of doing things of loc alities and communities that are involved with the program. • There is great value in simple, succinct program information from the outset. For current and future participants in EPA's Brownfields Cleanup Revolving Loan Fund (BCRLF) program'. • The legally driven exclusions and paperwork as well as the current funding levels for the BCRLF program make it a difficult challenge to administer. • The required site management responsibilities may force localities to look for outside help in program administration, thus adding to the complexity. • The volume of paperwork involved in a given BCRLF loan suggests the need to increase loan size from what appears at first as a program suitable for small sites. • Integrating the BCRLF loan program with other brownfields and redevelopment assistance may make it more attractive to potential borrowers and developers. Bob Cooper. Leslie Stewart a the other panelists and participants discussing the presentations 5 efc@unc : Sustainable Urban Environments ------- Goals of the Sustainable Urban Environment Charrettes In the 1990s, the importance and special challenges of sustainable urban environments became increasingly apparent to those concerned with environmental protection. Continued progress on core environmental problems in air, water and waste required more attention to patterns of urban growth. In 1999, the United States Environmental Protection Agency (EPA) teamed with the Environmental Finance Center Network to hold a series of charrettes on sustainable urban environments. Each charrette planned to focus on a specific environmental management problem. The overall goals of the charrettes were both to help solve these problems in particular cities and programs and to increase EPA's understanding of the ways its national policies affect local growth patterns. The twin objectives of the charrettes were to understand • How local governments were attempting to restore and retain urban core economic and environmental vitality, and • How EPA polic ies were helping or hindering these local efforts towards urban sustainability. This report summarizes the first EPA/EFC Sustainable Urban Environment Charrette. Policy arena: Charlotte and the Brownfield Cleanup Revolving Loan Fund The City of Charlotte is widely recognized as an innovator in enviromental remediation activities and an active cultivator of community partnerships. The City Within a City redevelopment J strategy and a Neighborhood Development Key Business resource office are tangible products of Charlotte's community development infrastructure. When EPA awarded Charlotte's Employment and Business Services Division (EBS) a Uptown Charlotte $500,000 Brownfields Cleanup Revolving Loan Fund (BCRLF) grant in May 1999, the City's political and administrative infrastructure already seemed to have the core capacity to implement the revolving loan program. The BCRLF grant program provides seed funding for a revolving loan fund dedicated to clean up brownfields. The loan fund then gives developers (possibly including die local governmental unit) access to low- or no-interest loans. EPA's source of funds for the BCRLF grants was the Superfund program (CERCLA).1 Under current EPA regulations for CERCLA, all federal funds from diis source must be spent consistently with the "National Contingency Plan" (NCP).2 The NCP was designed to channel and control spending on cleanup of the nation's most heavily contaminated sites.3 Further, the use of CERCLA funding brings some statutory exclusions to the program, such as the exclusion of expenditures on clean up of petroleum contaminated media. It was not designed to assist brownfields redevelopment. Brownfields cleanup normally involves the least contaminated, least dangerous sites. Making die BCRLF funding meet the requirements of the NCP, but also work effectively to help brownfields cleanup, is thus not a trivial task. It is, however, an important task, as one element of the federal government's attempts to use its resources to support sustainability and quality urban environments. EPA has worked hard to make its initial policies and guidance for the BCRLF sensitive both to NCP requirements and to projected actual program needs at the local level. But the program is still quite new, and the Charlotte Charrette provided one of the first chances to test the likely success of EPA in walking the line between NCP compliance and really helping brownfields cleanups. 1. Comprehensive Environmental Response Compensation and Liability Act (CERCLA) § 104(d), 42 U.S.C. § 9604(d). 2. 40 C.F.R § Part 300. 