Brownfield Programs Provide Tools for Economic Development & Community 

Located along the Halifax River, Downtown Daytona Beach offers bustling shops, restaurants and cinemas along a historic, mile-long, riverfront promenade. It is in this area that you will find William Square, a development by White Challis Redevelopment Co. Pedestrian friendly and designed to mimic the architecture of historic downtown, William Square offers 15 mixed-use city homes with ground-floors that can be used for commercial purposes, providing owners with live-work units to use or lease. It’s a relatively small scale project but it’s an example of one of the more than 20 Brownfield Areas in Volusia County. 

What are Brownfields?

Under federal law, a Brownfield Site is defined as property, the expansion, redevelopment or reuse of which may be complicated by the presence or potential presence of hazardous substances, pollutants, or contaminants. Similarly, under Florida law, a Brownfield Area is defined as one or more properties where expansion, reuse or redevelopment is complicated due to actual or perceived environmental issues.

A Brownfield Area is designed by a local government at public hearings. In addition, Brownfield Sites are one or more specific properties within a Brownfield Area that have formally entered into the state Brownfields Program by signing a Brownfield Site Rehabilitation Agreement (BSRA) with the Florida Department of Environmental Protection (“FDEP”). BSRAs are voluntary, negotiable agreements that identify the requirements, anticipated cleanup schedule, and benefits associated with the cleanup of
the property.

Incentives and Grant Opportunities

For more than 20 years, the Federal Brownfields Program and the Florida Brownfields Redevelopment Program have empowered communities to overcome barriers to economic development and create sustainable development. Several local governments in Flagler and Volusia Counties utilize brownfield programs as a tool for economic development and community revitalization, which has resulted in redevelopment of
various abandoned and underutilized properties into new
mixed-use, commercial/retail, office, recreational and
residential developments.

Under the Federal Brownfields Program, the United States Environmental Protection Agency (“EPA”) provides grants to local governments and nonprofits for the assessment and cleanup of sites, for financing the cleanup of sites with zero and low interest loans, and for job training and research opportunities. These grants are significant economic development tools because environmental due diligence expenses typically create risk in commercial real estate transactions. In addition, the grants help communities obtain an inventory of sites with potential environmental issues and assist in the financing of a cleanup where funds may otherwise be unavailable.

Under the Florida Brownfields Program, parties can receive significant regulatory and economic development benefits for entering into a BSRA and completing a cleanup. Assessment and cleanup expenses may be eligible for the Voluntary Cleanup Tax Credit Program (the “VCTC Program”), which provides Florida corporate income tax credits equal to a percentage of eligible costs. These tax credits are transferable, so parties without Florida corporate income tax liability can sell the credits for cash. In 2017, the Florida Legislature increased the amount of tax credits that the state can provide each year from $5 million to $10 million, making the cleanup of Brownfields Florida’s second largest environmental cleanup program in terms of funding. In addition, the Brownfield Redevelopment Bonus Refund provides a tax credit of up to $2,500 per qualifying, new job created within a Brownfield Area, which is applicable to sales, ad valorem, corporate income, insurance premium, and other taxes. The program also provides a sales tax credit on the purchase of building materials used in the construction of qualified redevelopment projects and state loan guarantees may also
be available.

Parties that execute a BSRA also receive protection for further liability from cleanup and property damage lawsuits filed by the state and third-parties. If the Brownfield Site receives a no further action letter, then the liability protection continues forever. Liability protection is also available for lenders and successors and assigns of the parties that sign the BSRA, which makes it easier to finance and sell properties with a history of environmental issues. Finally, FDEP staff provides expedited technical review and specific regulations for the cleanup, which allows for certainty and a faster regulatory process.

Brownfield Redevelopment Results

According to FDEP’s 2016-2017 Brownfields Annual Report, local governments in Florida have designated 427 Brownfield Areas, parties have entered into more than 295 BSRAs with FDEP, and 101 Brownfield Sites have reached regulatory closure. Significant job creation and economic investment is attributable to the Brownfields Program, as approximately 12,990 confirmed new jobs and more than $2.7 billion in capital investment is projected to occur in designated Brownfield Areas in Florida. With more than 20 Brownfield projects completed or underway in Volusia County we are active participants in this key Florida Department of Environmental Protection strategy. Jack White of White Challis Redevelopment says “From my perspective as a developer, the brownfield process was fairly fluid. It was there, we utilized it and there were no hang ups along the way, which is great, because when you’re working with development projects, there is always something. The state’s brownfield program was a great partner to work with.”

With the right approach and a partnership strategy, developing brownfields is one strategy to make our community green.