Re: Brownfields & Petroleum -Reply

[CHARLES PATRIZIA <CAPATRIZIA@phjw.com>]

While revolving funds are certainly an idea, I would be doubtful under
current circumstances that they would be funded sufficiently to
accomplish remediation of all affected sites, and in any event there are
limitations.  A revolving fund necessarily depends on the borrower's
repayment in a timely way -- otherwise the fund doesn't "revolve".  The
effect of that condition is often dollar limits on the amount to be
borrowed, time periods for repayment that can be shorter than is
commercially viable, and a sufficient assurance that the post remediation
use will provide enough revenue to meet debt service. 

There are several different kinds of funding mechanisms, and any
brownfield effort needs to look at the options and determine the right mix.
 There are revolving funds, industrial development bonds, private
funding, insurance, joint venturing with remediation firms, etc.  The type
and character of the contamination, the type and character of the
remediation, the position of the prior owner, the position of the agency,
the risk appetite of the new owner,  all play a role. 

I guess my basic point is that there aren't "magic bullets".  Doing a
brownfield deal requires a series of decisions.  It's not a one-stop shop.

I also want to take this opportunity to ignite a new debate -- in addition to
brownfields, the new term I'm hearing is "grey fields" -- these as I
understand it, are older commercial areas, often in the first ring of
suburbs around an urban core, which are contaminated to some degree
(often from old UST's, old dry cleaner operations, perhaps have
asbestos in pipe insulation, floor or ceiling tiles, etc).  Their renewal or
reuse can add appreciably to the quality of life in these areas and the
value of the neighborhoods, but they lack the amenities and space for
enclosed malls, etc.  

Chuck Patrizia

>>> "Kathy L. Dalton" <kd@well.com> 05/06/99 09:15am >>>

Revolving funds in general (not just this EPA clean water fund) would
seem
to be a good idea for those brownfields that will be developed by or for
the private sector. The trick would seem to be adequate capitalization of
the fund, and some loan guarantee or work out strategy for projects that
don't go to completion.

I believe you folks at Northeast Midwest have been looking at lots of
financing plans. How many states or other entities have set up such
funds?

And is there enough of a track record with any of these to evaluate them
yet?


>Alan raises a good financing option.  In fact, Ohio is the leading state in
>terms of using the revolving fund for brownfield purposes.
>Charlie Bartsch