3. More precisely, the NCP was developed under Section 311 of the Clean Water Act, 33 U.S.C. § 1321(d), to address discharges of oil and hazardous substances into navigable waters of the United States. It has been extensively revised, amended and reorganized in its role as the plan for Superfund Brownfield Cleanup Revolving Loan Fund : efc@unc I ------- Charlotte's EBS Division noted two problematic issues at the outset. • First: how to implement the BCRLF program while tailoring it to the needs of its target audience, i.e., developers, lenders, environmental consultants, and environmental attorneys who work closely with brownfields redevelopment? • Second: the EBS Division expertise lies in revitalizing distressed neighborhood communities through various strategies, including brownfields redevelopment. However, it had no technical expertise working directly with federal cleanup regulations. How could the EBS Division marry its focus on neighborhood revitalization with this new opportunity for environmental redevelopment in those neighborhoods? Both of these issues needed work before the EBS Division could propose a workplan to EPA for implementing the BCRLF program in Charlotte. Understanding the policy arena The charrette process The charrette is a tool that the Environmental Finance Centers have found useful for local environmental problem solving and for revealing policy problems that are important but unarticulated, or that are not widely understood. The process is essentially an intensive,\collaborative, short-term application of expertise to a particular, usually local, problem. Preparation for the Charlotte charrette Prior to receiving the grant award in May 1999, the EBS Division talked with the Environmental Finance Center at the University of North Carolina at Chapel Hill (efc@unc) and with the state Department of Environment and Natural Resources about its concerns for BCLRF implementation. Those conversations allowed the EBS Division to further refine these issues into diree, distinct topic areas that cut across both issues of loan implementation and community revitalization: • site management • financial structure, and • geography and community involvement. In light of EPA's interest in exploring sustainable urban environments, the efc@unc offered to hold a charrette on these issues. Charlotte's concerns about the BCRLF were shared by many of the new BCRLF grant cities. There was a close match between the goals of the EPA/EFC Sustainable Urban Environment charrette workplan and the efforts of BCRLF cities to clean up brownfields. Charlotte agreed with this proposal and planning began. The efc@unc conducted a phone survey of other BCRLF grantees similar to Charlotte in size and demographics to learn of their experiences with revolving loan funds, environmental financing, and environmental federal regulations. A guest speaker from The Institute for Responsible Management was invited to share its national perspective on brownfields redevelopment and provide a context for Charlotte's brownfields endeavors. The IRM has a cooperative agreement with EPA to "conduct research on and disseminate its findings ... to determine what processes are needed to achieve integrated cleanup and reuse of contaminated properties." Although its prior scope of work for EPA on brownfields did not include monitoring of the BCRLF grants, IRM agreed to and was able to quickly survey a sample of brownfield pilot programs around to country to assess how well the BCRLF was being implemented in its very early stages. During June, the EBS Division generated a tentative agenda modeled after previous charrettes held around die nation by the Environmental Finance Center network. The charrette was limited to one day to enable participation by panelists from the private sector. The efc@unc contacted the Environmental Finance Center at the University of Maryland to confirm availability of charrette moderator Dr. Jack Greer. Participants and panelists Charrette invitees categorized as "Panelists" provide external perspectives to the "Participants" who are directly involved with the implementation issues. The Charlotte Charrette assembled a diverse group of participants and panelists. Charlotte has already 7 efc@unc : Sustainable Urban Environments ------- laid an excellent foundation for discussions like the charrette through its Brownfields Partners, a long- standing effort to involve and inform all the community stakeholders with interests in brownfields development. The EBS Division generated a list of invitees based upon the roster of cooperative partners included with their BCRLF proposal. The target number of invitees was 25-30 panelists and participants. The Charlotte Charrette Participants were the City of Charlotte (EBS Division) and the U.S. EPA as grantee and grantor of the BCRLF grant program, respectively. Panelists included community stakeholders, financial partners, other City professionals from environmental planning and development, State EPA, environmental consultants, City Attorney's office, City Manager's office, and environmental attorneys. Materials The efc@unc assembled materials for a Charlotte Charrette information notebook to provide background material on Charlotte's brownfields efforts and the BCRLF rules. Notebooks were express-mailed to all invitees prior to die charrette. The invitees were asked to familiarize themselves with the brief overviews and summary material in the first two sections of die notebook. On July 22,1999, the City of Charlotte hosted "The Charlotte Charrette: Making a brownfields cleanup revolving loan fund work for Charlotte, North Carolina." The accommodations for the charrette included a large room with tables aligned of U.S EPA rules, interpretati BCRLF, an U"S. EPA Headquar unable to attend