Increase options for brownfield financing
Brownfield cleanup and redevelopment can support development in existing communities, which often has the effect of sparing open spaces from development. Reducing cleanup and redevelopment costs increases the likelihood that brownfield property will be reused.
States should ensure that brownfield cleanup and redevelopment are allowable activities under their infrastructure and capital programs, and that there are no barriers to using brownfield-specific tax credits and incentives.
Economic development agencies regularly provide loans and grants for capital needs such as land acquisition and provision of infrastructure, but the money often is underutilized for brownfield redevelopment. States could steer a larger share of loans and grants toward brownfield redevelopment by expanding eligibility requirements to cover brownfields or elements of brownfield redevelopment, such as site assessment or site preparation.
In addition to broadly defined economic development incentives, state economic development agencies should examine and refine their brownfield-specific tax credits and incentives. A 2005 study by the Northeast-Midwest Institute identified improvements that can make brownfield financing programs more enticing to developers and business owners. Among the suggestions:
- allow the transfer of incentives and credits from developer to eventual property owner;
- allow developers to defer property taxes;
- forgive taxes for owners of brownfield properties;
- increase the tax credit a developer can receive for redevelopment or cleanup;
- expand allowable uses for Tax Increment Financing to cover delinquent taxes and the removal of contaminants;
- allow the valuation of brownfields to be zero to maximize the tax increment that results from redevelopment; and
- provide developers with a menu of tax credits (property, income, and job creation) so they can tailor the incentives to best meets their needs.
- Wisconsin's Blight Elimination and Brownfield Redevelopment Grants
The Wisconsin Department of Commerce uses Community Development Block Grant to support brownfield redevelopment. Local governments are eligible for up to $500,000. Funds can be used for site assessments, environmental investigations, cleanup, asbestos and lead paint abatement, building renovation, demolition and infrastructure improvements. To qualify, a site must have a redevelopment plan that indicates how it will be reused in a way that benefits the community.
— Wisconsin's Brownfields Initiative