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Brownfields Quarterly Community Report
VOLUME 2 NUMBER 2 FALL/WINTER 1998
- EPA Tests Streamlined Approached to Brownfields Site Assessment in Newark and Trenton
- Financing Brownfields Reuse: Creative Use Of Federal Programs
- City, State & University Work Together to Build a Park in Camden
- Tax Credit Available For Brownfields Cleanup Costs
- Is Your Site Eligible For Tax Credit?
- EPA Brownfields Pilot Areas
- Federally Designated Enterprise Zones/Enterprise Communities (EZ/EC)
- 1990 Census Tracts and Poverty Rates
- Superfund National Priorities List
- Community Development Block Grants (CDBG)
- Block Grant Loans and Floats
- Section 108 Loan Guarantees
- Economic Development Initiative (EDI)/Brownfields EDI (BEDI)
- Tax Advantaged Zones
- Small Business Administration (SBA)
- Economic Development Administration (EDA)
- Department of Transportation (DOT)
- Tax Exempt Bonds
- Tax Credits
- New Brownfields Pilot Grants Available
- Call
the Region 2 Brownfields Hotline
EPA Tests Streamlined Approached to Brownfields Site Assessment in Newark and Trenton
As
part of ongoing efforts to streamline the redevelopment of brownfields
sites, EPA is studying the implications of field analytical technologies.
EPA Region 2 proposed the idea of an "Area Wide Characterization
Project" to determine if field analysis done simultaneously
at multiple brownfields sites can be more efficient in assessing
site conditions and cleanup needs than analyzing samples site-by-site
in the laboratory.
The project, intended to prove that field data can be as useful
as laboratory data and can ultimately save time and money in preparing
sites for cleanup, is underway in both Newark and Trenton, New Jersey.
When applied to several sites, field analytical techniques allow
personnel to go into the field once and cost-effectively characterize
a number of sites. For the cost of analyzing 12 samples in the laboratory,
for example, 250 field samples can be analyzed, their results available
in minutes rather than weeks. This rapid collection of data allows
preliminary decisions on the need and type of remedial action best
suited for site cleanup prior to redevelopment. Field analysis may
help communities more quickly prioritize several sites and
include those sites in community redevelopment planning.
"You don't need to go out in steps," said Tom Boland,
Field Engineer with the NJIT Center for Environmental Engineering
and Science (CEES), referring to the usual site assessment process
of taking samples at each site, waiting for laboratory results,
and then revisiting the site for more samples. Said Boland, "You
can get a lot of useful information at one time and make some decisions
from there, saving a lot of time and money."
"Field analysis may help communities quickly prioritize sites, and include those sites in community redevelopment planning."
In Newark five city-owned sites with redevelopment
potential, all in the East Ward section, are being screened through
field analysis. The CEES helped implement and design this project
by coordinating with EPA, the city and the New Jersey Department
of Environmental Protection (NJDEP). Field sampling was done
by EPA's Emergency Response Team in June 1998, with a portion of
some samples being screened on site using multiple field techniques
and a portion sent to the EPA laboratory in Edison, NJ for confirmatory
analyses. In cases when field analysis indicated the need
for further sampling to determine cleanup needs and costs, that
sampling was done immediately on site.
Through an EPA Targeted Site Assessment Grant, NJDEP is doing similar
field analysis work in Trenton. The City of Trenton has chosen four
sites, totaling 10.8 acres, along the Route One Industrial Corridor
for assessment. The Department began sampling at the first site
in December 1998, and expects to have completed all four sites in
early 1999. NJDEP is also planning to begin work at sites in Newark's
South Ward.
Currently, New Jersey and many other states require laboratory analysis
as part of all site characterizations. According to Jerry McKenna,
Director of Technology Transfer and Training at CEES, this project
may encourage states to consider accepting these innovative characterization
technologies for use in brownfields decision-making or investigation.
