Loan program to help companies clean up their own contaminated properties
Brownfield programs consolidated
Companies that want to clean up pollution on their properties now have access to low-interest loan funds, thanks to the reconfiguration of a little-used state brownfield program.
The Ohio Water Development Authority had administered a Brownfield Loan Program since 1995, but recently the program was expanded and moved into the Ohio Department of Development.
William Murdock, director of DOD’s Urban Development Division, said the OWDA loan program was underutilized partly because it had been isolated from the state’s other brownfield cleanup options, such as the Clean Ohio Program.
“Having the front door for all the brownfield in one place will help all the programs and with this particular program it will help it be better accessed,” he said.
OWDA Executive Director Steve Grossman said the loan program had only issued three loans since it was created, largely because of the grant money that became available through Clean Ohio.
“Once the Clean Ohio Program came about, there was something that’s more attractive than loan money and that’s free money. So the demand significantly fell away,” he said.
The changes are designed to mirror a separate program that OWDA shares with DOD, he said, referring to the Local Economic Development Loan Fund, which lends money to communities seeking to expand water infrastructure for business expansion.
“Using that model, where Development is the entry point for the loan recipient and Development does most of the credit analysis for it,” he said, adding OWDA will remain the funder. “They felt that by modifying our loan program, they could complement the work we’re doing.”
Although free money is available for industrial site cleanup through the Clean Ohio program, those funds carry certain restrictions that make the newly improved loan program more attractive, Murdock said. For example, Clean Ohio funds can only be used for certain types of sites and limited activities and only local governments are eligible.
“Whereas with the brownfield loan program, private entities can apply, there’s more flexibility in some of the things it will pay for, and for potentially responsible parties – they’re potential borrowers but they’re not eligible for grant dollars,” he said.
Previously, companies that were deemed responsible for contaminating a site were not eligible for financing through the loan program or Clean Ohio.
“So this becomes a real powerful tool to help companies that want to take care of those problems and stay on the site and take care of those problems,” Murdock said. “I think it can become a real attractive option for companies who want to grow in place.”
Moreover, the loan program will be able to approve assistance much faster than Clean Ohio, he said. “If a project is ready to go to redevelopment, there’s going to be financing available right away.”
Murdock said the agency has already received several inquiries about the loan program since announcing the changes at a recent conference on brownfield redevelopment.
The new loan program offers up to $500,000 for site assessment costs and $5 million for cleanup expenses. Interest rates are below market rates and have a maximum repayment period of 10 years.