The New Jersey Economic Development Authority on Tuesday approved the creation of a new Brownfields Loan Program that will provide low-interest financing to help complete remediation of vacant or underutilized brownfields sites.
The action paves the way for such sites to be revitalized and put back to productive use, and is part of Gov. Phil Murphy’s efforts to drive targeted investments in underserved communities, the EDA said.
The expanded loan program will make financing of up to $5,000,000 available to potential brownfield site purchasers and current brownfield site owners to cover the costs associated with site investigation, assessment and remediation, and building and structural issues such as demolition and asbestos removal. While the brownfields loan will only finance the remediation aspect of the project, all projects must include a redevelopment plan for the reuse of the remediated site.
To be eligible for funding, the NJEDA will conduct an analysis of the project application to determine if a project is economically feasible or if a funding gap exists.
The remediated property must also have an appraised value of at least 100 percent of all debt financing, including the proposed brownfields loan, and the project must submit an environmental report from a licensed site remediation professional or other qualified professional to verify that contamination exists on the site. Projects must also demonstrate local backing through a letter of support from the mayor of the municipality in which the project is located.
Funding will be made available through competitive application rounds.
Projects that meet the base eligibility will then be scored by EDA staff according to various details about the brownfields site and/or proposed redevelopment project. Priority of funding within a competitive round will be determined by highest overall scores, and all projects must meet a minimum score in order to be considered for funding.
The standard interest rate for projects that meet these baseline eligibility requirements will be fixed at 3 percent.
“Transforming contaminated sites into productive projects that enhance the areas where they are located is one of the most effective investments we can make in New Jersey’s communities,” said NJEDA Chief Executive Officer Tim Sullivan in a prepared statement. “The brownfields loan program and proposed remediation and revitalization tax credit will play a crucial role in getting these projects off the ground and bringing new life to communities around the state.”
Applications for the Brownfields Loan Program will be available in the coming months.
“Investing in communities is a pillar of our plan for a stronger and fairer New Jersey economy, and the brownfields loan program is a crucial tool we can use to build cleaner, safer communities where businesses and families can thrive,” said Murphy in a prepared statement. “Cleaning up contaminated sites and repurposing them for productive use allows us to achieve our goals for economic growth while protecting our environment and minimizing sprawl.”