The Brownfields Utilization, Investment, and Local Development or “BUILD” Act

BUILDlogo_FINAL_crop The Brownfields Utilization, Investment, and Local Development or “BUILD” Act (2013) is a bill recently introduced in the US Senate that would make federal brownfields cleanup grants available to a wider variety of groups and local governments, and would smooth the way for communities to redevelop these properties. These grants are a critical part of the success of the nation’s Brownfields program. According to EPA figures Brownfields grants have resulted in the assessment of more than 20,000 properties and the completion of 845 cleanups.

The bill was introduced by Senators Lautenberg, Inhofe, Crapo and Udall  to amend the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.A. §9601 et seq. (“CERCLA”), which has been the main US law governing federal cleanups since the 1970s. The BUILD Act reauthorizes the EPA’s Brownfields Program through Fiscal Year 2016. The BUILD Act is more than a simple reauthorization bill, however, as it contains important new eligibility and increased funding provisions that have the potential to both revive Brownfields projects that were tabled due to the economy and encourage new redevelopment projects. While currently non-profit organizations are only eligible for site remediation grants, the Act broadens the definition of an “eligible entity” under CERCLA to include non-profit organizations, certain limited liability corporations, limited partnerships and “qualified community development entities” among those that can obtain site assessment grants.

Some of the other important features of the BUILD Act include:

  • Local governments benefit from expanded opportunities to obtain site assessment grants to allow them to investigate properties that were acquired prior to the enactment of the Small Business Liability Relief and Brownfields Revitalization Act in 2002. The site assessment grants are available to local governments even if they do not qualify for the “bona fide prospective purchaser exemption” under CERCLA (i.e. they did not undertake a level of due diligence amounting to “all appropriate inquiry” before buying the site).
  • Under the Act, states benefit through targeted funding. The EPA is authorized under the BUILD Act to award up to $2,000,000 to provide grants to states. The caveat is that states must have spent at least 50% of the previous year’s funding on site assessment and remediation to qualify.
  • Increases in the amounts and allowable uses for funding are key elements of the proposed legislation. Under the current law, site remediation grants cannot exceed $200,000 per site. The BUILD Act would increase that cap to $500,000 per site and give the EPA further authority to waive the limit and award up to $650,000.
  • Grant recipients would have greater flexibility under the BUILD Act in terms of the costs that can be reimbursed though the grant program. Currently, CERCLA prohibits grant recipients from using grant proceeds to pay for administrative costs. If enacted, the BUILD Act would remove this prohibition and permit grant recipients to use up to 8% of any grant for administrative costs.
  • The BUILD Act would create multipurpose Brownfields grants of up to $950,000 that could be used to fund inventory, characterization, assessment, planning or remediation work at one or more sites in an area, provided that the grant money is used within a three-year period. At present, the grants are segmented in such a way that multiple grants may be needed in order to complete an entire project. Allowing applicants to apply for one grant to cover multiple phases of a project is be expected to save grant recipients money by reducing the administrative application costs and the delays and uncertainty associated with piecemeal grants.
  • The Act incents Brownfields redevelopment at particular types of sites through focused funding. It directs EPA to give priority in awarding technical assistance grants to “small communities, Indian tribes, rural areas, or low-income areas with a population of not more than 15,000” individuals. The EPA will also be required under the BUILD Act to give consideration to “waterfront brownfield sites” when awarding funds. A “waterfront brownfield site” is a site that is located adjacent to a body of water or a federally designated floodplain. Special grants up to $500,000 are available for clean energy projects, which include renewable energy (wind, solar and geothermal) projects at Brownfields sites.

Want to know more? A convenient section by section summary presented by Smart Growth America is available here.

As participants in successful brownfields redevelopments in Pennsylvania, New Jersey, and Delaware over the last twenty-five years, REPSG stays on top of funding opportunities, grants and legislation pertaining to your development. Please do not hesitate to contact me at Cdrake@repsg.com, or post in the comments below, to discuss your project and see how we can help.

The Journey of Redevelopment: an REPSG Photo Log

As a child, I used to work on family genealogy with my dad. We spent countless Saturdays pouring over ship manifests and other old records looking for any information about our ancestors. I was fascinated with all the old documents and photos that told the story of our family’s journey. Years later, working as part of REPSG’s Phase I team, I was explaining my work to my dad. He listened carefully and responded, “So it sounds to me like you’re doing genealogy, just on property instead of people.” I had never thought of my work that way before, but I liked the analogy.

