Frequently Asked Questions About Brownfields Cleanup and
What are brownfields?
Brownfields are abandoned, unused, or underused industrial and commercial properties.
Brownfield properties vary in size, location, age, and past use. They can be anything from
a five hundred acre closed steel mill to a small abandoned corner gas station.
|A brownfield is a parcel of real property, or a portion of the
parcel, that has actual or perceived contamination and an active potential for
How many brownfield properties are there in Illinois?
It is difficult to determine the exact number of brownfield sites in the state, however
it is believed they exist in almost all Illinois communities from the smallest towns to
the largest cities. While you might not be familiar with the term brownfield, you
are certain to be aware of the closed gas stations and empty manufacturing plants in your
Why are there so many brownfields?
For many years, brownfield properties were not redeveloped due in part to fear of
environmental contamination, especially concerns about:
- High cleanup costs
- Lengthy and complicated cleanup processes
- Potential liability risks
- Government involvement
Why are brownfields a problem for my community?
Brownfields can pose a number of threats to a community's well being. Brownfield
- Potentially harm human health and the environment
- Reduce local employment opportunities and tax revenue
- Limit economic growth and development
- Attract vandals, open dumping, or other illegal activity
- Lower surrounding property values and contribute to neighborhood deterioration
- Contribute to urban sprawl as businesses relocate to farmland and open space
How can brownfield redevelopment benefit my community?
Communities around the country have realized that responsible brownfield redevelopment
can transform environmentally impaired property into productive uses and can bring the
following community benefits:
- Improved public health and environment
- Economic growth and increases in local employment opportunities
- Revitalized neighborhoods
- Increased local tax revenues
- Reduced public service demands
Is there a cost to not cleaning up brownfield sites?
Yes, when brownfield sites are not cleaned up and redeveloped they can have real
financial impacts on a community.
A boarded up factory that sits idle can cost a local government thousands of dollars
each year. In addition to the lost local tax revenues, municipal governments often need to
devote their limited police, fire, and other public services to respond to vandalism, open
dumping and other problems at the site. Also, city officials must spend time responding to
concerns about the site.
What has been done to make it simpler for businesses, local governments, and community
leaders to redevelop brownfield sites?
In the last few years, a variety of efforts have been taken at all levels of government
to help overcome the barriers that have traditionally prevented brownfields from being
|The Illinois EPA, the U.S. EPA and other government bodies have
developed a number of tools, resources, and partnerships that are being used for
successful redevelopment projects around Illinois. These include financial incentives,
consistency among cleanup objectives, releases from liability, a flexible voluntary
cleanup program, and public / private partnerships.
Unlike a private business, local governments are responsible for
promoting the health and well being of their communities, and they can play a key role in
redevelopment projects that the private sector would not undertake on its own. Also,
because certain legal and financial tools used by local governments are not available to
private parties, local governments have a unique opportunity to participate in brownfields
cleanup and redevelopment. Local governments can initiate partnerships with stakeholders
to share costs and other resources, in which local governments take some actions described
below and private companies do others.
The basic steps communities can take to assist in cleaning up and redeveloping
brownfield sites vary and the steps can occur in a different order or simultaneously
depending on the circumstances. For example, site assessments may be conducted either
before or after the future use for the property is determined. Also, each stage has
multiple smaller steps. The complexity of the overall process depends on variables such as
site ownership, extent of environmental contamination, and funding structure.
What Actions Can I Take to Cleanup and Redevelop a Brownfield Site?
Each brownfield redevelopment project is different and there is no easy "how
to" formula that can be used for every site. Listed below are some general steps that
communities can take for brownfield projects.
- Identify a piece of property with an interested end user, high redevelopment potential,
or located in an area that is part of a larger redevelopment plan.
Connect with a private business or group interested in using a particular piece of
property (for example, an existing company wants help to expand onto an adjacent property,
or a developer or end user wants assistance in redeveloping a brownfield property).