die-chairette used a speakerphone to provide a perspective on the genesis of the BCRLF program and answer questions. Dynatech Industries, a Charlotte brown field Brownfield Cleanup Revolving Loan Fund : efc@unc ------- Participants and panelists in the Charlotte BCRLF Charrette, July 1999 Moderator Dr. Jack Greer Environmental Finance Center, University of Maryland Participants Tom Warshauer City of Charlotte, EBS Division Barbara Bassuener, via phone U.S. EPA-HQ Linda Rimer U.S. EPA-HQ Alecia Crichlow U.S. EPA-HQ, EFP Vera Hannigan U.S. EPA-HQ, EFP Robert Cooper U.S. EPA-IV, Planning Panelists Fran Hoffman, guest speaker The Institute for Responsible Management, Inc. Richard Whisnant Director, efc@unc Leslie Stewart efc@unc. Office of Economic Development Ellen Rogers Centura Bank Beth Gray First Union Bank, Environmental Policy Office Jerry Vaughn Self Help Credit Union Richard Bargoil City of Charlotte, Office of Business Services Jude Starrett City of Charlotte, City Attorney's office Tom Flynn City of Charlotte, City Manager's office Keith Carpenter City of Charlotte, Engineering and Property Mgt. Kevin Hall City of Charlotte, Planning Commission Bruce Nicholson State of N.C. Superfund section Beau Mills U.S. EPA-HQ, on IPA to N.C. Governor's Office Preston McLean Northeast Enterprise Community Ted White West Enterprise Community Louise Shakleford Wilmore Community Mike Fiori Altura Environmental, environmental consultants Charles Lee HDR Engineering, Inc., environmental consultant Chris Bozzini Malcom Pirnie, environmental consultants Mark Looney SECO, developer Chris Wannamaker UNC-C Urban Institute, conservation representative Rick Morton Kilpatrick Stockton, environmental attorney 9 efc@unc : Sustainable Urban Environments ------- Problems raised Charlotte's pre-charrette work led it to focus on three areas of potential problems. The City wanted input on each of these areas from the charrette. Site Management EPA guidelines for the BCRLF grant establish a three-part structure for the BCRLF: Lead Agency, Site Manager, and Fund Manager. The BCRLF grantee must submit a workplan to EPA for approval detailing the operational relations between these three elements before BCRLF money can be disbursed. The Lead Agency can include any governmental unit but must include the grantee - Charlotte's EBS Division. The Fund Manager, either a public entity or private contractor, must be capable of maintaining and disbursing revolving loan funds upon approval by the Lead Agency. The Site Manager, who fulfills the NCP-required role of "On Site Coordinator," must be an employee of a governmental agency. This role is typically filled by an environmental specialist who oversees the cleanup funded by the BCRLF loan and ensures regulatory compliance. Charlotte wanted the BCRLF to help clarify by whom and how the Site Manager duties would be fulfilled. Financial Structure The BCRLF grant provides an opportunity to brownfields developers for brownfields cleanup through low- to no- interest loans. EPA provides discretion for BCRLF loans to be used as a leveraging opportunity for additional cleanup borrowing or as environmental insurance. The usefulness of the BCRLF leveraging capacity depends direcdy upon the ability to coordinate BCRLF loans with other loan sources, such as private lending. Other financial structure issues such as loan terms, rates and collateralization are critical to successful marketing of BCRLF loans. Finally, there are structural decisions to be made on issues such as loan size and planned number of loans. Geography and Community Brownfields redevelopment can bring job creation and neighborhood revitalization through cleanup and reuse of abandoned, contaminated properties. Developing brownfield sites requires generating development interest secured by the assurance that the neighborhood community will not challenge the brownfield redevelopment, causing the developer to incur additional costs to defend the investment. The target BCRLF program geography and the surrounding community are critical elements in the success of the loan program. Charlotte's past work on brownfields had focused on a fairly small area of the city. The city wanted to expand this area for the BCRLF, but also wanted to ensure that funding was going to communities that need special help—where private sector funding standing alone would be least likely to overcome environmental stigma and where the need for jobs and economic development was highest. Jack Greer sets the stage for the The BCRLF rules require public meetings to be held before approving a BCRLF loan. Clarifying what geography and what neighborhood communities are open to redevelopment with BCRLF funding helps the program operate m ore efficiently and helps assure its alignment with overall municipal goals for growdi and development. Recap of discussion Introductions and process The charrette began with Dr. Jack Greer, moderator, explaining the charrette process. City's background and statement of issues Tom Warshauer of the City of Charlotte and its EBS Division explained Charlotte's situation and interests with respect to brownfields and targeted economic development. Charlotte's brownfields