From: | CHARLES PATRIZIA <CAPATRIZIA@phjw.com> |
Date: | Thu, 6 May 1999 13:38:10 -0700 (PDT) |
Reply: | cpeo-brownfields |
Subject: | Re: Brownfields & Petroleum -Reply |
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 | |
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