Sometimes, cities themselves have identified a brownfield property in a key location of
town and sought an interested business. Large redevelopment projects like downtown
renovation efforts can also include brownfield properties.
- Learn more about the property of interest
Investigate the ownership and legal status of the property. This includes reviewing tax
records and any liens on the property.
- Hire an environmental consultant to conduct initial site
assessments and obtain estimates of the cleanup and redevelopment costs
Site assessments and cleanups require technical expertise; hire an environmental
consultant to perform these activities. Before choosing an environmental consultant,
evaluate the firm's qualifications, experience and willingness to explain site clean
up options. Ideally, estimates of the cleanup costs as well as estimates of the amount of
time needed for the remediation should be obtained.
- Identify key players and interested parties to determine future
use of the property
Form partnerships with interested parties to assign responsibilities and determine
future plans for the property. Depending on the situation, this may involve working with
the current and past owners of the property, the businesses interested in developing or
using the redeveloped property, community members, civic organizations, and government
agencies. Some of the financial and property acquisition tools described elsewhere in this
document require preparation of redevelopment plans. Remember, future land use will impact
- Determine funding sources
Research what sources of funding are available for the site acquisition, cleanup, and
redevelopment project. Many cities establish Tax Increment Financing (TIF) districts that
include the brownfield property. Other types of funding often used in conjunction with the
TIF money include bonds, grants, general tax revenue, and private funds. Communities have
structured projects so that they basically pay for themselves using money generated from
the TIF and from the sale of the property.
The Illinois Municipal Brownfield Redevelopment Grant Program can provide cities with some
funding for brownfield projects. Also, cities can use traditional economic development
tools to fund brownfield projects. Local Community Development Corporations (CDCs) can
coordinate private financial sources for brownfield projects.
- Where necessary, acquire ownership of the property
If necessary, municipal governments can take over title to the property. Local
governments can use the following methods to acquire property:
- Eminent Domain / Condemnation
- Tax Delinquent property acquisition
- Demolition Lien or other liens foreclosure
- Negotiated Sale
- Enroll in the Site Remediation Program and clean up the property
If a city owns the property, it can enroll the site in the Illinois EPA Site
Remediation Program (SRP). If the property remains in private ownership, the city can
facilitate its entering into the SRP. Participants in the SRP voluntarily clean up sites
and receive Illinois EPA approval and release from further responsibility. Participants
are called Remediation Applicants or RAs. The RA must pay the Illinois EPA for
oversight services. The city or private owners should work with an environmental consultant
(sometimes the same firm that performed the initial site assessment) to make sure the
reports and plans required under the SRP are properly prepared and implemented.
RAs in the SRP can use the Tiered Approach to Corrective Action Objectives (TACO), a
new method in Illinois for developing cleanup objectives based on risk to human health and
land use. In cases of groundwater contamination, a city may be able to pass a local
groundwater ordinance that limits the use of groundwater for drinking water, thus
excluding an exposure pathway to protect human health. Once the cleanup is complete, the
Illinois EPA issues a No Further Remediation (NFR) letter for the property. An NFR Letter
contains terms and conditions for the property and must be recorded on the property title.
- Negotiate a redevelopment agreement with the end user or the
developer, sell the property, and transfer ownership to the end user or the developer
Finalize a redevelopment agreement with a developer or end user for the property. In
some cases, cities agree to make infrastructure improvements to the site such as improving
roads and sewers. Next, transfer the title to the developer or end users so they can
proceed to bring the property into productive use. It may also be necessary to pay back
any bonds or loans that were issued for the project.
How can local government pay for brownfield redevelopment?
A variety of funding sources can be used by local governments for brownfield
redevelopment. These can include grants, loans, bonds, taxes and fees, and
private funds. While only a few programs are specially designed for brownfields, many
traditional economic development tools can be used to support brownfield projects.
|Successful brownfield projects find creative ways to use money
from different sources to pay for the project.
