Chris Condon Environmental business development manager, BluSky Restoration Contractors LLC, Centennial
Since its reinstatement in 2014, the Colorado Brownfields Program has been an integral part of the revitalization of properties previously overlooked due to the burden of environmental cleanup requirements. The program offers assistance to current and potential property owners by providing tax credits, revolving loans, statewide project funding and environmental site assessments. Property managers most often work with ownership groups for properties that are potential purchases, properties under contract, or properties that are already owned and are in need of a facelift.
The Colorado Department of Public Health and Environment has continued to improve the application, review and approval process from start to finish. The program allows the real estate community to invest in and redevelop land and buildings that were, in the past, considered high risk and not worth the time or money needed for improvement.
Brownfields are abandoned or underutilized commercial or industrial properties where reuse, expansion or redevelopment is hindered by real or perceived environmental contamination. Types of properties include industrial facilities, forgotten or unknown gas stations, previous dry cleaning facilities, buildings with asbestos and lead contamination, and other contaminated properties that would negatively affect the development of an area.
The Colorado Voluntary Cleanup Program allows for a one-step approval of the federal and state required brownfields remedial plans. Property owners and managers can use the VCUP to obtain documentation from CDPHE as a record that the site is environmentally clean and suitable for reuse. This documentation culminates in a “no further action” letter as an assurance that the property is no longer subject to an environmental cleanup order by the state or the U.S. Environmental Protection Agency.
Beginning in 2014 and continuing through 2022, entities performing VCUP environmental remediation of contaminated properties are eligible for state income tax credits referred to as Colorado brownfields tax credit. These credits are equal to 40 percent of the first $750,000 of cleanup cost, and 30 percent of cleanup costs over $750,000, up to $1.5 million. The maximum credit available for a property is $525,000. These credits may be carried forward for up to five years or the taxpayer may choose to transfer all or a portion of the tax credit. There is a $3 million annual statewide cap on a first-come, first served basis.
The state of Colorado incorporated a public-private partnership called the Colorado Brownfields Revolving Loan Fund. This was instituted to further encourage the clean up of unused or underused contaminated properties. The fund offers financing with reduced interest rates and flexible loan terms to assist with the cost of approved VCUP environmental projects. In addition to the Colorado Brownfields Revolving Loan Fund, Colorado also provides grants for the clean up of contaminated land. The state has the authority to use $250,000 annually where there is no other federal or state program that can accomplish the clean up.
To further encourage revitalization of communities and to spur economic growth in underused areas, Colorado is providing site assessments. These include Phase 1, Phase 2 and other site-specific assessments (i.e., asbestos surveys, lead inspections, etc.). There is an application process for the CDPHE provided assistance. The applications are ranked according to the site control and ownership transfer, municipal commitment, municipal/ community vision and support for revitalization, adequate resources, likelihood of contamination, commitments of clean up, an increase in jobs and a clear need for revitalization.
In addition to the assistance that the state is offering, there are numerous partners available within the state. Many local consultants have extensive experience assessing properties, reviewing plans and working with property managers and owners to determine if the brownfields program is a fit.
There also are environmental companies that have experience in the process and the clean up. Many of these companies can assist during the due diligence phase of a property transaction or when looking at a renovation at an existing property. By including companies that could be performing the clean up in the early phases of a revitalization project, property owners can determine the real costs of a project. This will help the initial and continuing decision making.
The program gives property managers an opportunity to get in early during the due diligence process and be able to promote their services with additional knowledge of programs that are offered, because many of these programs are not used to their full extent. According to the CDPHE Brownfields Tax Credit Notification found on its website, only about $1.85 million of the $3 million was used in 2015. This leaves a substantial amount of unused credits that could have been put back into redevelopment projects.
Within the Colorado real estate market, there are many properties that may have been overlooked previously based on environmental concerns. There are some who have looked deeper and have used the programs that the state of Colorado and others provide to completely transform communities. For additional information on the state programs visit the CDPHE website, www.colorado.gov/pacific/cdphe/ brownfields.
