Wednesday, December 11, 10:45 am – 11:45 am, Room 403A
Track 2: Financing Options, Real Estate, & Economic Development
This interactive panel will discuss the nexus between brownfields development and affordable housing and will explore various policy, funding and incentive programs that have been successfully deployed in the US, including a forgivable loan and grant program in California, with an emphasis on creating affordable housing. A case study focused on Comm 22, an award-winning affordable housing project complements the policy and funding conversation. Dan Johnson, Evans Paull, and Jeff Williams share the complexities of tax credit based affordable housing finance of a 200 unit affordable housing and brownfield redevelopment project and the role that brownfields funding played. The premise is that if early-stage project funding were more widely available, combined with informed policy and regulatory approach, that the housing stock in California and elsewhere could be expanded, possibly significantly.
4:30 pm – 6:00 pm, Exhibit Hall, West Hall A
Jim Ritchie and Amy Dzialowski present on the City of West Sacramento and the SCS Brownfields Toolbox that helps take advantage of economy of scale to improve both cost and schedule outcomes, and can result in better buy-in from regulatory agencies, due to an emphasis on an overall vision rather than just a transactional approach. Flexibility is another key concept for reuse planning and as a tool for brownfields sites. SCS demonstrates their expansive experience with an array of brownfields tools including, grant funding and leverage, environmental insurance, and other risk-shifting tools such as “CLRRA” agreements.
At the SCS booth 417, meet Mike McLaughlin, SCS Engineers’ Senior Vice President of Environmental Services and a National Specialist on Brownfields & Landfill Redevelopment and Electric Utilities. He is a licensed engineer and attorney with over 30 years of professional experience providing advice on environmental matters. He is an expert on environmental compliance, remediation, and allocation of response costs.
Mr. McLaughlin advises developers, contractors, lenders and land development professionals on the technical and regulatory requirements for construction on Brownfields’ sites nationwide. His combined engineering and legal background provides an unusual perspective on land development where hazardous wastes or other environmental challenges are present. Redevelopment of closed landfills is an area of special interest; he worked on his first such project in 1976.
Mr. McLaughlin has worked at some three dozen Superfund National Priorities List sites in 17 states, and on scores of regulatory compliance, voluntary cleanup, and remediation projects for commercial, industrial, municipal, and military clients.
Thursday, December 12, 3:30 pm – 4:45 pm, Room 411
Track 1: Sustainability, Livability, Resiliency
This 75-minute clinic provides a fun and engaging hands-on experience that will inspire you to tackle the challenges of stormwater flooding using GSI on brownfields. Experts, including Jonathan Meronek, will explain the applications, techniques, and benefits of using GSI on any project site, including the challenges of implementing GSI on Brownfield Sites. During the guided exercise, participants will break into small think tanks, and each think tank will have an opportunity to design their own solution. Come to this session to soak up information on techniques and strategies for integrating GSI into your community’s overall planning efforts.
The Southeast Brownfields Conference will take place at the DoubleTree Universal in Orlando, Florida, October 27-30.
Hundreds of attendees representing federal, state, and local governments, tribes, private industry, consultants, attorneys, and many more, attend this premiere brownfields conference to learn more about local brownfields redevelopment programs. The event will comprise presentations on managing redevelopment initiatives, obtaining project funding, successes and lessons learned, and more. Build your network of colleagues and peers. Learn from others and share your ideas.
The American Bar Association’s Section of the Environment, Energy, and Resources (SEER) is hosting its 27th Fall Conference, September 11-14, 2019, at the Westin Copley Place in Boston.
The conference will feature panel discussions and breakout sessions on such timely topics as:
The conference will also include numerous social and networking opportunities, including a welcome reception, public service project, and a Leadership Day.
Meet SCS professionals Dan Johnson, Dana Wilson, Jim Ritchie, and Wendell Minshew at solar energy development event, “Brightfields 2019 California”, which will take place August 5 & 6 in Sacramento, CA.
The theme of the conference, hosted by Brownfield Listings and the California Environmental Protection Agency, is “Brightening Brownfields, Landfills & Greenfields with Solar Energy”. This exciting 2-day event will bring together solar developers, property owners, policy makers and a very large diversity of professionals for illuminating educational sessions, active networking, and live market-making. SCS Engineers is a co-sponsor of this conference.
Anyone may attend this power-packed brightfield marketplace event to hear the freshest industry insights from public and private sector experts, ask technical questions of trained professionals, and make direct connections via the numerous networking opportunities
Brightfields 2019 – California will focus on non-rooftop solar development in the West, California specifically, to help cultivate the region’s brightfield potential. The conference will feature compelling programming to provide basic, need-to-know info required to boot up a brightfield project, as well as tips and best practices to overcome development obstacles and advance more difficult projects.
