Limited Funding Available for NJ Brownfields – NJEDA Brownfields Impact Fund

The New Jersey Economic Development Authority (“NJEDA”) announced that the new Brownfields Impact Fund opened for applications on January 20, 2022.  This pilot program provides grant funding and low-interest loans to non-profit and public sector organizations, as well as low-interest loans to for-profit organizations to execute cleanup activities of underused, contaminated properties known as “brownfield sites” throughout the state. Specifically, the Brownfields Impact Fund dedicates $800,000 to address funding gaps to make the remediation phase of brownfield remediation projects financially viable. Yet, given the limited amount of funds available, those interested in obtaining funds should act quickly to take advantage of the new program.

This article provides an overview of the Brownfields Impact Fund and highlights the need to expeditiously apply for funding.

Loan and Grant Overview

As noted above, the Brownfield Impact Fund provides low-interest loans and/or grants for eligible brownfield cleanups. While the pilot program funding only consists of $800,000, the amount of the individual loans and/or grants that can be obtained are limited:  loans have a minimum of $50,000 and a maximum of $350,000, while grants have a minimum of $25,000, and a maximum of $350,000.

Activities that can be paid for with loan and/or grant monies include but are not limited to preparation of Remedial Action Workplans, remediation of lead based paint and asbestos, demolition of buildings in certain instances, construction of engineering controls (e.g., foundations and roadways), and other actions necessary to clean up the release or mitigate the threatened release of hazardous substances. Assessment or investigation are not eligible activities unless these are required as a component of the remedial action. A more detailed list of eligible and ineligible activities is outlined in the Brownfield Impact Fund brochure and can be found here.

The Application Fee is $1,000. For grant applications, the NJEDA will waive the application fee upon demonstration by the applicant that the fee imposes an undue financial hardship.  For loans, there is a commitment fee of 0.875% of the loan amount and a closing fee of 0.875% of the loan amount.

Community Collaborative Initiative Communities. The Community Collaborative Initiative (“CCI”) is a program operated by the New Jersey Department of Environmental Protection that promotes quality of life in New Jersey's distressed communities. For the first three months (90 calendar days), eligibility for funding from the Brownfield Impact Fund is limited to projects within the twelve CCI Communities, specifically: Bayonne, Bridgeton, Camden, Jersey City, Millville, Newark, Paterson, Paulsboro, Perth Amboy, Salem, Trenton, and Vineland. According to the NJEDA, these communities are home to New Jersey’s most underserved populations and have been disproportionately burdened by contaminated sites.

After the 90-day period, the NJEDA will accept applications from projects located outside of the twelve CCI communities, subject to the availability of funding.

General Grant and Loan Requirements. Grant funding is available only to non-profit organizations and government entities, but loans are available to public and private organizations, including developers.

For non-profit organizations and government entities applying for grant funding, the entity must own the brownfield property at the time of the application and retain ownership of the property for the term of the grant. Meanwhile, all entities applying for loan funding must be able to demonstrate site control or a path to site control at time of the application.

All applications for loans or grants must include: - A plan for the redevelopment of the property - A complete pre-screening form - A letter of support from the mayor or municipality in which the project is located - A complete NJDEA legal questionnaire - A valid New Jersey Tax Clearance Certificate from the N.J. Department of the Treasury, Division of Taxation.

Good Standing Required. All applicants must be in good standing with both the New Jersey Department of Labor and Workforce Development and the New Jersey Department of Environmental Protection. If a compliance issue exists, the eligible entity may correct this by agreement with the respective department. Loans or grants cannot be provided to entities who caused or contributed to the contamination of the property.

Prevailing Wage Requirement. The New Jersey Prevailing Wage and Davis Bacon Act applies to the work funded by this program, including all contracts awarded from funds provided by this program. Each worker employed to perform the remediation funded by this program is required to be paid the prevailing wage rate for their craft or trade. Some organizations have argued that the prevailing wage requirement reduces the benefit of this funding opportunity, as it will increase overall costs for the project.

Conclusion

This Brownfields Impact Fund is set to provide $800,000 in funding to private developers, public sector and non-profit entities. With the limited funding and relatively high minimums for grants and loans, it is important for interested parties to submit applications early, as the grants and loans will be awarded on a first come, first served basis upon receipt of a completed application.

For more information, please contact the author Holli Packer at HPacker@riker.com or any attorney in our Environmental Practice Group.