A wide variety of redevelopment incentives are available for any particular project.  As part of our Brownfield consulting services, CEG will evaluate your development goals/needs to determine which types of incentives are appropriate for your specific project.  The most common State and Federal programs designed to facilitate the redevelopment of brownfield sites include:

Tax Increment Financing (TIF)

Michigan Business Tax Credits (MBT)

The Obsolete Property Rehabilitation Act (OPRA)

MDEQ Brownfield Redevelopment Grants & Loans

EPA Brownfield Assessment and Cleanup Grants

EPA Brownfield Revolving Loan Fund/Grants

Historic Tax Credits

Neighborhood Enterprise Zones (NEZ)

Fast Track Land Bank Authorities

Any one or combination of these funding sources can often make the difference between whether or not a redevelopment project can come to fruition.  Rather than securing traditional funding solely through lending institutions and/or through existing client equity, a client/developer can often make use of the above mentioned funding sources as a means to offset certain development costs of the project.  The approval process and potential reimbursement of development costs related to environmental activities, demolition, asbestos abatement, site preparation, and public infrastructure improvements is often a means for establishing additional collateral benefits for the client when negotiating with financial institutions.  In addition and often most importantly, lenders can even be more agreeable to granting financing when they understand that a submittal of a Brownfield Plan (through a local Brownfield Redevelopment Authority) has been proposed.

A basic summary of the most common State and Federal Brownfield programs are listed below:

Tax Increment Financing (TIF) - Through a Brownfield Redevelopment Authority (BRA), qualifying properties may be eligible for TIF reimbursement.  With the approval of a Brownfield Plan, a BRA can allow projects (eligible property) to capture the incremental increase in newly generated property/school taxes to pay for environmental cleanup costs and when appropriate, demolition, asbestos and/or lead abatement, site preparation and public infrastructure improvements.

Michigan Business Tax Credits (MBT) - The state of Michigan provides MBT credits, on a case-by-case basis, to help with the expense of redeveloping an environmentally contaminated, blighted or functionally obsolete property.  Credits are available for up to 10% of eligible investments, to a limit of $30 million.  MBT credits enable “qualified taxpayers” as defined by Michigan Public Act 36 of 2007, to avail themselves of eligibility for a credit against their Michigan Business Tax liability for “eligible investments.”  Eligible investment includes demolition activities, new construction, restoration, and renovation of buildings or site improvements on all eligible property.  Costs for the addition of machinery, equipment and fixtures can also be included as well.

The Obsolete Property Rehabilitation Act (OPRA) - Public Act 146 of 2000 provides for a tax incentive to encourage the redevelopment of obsolete buildings.  A community may freeze the existing taxable value for non-school taxes on a designated facility for up to 12 years.  The hope being, the additional funds saved from increased taxes over the 12 year period will be put back into the rehabilitation of the property/building.

MDEQ Brownfield Redevelopment Grants & Loans - Funded under the Clean Michigan Initiative (CMI) through the Michigan Department of Environmental Quality (MDEQ), these grants and loans are available to local governmental units and authorities created pursuant to state law.  Funds are targeted to eligible projects that promote economic development and reuse of brownfield properties.  Once funding has been established monies can be used for site assessment, interim response activities, due care requirements, remediation and for limited demolition activities.

USEPA Brownfield Assessment and Cleanup Grants - This type of funding is available to local units of government through the United States Environmental Protection Agency (USEPA).  These cleanup grants are usually given in the form of “petroleum grants” or “hazardous materials grants” and are used in order to inventory, characterize, and assess environmental conditions, and conduct planning and community involvement related to brownfield sites.

USEPA Brownfield Revolving Loan Fund/Grants - RLF grants provide up to $l Million per recipient, available for up to 5 years to establish state or locally administered funds.  Local governments, states, Indian tribes, redevelopment agencies, regional councils and land clearance agencies may apply for funding.  Once funding is established within a governmental unit, monies can be made available to developers provided their intended development projects meet with specific requirements as governed by the USEPA.

Historic Tax Credits - The Federal program, administered through the National Park Service, fosters private sector rehabilitation of historic buildings and promotes economic revitalization through the use of up to a 20% rehabilitation credit for eligible investment.  The state of Michigan can also provide a state income tax credit of up to 25% for rehabilitation of certain historic structures.

Neighborhood Enterprise Zones (NEZ) - The NEZ Program was established by Public Act 147 of 1992.  The program provides tax incentives for the development and rehabilitation of residential housing.  A qualified local unit of government (Core Communities) may designate one or more areas as a NEZ within that local unit of government.  The program was established to spur the development and rehabilitation of residential housing in communities where it may not otherwise occur.  On qualified new residential construction projects the ad valorem tax is replaced by a special tax calculated at one-half the statewide average.

Fast Track Land Bank Authority - Public Act 258 of 2003 allows for the creation of "Land Bank Authorities" to streamline the process for returning underperforming properties to productive use.  Land Bank Authorities can hold and acquire property, assemble property, are exempt from liability under Part 201 of NREPA and provides certainty to purchasers by offering clear title to properties under its control.

Since 2001, CEG personnel have provided brownfield consulting services and/or direct project management for a number of brownfield redevelopment projects benefiting private developers through various Brownfield Redevelopment Authorities.

CEG personnel have worked with the following BRA's: Detroit, Lansing, Trenton, Ann Arbor, Auburn Hills, Ypsilanti, Howell, Battle Creek, Lincoln Park, Vassar Township, Washtenaw County (Saline and Chelsea) and Genesee County (Land Bank Authority).

For your next development project, allow CEG's experience to provide you with sound and economical environmental solutions as part of your brownfield redevelopment process.