redevelopment and community revitalization programs fit well with the overall EBS mission. The City applied for die BCRLF grant to extend that mission. The City was flexible on the number of loans and size of loans. The EBS Division's central ------- question was how the site management role would be structured, given: • the lack of city experience actually overseeing cleanup projects and assuring compliance with the NCP, • the uncertainty about the numbers of BCRLF loans that would be made, and • that cleanup level decisions were outside the control of the city. IRM presentation on national issues Fran Hoffman of the Institute for Responsible Management, Inc. (IRM) presented the findings of her recent scan of brownfield pilot cities for their experience with the BCRLF. IRM's past work has not been with the BCRLF pilots per se, but rather awarded money for assessment and planning. However, a significant number of those pilot cities have either received or considered BCRLF grants, and thus were in a position to give some early feedback on the program. In general, the first round of BCRLF pilots have had difficulty getting the program going. As of the date of the charrette, no BCRLF pilots had made any loans. Ms. Hoffman reviewed a long list of reasons offered by the pilots for the delay in getting the program up and running. EPA presentation on BCRLF Barbarba Bassuener of U.S. EPA provided some perspective on die expectations for the BCRLF program in Charlotte.4 In response to Ms. Hoffman's report about the first round of BCRLF pilot cities, Ms. Bassuener noted that the first round grants were awarded before the program guidelines were really in place. There has, as yet, been very little lime for actual planning and implementation in 4Ms. Bassuener could not be present in Charlotte due to schedule conflicts, but was kind enough to call in. The, panelists and participants listened and asked questions of Ms. Bassuener by speaker phone. die first round cities since the program guidance documents were prepared. EPA expects the second round grantees (of which group Charlotte is a member) to be much better positioned to get the BCRLF program running, in part because their grant applications benefited from knowing how the program would be structured. Ms. Bassuener confirmed that EPA had and would continue to work hard to make the program as useful and flexible as possible, given the limitations imposed by its funding source (CERCLA). The Site Manager, while required to be a governmental employee, can by contract look to other expertise for regulatory compliance assurance. (However, payments for this expertise count against the administrative cost cap for the BCRLF). Government partnerships are expected and encouraged, so that the state role in setting cleanup levels can, for example, be accommodated. General discussion For the remainder of the morning and early afternoon, the panelists and participants raised questions, offered suggestions, and refined their understanding of the BCRLF problems and opportunities. One possible solution noted to the Site Manager problem was to have the state Department of Environment and Natural Resources (DENR) itself fill that role. This could allow integration of BCRLF- funded sites widi DENR's role in setting cleanup levels and, conceivably, widi DENR's role as gatekeeper for Brownfields Agreements under the N.C. Brownfields Act. ITowever, there is uncertainty about the need for and possible level of this integration of state brownfields programs with local BCRLF-funded sites. Further, the State of North Carolina currently has no surplus staff Lime available to commit to projects just for Charlotte. The State's interest in playing such a role directly would likely be increased if there were more locations in North Carolina setting up BCRLF programs, so that a staff person dedicated to site management at the state level could work on projects ill more than one location. There were numerous concerns raised and hinted at about responsibility and liability for Site Managers. Given the inherent data gaps and uncertainties about risk of cleanups and the complexity of EPA's Superfund program, it is easy to understand how a local official who does not regularly work in the cleanup realm would be wary with the original brownfields pilots to whom EPA Fran Hoffman relates the experience of some first round BCRLF cities 11 efc@unc : Sustainable Urban Environments ------- of being held responsible for site oversight and regulatory compliance. Similarly, for state and federal officials, the further lliey are from the site itself, the more concern there is about responsibility for actions that take place at the site. Contractual indemnification and, conceivably, other forms of insurance may help bridge this gap. But clarity as to die level of responsibility for the role is also important. One hopeful suggestion was that die continued and inevitable oversight presence of EPA at BCRLF sites, even if a very attenuated presence, could conceivably be used to give comfort to borrowers that there was minimal risk of future federal intervention. This would give BCRLF-funded sites some advantage over other brownfields cleanups that