Brownfields Redevelopment Toolkit

"A brownfields site is any real property that is abandoned, idled or underused where environmental contamination, or perceived environmental contamination, hinders redevelopment." - NC Department of Environmental Quality

This toolbox is meant to provide users with information and resources on how to finance and complete a brownfields redevelopment project. The following sections, all related to brownfield redevelopment and land revitalization, address: 1. common myths; 2. definitions for commonly used terms; 3. phases of brownfields redevelopment and the stakeholders involved; 4. funding sources; 5. equitable practices; 6. case studies; and 7. brownfields redevelopment scenarios.

There are many misconceptions concerning brownfield redevelopment. The most common ones include;

A brownfield is a property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. Brownfields sites include abandoned factories and other industrial facilities, service stations, oil storage facilities, and dry cleaning businesses.

Brownfields redevelopment is a broad term used to describe the reuse and revitalization of abandoned, underutilized, or stigmatized properties through the use of one or more local, state, or federal programs. Brownfields can be redeveloped by private developers, local governments, or through public-private partnerships.

A greenfield is a property that has never been used or developed. Among other uses, greenfields may be agricultural land, conservation areas, or parks. As greenfields become scarcer in urban areas, or as people recognize the need to preserve the natural environment, brownfields present an alternative.

Greyfield is a term used to describe formerly viable retail and commercial shopping sites, such as malls and shopping centers, that have been abandoned. The primary difference between a brownfield and a greyfield is that a brownfield is, or is perceived to be, contaminated; a greyfield is underutilized due to disinvestment.

Infill development is defined as the process of developing vacant, underutilized, or abandoned areas, including brownfield sites, in older neighborhoods, traditional downtowns, and central business districts or areas that are largely developed.

Adaptive reuse is the process of converting obsolete or historic buildings from their original or most recent use to a new use. For example, an old manufacturing site could be converted into apartments or retail space.

Equitable development is an approach for meeting the needs of underserved communities through policies and programs that reduce disparities while fostering places that are health and vibrant.

An ESA is an official research and reporting process led by environmental engineers that officially documents the potential presence of environmental contamination on a property.

A Phase 1 ESA is a search and study of all known records of a property’s current and historical uses in order to determine the likelihood that soil, groundwater, and/or air contaminants exist on-site. More simply, this is a “property background check” to assess whether or not brownfield contaminants may be present. A Phase I ESA is typically led by environmental engineers.

A Phase II ESA is the collection, laboratory testing, and documentation of soil and groundwater samples from a property suspected to contain contamination. Typically led by environmental engineers, a Phase II ESA is based upon the findings of a Phase I ESA and follows a specific methodology.

A pro forma is a spreadsheet that provides a clear, numeric representation of future costs and income, and calculates the projected return on investment. A pro forma is the basic financial analysis that developers use to decide whether to move forward with a redevelopment project.

Due diligence involves a variety of activities in advance of purchasing a property and activities specific to the environmental components of the redevelopment.

NCDNCR oversees the state's resources for the state's arts, history, libraries, and nature, including historic sites, museums, and state parks. Many brownfield redevelopments are built on historic sites, or become cultural assets.

NCDEQ works to protect North Carolina's environment and natural resources by administering regulatory programs and providing education and technical assistance to businesses, farmers, local governments, and the public.

NCDOC improves the economic well-being and quality of life for North Carolinians by connecting businesses with the site locations, workforce, and infrastructure, and by connecting local communities with the grants and funding needed to attract and retain businesses. 

Additional Resources

For additional list of terms, check out the following resources:

•  Groundwork USA: Deconstructing Technical Jargon 
•  Environmental Law Institute: Glossary of Brownfields Terms 

Successful brownfields redevelopment doesn't just happen. It's planned for. Communities and local governments should approach brownfields redevelopment through creative, inclusive, and efficient planning activities. The following section describes frameworks commonly used in brownfields redevelopment.

In general, brownfields redevelopment consists of planning, clean-up, development, and maintenance phases.

EPA Brownfields Redevelopment Process

The U.S. Environmental Protection Agency (EPA) describes three phases to brownfields redevelopment. This includes the predevelopment phase where the brownfield site is prepared through activities such as a site assessment, clean-up, and visioning process. The development phase, where the lot is actually transformed into its intended use, and lastly, the management phase, where operations and maintenance (O&M) is undertaken.

NC Brownfields Redevelopment Toolbox

The NC Brownfields Redevelopment Toolbox breaks brownfield redevelopment down into 4 steps:

The NC Brownfields Redevelopment Toolbox states that "the most successful brownfield redevelopments are projects that are able to get private development interest involved from the beginning."

When private stakeholders are brought into the process early on as a part of the redevelopment team, they can provide perspectives on what aspects of a brownfield site make it desirable for redevelopment, which streamlines the site preparation process.

The following section highlights the different types of stakeholders that should be involved in the brownfields redevelopment team and the roles each play.

