Addressing environmental issues associated with the redevelopment of a Brownfield’s site or an environmentally impaired site can be a formidable financially challenge and on the surface, appear insurmountable. Soaring environmental costs could also challenge the success of the project and the ability to get them completed and still generate an adequate return on investment. 

A creative strategy that includes a mixture of enabling incentives and layering of finances needs to be implemented in order to assure project success, off-set environmental costs and secure financing for the redevelopment. The federal, state and local governments are committed to helping revitalize former industrial and commercial areas that lay idle due to concerns about environmental contamination.  Economic development officials have recognized that redevelopment of these sites can lead to a wide variety of public sector benefits, including the reduction of urban blight, meeting smart growth objectives, provide new jobs, lower crime and generate higher tax revenues for a community.

In order to encourage business development and commercial economic revitalization, the federal, state and local government have created a full range of enabling incentives and financial aid that can be used to turn environmentally challenged sites into new businesses and financial opportunities for the developer and investors.  The mix of available incentives, vary by state and city.  Incentives are too numerous to mention but examples of available incentives include:

·         EPA & local revolving loan funds

·         Environmental assessment grants

·         Brownfield’s tax incentives, loans and redevelopment grants

·         Enterprise zone tax benefit’s

·         Tax incremental financing (TIF)

·         Tax payers relief act,  community development block grants,
and low interest loans

·         General obligation bonds

·         Low income housing tax credits and loans

·         Historical tax credits

·         Non-profit financial sources

·         Numerous federal and state agency programs and statues (HUD, DOT, COE etc.)

Finding standard loan financing through institutional lenders and banks can also be a difficult task. Institutional lenders and banks have a hard time understanding how to deal with the environmental risk and feel it threatens their security or lessens the perceived value of the security.  Who wants to foreclose on a contaminated property and then have to deal with the issues?  Slowly, some of these institutions are coming around and getting more comfortable with these projects.

On the private side the key to success is finding debt and equity investors that understand this niche and its risk and are willing to take on the challenge in hope of higher rates of returns.  Investors of capital specialize in certain sectors of the market that they understand.  Success comes in the form of matching the project to the investor.  There is an increasing amount of private capital, seeking out the redevelopment of contaminated real estate assets.

Knowing when, where and how to blend the different sources of debt, equity and government incentives is the art of making the redevelopment of environmentally impaired real estate a reality.  SCS SECURE knows where to look and understands how to research and identify federal, state and local enabling incentives and sources of financing that match up with any given redevelopment.  Through our partners we also have sources of debt and equity capital available, looking for the right redevelopment opportunities.