How can Tax Increment Financing be used for brownfield projects?
Tax Increment Financing (TIF) is one of the most widely used tax
incentive programs available to local governments in Illinois. TIFs were authorized by
Illinois statute and designed to promote economic development in depressed areas that
would not otherwise receive investment.
|A TIF allows a community to capture the increase in various
state and local taxes resulting from a redevelopment project to pay for the costs involved
in the project.
While TIFs were not designed specifically for brownfield redevelopment, many cities in
Illinois have used TIF to partially finance successful brownfield redevelopment projects.
TIF money has been used for property acquisition, site planning, conducting environmental
site assessments, cleaning up contaminated property, and infrastructure improvements such
as upgrading streets.
While this tool can be useful, keep in mind that:
- There are limits on what TIF money can be used for.
- When a TIF district is first created, no money will be in the TIF for brownfield
redevelopment. Brownfield redevelopment projects need money up front to acquire, assess,
and cleanup brownfield properties. Cities have the ability to issue bonds for the
redevelopment and then pay them back using the TIF money.
- Not all brownfields are located in areas that meet the criteria necessary to be
designated a TIF redevelopment area.
- Redevelopment areas must be contiguous so communities can not easily use TIF for
brownfields scattered around a city.
What sources of financial assistance are available from the State of Illinois?
Illinois EPA's new Municipal Brownfields Redevelopment Grant Program is intended to
provide financial assistance to municipalities for brownfield cleanup and redevelopment
activities. The grant can be used by local governments to determine where brownfield sites
are located and to determine if a specific site is contaminated and to what extent.
It can also be used for actual cleanup activities. The grants are worth a
maximum of $240,000.
Is there any in-kind assistance available from the State of Illinois for brownfield
Yes, the Illinois EPA can help local governments by conducting Redevelopment
Assessments at brownfield properties in their communities. Using a grant from the
United States Environmental Protection Agency (U.S. EPA), Illinois EPA staff may come to
your community to conduct redevelopment assessments that provide information about the
environmental condition of a specific piece of property. To receive a redevelopment
assessment, the local government must own the property or obtain permission from the owner
and must document interest in developing the property.
What sources of financial assistance are available from the federal government for
The U.S. EPA provides Brownfields Assessment Demonstration Pilot Grants to
local, state, and tribal governments. These grants, up to $200,000, can be used for site
investigation costs including site assessments, site identification, site characterization
and development of site remediation plans. The grants can also be used to facilitate
coordinated public and private partnerships and conduct outreach activities. The money can
not be used for actual cleanup activities.
Can traditional economic development financing tools be used for brownfield projects?
Yes, many communities are not aware that the traditional economic development
tools they have been using for years can be used for brownfield redevelopment projects.
Keep in mind that restrictions on what the money can be used for depend on the type of
financial instrument. Throughout the country, communities have found creative ways to use
different government economic development programs such as grants, loans, loan guarantees
and other programs for brownfield projects. Sometimes, the economic development money can
be used to improve roads or to help finance a new business while other money can be used
for the site assessment and cleanup.
What main economic development programs have been used for brownfield redevelopment
A. Community Development Block Grants (CDBG). The CDBG program provides annual
grants on a formula basis to be used for a wide range of community development activities
directed toward neighborhood revitalization, development, and improved community
facilities and services. Larger communities, called entitlement communities, receive CDBGs
each year directly from the US Department of Housing and Urban Development. Smaller
communities can compete for CDBG money through the Community Development Assistance
Program (CDAP) administered by the Illinois Department of Commerce and
Some local governments have used portions of their CDBG money for brownfield redevelopment