rely either on state-only agreements or on no governmental presence. However, this would also require a degree of commitment by EPA that is not yet evident in the BCRLF program. With respect to financial structure and collateralization, repayment of die loans is expected. But if the BCRLF loan fails, the sense of panelists'comnients was that the EPA won't "hunt you down," so long as reasonable efforts are made to ensure payment, sites are secured, and EPA is notified of progress on loan performance. As for uses of the loan funds, the BCRLF is intended for non-time critical removals. These are actions that can be performed within a 12-month period. Where state and federal brownfields rules overlap, the BCRLF requirements establish the minimum standard that can be applied. The BCRLF program in Charlotte needs to operate efficiently to integrate with private financing and to be useful to developers. If the BCRLF-funded site brings widi it delay and onerous paperwork, on top of its restrictive eligibility requirements, no one will bother seeking the loans. The private banking perspective still starts with apprehension for financing brownfields development without cleanup estimates, available alternative funding, contingency plans, environmental insurance, and a site-specific definition of "clean." Impediments thrown up by onerous conditions on public financing will not help overall development financing at sites. In many instances, the feeling of the lenders and developers present was that private insurance, contractual Louise Shakleford discusses her community's response to Charlotte 's brownfields program arrangements between buyers and sellers, and creative collateralization mean that deals tiiat have good economics to begin are going to happen without the BCRLF. This raises the question of what niche the BCRLF-sites fill and what demand there is likely to be for that type of site. The community perspective asks: what is their involvement in site development? How will they be informed about site decisions? What is the degree of neighborhood benefit from the project? The BCRLF loan program requires the community organizing and informational meetings to occur prior to final approval of the loan. How will those concessions to neighborhood revitalization be captured and measured? Marketing the site will be instrumental to bringing jobs and money into the neighborhood and will also require community input on the nature of target site uses. Brownfield Cleanup Revolving Loan Fund : efc@unc ------- Recommendations In the final phase of the charrette, the panelists and participants compiled a substantial list of recommendations. Some recommendations were directed to Charlotte, others to EPA, and others to the relationship between Charlotte and EPA in setting up the Charlotte BCRLF. Most of the recommendations fell into four areas, and are grouped that way in the following list.5 1. Flexibility Many recommendations urged that Charlotte and EPA retain maximum flexibility in the BCRLF workplan in order to accommodate future learning about the program. Flexibility makes sense in light of the newness of the BCRLF program and the uncertainty over demand for BCRLF loans, as well as the uncertainty over how best to structure site management issues. 1.1 City/State Team Approach - A Site Manager team approach offers some promise for solving several problems. By having a team of persons available to serve as and advise the site manager, the actual oversight structure for any given site could be adjusted to reflect the risks, knowledge and experience, and regulatory complexity that site presents. For example, the team might include a member of the Charlotte engineering department, the EBS division, the city attorney's office, a representative of the State Superfund section, conceivably a representative from Region IV of EPA, one or more private environmental consultants, attorneys and lenders. Then on a site by site basis, the person actually serving as designated Site Manager (and thus responsible for signing documents in that capacity) could draw on different sources of expertise as needed to get an adequate level of comfort with the activities at the site. Since it is not known at present—ahead of the time that loan applications are actually being received—how complex any given site will be to manage, it is useful to have a flexible management structure that can be adjusted onCe actual sites are in the program. 1.2 Encourage and assist the State of North Carolina to be designated as a Site Manager for BCRLF purposes in any location across North Carolina that enters the BCRLF program. This would require discussion within DENR as to the level of commitment possible, and between EPA and DENR as to the state's role in these removals. But it would add considerable potential value to the team approach recommended above, especially for sites that seem to merit consideration under the State's brownfields program, or that otherwise require some interaction with the state regulatory structure (a high likelihood for most sites). Richard Baraoil notes some possibilities and realities about integration of city programs ! n -i 5 The recommendations that follow generally track all the advice given at the charrette. They do not represent fully-elaborated consensus or the positions of any particular charette participants, including the efc@unc and the Environmental Finance Center Network. 