For more information on the techniques employed by the Area-Wide
Characterization Project and its results, contact Jerry McKenna
at (973) 596-5882. For information on the EPA brownfields
pilot projects in Newark or Trenton, contact James Hackler at (732)
321-6730 or Larry D'Andrea at (212) 637-4314.
Go to top
Financing Brownfields Reuse: Creative Use
Of Federal Programs
| This article summarizes a background paper of the same title prepared by Charles Bartsch of the Northeast-Midwest Institute. To obtain a copy of the full report, contact the Northeast-Midwest Institute at (202) 544-5200 or call the EPA Region 2 Brownfields Hotline at 1-800-225-7044. |
Experience in brownfields restoration shows that funding
is a primary deterrent to site and facility reuse. The costs for
site assessment and cleanup with even small amounts of environmental
contamination can add significantly to the total cost of a redevelopment
project.
Financial institutions are sharply curtailing their lending to what
they consider to be "high risk" types of enterprises and
requiring additional and expensive documentation of site assessments
and cleanups. In many areas, adequate financing to carry out both
cleanup and redevelopment activities is simply not available.
Fortunately, federal economic development programs have begun to
allow and encourage brownfields restoration activities. As no two
brownfields projects are alike, there is no singular "best"
public sector approach to financial assistance for all projects.
Being aware of the variety of incentives available can help communities
tailor approaches for individual projects. Federal financial assistance
for brownfields projects typically serves to:
- reduce the lender's risk by providing incentives or legal clarification
of liabilities,
- reduce the borrower's costof financing, and/or
- ease the developer's financial situation by providing tax credits for investing in a brownfields site.
Programs administered by the Department of Housing and Urban Development (HUD) and the Small Business Administration (SBA) and tax incentives contained in the federal tax code can provide assistance for brownfields restoration. The chart on pages 4-5 summarizes these programs. Go to top
| The Brownfields Quarterly Community Report welcomes news about local brownfields efforts by community groups and others. If you have a story about what's happening where you are, please contact Suzanne Becker at (212) 349-4616, TRC Environmental Corporation, 200 Church Street, New York, NY 10013. Editorial staff retain the right to review and revise all text as necessary for publication. |
City, State & University Work Together to Build a Park in Camden
The City of Camden, NJ was awarded an EPA Brownfields
Assessment Demonstration Pilot Grant in 1997. Since then,
the city has formed new partnerships and made significant progress
towards redeveloping its brownfields sites. Along the Camden waterfront,
former industrial facilities and gravel parking lots are being cleared
to make way for a new recreational facility to serve the community.
The new park is being built thanks to a unique, three-way partnership
between Rutgers University, the City of Camden and the New Jersey
Department of Environmental Protection's Green Acres Program. The
partners are each making a contribution to transform under-utilized
properties into the city's planned premier recreational complex.
The Rutgers-Camden Community Park is an example of how the sharing
of project costs by the city, the university and the State of New
Jersey makes it possible to create a project that is beyond the
financial ability of any one of the partners.
Sharing an urgent need for quality recreational space, the city
and the university resolved to develop a facility which not only
provides recreational opportunities but also enhances the community's
access to the waterfront. Through consultation with city residents,
local officials and Rutgers students, a joint city/university planning
team proposed a five-acre sports and recreation facility for
use by both the local community and the university students. The
city then submitted the proposal to the Green Acres Program for
funding assistance.
Working in partnership,
the City of Camden, NJDEP and Rutgers University demolished the
Palko Millworking Facility to make way for a baseball field.
The
site of the new park is comprised of several parcels of land, including
privately owned, abandoned industrial facilities. Rutgers
has dedicated nearly three acres of university-owned land to the
project, and will use its own resources to operate, maintain and
police the facility. In addition, the university has performed a
Phase I assessment for the entire site. The Green Acres Program
has contributed $2 million towards the purchase of the industrial
parcels and the construction of the park. The City of Camden
has demolished the seven-story Victor Building and is in the process
of buying the former Palko Millworking facility. The
city plans to demolish a water tank which towers over the site,
and to remove any underground storage tanks found on the site.