The elite speaker lineup features some of today’s foremost practitioners, including representatives from regulating and permitting agencies as well as private sector professionals.
The conference is perfect for:
The conference will feature dual-track educational programming.
For Landowners & Communities topics will include:
The Solar Developers & Professionals track will cover:
Shared topics will include:
Day 1 will take place at the headquarters of CalEPA, and Day 2 will take place at Tsakapoulos Library Galleria across the plaza.
Meet SCS Engineers Project Manager, Christine Stokes, who is attending BRIGHTFIELDS 2019 – NEW ENGLAND — a solar energy development event about powering up greenfields, brownfields and landfills. The conference is hosted by Brownfield Listings, and will take place at The Falls Event Center in Manchester, New Hampshire, on July 23, 2019.
Brightfields 2019 – New England will address issues important to:
The conference will also feature 1-on-1 help and Q&A sessions by EPA & TAB experts on all aspects of brightfield development.
In addition to educational sessions, a plenary luncheon, exhibits, and a mixer, the conference will feature networking opportunities at breakfast and at the post conference reception.
The conference is hosted in collaboration with New Hampshire’s Regional Planning Commissions, and New Jersey’s Science & Technology University (NJIT).
The Urban Land Institute is holding its 2019 Florida Summit on June 13 & 14 at the Gaylord Palms Resort & Convention Center in Kissimmee, Florida (near Orlando).
The annual ULI Florida Summit connects the top real estate professionals from throughout the state, including developers, attorneys, engineers, architects, and land use planners, from both the private and public sector. From keynote addresses to conference sessions, the 2019 Summit will focus on today’s changing markets, trends, and opportunities, and feature leading industry professionals. More than 700 ULI members and non-members who are interested in the progress and prosperity of our state convene at the annual statewide Summit. It is hosted and produced jointly by the five ULI District Councils of Florida.
The Center for Creative Land Recycling is hosting their 4th Annual New York State Redevelopment Summit at The Armory at Sage College in Albany, NY, on June 11-12.
SCS professional Christine Stokes will be in attendance.
This year’s conference theme is “Pathways to Revitalization” and it will bring together redevelopment professionals and practitioners for comprehensive learning and extensive networking focused on solving challenges and creating opportunities for economic revitalization through land reuse.
From big-picture trends to policy and funding specifics, the summit will bring together distinguished speakers to discuss:
SCS Engineers professional Christine Stokes will attend the Brownfield Coalition of the Northeast’s (BCONE) 10th Northeast Sustainable Communities Workshop at the New Jersey Institute of Technology in Newark on June 4, 2019.
The goal of the workshop is to break new ground and offer new ideas and concepts on the topics of sustainability, collaboration and leverage, contamination, resiliency, redevelopment challenges, technology, and their impact on community revitalization. The event is attended by representatives from government, higher education, professional organizations, and laboratories, as well as attorneys, developers, contractors, and consultants.
Mr. Lefebvre, a Professional Engineer in nine states recently joined the SCS Environmental Services team. He brings over three decades of experience as an environmental engineer and consultant specializing in soil and water remediation services for both government and business sectors.
Mr. Lefebvre manages remedial action plans, multi-media contamination assessments, industrial wastewater treatability studies and treatment system designs for SCS’s clients. He serves as an expert witness as well. He has designed and managed industrial wastewater treatment systems for the pharmaceutical industry; successfully remediated groundwater at petroleum Superfund sites; restored soil and groundwater at several RCRA sites; and was the Engineer of Record for a South Florida Water Management District (SFWMD) project to protect the Everglades National Park.
Welcome to SCS!
Learn more about SCS Engineers work:
In a letter dated December 18, 2018, Patricia Overmeyer, Deputy Director, Office of Brownfields and Land Revitalization at the USEPA encouraged the IRS to clarify the proposed opportunity zone regulations (REG-115420-18). She reminded the IRS that investments in the assessment, remediation, and redevelopment of brownfields properties in qualified opportunity zones (QOZ) are included within the scope of qualified opportunity funds (QOF).
Her goal is to give Opportunity Fund investors confidence that QOF investments can be used to assess, remediate, and redevelop brownfields properties located in QOZs. Subsequently, these clarifications may lead to the economic revitalization of many of our nation’s disadvantaged communities.
The public comment period for these regulations expired on December 28, 2018. The public hearing was held on February 14, 2019; participants requested additional guidance on a wide variety of proposed regulations, with many suggesting improvements to the regulations allowing for more flexibility in regards to business investment.