13 efc@unc : Sustainable Urban Environments ------- 1.3 Keep the dialogue open among key players (e.g., the city, the state, the EPA, the community, other stakeholders). The "team" approach could help here. Improve information flow from analyses of the program now underway. 1.4 Access U.S. EPA's Excellence in Leadership (XL) program for variances in BCRLF program, to streamline and simplify brownfields rules and requirements wherever possible. 1.5 Do one loan to start the BCRLF as quickly as possible so as not to bottleneck the process. The kinks will be ironed out that way. Not enough is known about the costs and benefits of the program or about ideal management structures and the only way to gain that knowledge is to go ahead and "pilot" a loan. 1.6 Encourage the funding and cleanup of a "test site," which could then be used as a success story for marketing the program. 1.7 Explore basing loan rate and fee structures on the ability of the borrower to pay. 1.8 Aim for flexibility, in terms of the borrowers, the Sites themselves and the funding parameters, to encourage participation. Focus on recipient (the client), not the program. 1.9 Consider waivers of some constraints and use of Enterprise Community status to get maximum regulatory flexibility. The program geography appears to allow tapping Enterprise Community benefits for many potential sites. 2. Integration BCRLF funds are likely to be only a portion—perhaps a small portion — of a given site development's funding. Thus the program must fit well with other funding mechanisms, or risk delaying and threatening the overall project. Other integration issues arise at state and federal regulatory levels. The widespread energy and enthusiasm for brownfields approaches among federal, state and local agencies could result in a confusing mass of programs that hinder, rather than support, each other. 2.1 State as Site Manager - A cooperative agreement with the EBS Division to help fund the position would allow the State to offer Site Management as an additional item on their service menu. This would also allow the State to position itself to expand the Charlotte BCRLF program, if successful, throughout the State. U.S. EPA's Region IV under a 2.2 Place the brownfields revolving loan fund program under the Removal Cooperative Agreement (with the state) Bruce Nicholson explores possibilities for State assistance on tho tonvvi F This could be proposed as a state pilot program to cooperative agreement. Brownfield Cleanup Revolving Loan Fund : efc@unc 14 ------- 2.3 Consider the analogy of a "General Permit concept" in facilitating approval of redevelopment projects, where varying requirements and programs could be integrated, creating useful synergies and efficiencies. 2.4 Tie the revolving fund program to grant money for assessment (e.g., for small business or minority business programs) This would link assessment (which is not covered by the brownfield revolving loan program) to cleanup (which is). 2.5 Examine the "capacity" at EPA HQ, Region IV, and at the city and state level to operate and manage a comprehensive brownfields program (e.g., the need for more staff). The use of IP As could help here, as could other outside help, e.g., the Army Corps of Engineers. Interested parties should make known, e.g., by writing letters, the need for additional staff. "Do whatever it takes" to strengthen the brownfields program infrastructure. 2.6 Designate partial and/or shared assignments (i.e., "parts" of people) to mix and match expertise (and negotiate beyond the 15% cap on administration if necessary). 2.7 Consider the 'bundling" of sites to minimize paperwork for a given loan—attractive and robust business sites could be bundled with less attractive sites in order to achieve some of the City's equity-based goals. 2.8 Remember to keep focused on the most important and relevant problem (e.g. distressed communities) and to operate in the context of the overall goals of Charlotte and the state of N.C., fitting with existing programs wherever possible. 2.9 Explore direct tie-ins with other relevant initiatives including legislative initiatives focused on inner city and rural communities (as now underway at the Federal level). 3. Streamlining The biggest hurdle that the BCRLF must overcome may well be the paperwork and process requirements that come with the money. The recommendations consistently agreed that everything possible must be done to streamline this, so that the borrowers, if not the City itself, face the minimal possible paperwork and minimal possible delay. 3.1 Consider the City's funding of the revolving loan process (this would help enable and encourage the awarding of low- or zero-interest loans). 3.2 The City of Charlotte could also create its own revolving loan program, which could be less constrained by statutes, regulations and process. 3.3 Continue to streamline the process. The time issue is extremely important, both to clients (e.g., developers) and to lenders, who must be concerned about due diligence. 