Communities must often overcome serious financial and environmental barriers to redevelop brownfields. The concerns with liability, the time and cost of cleanup, and a reluctance to invest in older urban areas can deter private sector investment and prevent brownfields reuse. Public investment, combined with private financing, can provide incentives for brownfield property redevelopment.
The goals of public financing tools are:
The Community Development Block Grant (CDBG) program is one of the tools the City and County of Denver can use to revitalize distressed communities. CDBG funds are awarded by the U.S. Department of Housing and Urban Development. Any activity undertaken using CDBG funds must meet one of the program's three national objectives:
Brownfields redevelopment activities are eligible uses for CDBG funds.
For information about the use of Community Development Block Grants for environmental clean-up contact:
Section 108 is the loan guarantee provision of the Community Development Block Grant (CDBG) program. Section 108 provides communities with a source of financing for economic development, housing rehabilitation, public facilities and large-scale physical development projects. Section 108 allows Denver to transform a small portion of its CDBG funds into federally guaranteed loans large enough to pursue physical and economic revitalization projects that can renew entire neighborhoods. Such public investment is often needed to inspire private economic activity, providing the initial resources or simply the confidence that private firms and individuals may need to invest in distressed areas.
Section 108 loans are not risk-free, however; when the City borrows funds guaranteed by Section 108 it must pledge its current and future CDBG allocations to cover the loan amount as security for the loan. Loan commitments are often paired with Economic Development Initiative (EDI) or Brownfield Economic Development Initiative (BEDI) grants, which can be used to pay predevelopment costs of a Section 108-funded project. They can also be used as a loan loss reserve (in lieu of CDBG funds), to write-down interest rates, or to establish a debt service reserve.
New Market Tax Credits (NMTC) promote economic development in rural and urban low-income communities by increasing the amount of investment capital available. The City and County of Denver, in partnership with the Colorado Housing and Finance Authority and the Colorado Enterprise Fund, offers New Markets Tax Credit financing through the Colorado Growth and Revitalization (CGR) Fund, a community development entity. Since 2005, the CGR Fund has used $75 million NMTCs to help finance projects in underserved communities throughout Colorado.
Colorado Brownfields Revolving Loan Fund offers financing with reduced interest rates, flexible loan terms, and flexibility in acceptable forms of collateral. All cleanups financed through the fund must have previous approval under the Colorado Department of Public Health and Environment's Voluntary Cleanup Program. The City of Denver is a loan fund board member.
Tax Increment Financing (TIF) is a method available to support private development projects that are aimed at eliminating symptoms of urban blight. Through the Denver Urban Renewal Authority, TIF has helped finance a number of projects, such as the Stapleton redevelopment, Dahlia Square Shopping Center, and the Pepsi Center site. TIF allows the Denver Urban Renewal Authority to issue and repay redevelopment bonds by using the increment of increased taxes collected within the district after improvements are made.
The Environmental Protection Agency Region 8's Brownfields program provides funds and technical assistance to states, tribes, communities and other stakeholders to clean up and redevelop potentially contaminated lands in the Rocky Mountain region, making it easier for such lands to become vital, functioning parts of their communities. On this site you will find information about Region 8's Brownfields program, including grants, technical tools and resources, the Brownfields Revitalization Act, as well as information on brownfields projects across the country.
The State of Colorado offers financial incentives for cleaning up contaminated land in the form of grants.
House Bill 00-1306 provides for limited state authority to clean up sites where there is no other federal or state program that can accomplish the cleanup. It authorized $250,000 annually for such cleanup, which is designed first to protect human health and the environment, and also to enhance the redevelopment potential of these properties. The Colorado Department of Public Health and Environment has drafted criteria for use in prioritizing sites for the available cleanup funding.
For further information, contact:
Barbara Nabors, Project Contact
888-569-1831, ext. 3393
Marilyn Null, Community Involvement Coordinator
888-569-1831, ext. 3304
The Petroleum Cleanup and Redevelopment Fund (Redevelopment Fund) has been created to support the investigation and cleanup of contamination at abandoned former gas stations and other petroleum storage tank properties that have been unaddressed for decades, mainly because these unregulated former storage tank sites were not eligible for reimbursement from the Petroleum Storage Tank Fund.
The Colorado Department of Labor & Employment, Division of Oil and Public Safety is now accepting applications to the Redevelopment Fund. The division has created a guidebook to assist property owners in understanding the application process and how the fund can assist in reducing the risk and uncertainty that has previously complicated the sale, reuse or redevelopment of their petroleum storage tank properties.
Senate Bill 14-073 reinstated the Colorado Brownfields tax credit for qualifying entities that perform environmental remediation associated with capital improvements or redevelopment projects.
Colorado also offers grants for cleaning up contaminated land where there is no other federal or state program that can accomplish the cleanup. House Bill 00-1306 provided for limited state authority to use $250,000 annually for such cleanup, which is designed to protect human health and the environment and to enhance the redevelopment potential of these properties.