Funding a Brownfield Project – Putting the Puzzle Together

Properties and infill sites that are contaminated or environmentally damaged may be the most puzzling for developers. These sites, referred to as “brownfields”, exhibit added redevelopment complexities. Minnesota is fortunate to have an abundance of public resources available that help to make these redevelopments possible. Here is a rundown of the programs offered in Minnesota.

Minnesota Department of Employment and Economic Development
The Minnesota Department of Employment and Economic Development (DEED) has two grant programs that can assist in financing for redevelopment projects. The programs are the Contamination Cleanup and Investigation Grants Program and the Redevelopment Grant Program.

The Contamination Cleanup and Investigation Grants Program assists communities in paying for the assessment and cleanup of contaminated sites. The grants fund a maximum of 75 percent of assessment and cleanup costs, and are available twice a year in May and November. In 2017, DEED awarded 25 grants; 8 to Greater Minnesota communities. Since the program’s inception in 1995, it has created or retained over 47,000 jobs, generated roughly $114 million in increased tax base revenue, and leveraged $6.6 billion in private investment.

DEED’s Redevelopment Grant Program has significantly benefited local communities. Redevelopment Grant Program funds can pay up to half of the redevelopment costs, with a 50 percent local match. The grant covers unique costs related to redevelopment, including: land acquisition, demolition, asbestos abatement, infrastructure improvements, and more. Fifty percent of funds are directed to Greater Minnesota communities outside of the seven county Twin Cities metro area. Since the program’s inception in 1998, there have been over 26,000 jobs created or retained and there has been an increase tax base revenue of over $37 million. In addition, the program has leveraged over $2.1 billion in private investment.

Unfortunately, the Redevelopment Grant Program was not funded by the 2017 Minnesota Legislature, and has a zero balance. Minnesota Brownfields supports funding for this critical economic development tool.

Minnesota Pollution Control Agency
The Minnesota Pollution Control Agency (MPCA) assists in the assessment of brownfield properties through the Minnesota Targeted Brownfields Assessment Program (MNTBAP), which is administered by the MPCA Voluntary Investigation and Cleanup Program, with funds from the United States Environmental Protection Agency’s Region 5 Office.

Phase I and Phase II Environmental Assessments and Response Action Plans are eligible for MNTBAP funding. Applications for sites throughout Minnesota are accepted on a rolling basis and funds are awarded based on eligibility and application strength. Environmental consultants under contract with MPCA complete the MNTBAP activities for communities.

Metropolitan Council
The Metropolitan Council doles out $5 million annually through the Tax Base Revitalization Account (TBRA) to assist in the investigation and cleanup phases of brownfields projects. The goals of the TBRA include: increasing tax base, adding and maintaining jobs, expanding affordable housing, producing efficient development that encourages walking, best management practices for stormwater, and helping projects that are ready for redevelopment. Grant rounds for the TBRA are in May and November.

From 1996 to 2016, TBRA has accounted for a $118 million increase in tax base revenue and has created and retained more than 42,000 jobs. These are the results of 433 pollution cleanup grants to 46 cities and towns in the Twin Cities metro area.

Hennepin County
The Hennepin County Environmental Response Fund (ERF) awards grants to assist with the assessment and cleanup of contaminated sites for redevelopment purposes. Grants are typically offered in May and November (although the program was reduced to one grant round in 2016 and 2017 to enable special funding activities related to the Southwest Light Rail Line).  There will be two grant rounds again in 2018.

Since the ERF was created in 2001: 361 projects have received funding, 9,500 jobs have been created or retained, and there has been a $437 million increase in tax base revenue. In addition, $1.7 billion in private funds have been leveraged through ERF funded projects.

In addition, Minnesota Brownfields partners with Hennepin County to administer the Brownfield Gap Financing Program, which provides grants to non-profits for environmental assessment in Hennepin County on a rolling basis.

Ramsey County
Ramsey County also operates an Environmental Response Fund (ERF) to assist in the cleanup process of brownfield redevelopment. The program equally targets St. Paul and suburban cities in the County. Applications for funding are due in May and November.

Since the program began in 2006, there have been nearly 5,000 jobs created and more than 230 acres of land have been cleaned. For every $1 of ERF funding, there is $145 generated in new development.

United States Environmental Protection Agency
The United States Environmental Protection Agency (EPA) is the primary Federal agency for brownfield redevelopment funding opportunities. The grants and programs offered by the EPA cover all phases of the brownfield redevelopment process from the planning stages to cleanup, and environmental job training.

EPA’s Brownfields funding opportunities are: Brownfields Assessment Grants, Brownfields Revolving Loan Fund Grants, Brownfields Cleanups Grants, Brownfields Area Wide Planning Grants, and Brownfields Environmental Workforce Development and Job Training Grants.

The EPA awarded a Brownfield Assessment Grant to the MPCA in 2017. Grant funds are available for environmental assessment of sites in census tracts designated as Environmental Justice areas of concern. Check it out here.

The End Result
When used together, these various funding programs can make even the most difficult brownfield redevelopments feasible. Savvy developers in Minnesota have learned how to use these programs together to revitalize communities throughout our state and they continue to have a positive impact with every redevelopment effort.

Want to learn more about these programs? Visit Minnesota Brownfields Interactive Funding Finder to learn about your project’s eligibility for these programs. And take a look at recent ReScape Award winners and finalists to view successful projects, many of which leveraged a combination of these various brownfield grant programs.

Upcoming events on brownfield funding opportunities:

  • Minnesota State Funding Resources Webinar – View recording here
  • May 23: Minnesota Real Estate Journal Brownfields Summit