15 efc@unc : Sustainable Urban Environments ------- 3.4 The process should not be tied to a bank's commitment because of the timing issue (e.g., 12 months). That is, assessment and review would be stale by the time approvals are received, and the lender's analysis would have to take place all over again. 3.5 Couple more closely the assessment process and the loan process in order to streamline effort and shorten timeline. 4. Adapting to local culture and approaches An important sense of the Charlotte charrette is that Charlotte has evolved its own brand of problem solving for issues in its urban environment. This will be true of many local governments that are functioning with high levels of success in local projects. There will be overlap in local approaches, to be sure, and there may even be recognizable "types" or "classes" of approach among United States municipalities, counties and other local units of government. (An ad hoc classification of Charlotte's particular local genius might be "maximize the unleashing of private sector energy and civic pride on any given problem.") Still, the special needs and approaches of individual communities will inevitably vary. Taking stock of tiiese variations and making concessions or allowing flexibility for them is a major, critical, difficult challenge for EPA, as for any federal (and state) agency. To note but two difficulties: variation in program implementation means increased administrative complexity for the oversight unit, and also requires a degree of intergovernmental trust that often does not exist. Charrette participants and panelists recommended: 4.1 Maintain close connection with communities as you proceed with brownfields redevelopment; address both environmental justice and economic development issues, and focus on the "impact" programs will have on the community. 4.2 The program has to take account of Charlotte's own way of getting civic things done—which is to encourage the private sector to take responsibility and push as far as possible, with government involvement minimized and only present to help with particular situations the private sector is inadequately addressing. Private solutions are being found for many contaminated properties that might previously have been deemed hopeless—through insurance, creative collateralization, etc. This program needs to work within that overall local way of doing things. 5. Other Several other important recommendations do not fit neatly in categories and are set out below: 5.1 Hold a Developer Roundtable to articulate ways in which builders and others could join in enhancing this effort and making it work. This could be tied to a statewide group of stakeholders such as the listserv recently developed by the University of North Carolina (efc@unc). 5.2 Environmental Czar - Charlotte has enough environmental issues as a city that it might consider creating a position, the "Environmental Czar." Such a position would have authority to respond to brownfields remediation efforts with multiple source Brownfield Cleanup Revolving Loan Fund : efc@unc 16 ------- funding. The Site Manager job will not be full-time and so if the Czar is a City employee they can be kept busy with other projects. This approach was noted as an alternative to the "team" concept for site management. However, some participants felt this approach was contrary to Charlotte's preference for using the private sector; although noting that private consultants and attorneys come at a great cost. 5.3 Sliding scale loan fees according to size of development would provide BCRLF revenue for administration. 5.4 Developer support should be organized to provide financial support for more brownfields workers. 5.5 Given its nature and goals (e.g., to support urban sustainability and aid distressed communities) this program should offer the most incentives possible (e.g., zero interest loans) 5.6 Focus on small sites—the larger sites are more likely to receive funding from and capitalization from traditional sources. 5.7 Improve and emphasize marketing, making use of success stories to illustrate the value and effectiveness of the program. Also provide more helpful information, such as a fact sheet on "frequently asked questions." 5.8 Call for constructive changes in the National Contingency Plan (NCP/Superfund) in response to c lient and community needs. This is a big challenge, and will depend on actions taken by Congress as well as the Executive Branch. Brownlield Cleanup Revolving Loan Fund Eligible Geography ------- Conclusions, implications and further research directions The BCRLF program is an effort by EPA to use funding under CERCLA to clean up sites that have not historically been viewed as high priority, "Superfund" sites. The participants and panelists in the Charlotte charrette seemed to recognize and appreciate both the positive message this sends— that EPA is interested in helping out at the community level with funding that potentially supports other community development programs —and also the significant challenges it presents. On the EPA side, for example, there are administrative challenges in making sure the funds