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Madison trying to move brownfields money (UPDATE)

By Paul Snyder

Madison can’t loan money for brownfield cleanup projects, so city leaders want to try giving the money away.

But strings will be attached, including a financing match requirement from developers and a guarantee of one full-time job being created for every $35,000 the city provides.

“There are some types of real estate you freeze out right away with that,” said Tom Sather, president of Middleton-based Silverstone Partners Inc. “For instance, if you build an apartment, you’re creating one or maybe 1 1/2 jobs with a building manager and a service guy.”

Still, any interest from developers would be good for the city’s Brownfields Remediation/Elimination & Workforce Development program, said Alderman Mark Clear.

Clear is one of the city leaders pushing to change the program from a source of loans to one of grants.

“I think in any environment, developers are going to look at grants more favorably than they are loans,” he said. “The idea with this money was to clean up some sites and prompt jobs, and we want to try to do as much as possible.”

In 2006, the city received $1 million from the state to set up a cleanup program for brownfields, or areas that have been contaminated with industrial pollutants. In 2007, the city established a revolving loan program, Clear said, to clean up brownfields and generate future remediation money. Recipients would have 10 years to repay the loans at 2 percent interest.

But Michael Gay, the city’s business development coordinator, said the program has not awarded a single dollar since its inception.

“It’s hard to use loan money during a recession,” he said. “We’ve seen developers foreclosed upon and long planning processes that haven’t resulted in any work yet.”

Matt Mikolajewski, manager of Madison’s office of business resources, said city leaders last summer started considering moving from loans to grants.

“I don’t know that it really took us that long to get to this conclusion,” he said. “The program’s only been in place for about two years, and right after it started the recession kicked in. We recognized there had to be a change.”

There are local developers more interested in securing grant money than loan money, Mikolajewski said. He said Madison-based Common Wealth Development Inc. has expressed interest in getting money for site cleanup on its proposed redevelopment of the Garver Feed Mill in the city.

Marianne Morton, Common Wealth’s executive director, did not return calls for comment.

Given the increased difficulty in securing loans from lenders, Sather said developers are far more interested in grants because it’s one less source of debt they have to repay.

But if Madison attaches too many conditions to grant money, he said, it could remain difficult to move that $1 million.

“The more strings attached to these programs,” Sather said, “the less it fits into people’s plans.”

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