Purpose:

Brownfield redevelopment loans provide funding to local units of government and other public bodies to investigate and remediate known sites of environmental contamination, which will be used for identified economic redevelopment projects.

Goals of the Program:

To ensure safe reuse of abandoned, vacant, or underutilized properties that are known to be contaminated, and to promote redevelopment of brownfields.

Criteria:

A proposed project must have economic development potential. A municipality must pledge its full faith and credit to secure the loan. When the Brownfield Redevelopment Authority (BRA) is the applicant, the municipality under which the BRA was formed, must make this pledge. The Michigan Department of Treasury will approve the applicant's ability to incur the debt.  Loans are offered at an interest rate of 2.0 percent, simple interest. There are no payments or interest due for the first five years after a loan is awarded. Annual payments begin in the fifth year of the loan. The full amount must be repaid within 15 years of the loan award. This arrangement provides an excellent opportunity for a community, or the BRA, to use tax incremental financing under the provisions of the Brownfield Redevelopment Financing Act, 1996 PA 381, as amended, to capture future taxes generated from the redevelopment of the property, to repay the loan. PA 381 also provides the authority for the community to capture an additional amount of the incremental tax increase, after having repaid the loan, to use of future Brownfield redevelopment activities in their communities, essentially creating a local revolving fund.  Brownfield Redevelopment Loans can be used for environmental site investigations, site clean-ups, and demolition in limited situations where environmental remediation is being conducted .

Dollar Amount(s) Available (Min or Max):

Maximum award is $1,000,000 per project.

Eligibility:

Any county, city, village, township, Brownfield Redevelopment Authority, or other authority or other public body created pursuant to state law may apply for a loan. Eligible activities include environmental investigations, interim response, and due care response activities necessary for the proposed development. Only one loan may be awarded to an applicant during any state fiscal year, but an applicant can receive both a Brownfield Redevelopment Grant and a Brownfield Redevelopment Loan in the same year. A liable party may not profit from the expenditure of state funds nor be relieved of responsibility for environmental response activities. 

Application Process:

Applications are accepted on a continuing basis. Evaluation criteria include level of economic development, applicant and owner liability, environmental benefit, and other factors.

Source(s) of Funds:

Clean Michigan Initiative Bond Fund.

Authority:

Part 196 of the Natural Resources and Environmental Protection Act, 1994 PA 451, as amended.

CMI Brownfield Redevelopment Loan Projects