A Memorandum of Understanding (MOU) regarding shared programming
(between the city and the university) and guaranteeing public access
is being drafted for approval by the Green Acres Program. The construction
of the park will complement the proposed open space to be built
along the Delaware River as part of the Camden Waterfront Master
Plan. The park will serve as a link between the
Cooper Grant residential neighborhood, the Rutgers campus and the
waterfront. The project has the support of the Office of the Mayor,
Department of Community Services, Camden City Redevelopment Agency,
Cooper Grant Neighborhood Association, and Blue Bridge Community
Development Corporation.
In addition to providing quality recreational facilities, the new
park will improve public access to the riverfront and spectacular
views of the Delaware River and the Philadelphia skyline.
A site that is currently inhospitable to pedestrians will become
an extension of the waterfront and a destination for the community.
For more information on this project or Camden's EPA brownfields
pilot project, please contact Fredrick H. Martin, Senior Analyst
with Camden's Division of Planning or Alison Devine, USEPA at (609)
757-7214.
Go to top
Tax Credit Available For Brownfields Cleanup Costs
In August 1997, President Clinton signed into law the Taxpayer
Relief Act which included a new tax incentive to spur the cleanup
and redevelopment of brownfields in distressed urban and rural areas.
Federal tax law generally requires that expenditures which increase
the value or extend the useful life of a property be capitalized
and depreciated over the life of the property. The new tax incentive
allows developers to deduct the full costs of the environmental
clean-up of brownfields properties in the year in which
those costs are incurred.
The incentive applies to properties that meet specific land use,
geographic and contamination requirements. To be eligible
for the tax deduction, properties must be held by the taxpayer incurring
expenses for use in a trade or business for production of income,
and hazardous substances must be present or potentially present.
To meet the geographic requirement properties must be located in
one of the following areas:
- An EPA Brownfields Pilot area designated prior to February 1997;
- A Federal Empowerment Zone or Enterprise Community (EZ/EC) (or
any supplemental zone designated since December 21, 1994);
- A census tract in which 20 percent or more of the population
is below the poverty level; or
- A census tract with a population of less than 2,000 that has 75 percent or more of the land zoned for industrial or commercial use and is adjacent to one or more census tracts with a poverty rate of 20 percent or more.
In addition, a property must not be proposed or included on the National Priorities List of Superfund sites.
A variety of resources are available to help investors determine
if a specific property is located in any of these areas (see box
on this page).
The governors of New York and New Jersey have designated their respective
state environmental agencies as the lead agencies for the tax incentive
program. These agencies must certify that a property meets
both the location and contamination criteria listed above.
Go to top
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Is
Your Site Eligible ForiTax Credit? |
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For a property to be eligible for the federal brownfields tax incentive, it must meet specific location and contamination criteria (see accompanying article, "Tax Credit Available for Brownfields Cleanup Costs" on this page). Listed below are easily accessible resources that can help owners determine if their properties are eligible.
Federally Designated Enterprise Zones/Enterprise Communities (EZ/EC)
1990 Census Tracts and Poverty Rates For Printed References Visit:
Internet References:
Superfund National Priorities List To find out if a property is proposed or on the NPL, visit the EPA Superfund Web site at or call the RCRA/Superfund Hotline at: (800) 424-9346 Go to top |
These agencies must certify that a property meets both the location and contamination criteria listed above.
Within EPA Region 2, the state contacts are:
Terri Smith, Legislative Analyst New Jersey Department of Environmental Protection (609) 292-1250
Christine Costopoulos, Remediation Program Coordinator New York State Department of Environmental Conservation (518) 457-7894
For the EPA Quick Reference Fact Sheet on the Brownfields Tax Incentive,
contact the Region 2 Brownfields Hotline:
(800) 225-7044.
