May 18, 2022

Opinion: Oregon brownfield cleanup gets boost from federal infrastructure funds


This article was originally posted in the Portland Business Journal on May 17, 2022.

As the dust settles from last year’s passage of the $1.2 trillion federal Bipartisan Infrastructure Law, it is becoming clear that the sweeping legislation will bring much-needed green (as in dollars) to Oregon’s brownfields.

The broad strokes of the law provide $1.5 billion worth of brownfield grants and loans via the U.S. EPA’s Brownfields program over the next five years, a significant increase over the $200 million in annual federal spending previously authorized under the 2018 BUILD Act.

But a closer examination of the law reveals a new and promising source of federal grants totaling $150 million nationwide and $5 million for Oregon. While this may seem like a small drop of the overall funding bucket, when combined with another $10 million from the brownfields loan program that Business Oregon is seeking to renew with the state legislature, this new funding will provide a significant boost to brownfield cleanups here.

That is because these funds can be used by private developers to perform the costly upfront analysis needed to determine if a site is suitable for brownfield redevelopment. This will help bridge what has always been a disconnect for brownfield cleanup: Developers want to do their homework to evaluate just how expensive a potential remediation might be, but are wary of spending the money for all of the necessary studies needed to obtain that information.

This upfront money — which can run tens if not hundreds of thousands of dollars — is the most difficult to get people to put on the table and often is the deciding factor on whether a deal gets done.

Now, with an assist from the federal infrastructure law, this roadblock can potentially be removed. Developers can get the information they need to proceed, better understand the potential costs of remediation and better negotiate the purchase price of a property.

These federal funds also come with fewer purse strings than state funds. Under the Oregon program, developers are required to put up money in order to access state loans. This so-called cost-share requirement means developers must put some skin the game, which can be prohibitive for smaller, undercapitalized developers. But with the new federal money from the infrastructure law, there is no cost-share requirement.

An additional bonus is last year’s passage by the Oregon legislature of House Bill 2518, which created a revolving loan program for brownfield cleanup by private entities. These loans can be forgiven under certain circumstances, which transforms these loans into something more like a grant. This, too, is critical money for private developers interested in brownfields.

At least conceptually, HB 2518 is an interesting and potentially powerful new program. What was previously a statewide tax abatement program that never got traction now enables smaller, as well as minority- and woman-owned, developers to take on these projects knowing they won’t lose their shirts simply by taking the smart steps to evaluate a project.

But developers and others interested in brownfield cleanup need to get moving soon. Deadlines for state loan and federal grant applications to Business Oregon, which has a cooperative agreement with the U.S. EPA for brownfield cleanup, for fiscal year 2023 are in late summer or early fall of 2022. Developers will want to get in line for both the state and federal funds.

Private developers then should look to see if they qualify for the state’s new revolving loan fund. Those who do it right will essentially get grant money to gather data, and they won’t have to pay it back.

Taken together, these sources of funding provide a much-needed shot in the arm to Oregon’s brownfield cleanup efforts, remove barriers to brownfield reuse, and give private developers a new opportunity to spur revitalization of our communities to their former health.

David Rabbino is a shareholder and environmental lawyer at Jordan Ramis PC. A former enforcement attorney for the U.S. EPA, he represents clients in some of the largest Superfund sites across the nation.

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Tags: Environmental and Natural Resources, Construction and Development

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