HUD Announces FY07 Brownfields Grant Availability

November 16, 2007
by RODD BENDER
Client Alert Newsletter November 2007

On September 24, the U.S. Department of Housing and Urban Development ("HUD") announced the availability of $32.9 million in grant funds under its Brownfields Economic Development Initiative ("BEDI") program, the largest amount of BEDI grant funds ever made available by HUD in one year. Under the BEDI grant program, eligible applicants, consisting of local units of government receiving community development block grants ("CDBGs"), may apply for up to $2 million in BEDI grants to improve the viability of a brownfields project that will also be financed by HUD Section 108 loan guarantee funds of an equal or greater amount. Brownfields are defined broadly under the BEDI program to include abandoned, idled, or underused real property (including industrial and commercial facilities) where expansion or redevelopment is complicated by real or perceived contamination. Of importance, the local units of government may in turn grant the BEDI funds to private entities for use at brownfields projects.

BEDI grant funds may be applied toward numerous activities, including site acquisition, site remediation, and site preparation (e.g., infrastructure improvements, grading and demolition), as well as vertical building construction. As with the Section 108 loan program, BEDI grant funds may only be used for projects that will satisfy one of the National Objectives established under the CDBG program, such as benefiting low or moderate-income individuals through job creation. BEDI grant funds may not be used for market-rate housing, but may be used on the commercial portions of a mixed-use development.

The FY07 BEDI grant application deadline is December 24, 2007. Because of the complex nature of the application, as well as the extensive coordination required with local government eligible applicants, interested parties are encouraged to initiate the application process as far in advance of the application deadline as possible. In the past seven years, attorneys at MGKF have successfully assisted clients in securing $11.5 million in BEDI grant funds for use at brownfields redevelopment projects.