B. Section 108 Loan Guarantees & Economic Development Initiative (EDI) Grants.
The Section 108 loan guarantees, which are coupled with EDI grants, can provide
entitlement communities with a source of financing for a variety of economic development
projects. Section 108 is the loan guarantee provision of the Community Development Block
Grant (CDBG) program that allows local governments to, in essence, borrow against their
future CDBGs. The EDI grant is coupled with the 108 authorization to lower the effective
interest rate of the loan, thus making the project more viable and less risky. Some of the
activities that Section 108 money can be used for include: clearance and site
improvements, economic development activities eligible under CDBG, acquisition of real
property, rehabilitation of property, construction, reconstruction or installation of
public facilities (including street, sidewalk and other site improvements). Cities may be
reluctant to use Section 108 loan guarantees because they are fearful of losing future
CDBG money if their brownfield projects are not successful, so it is important that this
program be limited to economically viable projects.
C. Public Works Program. The Economic Development Administration (EDA), part of
the U.S. Department of Commerce, offers a number of different programs that provide
financial assistance for economic development to local governments and non-profit
organizations. The EDA Public Works Program can be used for brownfield projects in
conjunction with other funds. The Public Works program provides grants to distressed
communities that can be used for infrastructure such as roads and sewers. The Public Works
program grants can not be used for site assessments and only under rare circumstances can
be used for remediation.
D. Technical Assistance Grants. The Technical Assistance program, also from the
EDA, is designed to benefit areas of severe economic distress to help solve specific
economic development problems. In some cases, this money can be used for Phase I site
E. Community Facility Loan Program. A few programs from the U.S. Department of
Agriculture Rural Development can provide financial assistance for economic development
projects that involve brownfields. Specifically, the Community Facility Loan Program can
be used to construct, enlarge, extend, or otherwise improve community facilities providing
essential services in rural areas and towns with a population of 50,000 or less. Community
facilities may include industrial sites in some circumstances. The funds are available to
public entities such as municipalities, counties, special-purpose districts, and
corporations not operated for profit.
F. Rural Business Enterprise Grants. Also from the Rural Development of USDA,
Rural Business Enterprise Grants are available to public bodies or non-profit corporations
to facilitate development of small and emerging business enterprises in rural areas. Use
of the grant funds may include acquisition and development of land, construction of
buildings, plants, equipment, access roads, parking areas, utility extensions, and other
Have local governments issued bonds for brownfield redevelopment projects?
Yes, cities can issue general obligation and general revenue bonds and then use
the money for brownfield redevelopment. Bonds could be used in conjunction with a TIF
project, with the intent to pay back the bonds using money generated from the tax
increment over the life of the TIF.
Have cities used their own general tax revenue to redevelop brownfield sites?
Yes, some Illinois communities have set aside some general revenue for
brownfield projects. If the local government feels that the community will benefit in the
long run on the project, this may make sense for some communities.
|A boarded up factory can cost a city thousands of dollars each
year in lost taxes and resources spent responding to complaints about open dumping and
Brownfield redevelopment can turn the property into an asset, generating tax revenues
for the local government. In addition, many local governments have found that brownfield
development can be much less expensive than anticipated. Some cities have special funds
for economic development that can be used for brownfields.
Can private companies pay for brownfield redevelopment projects?
Yes, in many cases the prospective purchaser or the past owner has agreed to pay for
all or part of brownfield redevelopment expenses. Some communities have worked out
agreements where past owners who were partially responsible for the contamination have
contributed money to a brownfield redevelopment project.
What sorts of government incentives are available to encourage private businesses to
State and federal income tax incentives are designed to encourage private parties to
clean up and redevelop brownfield sites. The federal Brownfields Tax Incentive was
passed when President Clinton signed the Taxpayer Relief Act in August 1997. The
Brownfields Tax Incentive allows for environmental cleanup costs at properties in targeted
areas to be fully deducted in the year incurred, rather than having to be capitalized.
The Illinois Environmental Remediation Tax Credit allows a company or an
individual to obtain an income tax credit for certain environmental cleanup costs. The tax
credit is worth up to 25% of the un-reimbursed eligible remediation costs. This tax credit
can not be used if the taxpayer or any related party caused the contamination at the site.
