MAEDC Makes 1st Brownfields Loan in Montana; Missoula Sawmill Site to be Cleaned Up and Redeveloped

The “restoration economy” has been the subject of much attention recently. A prime example is the Missoula Sawmill Site. MAEDC, acting on behalf of the City of Missoula, approved a $1,000,000 loan to the Millsite Revitalization Project LLC, in 2006. The purpose of the loan is to fund the environmental cleanup of the site, which was once the location of a large lumber mill operation.

Dick King, MAEDC’s President and CEO, stated that “this loan reflects a tremendous commitment on the part of the borrower to redevelop 45 acres of vacant industrial property located in the heart of our city.” King explained that the loan was made possible by a grant to the City of Missoula from the U.S. Environmental Protection Agency’s Brownfields Revolving Loan Program. The City delegated the administrative responsibility for the loan to MAEDC, which operates an active economic development program in the region.

The borrower has submitted a Voluntary Cleanup Plan to the Montana Department of Environmental Quality, and that agency will oversee the scope of work. Ed Wetherbee, spokesman for the borrower, stated that the loan was “absolutely crucial to our project, which will include substantial public benefit, such as new parkland and connection of the bike and walking trail on the south bank of the river.”

In addition to EPA, DEQ and the City, a key partner in this entire effort is the Missoula Redevelopment Agency. MRA’s Director, Ellen Buchanan, said that “cleanup and redevelopment of this site is absolutely vital to the future of our community and our commitment to the project clearly reflects that determination.” As part of the project, MRA recently issued $3.6 million in tax increment bonds, which will be used to assist with acquisition of the site.

Eric Hanson, MAEDC’s Loan Program Manager, explained that “our loan is structured to allow redevelopment to occur as soon as possible and the fact that MRA is a co-borrower is further evidence of the project’s significance.”

The property is currently owned by the Morris Silver Foundation, subject to a long-term lease held by Idaho Timber. When the cleanup is complete, ownership will transfer to MRP, LLC.

Cindy Wulfekuhle, Grants Manager for the Office of Planning and Grants, which is responsible for ensuring that the City complies with all applicable EPA and DEQ regulations, said that “getting this loan approved was a long and arduous process but one that will clearly bear fruit in the future.”

The next step for the project involves the Voluntary Cleanup Plan and the State DEQ. Chris Cerquone, representing Geomatrix, the engineer on the project, explained that “DEQ will schedule a public hearing soon on the cleanup plan and the public will be most welcome to participate.”

“This is an exemplary project,” King stated, “and will probably be featured on EPA’s website in the future.” He concluded by expressing appreciation for the efforts of everyone involved. “This is the first EPA Brownfields loan to be approved in Montana,” he asserted, “and we are hopeful that this project will show the way for many similar such endeavors across the state.”

To expedite the cleanup, MAEDC’s Board of Directors recently approved an amendment to the loan agreement that will allow the City’s environmental expert, Alan Stine with Olympus Technical Services Inc., to approve interim cleanup work before DEQ approval of the final VCP. “Alan is in Helena and this will ensure that any interim work will be consistent with the VCP,” King stated. The project faces a critical time crunch. The cleanup must be completed and a “letter of no further action” issued to allow MRP to purchase the property by December 2007.

EPA’s Brownfields Program provides funding for assessment and cleanup of sites that have environmental contamination but are not super fund sites. Brownfields sites are often abandoned industrial property with good potential for residential and commercial development. The Brownfields loan program provides an incentive for developers to cleanup these sites that often include complex ownership.