Recently, President Trump signed the Consolidated Appropriations Act of 2018, better known as the 2018 omnibus bill, into law. The policy impact of this omnibus bill will be felt for many years to come. Congress accepted the administration’s push for redeveloping brownfields, cleaning up Superfund sites and improving water infrastructure. All three focus areas are clear winners in an omnibus bill.
The Brownfields Utilization, Investment, and Local Development Act of 2018, or the 2018 BUILD Act more than doubles funding for the brownfield program, authorizing the appropriation of up to $200,000,000 for each fiscal year through 2023—plus an additional $50,000,000 for state response program funding in each of those fiscal years. The United States Environmental Protection Agency (EPA) estimates there are more than 450,000 Brownfield sites across the country.
What does this mean?
The funding package is clearly incentivizing renewable or clean energy project development on brownfields, but also opens up access to brownfield grants to many more diverse organizations including non-profits, LLCs, LPs and community development entities. This federal funding availability is a great opportunity for a wide variety of entities to redevelop blighted properties.
Select developers, who understand and are willing to go through this process, will have access to remediation grants to $500,000 per site with the possibility of higher funding and multi-purpose grants up to a $1M for long-term project financing.
The 2018 BUILD Act Highlights
- Reauthorizes the Brownfield program at the same authorized funding level ($250 million per year) through fiscal year 2023.
- Incentivizes clean energy development on brownfields and revitalization of waterfront sites.
- Expands the eligibility for brownfield grants for nonprofit organizations to include certain nonprofit organizations, limited liability corporations, limited partnerships, and community development entities.
- Increases the funding limit for remediation grants to $500,000 for each site, with some exceptions for higher funding, and authorizes multi-purpose grants up to $1 million, which provide greater certainty for long-term project financing.
- Relieves state and local governments from liability under certain circumstances if they own a contaminated site but did not cause the contamination.
- Allows eligible entities to use up to 5% of their Brownfields grant funding for administrative costs.
- Authorizes up to $20,000 in technical assistance grants to eligible entities in small communities, Indian tribes, rural areas, and disadvantaged areas.
- The 2018 BUILD Act officially leans into the trends toward waterfront redevelopment and renewable energy development—two of the hottest segments at the forefront of redevelopment activity today.
For cities, states, §501(c)(3) nonprofits, proactive land banks & §45D(c)(1) community development corporations, the 2018 BUILD Act opens up a new world of possibilities for pro-action. Many would-be brownfield redevelopers can now acquire and develop contaminated property they have avoided in the past.
Redevelopment fundamentals continue to develop in very positive ways and substantial policy support from Washington such as this will likely contribute to constructive growth. For years policy brownfielders have lobbied for a brownfield authorization and modernization. Over a similar period, the Federal Reserve has begged for fiscal stimulation. The 2018 BUILD Act provides both.