The Economic and Fiscal Impact of Wisconsin s Brownfields Investments

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Redevelopment Economics Brownfields Prepared

1 The Economic and Fiscal Impact of Wisconsin s Brownfields Investments Dr. Russell Kashian: UW Whitewater Dr. Nancy Frank: UW Milwaukee Ev Paull: Redevelopment Economics Brownfields Prepared for Wisconsin Economic Development Association and Wisconsin Economic Development Institute 1

2 Brownfields abandoned, idle or underused industrial or commercial facilities or sites, the expansion or redevelopment of which is adversely affected by actual or perceived environmental contamination. Methodology DNR and WEDC provided a list of brownfield projects The Fiscal Economic Research Center gathered and researched each project by using the DNR s BRRTS database 2

3 BRRTS & Google Earth Pro Unique identifying BRRTS numbers gave us information about each brownfield project including: Reasons for the grants being awarded Present contamination at the brownfield site Size and location of the site Google Maps and Google Earth Pro Any new construction since grant awarded Square footage of the redeveloped site Able to search for more details about costs and new jobs Local Databases Used city and county assessor s sites and databases State legislative documents CoStar Newspapers, articles, and other news sources; news sources allowed the FERC to put a narrative together for most of the brownfield sites with regards to any activity that has happened since the grants were awarded Local chamber of commerce sites; allowed the FERC to gather data about number of current employees, property taxes paid, size of the commercial space, and other useful data points 3

4 Background Wisconsin Land Recycling Act of 1994 Created new tools to promote brownfield clean up and redevelopment Biennial Budget Brownfields redevelopment financial assistance programs Grants and loans to assess and clean up brownfields Created Brownfields Study Group First grants awarded in Brownfields Study Group Work Plan Commission the FERC to research to determine the impact of state brownfields funding Organizing for the Study The Subcommittee on Economic Impacts Engaged The Wisconsin Economic Development Institute Who Served As The Fiscal agent And Raised funds The WEDI subsequently Issued a Request for Proposals The Committee reviewed and selected: UW Whitewater, Fiscal and Economic Research Center Russ Kashian Redevelopment Economics Evans Paull 4

5 How the Process Began In December 2014, The study team began with a list of 703 sites that had been assisted by the state Brownfields Programs State DNR records provided accurate place and funding information for each site, but there were limited state records as to the nature of the actual redevelopment. While there were 703 sites that were assisted by the programs outlined above, there were a total of 915 grants and loans made from all governmental sources (the higher number reflects some projects getting more than one grant). You will hear lots of numbers (703, 563, 608 ) The best data is based on 563 of the 703 Type of Programs State Brownfields specific programs WEDC (formerly DNR) Site Assessment Grants WEDC (formerly Commerce Department) Brownfields Program WEDC Idle Industrial Sites Redevelopment Program DNR Green Space grants and Public Facilities DNR Sustainable Urban Development Zone (SUDZ) Other programs sometimes used for brownfields Other state economic and community development programs. Local ER TIF Conventional TIF, CDBG, local bond funds, local tax credits, and local infrastructure investments Federal EPA brownfields programs, including several administered by the state: DNR Federal Assessment Grant; Ready for Reuse RLF Grant Awarded; Ready for Reuse ARRA Grant Awarded; and WI Assessment Monies (WAM). Other federal programs (New Markets Tax Credits, USDA, etc.) 5

5% Centergy 25 4.1% New North 110 18.1% Momentum West 31 5.1% Grow North 7 1.2% Vision Northwest 35 5.8% Total 608 100.

6 65 of Wisconsin s 72 counties received stateassisted funding 51 counties received more than one grant Brownfield Sites Assisted Economic Development Regions (EDR) number % of all sites Prosperity SW % Madison Region % Milwaukee % 7 Rivers Alliance % Centergy % New North % Momentum West % Grow North 7 1.2% Vision Northwest % Total % Table: Brownfield Sites Assisted by Economic Development Region (EDR) Geographic Distribution of Brownfield Sites Assisted by Agency Regionally Distributed 6

7 Sites assisted by program number grants/ loans % of all grants $$ Amount % of Total $$ Amount State Brownfields Programs Site Assessment Grants (WEDC, previously DNR) % 21,986,425 $ 6.2% Brownfields Grants (WEDC, previously Commerce Dept) % 90,265,725 $ 25.4% DNR Green Space % 1,636,814 $ 0.5% DNR Sustainable Urban Development Action Zones (SUDZ) % 2,447,317 $ 0.7% WEDC Idle Industrial Sites 6 0.6% 5,118,000 $ 1.4% State brownfields funds sub-total % 121,454,281 $ 34.2% Other state funds 2 0.2% 1,381,700 $ 0.4% Total State Funds % 122,835,981 $ 34.6% Local ER TIF % 10,939,000 $ 3.1% Conventional TIF % 137,596,777 $ 38.8% Other local funds % 39,092,436 $ 11.0% Total Local Funds % 187,628,213 $ 52.9% Federal EPA Brownfields % 29,271,368 $ 8.3% Other federal 3 0.3% 15,027,000 $ 4.2% Total federal funds % 44,298,368 $ 12.5% Total, all funds ,762, % The FERC and The Process Analysts were principally concerned with analyzing the impact of the local, state, and federal brownfields specific programs. Within this construct, the greatest attention was paid to the state programs because the central charge to the consulting team was to test the efficacy of state brownfieldsrelated investments. The site inventory, which was the starting point for the impact analysis, consisted of sites assisted by the state brownfields programs. 7

Total Funding Since 1998, the State of Wisconsin has

4 million see slide #13 to private industry and local

are included, the total is $162 million.

