What are brownfields?
Why is the redevelopment of brownfields important?
What are some of the financial incentives to support brownfield redevelopment?How does Tax Increment Financing (TIF) work?
What is a Brownfield Michigan Business Tax (MBT) Credit?
Are there any grants or loans available?
I'm interested in learning more, where should I look?
Brownfields are previously developed sites that have barriers to redevelopment due to the prescence or threat of contamination on the property.
Redeveloping brownfields reduces sprawl, reduces public health threats, and encourages new investment in proxmity to existing infrastructure and public services.
A variety of financial incentives can be utilized to support brownfield redevelopment projects including tax increment financing (TIF), Community Revitalization Program (CRP), and a variety of grant and loans that can potentially assist in numerous phases of a brownfield project.
Tax Increment Financing (TIF) is a tool that allows a developer to be reimbursed for eligible costs related to an eligible property (contaminated, functionally obsolete, or blighted) using the incremental increase in the taxes on the property resulting from the new development. A TIF can only be used if there is going to be an increase in the property tax, otherwise there is nothing to capture to reimburse eligible activities.
Eligible activites include:
- Environmental Due Diligence (Phase I, II, and Baseline Environmental Assessments)
- Due Care Activities (e.g. deed restrictions, monitoring activities)
- Additional Response Activities (e.g. other clean up costs)
- Environmental Insurance
- Asbestos/lead-based paint abatement
Through qualification as Core Communities, the Cities of Ann Arbor and Ypsilanti can include additional activities:
- Site Preparation
- Public Infrastructure benefitting the project
These are the incentives available, but ultimately it is local government approval for each specific project that determines what can be included as eligible activities reimbursable by TIF. If a developer decides to pursue a TIF a Brownfield Plan will need to be created and approved by the jursidiction in which the project is located, the Washtenaw County Brownfield Redevelopment Authority, and the County Board of Commissioners. A Brownfield Plan may seek to capture state school taxes in support of such project, which requires additional approval at the State level. Any eligible expenses incurred before a brownfield plan is approved cannot be reimbursed.
Contact Nathan Voght at 734-222-3860 for more information on this program.
Are there any grants or loans available?
A variety of sources are available at the local, state and federal level. Different programs and funding sources are eligible for different project activities.
Through Washtenaw County's membership in the Downriver Brownfields Consortium, projects within municipal member communities are currently eligble to apply for grants to perform site assessment work. Additionally, funding is available for clean up of sites impacted with petroleum-based contaminants. To inquire about these programs, contact Nathan Voght at email@example.com or (734) 222-3860.
State of Michigan
The Michigan Department of Environmental Quality (MDEQ) offers a number of grant and loan programs for brownfield projects.
Clean Michigan Initiative (CMI) Brownfield Redevelopment Grant
These grants provde funding to local units of government, Brownfield Redevelopment Authorities, and other public bodies to assess and remediate brownfield sites that show economic development potential. Awards are limited to one project per applicant per year, not to exceed $1 million.
CMI Brownfield Redevelopment Loan
These loans are similar to Brownfield Redevelopment Grants. A municipality or BRA must pledge its full faith and credit to secure the loan and the Michigan Department of Treasury must approve the applicant. Loans are offered at a 2% rate of interest with no payments or interest for the first 5 years. The full amount must be repaid within 15 years. This loan allows a community or BRA to use TIF to capture furture taxes generated from the redevelopment of the property, to repay the loan
Revitalization Revolving Loan
The RRL Program provides eligible counties, cities, townships, villages, or BRAs with low-interest loans for brownfield redevelopment projects. The property must be a "facility" as defined in Part 201, Environmental Remediation, of the Natural Resources and Environmental Protenction Act, 1994 PA 451, as amended. There is no minimum or maximum loan amount and the conditions are the same as for Brownfield Redevelopment Loans.
Information about available State funds can be found at the MDNRE Brownfields Website.
Clean up Grants
Offered by the Environmental Protection Agency on a competitive basis, Clean-up Grants can be sought for specific projects. For informaiton on EPA Clean up Grants and other Brownfield funds visit the EPA Brownfields Webpage.
There are a variety of resources to learn more about brownfield redevelopment. Here are a few:
- Michigan Department of Natural Resources and Environment
- Michigan Economic Development Corporation
- Housing and Urban Development
Regionalism: An Effective Tool for Brownfield Redevelopment in Washtenaw County An in-depth look at the regional brownfield program in Washtenaw County, a presentation given at the 2008 National Brownfields Conference in Detroit, Michigan.