Revitalizing Brownfields: New Benefits from Old Sites (cont.)

Local brownfield initiatives: What tools are available?

Through creatively crafted and carefully targeted incentives and assistance, local and state governments, in many respects, are the innovators in leveling the economic playing field between greenfield and brownfield sites. Typically, brownfield success stories are found in places that have adopted their own site characterization and reuse tools and have built creatively on the foundation provided by federal programs and policies.

Many jurisdictions have or are currently setting up finance programs to ease the cost of borrowing, augment private funds, or fill funding gaps that the private sector will not bridge. These tools include:

The “tried-and-true.” Many efforts involve placing a new brownfields “spin” on traditional tools, which, briefly, include:

• Tax increment finance (TIF): TIF has traditionally been used for local revitalization efforts, usually in economically distressed areas. TIF is the most common local financing tool used for brownfield redevelopment.

• Tax abatements: Commonly used to stimulate investments in building improvements or new construction, they give local governments a workable, flexible incentive that helps influence private development decisions.
• General obligation bonds: Cities traditionally issue G.O. bonds for acquiring land, preparing sites, and making infrastructure improvements.

Program innovations. Already, a variety of financial assistance programs and incentives are in place to promote economic development. These could be redefined and more explicitly packaged and promoted for potential developers and lenders to use to acquire, clean, and rehabilitate brownfield sites. Alternatives being considered include:

• Earmarking some portion of grant, loan, or tax incentive program resources to applicants proposing site characterization or cleanup projects;
• developing a municipal “linked deposit” program targeted to brownfield projects;
• targeting various local franchise or use tax incentives to brownfield projects;
• channeling some portion of loan repayments from existing city programs to brownfield activities; <
• earmarking water, sewer, and waste water charges for brownfield cleanups;
• devoting monies raised from fines or fees to brownfield projects; or
• using small amounts of public funds to “seed” a private, shared-risk financing pool devoted to brownfield redevelopment.

In addition, cities can explore other low- or no-cost techniques to stimulate brownfield redevelopment undertakings. For example, some cities are considering ways to more easily convey tax-delinquent properties to new owners with viable reuse plans. Cities in Wisconsin can take advantage of a new state tax-forgiveness incentive pegged to brownfield sites. Other communities are contemplating modifications in their zoning requirements in specific brownfield cases (for example, reducing parking requirements on existing sites near public transportation) to provide developers with the opportunity to earn a greater return on their investment and offset more site preparation costs.

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