are properly used and accounted for. But the ultimate message of the Charlotte charrette is that it would be very easy for this program to go unused, given (1) the substantial number of sites excluded by the CERCLA petroleum exclusion, the removal cleanup criteria and the limited program geography; (2) the paperwork and delays involved in authorizing funding; and (3) the fact that the private sector is already creatively working to find cleanup money and approaches for sites that clearly have the right economics. Therefore, if the BCRLF is to make a difference at all, it will have to be as flexible, stream lined and well- integrated with existing programs as possible. One particular suggestion towards this end that bears further research is the possible use of the EPA "XL" program to add flexibility where needed. Several concrete suggestions for site management emerged. The panelists and participants seemed most supportive of a "team" approach to site management, at least in the early stages when all the institutions involved are still learning how to make the program work. The financial structure of the loans themselves was discussed, with the majority of comments suggesting that the City do everything possible to price the loans as cheaply as possible, even to the Rimer consider the XL program L '&• kJ extent of subsidizing the interest or charging no interest. Given the likely paperwork involved in any given loan, the recommendations suggested either bundling loans or looking to a smaller number of larger loans as the way to lower average administrative costs per loan. The geography of the program suggested by the City received some support, in the form of suggestions that the City look to Empowerment Community status for further regulatory flexibility and possible financing. There were no criticisms or concerns voiced about the City's proposed geography. In terms of further research, the preliminary findings presented by Ms. Hoffman were well- received by the group. There was substantial support for further efforts to collect and disseminate the learning from these BCRLF pilots across the country. That is one clearly identified further research task. Another research task that emerged was examination of the State's cooperative agreement with EPA to see whether some state-wide integration of site management responsibilities with state-lead brownfields agreements might be possible. There is need for some particular program evaluation for the Charlotte BCRLF after the workplans are put in place and the program has had Lime to be marketed and to make some loans for cleanup of brownfields in Charlotte. Finally, there is much to be learned about the capacities of different governmental units to carry out environmental programs targeted at relatively small areas, and about the intergovernmental challenges raised by attempts like the BCRLF. The need for greater understanding in this area is clearly and tangibly manifested by new requirements for "federalism analysis" at federal6 and state7 levels It would be 6 See Exec. Order 13132, Federalism (Aug. 4,1999). 7 See N.C. Admin. Proc. Act, G.S. § 150B, art II, part 5 (rulemaking and consultation requirements for rules with local fiscal impact) and Exec. Order 49 (1995) (same). ------- useful to have data on the attitudes and expectations (e.g., the stereotypes) that different stakeholders in a complex intergovernmental environmental effort have towards each other. It would also be useful to have a way to keep persons working at different governmental levels, on the same environmental problems, apprised of the roles and capacities of each other. There may be no frequent or long-term history of work between such individuals, making them poor judges of the capacities and constraints faced by the other person. The Charlotte Charrette on sustainable urban environments represents one approach to bridging this gap in knowledge of attitudes, expectations, capacities and constraints. Building better bridges— "intergovernmental infrastructure" — is a prerequisite to successful implementation of complex, innovative, intergovernmental efforts like the BCRLF.** Richard Whisnant Chapel Hill, N.C. About the efc@uric and the Environmental Finance Center Network Richard Whisnant The Environmental Finance Center at UNC-Cliapel Hill (efc@unc) is one of a group of university-based centers that concentrate on problems in the financing of environmental services. The U.S. Environmental Protection Agency originally established the centers in order to bring the work of researchers in the universities directly to bear on local environmental problems. For more information on the Environmental Finance Center network, see: www.epa.aov/efin. The efc@unc was begun in 1998 as a joint venture between the Institute of Government and the Office of Economic Development, both at UNC-Chapel Hill. Faculty and students working with the efc@unc concentrate on helping improve the financing and delivery of environmental goods and services by local governments. For more information, see www.unc.eclu/clepts/efc Or call Richard Whisnant, Director of the center, at (919) 962-9320. 19 efc@unc : Sustainable Urban Environments ------- |