What mechanisms can local governments use to acquire brownfield property?
Brownfield properties can be acquired using many of the same mechanisms that
governments use to acquire any properties, including tax foreclosure, eminent domain,
lien foreclosure, and negotiated sale.
When should local government take over the ownership of property?
It depends on the circumstances and type of project. While communities usually prefer
that brownfields redevelopment occur in the private sector with little government
involvement, there are some brownfield sites that will never be redeveloped by the private
Brownfield redevelopment is a complicated process and there are a number of financial
and legal hurdles that can sometimes best be overcome when the local government takes
ownership of the property. If a piece of property is tax delinquent and has a number of
liens on it, the only way to clear the title may be for a local government to acquire the
title. Also, there are some cases where local governments may want to enter into the chain
of title for a piece of property when the perception of environmental liability is
preventing development. Furthermore, cities may already own property that was used for
municipal purposes or that was acquired earlier for some other reason.
Another reason cities may want to acquire title to the brownfield property is so they
can assemble a number of pieces of property together for a large redevelopment project
like an industrial park. Many brownfields are in older industrial areas where sites are
often too small and are poorly designed for a modern industrial user. Some cities are
trying to develop suburban style industrial parks in older industrial areas by assembling
a number of sites, cleaning them up together, and providing updated infrastructure to
attract new companies.
How can local government acquire title to property that is tax delinquent?
|Illinois law (35 ILCS 200/21-90) allows counties to bid on
property that has been tax delinquent for two or more years on its own behalf or on the
behalf of other taxing districts, such as municipalities.
If the county bids on this tax delinquent property, it does not need to pay cash
for the property or pay the back property taxes. Some Illinois counties have programs
where they will put no cash bids on tax delinquent property on behalf of municipalities
and then, if the property owner does not redeem their property, they will transfer the
property title over to the municipality. Local governments should contact their county
treasurer's office for more information about these programs. Also, local governments
and private parties can bid on tax delinquent property at the annual tax sale.
When can cities use their powers of eminent domain to acquire brownfield properties?
Over the years, the Illinois General Assembly has designated specific purposes for
which municipalities can exercise their power of eminent domain to acquire property.
|Various Illinois statutes authorize local government to condemn
property under certain circumstances, some of which may involve brownfield property.
Also under the Illinois Constitution of 1970, "home rule" communities
generally have the power to exercise their powers of eminent domain for public purposes.
Specific statutory authority is found in the Blighted Area Redevelopment Act of 1947, the
Blighted Vacant Areas Development Act of 1949, and the section on Commercial Renewal and
Redevelopment Areas in the Illinois Municipal Code which allow local governments to use
eminent domain to redevelop certain areas that meet definitions of slum and blighted.
Furthermore, the Tax Increment Allocation Redevelopment Act (65 ILCS 5/11-74.4-1), which
authorizes communities to create Tax Increment Financing districts, allows communities to
use eminent domain to condemn property as part of a TIF redevelopment plan. In addition to
redevelopment projects, local governments have in many cases condemned contaminated
property for public purposes such as building a new city hall or a road.
How can a demolition lien be used to acquire property?
The Illinois Municipal Code (65 ILCS 5/11-31-1) explains the legal requirements that
municipalities must follow if they choose to demolish unsafe and dangerous buildings. In
general, a municipality can get a court order and then, with proper notice and warning
to the owner, demolish the building.
|Demolishing unsafe buildings can often reduce public health
threats, improve neighborhoods, and initiate the process of bringing brownfields back into
Also, after the demolition, the city can put a demolition lien on the property for the
cost of the demolition. If the owner does not pay back the city for its costs within a
certain period of time, the city can foreclose on that lien and obtain the title to the
Can a local government use its demolition authority to clean up property with
Yes, in 1997 Governor Edgar signed Public Act 90-393, which amends the Illinois
Municipal Code to allow municipalities to remove or cause the removal of environmentally
hazardous substances on, in, or under abandoned and unsafe property. It also allows the
municipality to inspect the property and test for the presence or release of hazardous
substances, if the municipality has evidence indicating such substances may be present. A
municipality can also put a lien on the property for its costs of inspection, testing, or
remediation and if, within a certain time period, the owner does not pay on its lien, the
city can foreclose and take over title to the property.
