Brownfields and their Remediation
in Oklahoma 

Also see related page on:
  All Appropriate Inquiry or Phase I Environmental Assessments
 Remediation of Brownfields in Oklahoma
Paper on Repositioning Brownfields Properties (PDF)

A Brhttp://www.brownfieldsok.com/Reposition.pdfownfield Site is a property whose development (or redevelopment) may be complicated by the presence (or potential presence) of a hazardous substance, pollutant, or other contaminants.  The term "Brownfields" first came into use in 1992, at a congressional field hearing hosted by the Northeast Midwest Congressional Coalition. 

If you have recently purchase property containing potentially hazardous materials (and you are not responsible for placing the hazardous materials on the property) the following describes federal and Oklahoma State programs that may help in the rehabilitation of the property.  Some of the programs require a public-private partnership, other programs are available to for-profit enterprises.  In most cases, governmental assistance is only available if you have preformed an All Appropriate Inquiry or Phase I Environmental Assessments before you purchased the property.  

The costs of remediation depends on the existing environmental hazards, the potential of uncovering additional unknown hazards, and the ultimate use of the redeveloped property.  For example, an industrial site being remediate to a residential site will have the highest standards (and cost) for cleanup. 

With a mixed-use redevelopment, minor changes in the physical layout of the property can significantly influence the remediation costs.  Many contamination sites can be managed by covering them with a parking lot.     

However, cleanup costs may be effected by factors other that the use of the land and placement of buildings and parking lots.  Contamination may migrate.  If contamination is reaching drinking water, or water sources on adjacent properties, the remediation is likely to be costly and unaffected by placement of parking lots or buildings.  

The implementation of land use controls, also known as institutional controls, may allow for higher levels of contamination to be left behind by restricting access to the contamination.  For example, a contaminated area caped by a parking lot may need to remain a parking lot unless further remediation is performed.     

A focus of the Brownfields program is to provide financing to provide a level financial playing field between Brownfield and non-Brownfield sites.  Brownfields grants and other incentives are provided to cleanup a site to the point where it is shovel ready" for traditional development.  Grants and other programs support revitalization efforts by funding environmental assessment, cleanup, and job training activities.

Where is the Money?

There are several different federal and state programs that can be used to help facilitate Brownfields developments.  Some agencies, such as the Environmental Protection Agency, have specific Brownfields programs.  Others, such as the Department of Commerce, have economic development programs designed to facilitate development after the cleanup has been accomplished.  Below are summaries of programs that may be of interest to developers interested in Brownfields.  

Also see information on All Appropriate Inquiries (AAI) or a Phase I assessment.   

Environmental Protection Agency

The federal government's Brownfields program was created in 1995, administered by the Environmental Protection Agency, and is designed to empower states, communities, and other stakeholders in economic redevelopment. Through passage of the Small Business Liability Relief and Brownfields Revitalization Act, the EPA has provided tools for public and private sector to promote Brownfields cleanup and reuse. 

• Site Assessment Grants: Funds for pre-cleanup environmental activities such as site assessment, inventories, planning, design, and outreach 
• Site Cleanup Grants provide direct funding for cleanup activities at certain properties with planned greenspace, recreational, or other nonprofit uses, by cities, development agencies, other non-profits 
• Brownfields Revolving Loan Fund Grants provide funding to capitalize loans that are used to clean up brownfields, provides capital to establish Revolving Loan Funds to make low/no interest loans for cleanup; starting FY 2003, recipients may use up to 40% of capitalization award for cleanup sub-grants
• Brownfields Job Training Grants provide environmental training for residents of brownfields communities. 

http://www.epa.gov/brownfields/gdc.htm

Economic Development Administration 
(of the US Department of Commerce) 

Where EPA focuses on the “front-end” or environmental aspects, EDA targets the “back-end” or real estate development components of transactions.  While the EDA does not have programs specifically targeted to Brownfields, they can be used for economic development after cleanup.  

• Loans: Title IX (capital for local revolving loan funds)
• Grants: Title I (public works) and Title IX (economic adjustment)

EDA investments range from planning and technical assistance to infrastructure construction. Project examples include activities such as feasibility studies, revolving loan fund capitalization, infrastructure construction and the creation of redevelopment plans. Overall, EDA’s goal in brownfields redevelopment is to create value by returning non-productive, blighted and/or formerly contaminated real estate to local tax roles while fostering capital investment and creating higher-skill, higher-wage jobs 

EDA Programs include:

• Public Works Grants - to revitalize, expand, or upgrade physical infrastructure to attract new industry or generate/save long-term private sector jobs
• Economic Adjustment Grants - design and implement strategies to adjust or change economies that have experienced or are under threat of structural change

Eligibility requires "Distress" (in a census track) which is defined as either

• Unemployment Rate for past 24 months is 1% above national average 
• Per Capita Income not greater that 80% of national average 

Funding Priorities:

1. Enhance regional competitiveness and support, long-term development of the regional economy
2. Help communities plan and implement economic adjustment strategies in response to sudden and severe economic dislocations
3. Support technology-led economic development and reflect the important role of linking universities and industry and technology transfers
4. Advance community - and faith-based social entrepreneurship in redevelopment strategies for areas of chronic economic distress

Housing and Urban Development

• BEDI -- Brownfield Economic Development Initiative, a competitive grant program used in conjunction with Section 108 loan guarantee, are initially made available to public entities (who may re-loan proceeds) for the purpose of redeveloping Brownfields sites and the increase of economic opportunities for low-and moderate-income persons as part of the creation or retention of businesses, jobs and increases in the local tax base.  Economic Development Initiatives may also apply for some projects.  
• Community Development Block Grant (CDBG) - activities are determined locally, under some circumstances, can be lent to private companies. Grants are issued to "Entitlement Communities" (larger cities or counties) or to states as a proxy for smaller communities.  Activities include:
  • site acquisition
  • site assessment, planning for redevelopment or revitalization
  • site clearance, demolition and removal of buildings
  • rehabilitation of buildings, removal of contamination
  • construction of real estate improvements
• Section 108 Loan Guarantee Program - the loan guarantee portion of CDBG which allows local governments to transform a small portion of their CDBG funds into federally guaranteed loans large enough to pursue physical and economic revitalization projects that can renew entire neighborhoods.  
• Empowerment Zone and Enterprise Communities
• Main Street - Hope VI Funds - grants available for downtown revitalization available to communities under 50,000 and have less than 100 public housing units.  

Department of Transportation

Highway and transit construction programs can support Brownfields by upgrading existing facilities, offering transportation amenities that may improve access to sites, funding facilities and structures that serve as part of the remedial solution.  

• Federal Transit Administration (FTA) - land pruchased for right-of-way must be remediated, typically under one of the following programs; Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or "Superfund"), the Resource Conservation Recovery Act (RCRA), the Oil Pollution Act (OPA) and the Underground Storage Tank (UST) program
• Federal Highway Administration (FHWA) 

Army Corps of Engineers

Can provide planning and technical support if the Brownfields/waterfront connection can be made

Federal Tax Incentives

• Low - Income Housing Tax Credits - States get a population- based allocation for distribution to communities and non-profits
• Rehabilitation Tax Credits - Taken the year renovated buildings are put into service
  • 20% Tax credit for historic structures
  • 10% Tax credit for non-historic buildings constructed before 1936
• Empowerment Zone and Enterprise Communities

 National Trust for Historic Preservation 

Main Street USA is a program started by the National Trust for Historic Preservation in the late 1970's for community revitalization.  Main Street focuses on a holistic approach to revitalization based on the "4-point" approach of design, promotions, economic restructuring, and organization. Originally targeted at small, traditional downtowns, the program now encompasses sections of large urban centers. 

The National Trust also provides grants and loans for use in historic preservation in three major areas, Homes, Commercial, and Nonprofit or Government.  

Issues Regarding Land Transactions

The classic real estate axiom is that a property is worth what someone is willing to pay to acquire.  When discussing property with potential contamination, the value issue becomes a bit more complicated in that property will have a value as a "clean" property, and another value as a property with potential contamination.  The reduced value of the property may be because of stigma surrounding the property or because of potential costs that might be involved in cleaning up the contamination.  

The purchase agreement should address the following:

• Site Characterization
• Cost of Remediation 
• Temporary vs. Permanent Contamination
• Potential Acceptable property use
• Limitations and institutional controls that are part of previous remediation.
• Determine Exposure to Liability Post Remediation
  • Brownfields, Voluntary Cleanup Programs, etc.
  • Potential 3rd Party Liability (trespass, nuisance, etc.)
  • Assignment of Liability - Representations and Warranties, Indemnity
• Defining Brownfields Action and Remediation Goals
  • Determine who will be responsible for remediation
  • Carve out impacted property from non-impacted property
• Insurance - Federal funds can be used to purchase insurance coverage that can be used to mitigate risk in the cleanup of Brownfields; examples of insurance specific to Brownfields include:
  • Contractors Pollution Liability - protects contractors against claims for third-party bodily injury, property damage or environmental damage arising from pollution conditions caused in the performance of covered operations. The coverage applies to sudden and gradual pollution events and responds to clean-up costs, both on and off the work site
  • Cleanup Cost Cap - covers cost overruns when environmental remediation projects exceed the projected costs 
  • Pollution Legal Liability - site-specific coverage for first-party cleanup at an insured property and third-party claims resulting from pollution conditions that cause on - or off-site bodily injury, property damage or cleanup, Provides coverage for unknown pre-existing conditions
  • Storage Tank Liability Insurance - provides coverage for third-party bodily injury and property damage from pollution conditions emanating from scheduled storage tanks