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Brownfield Redevelopment Loans


Brownfield redevelopment loans facilitate the redevelopment of brownfield properties by providing low-interest loans to local units of government and other public bodies to investigate and remediate sites of known or suspected environmental contamination. 

Goals of the Program:
To ensure safe reuse of abandoned, vacant, or underutilized contaminated properties, and to promote clean up and redevelopment of brownfields.  Redevelopment of brownfield sites re-energizes local economies, strengthens neighborhoods, benefits the environment and protects public health. 

A proposed project site must have economic development potential although a specific development project is not required for a loan award. Loans are offered at an interest rate of no more than 50 percent of prime.  Currently the interest rate is set at 1.5%, 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 Brownfield Redevelopment Authority (BRA), to use tax increment financing (TIF) 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. The legislation authorizing the TIF also allows the community to capture additional tax dollars after having repaid their loan, to use for future brownfield redevelopment activities in their communities, essentially creating a local revolving fund.  

Any county, city, township, village, BRA, or other authority or public body created pursuant to state law may apply for a loan.  Brownfield Redevelopment Loans may be used for environmental site investigations, Baseline Environmental Assessments, due care activities, site clean-ups, and demolition in limited situations where environmental remediation is the primary activity.  Only one project may be awarded to an applicant during any fiscal year.  A loan cannot be awarded to an entity that is responsible for causing a release or threat of release at the site proposed for loan funding.  A liable party may not profit from the investment of public funds nor be relieved of their obligation or responsibility for response activities.  

Application Process:
Applications are accepted on a continuing basis.    A single application is used for all grant and loan funding sources.  Evaluation criteria include the potential economic benefit to the community, the environmental benefit, local support, and other factors. 
Prospective applicants are asked to contact the program Brownfield Coordinator assigned to the area in which the project is located to discuss eligibility of the proposed project, confirm funding availability, and obtain an application.  The review time from the date an application is received until a decision is made by the Director is usually three months. 

Dollar Amount(s) Available (Min or Max):
Maximum loan amount is $1 Million per project for Brownfield redevelopment loans.  

Source(s) of Funds:
Clean Michigan Initiative Bond Fund of 1998 

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

For a list of Brownfield redevelopment loans Projects, please refer to the Consolidated Report.