Federal Financing Opportunities for Remediation and Redevelopment – What Can Be Leveraged? Charlie Bartsch Senior Program Advisor for Economic Development US Environmental Protection Agency September 16, 2015 Bartsch.charlie@EPA.gov
What t this p power p point c covers… Federal resources that can jump-start, support “R&R” * remediation and redevelopment – • Community/economic development funding/programs – HUD, EDA, DOT, USDA, EPA – What $$ available in 2015? • Key applicable federal tax incentives • Intro to EB-5 opportunities • Examples along the way…m aking the “R&R” link * “Remediation and Redevelopment”
Fede Federal Tool Tools Can an Be e Fi Fit Toge Togethe her, Lever eraged aged in Various ious Ways to Promot mote e R&R – Remedi ediat ation on and Redev evel elopment opment To provide resources directly Grants; forgivable/performance loans But also to… Reduce lender’s risk loan guarantees; companion loans Reduce borrower’s costs • interest-rate reductions/subsidies; due diligence assistance Improve the borrower’s financial situation • re-payment grace periods; tax abatements and incentives; technical assistance help Provide comfort to lenders or investors • performance data, risk management/corroboration
Feder ederal Progr ogram ams s Fundi unding ng and and Tax ax Progr ogram ams s Can Can Suppor upport R& R&R R in n Many any Way ays • brownfield redevelopment/revitalization planning • site acquisition • environmental site assessment • site clearance, demolition, and removal of buildings • rehabilitation of buildings • removal or remediation of contamination • construction of infrastructure and related improvements that enhance site value Activities often carried out in partnerships with the private sector, or to leverage private participation
Which Federal CD/ED Funding Programs Have Good Potential for R&R Application? HUD/community development programs • CDBG – grants for economic/community development, planning, support services, housing EDA/economic development, infrastructure programs • Public works/economic adjustment/planning USDA/rural development programs • Business/industry, business development – loans, loan guarantees, grants for all phases of project development • Community facilities – grants and loans DOT/transportation • Road/transit system enhancement, construction, improvement, cleanup EPA • Site assessment, cleanup, RLF
HUD Com HUD Communi unity y Dev Devel elop opmen ent B Bloc ock k Grant ants s • Entitlement cities (50,000+ ) and urban counties (200,000+) get formula-based annual grants Direct formula-based grants to states for small city • needs: Small communities (> 50,000) compete for funds distributed by states • Projects must meet one of 3 HUD objectives: – Benefit low- and moderate-income persons Prevent/eliminate slums and blight – – Meet an urgent community need R&R potential: Help finance all phases of preparation/ redevelopment/project implementation, consistent with HUD objectives
CDBG BG Eligible Eligible Ac Activit vities , , Wit With h Links Links t to o Remedi ediat ation/ on/Redev edevel elopm opment ent Needs ds -- • Demolition and removal • Rehabilitation of public and private buildings • Planning • Construction or reconstruction of infrastructure, neighborhood centers, recreation/public works facilities • Can include coping with contamination as part of site preparation or infrastructure development • Can be lent to private companies in some circumstances For the state/small cities program – – Each state sets it own project funding priorities, defines its own program requirements, within CDBG objectives and these activities
CDBG BG: Chevy P vy Place ce – Roch chest ster , r , NY • 2.2 acre downtown auto dealership, gas station, and service garage site • Key concern -- UST and other contamination deterred developers • R&R Role of CDBG – Critical gap financing; used for site assessment, partial 1 st phase cleanup (including tank removal) • Developer funded 2 nd phase of cleanup • City $2.35 million redevelopment loan from CDBG -capitalized pool • Result -- 77 new residential units; coffee house with 20 jobs
CD CDBG -- Jack ack Ev Evan ans Polic Police St Stat atio ion, Dalla allas s TX • Jack Evans police station, on 3.2 acre former gas station/dry cleaner site • R&R Role of CDBG -- used for initial site preparation, including cleanup and demolition • Construction funded with G.O. bonds • LEED silver certified Revialization link: meeting critical public service component of an area-wide strategy