Can a local government purchase property for brownfield redevelopment?
Yes, local governments around Illinois have negotiated with property owners to
buy their property with the intent to clean it up and prepare the property for
redevelopment. If a site assessment has been conducted and the city and the owner are both
aware of the environmental condition of the property, the parties will usually consider
the cost of cleanup in negotiating a price for the property. Sometimes as part of a
negotiated sale, the city and the owner may make agreements regarding any contamination
and site cleanup. The city may, for example, agree to take responsibility for the cleanup
if the owner donates the property to the city for free.
What are some barriers local governments can face in land acquisition for brownfield
It is not always easy for local governments to acquire brownfield property. Generally,
the mechanisms described above can be time consuming, expensive, complicated, and fraught
|Some problems are related to the value of the property.
Before brownfield property can be redeveloped, site assessment and clean up is usually
necessary. As a result, prospective purchasers often feel that the price of the property
should be reduced to reflect these assessment and clean up costs. This can be
a problem in
negotiated sales when the owner does not want to acknowledge that their property value is
decreased because of the environmental problems on the property. It can also be a problem
to determine the fair market value of contaminated property acquired using eminent domain.
Historically, courts did not consider environmental cleanup costs in determining the fair
market value in eminent domain proceedings. This has now been changed since the Illinois
Code of Civil Procedure was amended by Public Act 90-393 to allow evidence regarding any
violation of environmental laws or regulations to be admissible in eminent domain
proceedings. This change took effect January 1, 1998.
Another problem is land assembly. It can be difficult to acquire a number of
different pieces of property and put them together for a large redevelopment project. This
is often time consuming, complicated, and can run into a number of legal road blocks.
Usually the city will have to acquire the different pieces of property using different
mechanisms and each mechanism has different legal requirements and time frames.
Furthermore, there are uncertainties with each mechanism that can delay or possibly stop
property acquisition all together.
While land acquisition can be time consuming and expensive, a number of local
governments have evaluated the costs and benefits and concluded that their community will
be better off in the long run if they acquire brownfield sites for redevelopment. Many
communities around Illinois have found ways to overcome these barriers and have
successfully acquired property for redevelopment. Furthermore, if local officials do their
homework and fully research all legal requirements, they will be in a better position to
acquire property in an inexpensive and expedient manner.
If I want to clean up and redevelop a contaminated piece of property, do I need to be
concerned about potential liability?
Yes. Before getting involved with a development project that includes property
with possible environmental contamination, municipalities should familiarize themselves
with the relevant state and federal liability laws and regulations. Liability for a
contaminated piece of property can be a serious concern in some circumstances.
|In general practice, many brownfield properties have low levels
of contamination and are not usually the target of federal or state enforcement actions.
If someone proceeds voluntarily to clean up a property in accordance with
Illinois' voluntary cleanup regulations, the state and the federal governments
generally do not pursue legal action to force the party to clean up or pay for a clean up
at that site.
What federal and Illinois laws apply to the potential liability for a contaminated
The two most important federal laws that govern contaminated sites are The
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or
Superfund) and the Resource Conservation and Recovery Act (RCRA). The main
Illinois law that applies to contaminated sites is the Environmental Protection Act.
This area of law is quickly changing, so it is important to know the latest laws and
How do the federal and Illinois environmental agencies work together on liability for
contaminated sites? Do I need to worry about the U.S. EPA and the Illinois EPA if I want
to clean up a brownfield site?