December 18, 2018
Kirsten B. Wielobob
Deputy Commissioner for Services and Enforcement
CC:PA:LPD:PR (REG-115420-18), Room 5203
Internal Revenue Service
PO Box 7604
Ben Franklin Station
Washington, DC 20044
Subject: U.S. EPA Office of Brownfields and Land Revitalization Seeks Regulatory Clarifications and Improvements to Proposed IRS Rule Regarding “Investing in Opportunity Funds,” REG-115420-18
Dear Ms. Wielobob:
On behalf of the U.S. Environmental Protection Agency’s (EPA) Office of Brownfields and Land Revitalization (OBLR), thank you for the opportunity to comment on the Department of Treasury’s Proposed Regulations §1400Z-2(a)-1, 2(c)-1, 2(d)-1, 2(e)-1 and Revenue Ruling 2018-29, regarding “Investing in Opportunity Funds.” EPA’s OBLR encourages the IRS to clarify and improve the proposed rule to better foster investment in blighted and contaminated properties, or “brownfield sites,” in designated Opportunity Zones.
The “Investing in Opportunity Act” has the potential to spur investment in communities where neighborhoods have long been plagued by concentrated distress and those left behind by the economic recovery following the Recession. Many of these communities struggle with stagnation and lack of access to capital, in part due to the challenges of remediating and redeveloping their brownfield sites. A brownfield is a property where the presence or potential presence of a hazardous substance, pollutant, or contaminant from the property’s former use complicates or inhibits the property’s expansion, redevelopment, or productive reuse. Brownfield sites often stigmatize neighborhoods and perpetuate blight and socio-economic distress.
EPA’s OBLR encourages the IRS to clarify in the final guidance that investments in the assessment, remediation, and redevelopment of brownfields properties located in Qualified Opportunity Zones (QOZs) are included within the scope of Qualified Opportunity Funds (QOFs). This clarification will provide an incentive to invest funds in the assessment, remediation, and reuse of brownfield properties. Assessing, remediating and redeveloping brownfield sites in QOZs is integral to the primary purpose of the Investing in Opportunity Act provisions1 because:
Clarification Requests and Comments:
EPA’s OBLR requests that the IRS make the following clarifications to the proposed guidelines. These clarifications will give Opportunity Fund investors confidence that QOF investment can be used to assess, clean up, and redevelop brownfields properties located in QOZs.
EPA’s OBLR requests that the IRS clarify the definition of “Original Use” so that the term applies to property that is a brownfield site as defined by section 101(39) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601), which is the law that establishes the U.S. EPA brownfields program and guides brownfields considerations by many other federal departments and agencies. The IRS has used this definition of “brownfield” as well, under 26 U.S.C. Section 198(c), which permitted certain treatment of expenditures on “qualified environmental remediation” at a “qualified remediation site”, which was defined as “any area . . . at or on which there has been a release (or threat of release) or disposal of any hazardous substance.”
While most new investments assume that a property already meets applicable health and safety standards, brownfields properties are different in that they are complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.
Defining “Original Use” to incorporate brownfields properties located in QOZs creates the best solution to enabling QOF investments in brownfields remediation and redevelopment. This clarification will address the concern that the 30-month window for substantial improvement is unrealistic for brownfields properties, which take longer than traditional vertical development projects due to the added challenges of contamination.
Example: A brownfields remediation firm purchases a contaminated brownfields property in a QOZ, where a former factory was once located, to remediate the land and sell the property for new use. This brownfield property should qualify as QOZ property under “original use.
“Underutilized” could be defined as it is in other federal statute, such as the definition of “underutilized” in 45 CFR 12a.1 (which defines underutilized as it relates to property owned by federal agencies), stating that ” underutilized” should mean an entire property or portion thereof, with or without improvements which is used only at irregular periods or intermittently by the owner or operator for purposes of that owner or operator, or which is used for current purposes that can be satisfied with only a portion of the property.
The definition of original use should also permit QOZ investment in properties that contribute to blight or create barriers to economic vibrancy due to prolonged vacancy or underutilization. Defining original use to include new use of properties that are contributing to decay within distressed communities is clearly in line with the purpose of the incentive
Example: A developer purchases a property to rehabilitate for new use. The property has a factory on it that has been vacant for more than one year. Regardless of whether that property is reused for a similar manufacturing purpose, a new manufacturing purpose, or a different kind of development (such as commercial or residential), this property should qualify as QOZ Property under “original use.” The same should apply for a property that has a 5-acre factory on it where only 0.5 acres of space are currently in use.