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FEDERAL HELP FINANCING BROWNFIELDS REUSE |
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Department of Housing and Urban Development (HUD) |
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Community Development Block Grants (CDBG) Cities must use these annual grants for providing assistance to low and moderate income persons, alleviating slum conditions, or addressing conditions that present a serious and immediate threat to health and safety. Brownfields activities are eligible, but must be incorporated into local government priorities through the community's Consolidated Plan and annual action plan. Block Grant
Loans and Floats Economic
Development Initiative (EDI)/Brownfields EDI (BEDI) Tax Advantaged Zones For more information about:
Section 504 Development Company Debentures Small Business Investment Companies |
Title IX Revolving Loan Funds Title I Public Works Grants Title III Planning Grants
Policy on Brownfields Redevelopment Transportation Funds for Brownfields Under the Transportation and Equity Act for the 21st Century
(TEA-21), over $200 billion is allocated to integrate transportation
projects with environmental and community revitalization goals
over a period of six years. TEA-21 funds are applicable beyond
highways, road and transit maintenance -- funds may also be
used for relevant environmental restoration, pollution abatement,
historic preservation, trails, bike paths and pedestrian infrastructure
including aesthetic enhancements.
Industrial Development Bonds
Brownfields Tax Credit Developers of contaminated properties may fully expense their cleanup costs (i.e., deduct all of them in the year incurred) at sites that meet one of four criteria, including those located in state-certified poverty tracts, in predominantly industrial or commercial areas adjoining those tracts, federally designated empowerment zones/enterprise communities, or among EPA's initial rounds of brownfields pilots. For more information, phone:
Historic Rehabilitation Tax Credit Investors can receive a credit against their total income taken for the year in which a rehabilitated building is put into service. Rehabilitation of certified historic structures qualifies for a credit equal to 20 percent of the cost of the work; rehabilitation work on non-historic structures built before 1936 qualifies for ten percent. For more information, phone: Low-Income Housing Tax Credit These tax credits, allocated by states against a federally specified ceiling, enhance the return to developers or limited partners in private housing developments targeted to low-income occupants. For
more information, phone: |
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Understanding Liability at Brownfields Sites
For many years, uncertainty about liability has been a major obstacle
to brownfields redevelopment. In order to address this concern,
EPA has worked with states and municipalities in documenting the
circumstances under which the federal government will not pursue
for cleanup costs those developers, prospective purchasers and owners
of brownfields sites who have not caused or contributed to the contamination.
Many states have adopted similar policies.
In addition, on September 30, 1996, Congress passed and the President
signed into law the Asset Conservation, Lender Liability, and Deposit
Insurance Protection Act of 1996, as part of the Omnibus Appropriations
Bill for FY 97. This law includes the following amendments:
1) Clarification of limitations of lender and fiduciary liability
under the Comprehensive Environmental Response, Compensation, and
Liability Law (CERCLA), also known as Superfund;
2) Secure creditor exemptions set forth in the Resource Conservation
and Recovery Act (RCRA); and
3) Validation of the portion of the CERCLA Lender Liability Rule
that addresses involuntary acquisitions by government entities,
such as by foreclosure. By limiting the liability of these key players
in redevelopment, EPA hopes to encourage the return of abandoned
brownfields properties to the tax rolls and create new jobs.
