Businesses that expand or relocate within Milwaukee could be eligible for low-interest loans under a new city program aimed at redeveloping environmentally contaminated properties.
The $1 million revolving loan fund will help businesses pay for the cleanup costs of properties purchased for development, Mayor John O. Norquist said earlier this month.
The loans will help redevelop polluted properties known as brownfields. Milwaukee has dozens of brownfield sites, which are typically located in older, industrial areas.
“I think this will give us a chance to accelerate development in the valley and some other places,” Norquist said.
Real estate brokers who work with industrial land sales said the loan fund could help attract more developers to brownfield sites. But the brokers also said they didn’t expect the fund to create a major shift to brownfield redevelopment.
Broker Mark Schnoll of MLG Commercial Inc. said property sales that involve environmental cleanup are often complicated and difficult — and it sometimes takes a certain mind-set among developers to do such deals.
“Environmental remediation is such brain damage,” Schnoll said.
Most brownfield developers would likely first seek financial assistance through the state Department of Commerce, which provides grants to help with environmental cleanup costs, said broker Robert Dufek of Inland Cos.
Developers who are turned down on their grant applications could then seek loans from the city fund, Dufek said.
Companies that take advantage of the loan program could include Allen Edmonds Shoe Corp., which has announced plans to develop a shoe factory on a Menomonee Valley brownfield, Norquist said.
The loan fund is being created through a $1 million grant provided by the U.S. Environmental Protection Agency.
The grant drew praise from Rep. Tom Barrett (D-Wis.), who supported legislation that increased funding for EPA’s brownfield cleanup programs.
The loan fund will become a self-sufficient city program, with loan repayments used to provide additional loans to other companies, Norquist said.
The expense and difficulty of cleaning brownfields often has stopped development, even though the properties have the advantages of being located near freeways, water and sewer lines and an available work force.
Even the perception of contamination can kill redevelopment deals before they begin, Norquist said.
Since 1999, the city has tested 17 Menomonee Valley parcels for contamination, and eight parcels required no cleanup, he said.
By redeveloping brownfields, jobs are created closer to where most workers live, including those in lower-income neighborhoods.
Brownfield redevelopment also helps prevent development from occurring on the suburban fringes.
The city has long focused on brownfield redevelopment, particularly in the Menomonee Valley, which is bordered roughly by Interstate Highway 94, West Pierce Street, South 1st Street and U.S. Highway 41.
The city Redevelopment Authority has taken steps to condemn and acquire a 140-acre parcel in the valley owned by Chicago-based CMC Heartland Partners and develop the former rail yard as a business park.
But CMC has opposed that action, maintaining the property would be best developed for a mixed-use retail, entertainment and light-industrial project, given its location that is quite near Miller Park.