Want to learn more?

•  EPA: Anatomy of Brownfield Redevelopment 
•  EPA: Land Revitalization Toolkit 
•  NC Brownfields Redevelopment Toolbox 
•  Policy Link: Equitable Development Toolkit 

A variety of stakeholders are needed to redevelop a brownfield site safely and holistically. The Agency for Toxic Substances and Disease Registry (ATSDR) identifies 5 important types of stakeholders needed in brownfield redevelopment: community champions, community planners, municipal agency staff, environmental or health professionals, and developers.

Learn more about each of these community stakeholders at the links below:

•  Community Champions 
•  Community Planners 
•  Municipal Agency Staff 
•  Environmental or Health Professionals 
•  Developer 

A combination of private- and public-sector funding may be used to fund or finance brownfield site purchase and pay for site assessment, site cleanup, and other brownfield redevelopment activities. Securing external funding for brownfields redevelopment is crucial for a project's success. This is especially true during the predevelopment phase, when developers and banks may be hesitant to fund a project because of the uncertainty and risk that the discovery of potential contaminants may bring.

Sound initial investments of local funds in brownfields revitalization can attract the support of outside investors and lead to additional funding.

Below are different local, state, and national funding mechanisms that can offer support for brownfield redevelopment.

Federal Grants and Programs

The EPA’s overall mission is to protect human health and the environment. Through its Brownfields Program, the EPA provides communities with grants for environmental assessment and cleanup, and job training activities.

Notable Brownfields Program grants include Brownfields Assessment and Cleanup Grants, Brownfields Revolving Loan Fund Grants, Environmental Workforce Development and Job Training Grants, and State and Tribal Response Program Grants.

The EDA fosters regional economic growth by providing support and funding directly to communities in order to promote locally-driven economic development.

The EDA has a number of funding opportunities that can serve as gap financing or be catalytic, spurring private capital investment and long-term job creation by helping to build the regional capacity to support bottom-up, regionally driven development priorities

State Grants and Programs

The North Carolina Small Cities Community Development Block Program (CDBG) provides funds to local governments to restore vacant commercial and industrial buildings for economic development purposes, resulting in new or expanding business/industry and the creation of permanent full-time jobs.

The Small Cities CDBG is a part of the larger Building Reuse Program that the NCDOC administers. The ultimate goal of the program is to provide jobs for low and moderate-income persons. 

Note: Only non-entitlement communities and all counties except for Wake, Mecklenburg, and Cumberland Counties are eligible.

In addition Small Cities CDBG, the NCDOC also administers a State Rural Grant through its Building Reuse Program. State Rural Grants are used for projects that utilize current assets to attract new or expanding businesses.

The program focuses on three categories of funding including; 1. the renovation of vacant buildings 2. the renovation or expansion of a building currently occupied by an NC business and 3. the renovation, expansion or construction of health care entities that will lead to the creation of new, full-time jobs.

The Golden LEAF Foundation offers grant funding for projects that will increase economic opportunity for rural and tobacco-dependent communities. Golden LEAF awards two types of grants: Economic Catalyst Program and Open Grants Program.

Economic catalyst awards are open to governmental entities and 501(c)(3) organizations. Projects must lead to job creation and have a committed company to support this role. Eligible applicants must illustrate that a funding gap is prevalent without Gold Leaf's investment.

Open Grants are also meant for governmental entities but designed to make it easier for applicants to submit a proposal. Competitive grants are those that can demonstrate that the project will contribute to Golden LEAF's priority areas: Job Creation and Economic Investment; Workforce Preparedness; Agriculture; and Community Competitiveness, Capacity, and Vitality.

Tax Incentives

Brownfields redevelopment can leverage a wide variety of tax incentives that make development projects more feasible. Below are some of the commonly used tax incentives:

Created in 2017 by the Tax Cuts and Jobs Act, Opportunity Zones are economically distressed census tracts where private investments, under certain conditions, may be eligible for capital gain tax incentives.

North Carolina has been a leader in using both federal and state Historic Tax Credits to rehabilitate historic buildings for economic purposes. In fact, the state consistently ranks in the top 5 in the country in the number of complete certified rehabilitations in a year.

The federal income tax credit for historic rehabilitation started in 1976 and currently offers a 20% credit for qualifying structures. In 1998 the state expanded its tax credit to include historic structures. 

Although the NC Brownfields Program has no upfront funding available to private party prospective developers, a brownfields agreement obtained from the program entitles the developer to a property tax exclusion on improvements made to the property for a period of five years. This exclusion can more than pay for assessment and cleanup activities on many projects. This tax exclusion results in a property tax saving of over 50% over those five years.

Tax Increment Financing, or TIF, is a tool utilized by governments where a special district surrounding a redevelopment site’s pre-development tax levels are frozen, and the expected post-development tax increases are used to secure bonds or loans that can finance the upfront infrastructure costs for redevelopment of the site and district. 