Go to top
| The following are summaries of selected
guidance documents developed by EPA to address liability concerns:
Policy Toward Owners of Property
Containing Contaminated Aquifers - addresses potential
liability concerns resulting from contaminated groundwater
migrating beneath an otherwise uncontaminated property. This
guidance states EPA's policy not to sue those owners, developers
or prospective purchasers of a contaminated property for groundwater
contamination if the party did not cause or contribute to
the contamination. Policy on CERCLA Enforcement Against Lenders and Government Entities That Acquire Property Involuntarily - outlines criteria for determining when lenders and municipalities are exempt from CERCLA enforcement provisions. The guidance explains that EPA will not pursue for cleanup costs those lenders who merely provide money to develop a contaminated property, but do not actively participate in the daily management of the property. Under the same guidance EPA defines what constitutes an involuntary acquisition by a government entity and explains the liability limitations under these circumstances. Underground Storage Tank Lender Liability Rule - limits the regulatory obligations of financial institutions and others who hold security interests in property on which petroleum underground storage tanks are located. Soil Screening Guidance - helps decision-makers quickly determine which portions of a site require further study and which pose little risk to human health and may be ready for development without extensive cleanup. Go to top |
For copies of these and other guidance documents
on environmental liability visit the EPA Brownfields Web Page at
http://www.epa.gov/brownfields/ or call the Region 2 Brownfields
Hotline: In Region 2 (New York, New Jersey, Puerto Rico or the U.S.
Virgin Islands) call: (800) 225-7044. Outside Region 2 call: (212)
619-7703.
| Brownfields On-line |
A variety of brownfields web pages are now on the
Internet. Web pages developed by nonprofits, universities and government
disseminate information about new technology and regulations. Banks,
developers, attorneys and real estate firms have developed web sites
to advertise services and keep the industry informed. A selection
of brownfieldsrelated web pages is offered below.
EPA National and Regional Web Pages (www.epa.gov/brownfields
and www.epa.gov/region02/superfund/brownfld/bfmainpg.htm) offer
information about EPA's Brownfields Initiative including information
about specific pilots.
The National Association of Local Government Environmental Professionals (www.nalgep.org/) provides information about Smart Growth Business Partnerships, the Showcase Community Network, Local Brownfields Revolving Funds, and State Voluntary Cleanup Programs.
The Brownfields Center
(www.ce.cmu.edu/Brownfields)
brings together interdisciplinary brownfields research from Carnegie
Mellon University and the University of Pittsburgh.
The Brownfields NonProfit Network
(www.brownfieldsnet.org)
nonprofit organizations that promote the redevelopment of brownfields.
The Smart Growth Network
(www.smartgrowth.org) is a coalition of developers and
local governments working together to encourage environmentally
and fiscally responsible land use, growth and development.
The Institute for Responsible Management
(IRM)
(www.instrm.org) is nonprofit and charts the Brownfields Initiative.
Website offers IRM newsletters, IRM's Brownfields Dialogue Conference
Calls and an information database.
The Northeast/Midwest Institute
website (www.nemw.org) includes information about brownfields
publications, legislative updates, financing information, and links
to other websites. Go to top
Citizens Use Plants to Clean Trenton Pilot Site
The City of Trenton, NJ is successfully implementing phytoremediation,
a technology which uses plants to draw contamination from the soil,
at one of its Brownfields Assessment Demonstration Pilot sites.
Begun in 1996, phytoremediation at the grounds of the Gould Battery
site (also known as the Magic Marker site) has already rendered
sections of the property clean. The project is also a model of positive
community involvement in brownfields remediation.
The 7.5-acre brownfields site was most recently occupied
by Magic Marker Industries and used to manufacture felt tip markers.
However, the lead contamination is thought to have occurred previously
as a result of the site's long history of use by lead acid battery
manufacturers. Since Magic Marker filed for bankruptcy in 1989,
the site has stood empty and deteriorating. Several fires had occurred
in the site building, leaving residents concerned over the danger
of burning contaminants which might be inside. Located across from
an elementary school and surrounded by residences, the abandoned
factory was a local safety and health concern for the community.
This concern led residents, united under the Northwest Community Improvement Association (NCIA), to take action. With technical assistance provided by Isles, a nonprofit community development corporation, residents educated themselves about the site and its environmental contamination and invited Phytotech Inc., a remediation research and development firm in Monmouth, New Jersey, to demonstrate the phytoremediation technology on the site. In April 1996, residents helped plant the first crops of Indian mustard plants on a small portion of the Magic Marker grounds.
