Last year President Trump’s big tax plan had major implications for real estate redevelopment and created new opportunities for distressed communities. In February, President Trump pitched substantial changes to Superfund laws, effectively brownfielding the Superfund program to speed up site redevelopment and catch it up to the brownfield program’s enviable success. Last month, the biggest omnibus bill ever incorporated a compromise version of the BUILD Act–a sweeping brownfield re-authorization bill floating around since 2013 with categorical changes to the U.S. EPA brownfield program. And now, another bill introduced into the Senate could restore old tax incentives to (1) enable developers to fully deduct the costs of environmental cleanup, and (2) exempt some unrelated business income taxes on profits earned from the sale or exchange of certain brownfields.
It’s been a big, breakout kind of time for brownfield redevelopment. Market fundamentals finally pivoted towards reinvestment and revitalization following the 2008 financial shock, taking up a larger number of brownfield sites than in prior cycles. Amidst peak levels of angst, discord and dysfunction in Washington, policymakers are somehow sending strong, bipartisan signals that these essential and highly effective pre-development programs should continue to aid America’s real estate resurgence.
The takeaways are still shaking out of this redevelopment policy readjustment and many consequences will take time to place out. The most legally significant changes to the brownfield regime may be expanded grant eligibility and enhanced liability protections, but bluefields and brightfields are big stories too. The BUILD Act mandates that EPA shall re-calculate its scoring methodology applied in the brownfield grant application process to award additional points for ‘waterfront/floodplain’ sites and those involving “clean energy” generation or energy savings.
What do these new preferences mean for the brownfield grant competition? And should bluefields, brightfields, windfields and other clean energy projects receive preferential treatment?
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