In Ohio, the state Department of Development Clean Ohio program gives about $50 million a year to brownfield development projects. "This program has provided a predictable source of funding to developers that is more readily accessible, and with larger grants, than anything provided by EPA or HUD," Reidy says. "Depending on the location of the property, grants are available for assessment, as well as remediation/demolition."
Counties and municipalities also contribute funds for brownfield projects. For example, in Cuyahoga County, Ohio, which encompasses Cleveland, the county provides grants and forgivable loans of up to $1 million, which can be used to provide the matching funds Clean Ohio requires.
In Columbus, the city now provides grants of up to $200,000 for assessment and/or remediation of brownfields or reimbursement of LEED certification costs. Time Warner Cable recently relocated its regional headquarters to a former landfill in Columbus that was remediated with a $3 million Clean Ohio Revitalization Fund grant, bringing more than 450 jobs to the city. Two new buildings there have been leased to the Ohio State University Medical Center, all part of the $60 million office park.
"One of the deciding factors for Time Warner was the fact this brownfield site was adjacent to a busy freeway with easy access," Reidy says. "With several million cars passing by every day, Time Warner also recognized the tremendous visibility the site provided and put up prominent signage on the property, essentially free advertising."
Risk management tools, such as environmental remediation funding and state government sign-offs that protect developers from future litigation, can make brownfield sites cost-competitive and attractive to relocating or expanding companies.
For instance, Ohio EPA Voluntary Action Program cleanup standards, coupled with the Covenant Not to Sue (Ohio EPA's promise that no further assessment or remediation is required at a property that has completed the program), provide potential brownfield site end-users with the transaction comfort to secure financing and successfully complete the relocation.
"Projects have less risk and therefore become more affordable when they receive a Covenant Not to Sue from the state of Ohio," Reidy says.
Environmental insurance also protects companies from the possibility of additional investigations or remediations in the future. Depending on project size, a 10-year policy ranges from $50,000 to $300,000 for $20 million to $25 million in coverage. Some states sweeten the deal by offering a discount on environmental insurance products purchased for brownfield sites (10 percent in Ohio).
"With all the incentives we have in Ohio, as well as other publicly funded incentives available for new development, brownfields can be developed for costs on par with, if not less than, the cost to develop greenfield sites," Reidy says. "Brownfield sites can typically be acquired for less than market value and then remediated using public funds, thereby significantly reducing the cost of land for a project."