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A Better Partnership


Jul 2004
July 01, 2004

Additional Brownfield Funds Provide Added Incentives for Business to Redevelop Property

An infusion of new funds for brownfield financial programs in Michigan will provide grants and loans to Michigan businesses looking to expand or relocate. Thirty million dollars in grants and loans are now available to facilitate development of brownfield sites across the state this year.

Applications for these funds will be made through local units of government. These local governmental units can apply to the state for grants and loans to benefit developers that will cover expenses such as due care, baseline environmental assessments, cleanups and other expenses at these brownfield sites. The legislature is expected shortly to appropriate $15 million in grants and $15 million in loans for these projects. Preference for the grants and loans is given to "cool" communities, as determined by the state.

Single business tax (SBT) credits and tax increment financing (TIF) will continue to be available in addition to the grants and loans. Developers of brownfield sites can apply for an SBT credit of 10% of their capital investment in a brownfield project (construction and equipment costs). The credit can be carried forward for up to ten years. Additionally, developers who invest in brownfield properties and increase their taxable value can apply for TIF funds, which are captured and returned to developers to reimburse the cost of environmental investigation, cleanup and related activities. These tools are often used in conjunction with grant and loan funding.

In short, Michigan's financing program presents significant opportunities for developers, businesses and communities to secure substantial financial incentives for taking the risk to redevelop brownfield sites. In the end, everyone wins through the preservation of green space, the reuse of existing sites and capital investment in core communities.

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John V. Byl is a partner with Warner Norcross & Judd LLP specializing in the environmental area and is involved in virtually all aspects of the Firm's environmental practice, including transactions, brownfield redevelopment and financial incentives, underground storage tank matters, CERCLA cases, Part 201 cases, insurance coverage cases, air permits and enforcement matters, water permit matters (including NPDES permits) and solid and hazardous waste permit matters. John may be reached in the Grand Rapids office at 616.752.2149. Warner Norcross & Judd is a full-service law firm with offices in Grand Rapids, Holland, Metro Detroit and Muskegon. Because each business situation is different, this information is intended for general information purposes only and is not intended to provide legal advice.

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