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Experts Corner: Michigan Brownfield Incentives Keep Getting Better

January 26, 2017

A recently signed group of Senate bills promises developers in Michigan more latitude in obtaining Brownfield funding.  Key provisions of SB 908-913 expand the types of activities that can be covered, loosen requirements on applying for funding and shorten the processing time on Brownfield Plan requests under $1 million.

UST Inclusion

Before SB 908-913, Brownfield funds for activities related to Underground Storage Tank (UST) removal were limited to “Orphan” USTs, or those that were previously unknown and/or recorded. 

In a state with over 17,000 Underground Storage Tanks (USTs)* - making the top 10 in the US- the presence of buried tanks is a real concern when evaluating property to redevelop. Gas stations are usually located in central, high-traffic locations. With the expansion of “eligible activities”, the removal or closure of these tanks is now covered and opens new opportunities to redevelop and these properties.  Many developers may have previously walked away from these desirable sites due to the costs associated with removal of the USTs. 

BEA Considerations

Another positive change allows parties that acquired property that was contaminated and did not complete a BEA -whether due to timing restrictions on a transaction or limited knowledge of the process and not engaging an environmental firm soon enough etc. - to apply for Brownfield funding.  With SB 908-913, as long as you were not responsible for the contamination, you no longer need a BEA to apply for funding. However, you will still be responsible for completing your environmental due diligence during the application process.

Shorter Approval Time

Finally, a month has been shaved off Brownfield Plan approvals through the Michigan Strategic Fund (MSF), now that SB 908-913 reduced the processing time from 90 to 60 days.  Additionally, the MSF board approval is now only necessary for projects requesting more than $1 million in eligible activities (previously the limit was $500,000). MSF board approvals typically added six weeks to a project. Overall, developers of projects requesting under $1 million cut two and a half months off their approval time. 

These changes bring more efficient brownfield redevelopment tax increment financing (TIF), grant, and loan processing and encourage developers to consider a wider range of properties.