The U.S. EPA and the Illinois EPA both encourage communities and private companies to
voluntarily clean up and redevelop brownfield sites. Over the last several years, the two
agencies have worked together to reduce the barriers that have, in the past, discouraged
brownfield redevelopment. As part of this effort, Illinois was the first state in the
nation to enter into a Superfund Memorandum of Agreement with U.S. EPA Region V. Also, the
U.S. EPA and the Illinois EPA have recently signed a RCRA Memorandum of Understanding.
These agreements demonstrate that the U.S. EPA does not generally pursue legal actions at
sites that are being cleaned up voluntarily under the Illinois Site Remediation Program
Under federal law, who is potentially liable for contamination at a brownfield site?
Federal law categorizes parties who are potentially liable for cleanup costs at
contaminated sites. These include owners and operators of the property, generators of the
hazardous substances, and transporters of the hazardous substances. These parties
are often referred to as "potentially responsible parties" or "PRPs".
Under the federal liability system, someone could be held liable for all the costs of
cleanup, even if they only contributed a small portion of the waste. Also, a party who
recently purchased a piece of property could, in theory, be held liable for all the costs
of cleanup at a site. The federal liability system has been described as strict, joint,
several and retroactive.
While federal liability can extend to a broad range of parties, there have been a
number of recent reforms aimed at changing and clarifying the federal liability system to
encourage parties to clean up and redevelop brownfields. These efforts have taken the form
of new legislation, policy statements, and guidance documents that have helped to reduce
fears and clarify under what circumstances local governments, private parties, and lenders
should be concerned about federal Superfund liability.
Under State of Illinois law, who is potentially liable for contamination at a
The liability laws in Illinois were first drafted using the same structure as the
federal liability system established under CERCLA described above. Beginning in 1993
however, a number of changes to the state statutes related to liability for contaminated
sites were put into effect. Most notably, Title XVII of the Environmental Protection Act,
passed in 1995, included changes to the environmental cleanup liability scheme in
Illinois. These changes to the liability system are found in 415 ILCS 5/58.9.
|Title XVII lists a number of defenses from environmental
liability that parties may invoke under which the state can not require them to perform
remedial actions at a site.
Title XVII also created proportionate share liability in Illinois. Proportionate share
liability is a system where each party's liability is limited to the extent of
responsibility or fault of that party in causing or contributing to the release of
regulated substances. Although this section of the Environmental Protection Act is
currently in effect, the Pollution Control Board is required by January 1, 1999 to adopt
rules and procedures for determining proportionate share; it is now in the process of
adopting these rules.
What do I do if I want to redevelop property where the U.S. EPA or the Illinois EPA
has already conducted a site assessment or conducted an emergency removal?
The first thing you should do is to find out as much as you can about the actions that
have been taken at the site you are interested in. You should find out if any removal
actions (disposal of drums of hazardous materials, soil excavation, etc.) were taken by
the U.S. EPA or the Illinois EPA. If actions were taken, you should find out the status of
any enforcement and cost recovery efforts by the agencies against responsible parties. The
U.S. EPA or the Illinois EPA is often willing to talk with you about what they have done
at the property and what needs to be done if you want to bring the property back into
productive use. Contact the Illinois EPA if you have concerns about a specific piece of
Why are lenders often reluctant to finance brownfield cleanup and redevelopment
projects? Can lenders be held liable for cleanup costs at contaminated sites?
Historically, lenders have been reluctant to finance real estate transactions that
involved environmentally risky sites. Lenders have two main concerns with respect to
lending on contaminated property. First, they are concerned that uncertain cleanup costs
and the borrower's possible liability could impact the borrower's ability to pay
back the loan. If the borrower has difficulty paying back the loan, banks are concerned
that the value of their collateral could be impaired and that it would be difficult for
the bank to foreclose on the property. Second, lenders are concerned that they could be
held liable for cleanup costs at the sites on which they lend. Recent legislation, The
Asset Conservation, Lender Liability, and Deposit Insurance Protection Act of 1996,
clarified the situations when lenders can be protected from federal liability at
contaminated sites. Basically, a lender can not be held liable under CERCLA if it does not
participate in the management of the site. In the last few years, a number of banks have
increased their willingness to finance environmentally impaired property.
|The more certainty that banks have regarding the expected
cleanup costs and possible liability at a brownfield site, the more likely they will
finance a project.