At REPSG, we do a lot of historical research. We want to understand as much as we can about the history of a property in order to inform its future transformations. Some of our projects are short term, some we get to participate in through the course of redevelopment, and some are sites that just keep coming back. It’s fascinating to see what these properties become – old factories turned into thriving community centers, forgotten land redeveloped as affordable housing, or buildings whose future is in limbo and who are left to decay.

I thought it would be interesting to share some photos of the “journeys” of some of our sites.  Click through each set of photos below to see the amazing transformations!

From empty row-homes to state-of-the-art senior housing

Before

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 A major industrial facility redeveloped into homes. In my early days with REPSG, I spent weeks at this site overseeing the volumes of trucks hauling soil on and off site. It was great to be able to see the project evolve, and REPSG was invited to take company tour of the model home!

Before

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Sometimes we visit sites multiple times over the years, and one particular site comes to mind. REPSG has watched this building change over time as it waits for a new life. These photos remind me a bit of the decay you see on the Titanic.

Before

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 REPSG frequently works with community revitalization organizations. I always enjoy working with these types of clients who have such a vision for what a site or even neighborhood can be. This old factory and warehouse is, piece by piece, being renovated to house community offices and a charter school.

Before

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 Another developer client of ours had the vision to turn this piece of vacant urban land into a vibrant senior housing community. This site was also the site of a former industrial facility that had long ago been demolished.

Before

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Do you own a site or have your eye on one for reuse or redevelopment? REPSG would love to be a part of the next phase of your property’s journey of transformation.  Contact us to see how we can best partner with you to define the next generation of your site.

Top 5 Challenges Lenders Face in Environmental Due Diligence

EDR surveyed 819 financial institutions that provided insight into the Environmental Due Diligence (EDD) challenges that they face. REPSG is a full service, customer conscious environmental firm that has the following commentary related to the below mentioned lender challenges:

 

Challenge #1: Environmental Reports and Risk-Based Decisions

  • Interpreting environmental results and knowing which risks to be concerned about
  • Finding out what the EP’s opinion is and determining whether the subject property has any environmental issues the bank should be concerned about

At REPSG, all EDD is performed by personnel who have many years of experience and meet the AAI and ASTM E1527-05 qualifications and can make coherent professional, environmental decisions. We make sure we understand the lenders risk tolerance and their overall lending goals. Our reporting is structured to clearly define what a Recognized Environmental Condition (REC) is and if it is a concern for the property in question. We clearly define the risks and recommendations in our reporting and follow up with the lender to ensure that any questions they may have are answered.

 

Challenge #2: Internal Education & Training

  • Understanding the importance of EDD in the context of the overall lending process
  • Educating senior management and loan officers

At REPSG we are very experience with lenders and their vary degree of EDD knowledge. We make sure that every lender understands the important that their personnel are knowledgeable and understands all of the potential EDD concerns and how it is a critical component of the bank’s overall risk management practices. We have meet with many lenders and presented case studies and conveyed the importance of knowing many risks involved with inadequate EDD or the choice not to require any EDD. We are contracted by many banks to perform a third party review of EDD reporting to endure that the EDD assessment was conducted in compliance with AAI and ASTM E1527-05 standards and that our professional judgment and that of the report writers professional judgment coincide with each other. Our goal is to make sure the lender understands their environmental risk.

 

Challenge #3: Turnaround Time

  • Meeting the challenges of efficiently conducting EDD

At REPSG, we know what items required for EDD take time and therefore have a system down that allows us to efficiently turnaround an EDD assessment to meet the client’s needs and the AAI and ASTM E1527-05 standards. The federal, state and local review of records is one of the most important and time consuming requirements of EDD, which REPSG makes a priority during our EDD research. We have experience turning around an assessment anywhere from two days to two weeks.

 

Challenge #4: EDD Decisions

  • Balancing EDD costs against risk tolerance
  • Determining appropriate EDD levels

At REPSG, we are very focused on what our customer’s ultimate goals and needs are for the property. We emphasize for them if the site’s history will pose large environmental risk and expense and if the risk is manageable through the longer and more intense regulatory process or possibly the more simplified construction and disposal process. Being able to breakdown the risk and type of management for a site can clarify the level of environmental liability related to the size of the loan.

 

Challenge #5: Competitive Issues

  • Justifying EDD costs to customers
  • Requiring borrowers to pay for a Phase I when a competing bank doesn’t.

At REPSG, we encourage lenders to compare our comprehensive EDD assessments to others. This comparison justifies the need for the assessment as well as being able to pass on the costs to their customer. We are very focused on producing a site-specific assessments tailored to identify the RECs and risks involved at each property.