As part of the 2016-2017 Operating Budget for the Ohio Development Services Agency (ODSA), a new $20 million dollar cleanup fund was created in House Bill 64 to address old gas stations around the state. The money came from remaining Clean Ohio funds.
Abandoned or defunct service stations have always fallen through the cracks of brownfield programs and are a very significant problem in the State. (See the Canton Repository story "Gas Stations’ owners vanish, leaving possibly hazardous eyesores")
Gas stations were never deemed large enough issues to attract incentives. However, many times these stations are located in key development areas within a municipality. The new fund provides an excellent opportunity for municipalities and developers to address these problematic sites.
Here are the basics of the new program:
- Up to $100,000 in grant funds for sampling
- Up to $500,000 for cleanup
- Political subdivisions can directly apply for funds
- Organizations that enter into an agreement for redevelopment with a political subdivision can also apply
- Must be a Class C site (i.e. State has certified that the party responsible for contamination is not capable of performing the investigation and cleanup)
- Applications are filed with ODSA
- Applicants cannot have caused or contributed to the contamination on the property
While $20 million seems like a lot of money, I predict that this money will be used up very quickly. A current list of Class C Abandoned Gas Stations maintained by the States shows approximately 500 such sites right now. That list will surely grow now that funding is available to help cleanup these sites. With such limited funding given the scope of the problem, it is very likely this funding will be gone very quickly.
However, many of these sites still present impediments to redevelopment. Many political subdivisions do not want to take title to abandoned stations due to liability issues, even if grant funding for cleanup is available.
For potential private party redevelopment, many of these sites have further complications due to title issues or back taxes and liens on the property. Also, the sites need to have strong redevelopment potential for private parties to take ownership as well as to compete for the limited funding. ODSA will likely require a detailed information regarding redevelopment potential as part of its forthcoming grant application process.
Liability, redevelopment and other issues are common among brownfield sites. However, when funding is available it provides a strong incentive for parties to get creative and overcome these obstacles.