Local units of government often acquire brownfields and other blighted properties through tax delinquency, abandonment, bankruptcy, etc. A bright line test around the status of ownership for properties in foreclosure, receivership, or involuntary transfer may be easier to determine than the historical use of the property and expedite investment in assembled properties, particularly in distressed urban areas.
Without this clarification, it is unclear how improvements to the land itself factor into a calculation of substantial improvement, given that the adjusted basis in the example outlined in Rev. Rule 2018-29 pertains only to improvements to a building. While Rev. Rule 20 18-29 indicates that the cost of the land on which the building is located is not included in the adjusted basis for the substantial improvement calculation, it is unclear what the calculation would be on a brownfields project for which the primary or sole improvements are improvements to the land itself, when vertical development expected later.
Environmental assessment and remediation activities can make a property ready for redevelopment where it would otherwise be unsafe for reuse due to the presence or potential presence of environmental contamination. Unless the land is assessed, remediated to appropriate contaminant levels and exposures controlled (based on reuse of the property), any building and business investment will not occur on the property.
The following environmental assessment and remediation activities commonly occur at brownfield properties because they are necessary to enable safe reuse:
Example: A developer purchases Property X, which is located in a QOZ, for $1 million. Property X consists of a building previously used as a factory erected prior to 20 18 and land on which the factory building is located. Sixty percent ($600k) of the $1 million purchase price for Property X is attributable to the value of the land and forty percent ($400k) is attributable to the value of the building. QOF A intends to convert the factory building to residential rental property. The transformation will require $800k in environmental remediation costs. Within 29 months after the date of QOF A’s acquisition of Property X, QOF A invests $800k in remediating the property and $500k in additions to the building. Clarification is necessary to ensure that the expenses associated with remediating the land will count toward the substantial improvement calculation. The same is true for a similar scenario common at complex brownfield sites in which at the close of the 30-month period the only expenditures have been for remediation of the land.
Clarification on this issue is particularly pertinent to facilitating the ability for QOZ Businesses to remediate brownfields properties with QOF funds to sell to a vertical developer and still access the benefits of the step-up in basis. Without this clarification, using QOF funding for brownfields remediation and property improvement as the primary business activity might require the owners of the site to sit on the site for the duration of the ten years after remediation is complete in order to access the benefits of the Opportunity Zone incentive.
Example: On January 1, 2019, T, a calendar-year taxpayer, invested $1 million of gain in B, an QOF partnership dedicated to brownfields cleanup that remediates properties to sell for future vertical development by other parties. B immediately makes a $1 million investment in remediation and land improvements to a brownfields site that qualifies as QOZ Property. On January 1, 2023 (after four years), B sells the remediated QOZ Property to a vertical developer for $1.5 million and reinvests all of the proceeds in replacement QOZ Property within 12 months. Clarification is necessary that if the entire $1.5 million from the sale of QOZ Property is reinvested into replacement QOZ Property: 1) the deferral and reduction in basis timeclocks on the original $1 million investment would not reset, and 2) the 10-year timeclock on would not reset for the $500,000 in gain.
Brownfields remediation and redevelopment often includes separate land improvement (horizontal development) and vertical development phases, and investors face regulatory risk of effectuating cleanup which enables the property to be financed. These factors make the substantial improvement 30-month window extremely difficult time frame in which to complete a redevelopment which involves remediation of environmental contamination.
Large redevelopment projects such as auto manufacturing site or former hospitals may require extensive demolition of existing buildings, excavation, cleanup and grading as early site preparations for the construction of the new structure. It is common to spend several years on existing structural demolition, earthmoving, and environmental cleanup on large sites, which almost guarantees that the finished building will not be completely operational by the end of the 30-month period for substantial improvement. Many “ground up” construction projects in cold weather climates will also face greater challenges in achieving occupancy within 30 months and will likely be a work in progress. Clarity is needed so that significant — and transformative — redevelopment projects can be pursued.
Thank you for considering our requests for clarifications. The clarifications we are requesting will give Opportunity Fund investors confidence that QOF investments can be used to assess, remediate, and redevelop brownfields properties located in QOZs. Subsequently, these clarifications may lead to the economic revitalization of many of our nation’s disadvantaged communities. Should you want to discuss our comments and requests for clarification, please feel free to contact me at 202-566-2774 or Overmeyer.email@example.com.
Office of Brownfields and Land Revitalization
U.S. Environmental Protection Agency
1See H.R. Rept. 115-466, 537, which describes the intent to attract an influx of capital to designated low-income communities with impacts and outcomes in those areas including job creation, poverty reduction, and other metrics.