Page 20
— Property Management Quarterly — July 2016
S
ince its reinstatement in
2014, the Colorado Brown-
fields Program has been
an integral part of the revi-
talization of properties
previously overlooked due to the
burden of environmental cleanup
requirements. The program offers
assistance to current and potential
property owners by providing tax
credits, revolving loans, statewide
project funding and environmental
site assessments. Property manag-
ers most often work with ownership
groups for properties that are poten-
tial purchases, properties under con-
tract, or properties that are already
owned and are in need of a facelift.
The Colorado Department of Pub-
lic Health and Environment has con-
tinued to improve the application,
review and approval process from
start to finish. The program allows
the real estate community to invest
in and redevelop land and buildings
that were, in the past, considered
high risk and not worth the time or
money needed for improvement.
Brownfields are abandoned or
underutilized commercial or indus-
trial properties where reuse, expan-
sion or redevelopment is hindered
by real or perceived environmental
contamination. Types of properties
include industrial facilities, forgot-
ten or unknown gas stations, previ-
ous dry cleaning facilities, buildings
with asbestos and lead contamina-
tion, and other contaminated prop-
erties that would negatively affect
the development of an area.
The Colorado Voluntary Cleanup
Program allows for a one-step
approval of the
federal and state
required brown-
fields remedial
plans. Property
owners and man-
agers can use the
VCUP to obtain
documentation
from CDPHE as a
record that the site
is environmentally
clean and suit-
able for reuse. This
documentation
culminates in a “no
further action” let-
ter as an assurance
that the property
is no longer subject to an environ-
mental cleanup order by the state
or the U.S. Environmental Protection
Agency.
Beginning in 2014 and continuing
through 2022, entities performing
VCUP environmental remediation of
contaminated properties are eligible
for state income tax credits referred
to as Colorado brownfields tax cred-
it. These credits are equal to 40 per-
cent of the first $750,000 of cleanup
cost, and 30 percent of cleanup costs
over $750,000, up to $1.5 million.
The maximum credit available for a
property is $525,000. These credits
may be carried forward for up to five
years or the taxpayer may choose
to transfer all or a portion of the tax
credit. There is a $3 million annual
statewide cap on a first-come, first-
served basis.
The state of Colorado incorporated
a public-private partnership called
the Colorado Brownfields Revolving
Loan Fund. This was instituted to
further encourage the clean up of
unused or underused contaminated
properties. The fund offers financ-
ing with reduced interest rates and
flexible loan terms to assist with the
cost of approved VCUP environmen-
tal projects. In addition to the Colo-
rado Brownfields Revolving Loan
Fund, Colorado also provides grants
for the clean up of contaminated
land. The state has the authority to
use $250,000 annually where there
is no other federal or state program
that can accomplish the clean up.
To further encourage revitaliza-
tion of communities and to spur
economic growth in underused
areas, Colorado is providing site
assessments. These include Phase
1, Phase 2 and other site-specific
assessments (i.e., asbestos surveys,
lead inspections, etc.). There is an
application process for the CDPHE-
provided assistance. The applica-
tions are ranked according to the
site control and ownership transfer,
municipal commitment, municipal/
community vision and support for
revitalization, adequate resources,
likelihood of contamination, com-
mitments of clean up, an increase in
jobs and a clear need for revitaliza-
tion.
In addition to the assistance
that the state is offering, there are
numerous partners available within
the state. Many local consultants
have extensive experience assess-
ing properties, reviewing plans and
working with property managers
and owners to determine if the
brownfields program is a fit.
There also are environmental
companies that have experience in
the process and the clean up. Many
of these companies can assist dur-
ing the due diligence phase of a
property transaction or when look-
ing at a renovation at an existing
property. By including companies
that could be performing the clean
up in the early phases of a revital-
ization project, property owners can
determine the real costs of a project.
This will help the initial and con-
tinuing decision making.
The program gives property man-
agers an opportunity to get in early
during the due diligence process
and be able to promote their ser-
vices with additional knowledge of
programs that are offered, because
many of these programs are not
used to their full extent. According
to the CDPHE Brownfields Tax Credit
Notification found on its website,
only about $1.85 million of the $3
million was used in 2015. This leaves
a substantial amount of unused
credits that could have been put
back into redevelopment projects.
Within the Colorado real estate
market, there are many proper-
ties that may have been overlooked
previously based on environmental
concerns. There are some who have
looked deeper and have used the
programs that the state of Colorado
and others provide to completely
transform communities. For addi-
tional information on the state
programs visit the CDPHE website,
/
brownfields.
s
Management
Chris Condon
Environmental
business
development
manager, BluSky
Restoration
Contractors LLC,
Centennial
