Few investors and landowners are willing to undergo the process of transforming a brownfield from dross to gold. What keeps these abandoned and contaminated fields unwanted is the sheer cost of upkeep and maintenance, which could mean shelling out millions to clean up the site before a development rises from the ashes.
These legacy sites, previously used for industrial or commercial purposes, have remained largely untouched in the years after the economic recession peaked. But in the past three years, Gov. Dannel Malloy has made brownfields a priority by ramping up loans and grants to remediate them.
Through the Connecticut Department of Economic and Community Development, Malloy”™s office has awarded more than $50 million in loans and grants since he took office in 2011, said Harold M. Blinderman, a real estate and environmental land use partner at Day Pitney L.L.P.
In the most recent round of state funding, the department announced the availability of up to $20 million in brownfield remediation money. Municipalities and economic development agencies are eligible for grants of up to $4 million, while municipalities, agencies, for-profit and nonprofit developers are eligible for low-interest loan funding of up to $2 million, according to Malloy”™s office.
To prevent the money from becoming just a windfall with no guidance on how to spend it, the state has hired a full-time director, Tim Sullivan, to oversee all things brownfield-related.
“The DECD and Office of Brownfield Remediation and Development are at the forefront,” Blinderman said. “Recently, Gov. Malloy appointed Tim Sullivan as director of brownfield, waterfront and transit-oriented development whose job it is to be at the forefront of brownfield development and coordinate with the Department of Energy and Environmental Protection and the Office of Policy and Management within the state.”
Blinderman added that within Connecticut Innovations, a quasi-public investment entity, there is a second agency called the Connecticut Brownfields Redevelopment Authority that provides both direct loans and loan guarantees and tax increment financing for projects.
Sullivan praised as a milestone the idea of multiple agencies working together to solve the problem of urban blight ”” brownfields, safety hazards and crime.
“DEEP, which oversees state regulation and guidance, DEDC, which administers the funding that comes from the Legislature and governor to provide financial assistance, and the federal EPA (Environmental Protection Agency), which regulates certain kinds of regulations and provides funding all working together is a hallmark,” Sullivan said. “We”™re operating without silos, and I speak with the DEEP multiple times a day.”
Although owners of the brownfields are responsible for cleaning up the contaminated site, often they will not spend money on remediation because the cost-to-benefit ratio can be poor, Sullivan said. But more recently, the state government is making known its interest in helping municipalities, landowners and investors redevelop on derelict properties because it places less pressure on developing open lands and puts properties back on the tax rolls.
“Municipalities play a role in bringing brownfields back on the tax roll because they regulate the zoning and planning aspects,” Sullivan said. “If a municipality wants to take control of a site by purchasing it or doing a tax foreclosure, often there”™s trepidation because of the concern of liability for contamination, on the site or off-site, if a spill leaks into the water table. The state will give liability protection to municipalities to protect their financial interests, so they can take action to activate these sites again.”
Hundreds or thousands of brownfield sites exist in the state with a heavy concentration of them in cities where industrial activity was prominent, including Bridgeport, Waterbury, Stamford, Danbury and Hartford, Sullivan said.
Bridgeport, Trumbull and other small towns across the state have used the funding to take a look at abandoned properties and perform environmental assessments, Blinderman said. Other cities have actually been able to turn brownfield sites into redevelopment projects.
“One example is Harbor Point in Stamford,” Blinderman said. “That site was the beneficiary of considerable funding through the brownfields funding program. And they took advantage of the liability protection available under various state statutes. There”™s also a project in Stratford called the Two Roads Brewery that took advantage of the funding made available through the DECD to perform remediation as part of the work that they did to construct their brewery and administrative offices.”
Last year, the state clarified the regulations for funding brownfield remediation, Sullivan said. Under the new rule, there”™s a simplified funding program that breaks down into two categories: loans and grants. Previously, there were multiple streams of loans and grants without clarity as to who was funding the money and what the eligibility requirements were to apply for the funding. The new addendum simplifies the eligibility process and clarifies ways to comply with inside and outside remediation standards.
“There are two main issues,” Sullivan said. “Inside the building, there could be asbestos or lead paint. Then there”™s contamination in the soil either from chemicals or an underground storage tank that leaked oil. There are different remedies and standards in place to clarify important distinctions around building material versus soil contamination. The new rule creates more options for developers to comply with the regulations.”
Sullivan will continue coordinating and supervising funding programs and brownfields-related policies. “Gov. Malloy has made brownfield remediation and development a major priority because it”™s a critical opportunity to create jobs and reactivate underused sites across the state,” he said.
Editors Note: In an earlier version of the article, the story had made a typo that said hundreds OF thousands of brownfields exist in Connecticut. That should be hundreds OR thousands.
