Funding Vapor Intrusion Mitigation: A Midwest Overview
Vapor intrusion (VI) mitigation is an integral aspect of brownfield redevelopment that is common to property owners, developers, and responsible parties alike. Mitigating VI can be challenging due to evolving regulations and costs associated with investigation, mitigation, and ongoing VI compliance activities. So how does one offset those costs or seek funding for those activities?
Dedicated funding mechanisms that are VI-specific are uncommon. However, various brownfield funding and remediation funding sources exist across different Midwestern states that can be used to support VI solutions. These include grants, loans, tax credits, tax increment financing, and direct appropriations that may be available to developers and local communities. It is important to understand that these funding sources are not intended to fund VI alone; they are commonly tied to a larger insurance claim or brownfield redevelopment projects, as well as Leaking Underground Storage Tank (LUST) releases, state-funded cleanups, or remediation and redevelopment efforts.
In Illinois, the LUST Fund provides up to $1,500,000, with a deductible determined by the State Fire Marshal, depending on tank registration and reported release dates. This deductible can range from $5,000 to $100,000.
Indiana has several funding options, including EPA brownfields cleanup grants. Low-Interest Loans are available with flexible terms of up to 20 years, and interest rates ranging from 0% to 3%. Revolving Loan Funds, of which the lesser of $200,000 or 30% may be forgiven, are an option for political subdivisions or non-profit entities (but not private, for-profit entities). The state also offers a brownfield tax reduction or waiver statute for delinquent tax liability.
In Michigan, developers can access grants of up to $1 million per year. Loans of up to $1 million at a 1.5% interest rate with up to a 15-year term and a 5-year interest-free grace period for payment are also available. These may be repaid using Tax Increment Financing (TIF). TIF is the use of reimbursed property tax funds generated from increased property value resulting from brownfield redevelopment activities. The newest funding offering in the state is the Transformational Brownfield Fund, introduced in March of 2023, which applies to large-scale redevelopment projects involving eligible properties or groupings of properties.
In Minnesota, the Drycleaner Fund provides reimbursement for approved expenses up to $100,000 per year. Additionally, redevelopment grants with a 50% local match, Cleanup Revolving Loans for sites with a pre-approved response action plan, and the Tax Base Revitalization Account, offering $5 million in annual grants for investigating and cleaning up brownfields, are available for a wide range of projects. Local county resources are also available, as well as EPA Brownfield grants and Revolving Loans.
Ohio’s Voluntary Action Program (VAP) grant funding is available for public entities seeking VAP technical assistance. The state also offers a Loan Program, providing up to $5 million per site for a 15-year loan with an interest rate of the 10-year treasury rate plus 10 basis points or 1.5% (whichever is higher) at approval.
Wisconsin offers Brownfields Grants for cases where the liable party is unknown or unable to pay and the applicant has received assistance or comments from the WDNR for the planned work. The Ready for Reuse Program provides hazardous substance and petroleum site loans (zero interest on $250,000 or more) and grants (up to $200,000) with a 22% match from public or nonprofit applicants.
By taking advantage of these programs or brownfield funding sources, developers may be able to address vapor intrusion challenges while offsetting associated costs or funding gaps and accelerate brownfield redevelopment. Program requirements will vary, and a given program may not apply to all VI situations. It is vital that anyone in need of funding assistance have the guidance of experts who are adept at navigating these programs rather than attempting to reach out to government agencies directly. For any questions on how to leverage the programs specified, feel free to reach out to PM Environmental, a Pinchin company at www.pmenv.com/contact.
August 23, 2023