Brownfields
Lansing Brownfield Redevelopment Authority
In August of 1997 the Lansing City Council established the Lansing Brownfield Redevelopment Authority (LBRA). The primary purpose of the LBRA is to encourage the reuse of industrial, commercial and other property by offering economic incentives for Brownfield redevelopment.
A "Brownfield" is a property or structure which is currently abandoned or underutilized because of the perception or existence of environmental contamination or that the site is blighted or functionally obsolete.
The LBRA can offer incentives because the redevelopment of a Brownfield site typically results in an increase in the tax value of the property. This increase generates additional tax revenue. The LBRA then has the ability to "Capture" the increase in tax revenue and use these funds to reimburse a developer or property owner for eligible project costs.
In addition to reimbursement for eligible activities, qualified projects might qualify to receive credits to use against their Michigan Business Tax liability from the Michigan Economic Development Corporation or Michigan Economic Growth Authority.
For most Brownfield projects a "Brownfield Plan" is created which is the document that specifies the scope of the redevelopment project, the private investment, job creation and other economic indicators. Additionally, the Brownfield Plan makes an estimate about the amount of new taxes generated from the project and the level of reimbursement which may be provided to the developer for eligible activities. According to Michigan Public Act 381 of 1996, as amended, eligible costs typically can include environmental assessment, remediation and due care activities, demolition, infrastructure improvements, lead/asbestos abatement and site preparation.
How Does It Work?
The Lansing Brownfield Redevelopment Authority reviews proposals for the redevelopment of eligible property and determines what financial incentives are necessary to assist the redevelopment. The Authority prepares a plan that identifies the brownfield projects. Each project section of the plan includes the description of the eligible property, the eligible activities, the TIF and MBT approaches to be taken and other issues related to the subject parcels. The Authority then recommends to the governing body of the municipality (city or village council, township board or county commission) that the decision-making bodies hold a public hearing regarding the plan and subsequently act to approve with modifications or deny the plan. The Authority would recommend revisions to the plan as new projects are submitted or revisions are requested on existing plan projects.
What Is the Brownfield Redevelopment Process?
1. Contact the Lansing Brownfield Redevelopment Authority (LBRA) before beginning work on the project.
2. A Brownfield Plan is written and reviewed by the LBRA Board of Directors and Lansing City Council for approval.
3. If desired, apply for and receive pre-approval from the State for the Small Business Tax (SBT) Credit.
4. Complete eligible activities on the brownfield site. Eligible activities include environmental activities, infrastructure improvements, demolition, lead/asbestos abatement and site preparation.
5. Site is ready for redevelopment.
6. New investment occurs and site is successfully redeveloped.
7. Increase in local property taxes is generated by the redeveloped site.
8. Michigan Single Business Tax Credit – Up to 10% of eligible investment over 10 year.
9. LBRA uses captured tax revenue to reimburse eligible expenditures which can include repayments to the developer, property owner, tenant, the LBRA and others who paid for the items in step 3.
Other Program Funding Through LBRA
The LBRA has been awarded tow grants from the United States Environmental Protection Agency (EPA). One of the grants permits the LBRA to provide environmental assessment work on properties in advance of redevelopment. The second grant, called the BCRLF program, allows the LBRA to pay for the costs of eligible remediation activities in conjunction with a planned redevelopment project. We encourage you to speak with a LBRA staff person to determine if your Brownfield redevelopment project is eligible for either of these two EPA grant funded programs.