 Several states , like Michigan and Wisconsin, have extensive brownfields TIF programs, but it is still a relatively underutilized tool in North Carolina. More information can be found in Appendix D of the NC Brownfields Redevelopment Toolbox linked below.

In 2006, The EPA published a report entitled  Unintended Impacts of Redevelopment and Revitalization Efforts in Five Environmental Justice Communities  which found that the EPA Brownfields Program may unintentionally exacerbate historical gentrification and displacement through its clean-up program in low-income and minority communities.

Below are resources meant to aid communities in approaching every phase of brownfield redevelopment with an equity lens.

Resources

•  Environmental Justice, Urban Revitalization, and Brownfields 
•  Groundwork USA: Equitable Development Tools 
•  The Color of Law and Land Recycling 
•  Addressing Environmental Justice in EPA Brownfields Communities 

The following section provides case studies of various brownfields redevelopment projects both in the state of North Carolina and nationwide.

Additional Case Studies

More case studies can be found at the following websites:

•  EPA: Brownfield Grant Recipient Success Stories 
•  NC DEQ: Brownfield Inventory 
•  NC DEQ: Brownfield Success Stories 
•  VA DEQ: Brownfield Success Stories 
•  WI Department of Resources: Brownfield Success Stories 

Brownfields redevelopment can be conducted through wholly private- or public-led cleanup and development. However, many successful development initiatives have been facilitated through collaboration between the public sector while accelerating property cleanup, redevelopment, and community revitalization.

Generally, brownfields redevelopment is conducted under the following scenarios:

Private development most often occurs when a property is in an area with favorable development potential, when there is a healthy market demand for redevelopment in one or more sectors where the developer anticipates making a profit and an acceptable return on their investment.

In a privately driven redevelopment scenario, a developer is responsible for the redevelopment process. Typically, the developer:

• usually needs private financing through debt or equity to complete the project,
• may require some limited public investment to assess the contamination onsite, and
• completes all environmental cleanup activities, meeting the state's voluntary cleanup program requirements and other applicable federal or state regulations.

Public development most often occurs when there is little private-sector interest in a property because of market factors, or when environmental conditions, property size, property configuration, or other factors limit potential development options.

In a public redevelopment scenario, a municipality takes responsibility for the entire assessment and cleanup process. Typically, the municipality:

• takes ownership of the property by voluntary purchase, foreclosure, or eminent domain,
• conducts environmental site assessment and cleanup activities,
• prepares the remediated property for construction activities, and redevelop site into a public use (such as a park, school, or municipal building), and/or
• sells the site to a private developer.

A public-private partnership redevelopment project occurs when there is an agreement between at least one public-sector entity and one private-sector organization to combine resources and efforts to accomplish a common goal.

Typically, in public-private partnerships:

• the public entity sponsors the project and provides some initial funding, often for environmental site assessments and for infrastructure to support development, and
• a private-sector developer then funds and manages the pre-development and construction process.

Engaging with the Private Sector

For all communities, brownfields redevelopment requires partnership and, for most projects, private investment. Developers need sufficient return on investment to justify redevelopment activities and have limited ability to absorb the unpredictable costs of environmental investigations and cleanups. A private developer will often work with local government and other actors to locate and manage the funding necessary to accomplish cleanup at a brownfields site.

Private developers and investors often judge a brownfields project's potential for success by the degree of local investment or commitment to a project.

Private developers are critical project partners, and must work with the community to balance local input with local government requirements and economic demands. The keys to successful engagement with developers and end-users are:

• Communicate frequently with potential developers, tenants, and end-users. Local governments should provide regular updates on the developable brownfields sites, and their reuse vision, to increase and monitor potential interest from private developers, investors, and other stakeholders.
• If necessary, assemble properties. Sometimes a brownfields site is not viable unless combined with adjacent properties. Reasons for this include type or size of the site needed for the desired reuse, limited site access, or improvement of surrounding blighted conditions. A local economic development authority or land bank can help by acquiring, assembling, and preparing sites for transfer back to the private sector for redevelopment.
• Create market interest, particularly when local market conditions are weak. Communities and local governments can market the brownfields site to create “buzz” and generate interest from potential tenants or other end-users. Local governments can reduce risk for potential investors by eliminating remaining uncertainties specific to brownfields, such as knowledge of environmental conditions, land use restrictions, or public or neighborhood concerns. 
• Issue a request for expressions of interest from developers and investors. Communities and local governments can gauge the potential redevelopment interest in a brownfields site by requesting  preliminary, nonbinding statements of interest . This process allows your community to engage potential redevelopers, discuss what is needed to achieve the overall reuse vision, and chart a path toward reuse.

This StoryMap was made in partnership with the Triangle J Regional Brownfields Consortium, which aims to assist municipalities in Region J to better leverage brownfields redevelopment as an economic and land revitalization tool for their communities. More information about the Triangle J Regional Brownfields Program and Consortium can be found  here .