The local economic development agency held a symposium in Havre Thursday to talk about a program in its infancy at the agency, and work already done through the program to assess and clean up properties and bring them back to full use.
“Our goal, really, is just to really introduce you to Bear Paw (Development Corporation’s) Brownfield Program this morning and present some case studies of actual properties Bear Paw has done work on through this program, ” program Director Christin Hileman said at the start of the symposium. “So you can get a good idea of how this program might potentially benefit you or other landowners that you know of in the community who are dealing with contaminated properties and trying to move those forward on the path to redevelopment. ”
After several years of applying for grants to start a brownfields program, Bear Paw received a $400,000 grant in 2009 through the American Recovery and Reinvestment Act, and soon went to work identifying problems on property in its five-county, two Indian reservation service area.
Hileman said $400,000 was allocated to assessment projects in less than one year, including the four discussed at the symposium: Havre’s Short Stop gas station, the old Malta airport, the former Kaste’s Department store in Big Sandy, and the Fort Benton Motor Co.
The U. S. Environmental Protection Agency’s Brownfields Program, created under President Bill Clinton in 1995 and supported in the administrations of both of his successors, provides federal funds to help identify properties that are abandoned or underused due to contamination — or perceived contamination — assess the actual contamination and clean up the properties.
EPA divides contamination into two categories: petroleum contamination, which was not originally addressed in the program but later was added; and other hazardous materials.
The agency defines a brownfield as “a property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.
The purpose of the program is generally twofold: improving the environmental health of communities across the country and using collaboration to help local economies by bringing properties back into use.
Cleaning up old properties
Hileman said brownfields are problems throughout the Bear Paw district — the Fort Belknap and Rocky Boy’s Indian reservations and Blaine, Chouteau, Hill, Liberty and Phillips counties — and throughout the country.
Common problems on the Hi-Line arise from old abandoned gas filling and automotive service stations, often forgotten by many current residents of areas, but many more historical uses cause problems. That includes old laundry and dry cleaning facilities, chemical companies, landfills and buildings with lead-based paint or asbestos, and a more modern problem — methamphetamine laboratories.
Contamination — or the belief contamination exists — can lead to investors being unwilling to buy a property or take on its development, and also can keep lending institutions from providing funds for projects.
A key to redeveloping properties is finding out exactly what is the problem, including if contamination actually exists.
Hileman said without knowing what contamination actually is on a property, and how extensive it is, trying to develop that property can be extremely difficult.
“I have found that contamination in itself isn’t necessarily the problem, ” she said. “The lack of information is the problem. ”
Hileman said Bear Paw received a second round of funding in 2011, another $400,000 to identify and assess contamination, and a $1 million grant to provide funds for cleaning up properties.
The case studies presented at the symposium were on the work at the Short Stop gas station and convenience store in Havre; the old airport at Malta, which was replaced by a new facility in the 1990s and which the PhillCo economic development agency is developing as the Malta Business and Industry Development District; the historic Fort Benton Motor Co. ; and the Karste Department Store building in Big Sandy, which will be redeveloped into a new branch of the Chouteau County Library.
Part of the symposium was in-depth discussions on how to find funding, using a variety of programs including Bear Paw’s $1 million Brownfields Program revolving loan fund.
“(We will) look at different funding sources to assess these properties and clean them up, because, ultimately, that’s the question that we’re all asking, is how are we going to pay for this, right? ” Hileman asked.
A collaborative effort
A multitude of presenters spoke at the symposium, including representatives of the EPA, that state Department of Environmental Quality and the state Department of Natural Resources and Conservation, environmental consultants and representatives of lending institutions and real estate companies.
A main focus was that many programs are available on the federal and state level as well as through agencies like Bear Paw.
“You are going to get a variety of perspectives on this process, and I think that’s great, because contaminated properties can affect a lot of different people and take a lot of different roles, and it takes us working together to move those properties toward redevelopment, ” Hileman said.
The EPA program and reclamation programs in DNRC and DEQ were discussed, including specific Montana programs including the state PetroFund used to clean up petroleum contamination.
Jason Seyler, DEQ’s brownfield coordinator, said an example of a well-planned and executed cleanup is from Shelby.
The community wanted to move the local cement plant outside of town to on old petroleum refinery that had operated off and on from the 1940s through the 1960s and redevelop the cement plant to another, he said, but that meant first cleaning up the old refinery site.
The project is using a variety of programs, including programs and funding from the EPA, DEQ — including that department’s own brownfields program — and DNRC.
Seyler said additional work is planned for next month on that project to clean up some more contamination and move further toward development.
“They actually went about it the right way …, ” Seyler said. “They really had a long-term vision for it. And they were patient about it … Ultimately, it’s going to be a valuable piece of property for the town of Shelby
Navigating a complex process
DEQ’s Hazardous Waste Site Cleanup Bureau Chief Mike Trombetta said the process of identifying, assessing and cleaning up sites — and finding ways to fund them — can be extremely complex. But, he said, representatives of the different agencies know their programs and problems can be solved. People should contact them to find ways to clean up sites, and if the person contacted doesn’t know the solution, he will find someone who can, Trombetta said.
“I’m hoping the point you all take home is, you need to talk to experts, ” he said.
Stephanie Metz, brownfields coordinator from EPA’s Region 8 in Denver, talked about that department’s program; Alicia Stickney, DNRC reclamation and development grant specialist talked about that department’s program; and Seyler and Trombetta discussed DEQ programs including the state PetroFund and the state Leaking Underground Storage Tank Trust and the Controlled Allocation of Liability Act.
Seyler said that act, known as CALA, allocates liability for the cost of cleanup between parties, including an orphan share paid for through a state trust funded by gasoline taxes for liability assigned to entities that went bankrupt or no longer exist.
He said an example was the city of Bozeman when it was working on cleaning up an old asbestos plant to convert into a library. Bozeman was assigned liability for 1 percent of the $4.5 million cost — $45,000 — and other previous owners were assigned 20 percent, while 79 percent of the cost was paid as an orphan share.
Setting the cost of cleanup
Les Odegard of Independence Bank said, much like Hileman did, that the factor of the unknown can prevent any chance of development.
Odegard said the bank was approached by the owner of Short Stop — which ran as a Circle K from the early 1970s before it was converted to Short Stop — about using it as collateral for a loan.
Before that could be done, Odegard said, lending institutions have to know if contamination likely exists and what the costs of cleanup will be.
Until that is quantified, and factored into the value of the property, a lender can’t justify a loan — if a $450,000 property will take more than $450,000 to clean up, it has no value. Because the cost to clean up Short Stop is unknown, its value can’t be quantified.
“There has to be a number, ” Odegard said. “As of today, the value of that property is zero. ”
Adam Johnson of AMEC Environment and Infrastructure Inc., the consultant doing the assessment on Short Stop, said the assessment is nearing completion, and the estimated cost should be known soon.
He said the property was contaminated, and the contamination initially was thought to have migrated off the property, possibly impacting a coffee and sandwich shop to the north, a hair salon to the northeast and an apartment building to the east.
Additional testing determined that that does not seem to have happened.
Chris Cerquone of AMEC said a concern was that the groundwater flows to the north and east off of the site, which could have led to a migration. A test well has been monitoring that situation.
“That came back clean, ” he said. “It does not appear to have moved off the site. ”
Some other tests, of impacts to air quality at the site, still are under way.
Johnson said the site has been deemed eligible for PetroFund, which could provide up to $1 million for its cleanup.
Hileman added that the PetroFund eligibility also is transferable. If someone buys the property — she and Odegard both said parties are interested in that — the money for cleaning the site goes with the property.