Can local governments be held liable for cleanup costs at a contaminated site?
Yes, however it would be rare for a local government to be held liable if the local
government simply acquires a brownfield property for purposes of cleaning it up. The
Illinois EPA is not aware of any site in Illinois where liability has been imposed on
local government by state or federal government in such circumstances. There have been
some cases where local governments have been held liable for cleanup costs at contaminated
sites, however most of these were cases where the local government caused or contributed
to the contamination.
For More Information
On the Illinois Brownfield Initiative:
Illinois Environmental Protection Agency
1021 N. Grand Ave. E.
PO Box 19276
Springfield, IL 62794-9276
On Tax Increment Financing:
Read "Tax Increment Financing" 1990, published by the Illinois Department of
Commerce and Community Affairs Thomas Henderson
Illinois Department of Commerce and Economic Opportunity (DCEO)
620 East Adams Street
Springfield, IL 62701
On the USEPA Brownfields Assessment Demonstration Pilot Grants:
Applications and information about this grant can be obtained by calling the USEPA
Region 5 office at 312-886-7596 or the Washington D.C. office at 202-260-4610. Information
can also be obtained on the Internet at http://www.epa.gov/brownfields.
On the use of CDBG or the Section 108 Loan guarantees for brownfields contact:
US Dept. of Housing and Urban Development
77 West Jackson, 24th Floor
Chicago, IL 60604
On the Community Development Assistance Programs:
Illinois Department of Commerce and Economic Opportunity
620 East Adams Street
Springfield, IL 62701
On the Illinois Municipal Brownfields Redevelopment Grant Program:
The statute that authorizes this grant is found in Title 17 of the Environmental
Protection Act at 415 ILCS 5/58.13
Illinois Environmental Protection Agency
1021 N. Grand Ave. E.
PO Box 19276
Springfield, IL 62794-9276
On the Illinois Redevelopment Assessments:
Illinois Environmental Protection Agency
1021 N. Grand Ave. E.
PO Box 19276
Springfield, IL 62794-9276
On EDA programs:
Economic Development Administration
111 N. Canal Street, Suite 855
Chicago, IL 60606
USDA, Rural Development:
Illini Plaza, Suite 103
1817 South Neil Street
Champaign, IL 61820
TEL: 217-398-5412 Ex:247
On the Illinois Environmental Remediation Tax Credit:
Read the "Environmental Remediation Tax Credit - Financial Assistance for the
Cleanup of Brownfield Sites" brochure.
Illinois Environmental Protection Agency
1021 N. Grand Ave. E.
Springfield, IL 62794-9276
To learn more about the liability-related federal administrative and legislative
Visit the USEPA web site at http://www.epa.gov/brownfields or contact:
Jim Van Der Kloot
USEPA Region 5
77 West Jackson
Chicago, IL 60604
These reforms are found in the following documents available from the U.S.EPA:
- EPA Policy Toward Owners of Property Containing Contaminated Aquifers
- Policy on the Issuance of Comfort/Status Letters
- Model Comfort Letter Clarifying NPL Listing, Uncontaminated Parcel Identifications, and
CERCLA Liability Issues Involving Transfers of Federally Owned Property
- Guidance on Deferral on NPL Listing Determinations While States Oversee Response Actions
- CERCLA Enforcement Against Lenders and Government Entities that Acquire Property
- The Asset Conservation, Lender Liability, and Deposit Insurance Protection Act of 1996
- Land Use in the CERCLA Remedy Selection Process