what a MORON
Cleanup fund is almost cleaned out
Money to redevelop brownfields sites could be depleted by year-end
By Susan Diesenhouse, Globe Correspondent | April 9, 2005
In downtown Worcester next month, construction will begin on a 122,000-square-foot laboratory that will rise on a site contaminated by a century of metal processing. With $700,000 in loans from the state Brownfields Redevelopment Fund, the developer, Gateway Park LLC, is cleaning up 11 acres where it plans to build an approximately $100 million, 1 million-square-foot mixed-use complex.
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''We couldn't have gone forward without the fund's assistance," said Craig Blais, vice president of the Worcester Business Development Corp., a private, nonprofit agency that is developing the project in partnership with Worcester Polytechnic Institute.
Last year in Boston, on a site where factories produced lead paint and then computer parts, the new 125-room Hampton Inn & Suites hotel opened, the first phase of the $140 million Crosstown Center project. Early on, a $50,000 brownfields fund loan was used to determine the project's feasibility and to secure financing.
''The loan was critical in defining costs and reassuring lenders," said developer Kirk Sykes.
But new projects seeking loans from the brownfields fund, which are used to assess the extent of contamination and begin cleanup, may find the coffers depleted. Janet Hookailo, spokeswoman for the Massachusetts Development Finance Agency, a state authority that manages the fund, said, ''At our current rate of activity, we think the fund could possibly run out by the end of 2005."
Senator Mark C. Montigny, a Democrat from New Bedford, has filed a bill that, if passed, could provide an infusion of $30 million by July 1, when fiscal year 2006 begins.
''There's a shortage of land for development, especially in older cities, because sites are environmentally unsafe," Montigny said. ''Restoring the fund to assist more commercial and residential development helps municipalities keep tax revenues balanced, reuses land, and is a major jobs-creation initiative."
Since the fund was established in 1999 with $30 million, it has provided loans and grants to help redevelop contaminated sites statewide that might otherwise be abandoned or endanger public health. But Montigny anticipates a struggle to pass his funding bill.
''We're just emerging from a fiscal crisis that saw billions in cuts, so there are legitimate competing interests," he said. ''I sense some resistance from the Romney administration; I hope I'm wrong."
The administration's Executive Office of Environmental Affairs considers the fund a success, said spokeswoman Corbie Kump.
''We'd like to see it re-funded but we can't say when," she said. ''There's about $3.1 million left, enough to continue operating for one more year."
For developers, ''The fund is about reducing risk," said David Begelfer, chief executive of the state chapter of the National Association of Industrial and Office Properties.
Developers are increasingly attracted to previously used sites because of the scarcity of build-able land, especially in urban areas.
But risks abound. Before investing, a developer must know the extent of the contamination, and the cleanup cost.
''If you find too many unanticipated environmental problems it can kill a project financially," said Sykes.