State’s tools can spark redevelopment

Last updated on May 13th, 2019 at 02:40 pm

Commercial real estate developers are encouraged to learn more about the variety of programs and incentives available through the State of Wisconsin to encourage the redevelopment of brownfields.

Most of the brownfield programs are administered through the Department of Natural Resources (DNR) and the Department of Commerce (DOC).

Both agencies help developers and local governments navigate the complex world of brownfield grants and incentives, said Jason Scott, director of the blight elimination and brownfields redevelopment program with DOC.

Many times, DNR and DOC officials work hand-in-hand when properties are being cleaned up and redeveloped, Scott said. Often, the DOC will help a developer connect with financial incentives, while the DNR will help oversee the cleanup work.

“Commerce and the DNR work closely together,” Scott said. “We promote ‘Green Team’ meetings, where we’ll offer to meet jointly and all get together and talk about the project.”

If a DNR or DOC grant or other incentive isn’t available, those agencies can refer developers to other agencies such as the Milwaukee Economic Development Corp. (MEDC), the state Department of Transportation, Department of Agriculture or other agencies that have grants and incentives.

Green Team meetings can be especially valuable for entrepreneurs or developers who don’t have previous experience with brownfield redevelopment, said Darsi Foss, the DNR’s chief of brownfield and outreach programs.

“The Green Team meetings puts a face on it all,” she said. “That way, people don’t get nervous about it all, and they learn who they need to call. The state doesn’t have a ton of money, but the nice thing is that it has money to cover a bunch of things.”

The state’s programs include grants, reimbursements, loans, loan guarantees, tax credits and other incentives.

The DOC’s blight elimination and brownfield redevelopment grants are one of the most commonly used tools for brownfield redevelopment, Scott said. The program has more than $7 million in funding every year, which can be used for property acquisition, environmental investigation, removal of containers and some underground tanks, environmental cleanup, demolition, building rehabilitation and redevelopment.

“The grants are flexible, but a lot of them are used for cleanup cost and site investigation costs,” Scott said. “They’re pretty flexible above and beyond that. You can even use them for some infrastructure costs like water and sewer.”

However, there is always competition for brownfield dollars, Scott said, and most DOC grants are over-subscribed. Although the agency does its best to evenly distribute its grants, some applicants go home empty-handed.

Developers or municipalities that want to improve their chances of receiving brownfield grants need to keep in mind that the DOC considers the benefit to the public, the environment and the state’s economic development when awarding the grants.

“When (the grants) were set up in 1998, there was statutory language that when we give money, we should look at the economic development aspect,” Scott said. “We’re looking at the level of investment that’s going into the property – if it relates to the increased taxable property, if it will create jobs. That gives us a little more incentive for us to participate.”

The DOC and the DNR also examine the impact a development or cleanup project will have on the neighborhood.

“We want to see if it will be a catalyst,” Scott said. “And it’s also about the degree of contamination (of the property), if it is a hot spot or a bigger problem.”

The DNR offers three different types of oversight services: (1) grants, which are typically available only to local governments; (2) technical assistance, where the DNR can help developers ensure they aren’t missing contamination when they’re in a cleanup project; and (3) letters that clarify liability for contamination on properties.

While the DNR’s grants are aimed at local governments, developers can take advantage of them by partnering with municipalities to develop blighted properties, Foss said.

“If a developer doesn’t want to spend the money for a Phase 1 or Phase 2 (site investigation), the city can do it with a grant and give it to them (the developer),” she said.

The DNR launched a new grant and loan program this year, with $4 million earmarked for local governments to spend on cleanup efforts at brownfields, Foss said. The grants are funded by U.S. Environmental Protection Agency (EPA) dollars, she said. Like other DNR grants and loans, this program is only available to municipalities, but developers can tap into it by partnering with cities, towns and villages.

Get our email updates