Financial Assistance

Federal and state governments have enacted a variety of financial assistance programs, primarily in the form of grants, loans, and tax incentives, to facilitate the remediation and redevelopment of contaminated sites where such projects might otherwise be economically unviable. In addition, new programs are coming on-line to encourage sustainable development, including such green building techniques as the use of recycled building materials, water re-use and energy efficient construction, the use of renewable energy (e.g., solar and wind), and other building characteristics that qualify projects for certification under the U.S. Green Building Council's "LEED" (Leadership in Energy and Environmental Design) program. MGKF lawyers assist our clients in evaluating, qualifying for, and obtaining funds from these programs.

Brownfield Financial Assistance
Because of the significant costs associated with the investigation and remediation of brownfield sites, government financial assistance is often key to the economic viability of a project. These projects are viewed as "win-win-win" opportunities in that the financial assistance makes the project viable to a private developer, generates jobs for the community in connection with construction and eventual occupancy of the property by new businesses, and returns the property to the tax rolls to generate both local property taxes and sales and income taxes associated with the long-term business activities at the site.

A variety of federal and state brownfield financial incentives exist to promote these objectives. Many of these programs require private-governmental partnerships to take advantage of the funding opportunities. MGKF attorneys have experience with a wide range of programs and the cooperative arrangements necessary to leverage the funding opportunities.

With respect to federal incentives, the chief programs are administered by the U.S. Environmental Protection Agency ("EPA") and Department of Housing and Urban Development ("HUD"), and include the following:

• EPA Brownfields Assessment Grants: Grants to governmental and quasi-governmental entities and to non-profits to characterize and assess brownfield sites.
• EPA Brownfields Cleanup Revolving Loan Fund Grants: Grants to governmental and quasi-governmental entities and to non-profits to capitalize revolving loan funds to make low-interest loans to clean up brownfield sites.
• EPA Brownfields Cleanup Grants: Grants to governmental and quasi-governmental entities and to non-profits for the cleanup of brownfield sites.
• HUD Brownfields Economic Development Initiative ("BEDI") Grants: An adjunct to HUD's Section 108 loan program, grants under this program are available to communities that receive Community Development Block Grant ("CDBG") funding from HUD and may be subgranted to private developers. Eligible projects must also participate in the Section 108 loan program.

New Jersey also has a wide array of financial assistance programs for brownfield projects, including the following:

• Hazardous Discharge Site Remediation Fund: This fund provides substantial grants to municipalities (up to $5 million per year) to fund site assessments, investigations, and cleanups. A variety of mechanisms are available depending on the nature of the conditions at the site, the planned use of the property, and the type of cleanup contemplated. Private developers are also eligible for low-interest loans and may partner with municipalities to take advantage of grant opportunities available to the latter.
• Brownfield and Municipal Landfill Site Remediation Reimbursement Funds: These are unique programs pursuant to which New Jersey reimburses redevelopers for up to 75% of the cost of remediation of (1) brownfield sites and (2) sites at which municipal landfills were located and closed prior to 1983, out of taxes (primarily sales and use taxes) generated from development performed at the sites.
• Environmental Infrastructure Trust: Also a program conceived to provide low-interest loans for the construction of sewer and water infrastructure, this funding may be authorized for any "environmental infrastructure facilities" including "nonpoint source management facilities," which are in turn defined to include remedial action activities, landfill closure facilities, and land purchase and conservation.
• Other General Business Financial Assistance Programs: New Jersey also has a wide array of other financial assistance programs that can be applied to brownfield redevelopment projects, including low-interest financing from the New Jersey Economic Development Authority, the Business Employment Incentive Program, and various geographic and urban redevelopment tax credit programs.

Sustainable Development and Green Building
As the sustainable development movement gathers momentum, government is looking for ways to stimulate the use of "green building" techniques that promote these objectives. Many state and local governments are coming up with a variety of tools that do this, including grants, low-interest loans, tax credits, priority permitting, and in some instances modifying building codes to require the use of these techniques. In certain instances, participation in these programs will require participants and/or third parties to certify compliance with particular environmental or energy efficiency standards, which could implicate complex legal and regulatory issues. While many of these programs are only now being developed, some are in place and MGKF's Energy Practice Group is carefully monitoring them so that our clients may take fullest advantage of the opportunities they offer.

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MGKF has also advised and assisted clients in obtaining state financial assistance for brownfield projects, including programs in Pennsylvania and New Jersey. Examples of Pennsylvania programs include the following:

• Industrial Sites Reuse Program: This program, established pursuant to Pennsylvania's Land Recycling and Environmental Remediation Standards Act ("Act 2") and the Industrial Sites Environmental Assessment Act ("Act 4"), provides grants to governmental and quasi-governmental entities for assessment and cleanup of former industrial sites owned by the applicant. Private developers are eligible for low-interest loans for these activities.
• PENNVEST Environmental Loan Program: The Pennsylvania Infrastructure Investment Authority ("PENNVEST"), originally intended as a source of low-interest loans to fund water and sewer infrastructure projects, also makes loans for remediation of brownfield sites that have been contaminated by past industrial or commercial activity and pose a threat to local groundwater or surface water sources.
• Other General Business Financial Assistance Programs: Pennsylvania also has a variety of other financial assistance programs that can be applied to redevelopment projects at brownfield and other sites. For example, these include the Redevelopment Assistance Capital Program, Infrastructure Development Program, Business in Our Sites Program, Infrastructure and Facilities Improvement Program, and the Tax Increment Financing Guarantee Program.