LVEDC Event Touches Upon Environmental Due Diligence, Redevelopment Financing
By Colin McEvoy on September 11, 2015
Don’t fear the reaper.
It’s not just the title of that famous Blue Oyster Cult song. It was also among the advice given at the Lehigh Valley Economic Development Corporation (LVEDC) Brokers and Developers Council event on September 10, which focused on environmental due diligence and the redevelopment funding opportunities available through the LVEDC Finance Department.
Speakers included Vincent Carbone, a senior geologist for the engineering firm HDR; John Kingsley, LVEDC Vice President of Finance; and LVEDC Director of Redevelopment and External Affairs Andrew Kleiner, who which oversees the program that promotes the reuse of abandoned and underutilized commercial and industrial properties, also known as brownfields.
Attended by about 70 people at Bethlehem’s ArtsQuest Center at SteelStacks, Carbone opened the presentation by playing the song “Don’t Fear the Reaper.” When it comes to due diligence, he said, the “reaper” is any potential roadblocks or challenges to a redevelopment project that can create unexpected costs, project delays, or complications.
“The reaper strikes when you least expect it, when you do poor due diligence, or when you think you have it all under control,” said Carbone, who has 23 years of experience working in due diligence. “… But fear not. Environmental professionals make it very easy to find where this guy hides. To find where these problems lurk.”
Carbone said an environmental professional can explain your liabilities, minimize risk, working within a developer’s design plans and schedule, provide options for development, and act as a guide through environmental processes. He urged developers to reach out to environmental professionals as early as possible, provide as much information as possible about the history of the site, and identify someone knowledgeable about the property.
Kleiner discussed the Lehigh Valley Land Recycling Initiative (LVLRI), LVEDC’s brownfields program, which has assisted 76 projects since 1998, resulting in 3,000 acres of land remediated and the creation of 1,900 jobs. Earlier this year, LVLRI was one of only nine programs in the state to be awarded a $500,000 federal grant to assist with environmental assessments and site cleanup plans for brownfields.
Kleiner cited several projects LVLRI has assisted with, including the former Schoen’s furniture store in downtown Allentown, which had been vacant for 20 years before being converted into a modern office building for Trifecta Technologies. Other examples include the Easton Silk Mill and the Allentown Waterfront development. LVLRI provided phase 1 and phase 2 environmental assessments for both projects, as well as cleanup and redevelopment planning.
Kingsley outlined the business financing programs LVEDC administers, which includes three loan pools (city, regional, and state), two area loan organizations, two industrial development authorities, and the Small Business Administration’s 504 program.
He also discussed redevelopment assistance programs like Business in Our Sites (BIOS), low-interest rate financing for shovel-ready site development activities; Industrial Site Reuse Program (ISRP), which provides grants up to $1 million for environmental remediation; and Tax Increment Financing (TIF), in which municipalities pledge future tax increment generated from future site development to pay down debt service.
As a case study, Kingsley discussed The Bug Company of Pennsylvania, which established a 47,500 square-foot facility in Hellertown. LVEDC helped the company acquire and renovate the building, and financed the entire project at $1.6 million. The borrower saved $150,000 in total interest over the life of the loan, and LVEDC also assisted them in accessing $120,000 in grants. The project created 41 new jobs.
“We are a great resource in identifying the resources that can be brought to bear to assist you with your project,” Kingsley said. “All I ask is if you have a project, don’t hesitate to reach out to us. We have close to 100 years of economic development and lending experience in our finance department, and we love to use it.”
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