[Fwd: Report from the Clean Land Fund]

[Tony Chenhansa <tonyc@cpeo.org>]

This message originated from a different Brownfields Listserve.


From: "William J. Penn" <WPenn@compuserve.com>

I am very pleased to report that after more than two and one half years
of
negotiations with the IRS the Clean Land Fund has finally received its
501(c)(3) tax-exempt designation. Our initial application which was
based
on the economic, environmental and social  benefits of financing the
cleanup of Brownfields sites was denied by the IRS. We were told that
Brownfields financing was a private sector real estate transaction and
did
not qualify for tax-exempt status. In our appeal, we shifted the benefit
emphasis to our borrowers i.e., nonprofit organizations, minority owned
businesses and businesses who are or will locate in economically
distressed
areas (the location of most Brownfields in the Northeast). The IRS was
satisfied with this approach since it brought the Clean Land Fund more
closely in line with CDCs and CDFIs. To my knowledge, we are the first
private sector, nonprofit revolving loan fund dedicated solely to the
financing of the clean up of Brownfields sites to receive a 501(c)(3)
designation.

Our present business strategy is to develop co-lending arrangements with
the sixteen EPA funded municipal Brownfields Cleanup Revolving Loan
Funds
(BCRLF) located in the Northeast (EPA Regions 1& 2). As a co-lender, the
Clean Land Fund will be able to finance those cleanup cost which are not
eligible for the BCRLF i.e., structural remediation, petroleum
remediation
and soft costs such as capitalization of interest, loan fees and
environmental insurance premiums. Our plan is to match the $11 million
in
capital the EPA committed to these BCRLF on May 25, 1999 by borrowing
debt
capital from banks doing business in the sixteen communities. The banks
as
debt capital lenders to the Clean Land Fund will receive CRA credits as
well as interest on their loans. We feel this will be an economic
incentive
to develop private/public partnerships to finance the comprehensive
cleanup
of Brownfields sites in these communities which will improve the
economic,
environmental and social quality of life for community residence.

If there are any nonprofit organizations or individuals who would like
to
establish a Clean Land Fund affiliate in their geographic area outside
of
the Northeast, we would be very interested talking with you. We have
learned a great deal of what it takes to start-up a Brownfields
nonprofit
revolving loan fund and we would like to share this with those of you
who
may be interested in replicating what we have accomplished in your
region. 
    

Bill Penn
Clean Land Fund
PO Box 725
Block Island, RI 02807
E-mail: wpenn@compuserve.com