Phytotech harvested three crops in 1996, and in 1997 the entire treatable area (roughly one acre) was planted. Because of the small scale of the project, the harvested plant material was disposed of at a hazardous waste disposal facility. Larger volumes of harvested plants could be recycled at a lead smelting operation.
With all the stakeholders involved from the beginning, says Isles Executive Director Gary Lord, this brownfields project has been different from most. Instead of a top-down, government-driven process, the cleanup of the Magic Marker site has grown out of the community and its goals. The City of Trenton has worked with Isles and NCIA to assure that the community is involved in the site's ultimate redevelopment.
"The benefit of this approach," says Lord, "has
been the emergence of a new hope and sense of community ownership
of the site. Neighbors are painting houses and planting trees again."
According to Michael Blaylock, Research Scientist with Phytotech,
contamination at the site has decreased each year. Other than isolated
hot spots such as under formerly leaking transformers, phytoremediation
is expected to sufficiently clean all of the outdoor soil.
In late 1997, EPA removed drums of hazardous materials from the building at the site. Now the city is pursuing funding sources, including potentially responsible parties, to pay for the demolition of the building so cleanup can proceed. The New Jersey Department of Environmental Protection is the lead agency overseeing the cleanup and is currently working with the City of Trenton to schedule the next steps.
Redevelopment at the site is still several years away. Tentative redevelopment plans for the site include a mix of low-income housing, a community center and open space.
EPA's Superfund Innovative Technologies Evaluation Program (SITE) began evaluating the phytoremediation project at this site in 1997. SITE will issue a final evaluation report when the project is completed. According to Steve Rock, Environmental Engineer with the EPA's National Risk Management Research Laboratory in Cincinnati, the one phytoremedia-tion project SITE has evaluated to date was successful in the cleanup of wood treatment wastes such as creosote and pentachlorophenols. Go to top
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EPA BROWNFIELDS WEB PAGE- CHECK IT OUT! EPA Region 2's new Brownfields Web Page is on-line, carrying The Brownfields Quarterly Community Report in full. The Brownfields Web Page is accessible through: Region 2 Web Page http://www.epa.gov/region02/superfnd/brownfld/bfmainpg.htm EPA's National Web Page |
New Brownfields Pilot Grants Available
EPA is now accepting applications for a new round of Brownfields Assessment Demonstration Pilot Grants. The agency hopes to award 100 new grants of $200,000 each by May 1999.
The deadline for applying for the new pilot grant is March 22, 1999.
| Application booklets may be obtained by calling the EPA Region 2 Hotline at 1-800-225-7044 or outside Region 2 at 212-619-7703. |
EPA seeks to identify applicants that demonstrate the integration of brownfields assessment pilots with other federal, state, tribal, and local economic development and environmental programs. Special consideration will be given to Empowerment Zones and Enterprise Communities (EZ/ECs), communities with populations of under 100,000, and federally recognized Indian tribes. Go to top
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Call
the Region 2 Brownfields Hotline and ask for the Brownfields General Information Packet. The Packet provides information that will bring the novice up to speed with the Region's Brownfields Initiative. The packet includes the following items:
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- Spring 2001 - Vol. 3 No. 1
- Fall/Winter 1998 -Vol. 1 No. 2
- Summer 1998 - Vol. 2 No. 1
- Spring 1998 - Vol. 1 No. 4
- Winter 1997-98 - Vol. 1 No. 3
- Summer 1997 - Vol. 1 No. 2
- Spring 1997 - Vol. 1 No. 1
Regional Brownfields Hotline (800) 346-5009
Pilots in Region 2 | Pilot Assessments | National Web Site |Grant Application |Contacts | Resource Directory | Quarterly Reports
For information, contact: brownfields.r2@epa.gov