PERCENTAGE OF THE NUMBER OF ASSISTED SITES BY PROGRAM DNR

8 Total Funding Since 1998, the State of Wisconsin has provided grants totaling $121.4 million see slide #13 to private industry and local governments to assist brownfields investigation, cleanup and redevelopment. When local and federal brownfields specific incentives are included, the total is $162 million. Brownfield Funding ER TIF 3% WEDC Idle 1% Comm BRFD 29% PERCENTAGE OF THE NUMBER OF ASSISTED SITES BY PROGRAM DNR SAG 55% Percentage of Brownfields Specific Funding 18% 7% Local (ER TIF) State WEDC BRFD 5% WEDC SAG 5% DNR Green Space 2% 75% Federal EPA Brownfields 8

Analysis This study assessed the economic and fiscal impacts of investing public funds into an initiative that cleans up and reuses brownfields properties.

9 Analysis This study assessed the economic and fiscal impacts of investing public funds into an initiative that cleans up and reuses brownfields properties. Since 1998 the State of Wisconsin brownfields funding programs assisted 703 sites. Status of the Sites Researchers were able to determine the redevelopment status of 563 sites. Redevelopment was complete or underway at 356, or 63 percent of the 563 sites 9

Jobs Created Because brownfields sites represent a loss of economic activity due to plant closure or other abandonment of commercial and industrial properties, many policy makers prefer that the

10 Jobs Created Because brownfields sites represent a loss of economic activity due to plant closure or other abandonment of commercial and industrial properties, many policy makers prefer that the redevelopment of brownfields produce new jobs and business investment in sectors that are regarded as economic base contributors Economic Development One time impacts $3.3 billion generated in direct total investment/construction (or $6 billion in direct and indirect investment) in completed and underway brownfields projects. Ongoing economic output Economic activity associated with the businesses now occupying completed projects amounts to $4.4 billion direct (or $7.6 billion direct and indirect) in statewide economic output. Permanent jobs A total of 29,883 direct new and retained permanent jobs (or 54,483 direct and indirect jobs) were generated in assisted complete or underway brownfields projects. Projects representing an additional 9,107 jobs are planned; thus the total pipeline is 38,990 direct permanent jobs. 10

state has cumulatively recouped $1.77 billion, a more than 14 fold return on investment Local governments gain $88.

11 Economic Impact Fiscal Efficiency Over half of the state revenue outlay is recouped in state tax revenues from construction activities alone Counting only the direct state revenues generated by the business occupants of newly created space, the state has cumulatively recouped $1.77 billion, a more than 14 fold return on investment Local governments gain $88.5 million annually in tax revenue from redeveloped brownfields, not including property taxes derived from the new/renovated buildings 11

Industrial and Manufacturing $1.3 billion annually direct economic impact $2.

brownfield sites 7,300 direct industrial sector jobs created (new and

total jobs when planned projects are included Menomonee Valley Cited as

and Manufacturing Brownfield Projects Focus Projects: Waterfronts and

12 Industrial and Manufacturing $1.3 billion annually direct economic impact $2.1 billion in direct and indirect Businesses that occupy the assisted brownfield sites 7,300 direct industrial sector jobs created (new and retained) Industrial and manufacturing businesses on assisted sites 8,200 total jobs when planned projects are included Menomonee Valley Cited as national model for industrial corridor revitalization Completed Industrial and Manufacturing Brownfield Projects Focus Projects: Waterfronts and Tourism Green Bay Children s Museum Harley Davidson Museum in Milwaukee Leach Amphitheater in Oshkosh 12

Cooperative in Viroqua Potosi s National

13 Small Communities 237 sites in communities of less than 15,000 population 6,640 jobs were created in completed brownfields projects in small communities Focus Projects Distressed Areas 2,700 jobs Summit Place West Allis 1,500 permanent jobs Beloit Ironworks project Community Serving Food Cooperative in Viroqua Potosi s National Brewery Museum West Allis/Summit Place Ice Hockey Rink in Neillsville Summary 13

14 A Leader in Brownfields The Wisconsin Brownfields Program is nationally recognized; it has been cited in numerous national publications as a potential model for other states A 2011 report to the Connecticut Governor and state legislature summed it up as follows: We [in Connecticut] need to emulate the cooperative spirit between regulators and the regulated community that exists in Wisconsin. Ev Paull s Final Report Excel Project Master Works Cited Contact: Russ Kashian, kashianr@uww.edu Nancy Frank, frankn@uwm.edu Ev Paull, Ev@redevelopmenteconomics.com 14

The Economic and Fiscal Impact of Wisconsin s Brownfields Investments

The Economic and Fiscal Impact of Wisconsin s Brownfields Investments Prepared for Wisconsin Economic Development Association and Wisconsin Economic Development Institute Brownfields are defined as abandoned,