04.05.18   Daniel R. Cassidy, CPG | More by this Author


Governor Snyder recently announced a new funding plan to replace the nearly depleted Clean Michigan Initiative (CMI) bond fund. The proposal will generate $79 million in annual funding for the Michigan Department of Environmental Quality’s (DEQ’s) brownfield, environmental cleanup, drinking water protection, and waste management programs.

Many are wondering how to access this funding now and in the future. SME’s brownfield experts routinely help communities, developers and owners obtain these funds.

So what are these funds?

 The DEQ offers funding in two forms: Brownfield Redevelopment Grants and Brownfield Redevelopment Loans. The maximum award is $1 million per project. Grants and loans are awarded to local units of government, who can act as a sponsor for a private entity. The goal of the program is to ensure safe reuse of abandoned, vacant, or underutilized properties that are known to be contaminated, and to promote redevelopment of brownfields.

A proposed project must result in economic benefit for the community that is greater than the amount of the grant. This can be achieved through job creation, private investment, and/or property tax increase. The property must meet the definition of a “facility” (i.e., be contaminated) under Part 201 of the Natural Resources and Environmental Protection Act, 1994 PA 451, as amended. A liable party may not profit from the expenditure of state funds nor be relieved of responsibility for environmental response activities.

How can I obtain funding for my redevelopment project?

A pre-application must be submitted to the Brownfield Redevelopment Unit. Pre-applications that meet threshold requirements may be invited to submit a full application. Application evaluation criteria include:

  • estimated private and public investment,
  • applicant and owner liability,
  • environmental benefit,
  • and projected economic outcomes such as new full time jobs and new tax revenue.

It typically takes three months for DEQ to review an application and make an award. After award, DEQ requires a Work Plan outlining how the money will be spent.

How can I use the funding?

Grant and loan funds can be used to conduct environmental assessments, interim response activities, and environmental cleanup and due care response activities (e.g. engineering controls such as contact barriers and vapor mitigation systems) that are necessary for the proposed development.

What are the loan terms, and how can I repay using other than traditional means?

Loans are offered at an interest rate of no more than 50% of prime; the current interest rate is set at 1.5%, simple interest. There are no payments or interest due for the first five years after a loan is awarded. The full amount must be repaid within 15 years of the loan award. This arrangement provides an excellent opportunity to use tax increment financing (TIF), approved through an Act 381 Brownfield Plan, to capture future taxes generated from the redevelopment of the property and repay the loan.

Next Step

 Contact SME’s brownfield experts for more information and to explore whether this funding program is a fit for your next project.

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