CDBG – Fundi CDB ding w ng wrink inkle les & reality c rea chec heck • Projects are locally determined • Considerable local competition for funds • Many long-time, repeat local recipients • Low-mod benefit is primary HUD objective (minimum use of 70% of CDBG funds) • Activities must be incorporated into CDBG Consolidated Plan and annual actin plan FY 2015 funding – • Community Development Block Grants – $2.942 billion in formula grants • 70% to entitlements ($2.06 billion) • 30% to states for small cities (883 million)
Economic Development Administration • Public works grants – Finance industrial site re-development, building reuse, and infrastructure preparation • Economic dislocation program – capitalizes economic adjustment RLFs for distressed areas • Planning to support revitalization, through Economic Development Districts (EDDs) R&R potential: can finance business-based, job promoting projects, support necessary redevelopment planning activities
EDA DA Eligi gible A Activities es, Wi With Links t to Reme Re medi diation/ n/Redevelopmen ment Ne Needs ds • Revitalize, upgrade, and expand infrastructure needed to retain/attract jobs • Attract new business and industry • Site preparation, including demolition and removal • Construction and rehabilitation of public and private facilities (such as industrial parks) • Planning
EDA DA/planni ning g -- -- Ci Cimar marron Ce n Cent nter – San and d Springs, O OK • Former zinc smelter, abandoned rail spur in small Oklahoma town • Key challenge: making brownfield site viable relative to nearby greenfield sites • R&R role of EDA planning funds – structured a cleanup plan that made the site economically competitive with nearby greenfield for big-box retail, supported TIF application • Result -- Cimarron Center, with Wal-Mart Supercenter as anchor, has created 350 new jobs, added $3.5 million in annual city sales tax revenues
ED EDA A – Fundi ding w ng wrink inkle les and d reality c rea chec heck • Limited funding, significant competition • Applications accepted on a quarterly basis – Pre-approval at regional office level – Regional offices, EDRs, can discuss/advise on proposals • Projects driven by job-generating potential, minimum $/job requirements • Unemployment a key eligibility/selection factor • Often, a focus on smaller towns, rural areas FY 2015 funding – • Public works -- $109 million in grants Planning -- $31 million in grants • Economic adjustment assistance -- $60 million in grants •
USDA US DA Ru Rural al Dev Developmen ment Prog ograms ms USDA rural development funds must meet broadly defined program objectives – key programs can do this within an R&R context: • Community facility loans and grants – for a range of development and community benefit projects • Business and industry (B&I) loan guarantees – to public or private organizations, for activities such as industrial park site development/rehabilitation or access ways • Intermediary re-lending program – intermediaries such as local governments are loaned money to re-lend to companies, in order to finance business facilities • Rural development loans and grants (REDLG) – given to provide operating capital and finance emerging private business and industry; operated thru local utilities
Rur Rural al Dev Devel elop opmen ent Eligi gibl ble Activi vities, s, wi with h Links t Li nks to Rem Remedi ediat ation on/Red Redeve velopment Needs Needs • Planning for redevelopment or revitalization – for businesses and community facilities • Site clearance/preparation, including demolition • Rehabilitation/improvement of sites or structures • Construction of real estate improvements • Installation of amenities to enhance development R&R potential : could all be used to meet brownfield cleanup and redevelopment needs, finance complementary activities to reuse effort
USDA/B&I guarantee: Potosi Brewery, Potosi, WI • Brewery built 1852 in Potosi (pop. 700), abandoned 1972 • R&R role of USDA – $3.3 million B&I guaranteed loan key to securing additional $4.2 million in financing to cover range of development needs • Strong state partnerships, t.a. • Transformed Potosi’s main street; community involvement key • Result: Refurbished site transformed into micro-brewery, brewing museum and library • 50 new jobs, 4 new beers
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