946 Mass. Reg. 3.06

Current through Register 1527, August 2, 2024

Section 3.06 - Eligibility Requirements for Loans and Grants

(1)Overview.

(a) Loans and Grants shall only be made by MassDevelopment to a Borrower or a Recipient if MassDevelopment determines that

1. the Borrower or Recipient satisfies the requirements and criteria contained in 946 CMR 3.04, 3.05, and 3.06, as applicable; and

2. the Project satisfies the requirements and criteria contained in 946 CMR 3.06 and qualifies as an Eligible Project, as applicable.

(b) In order for MassDevelopment to make its determinations under 946 CMR 3.06, each potential Borrower or Recipient shall submit a completed Application to the Brown fields Advisory Group (which may be sent c/o MassDevelopment) and to MassDevelopment for:

1. a Loan or Grant for an Environmental Site Assessment; and

2. a Loan or Grant for an Environmental Cleanup Action.

(c) The Brown fields Advisory Group and MassDevelopment shall review each Application. Each Application is subject to MassDevelopment's final approval.

(2)General Requirements of the Application Process.

(a) Each Application shall be signed by an authorized representative of the Applicant.

(b) The Application shall be prepared on the form prepared by MassDevelopment.

(c) MassDevelopment may return an Application to an Applicant, or hold an Application without taking action, if additional or supplemental information is needed.

(d) The Application, as completed, shall contain sufficient information to enable MassDevelopment to determine whether the Applicant and the Project satisfy the eligibility requirements and criteria contained in 946 CMR 3.04, 3.05, and 3.06, as applicable.

(e) If an Applicant is not the owner of the Project Site, the Applicant shall provide evidence satisfactory to MassDevelopment:

1. that the current owner of the Project Site is aware of and consents to the Project, the proposed Environmental Site Assessmentand/or the proposed Environmental Cleanup Action and the Applicant has control of the Project Site;

2. that the Applicant has the legal right to enter and conduct the Environmental Site Assessment, the Environmental Cleanup Action and/or the Project and has control of the Project Site; and

3. the Applicant, (and the current owner of the Project Site if applicable):

a. did not own or operate the Project Site at the time of a release of hazardous materials as defined under M.G.L. c. 21E;

b. did not cause or contribute to the release of hazardous materials, as defined under M.G.L. c. 21E, at the Project Site; or

c. does not have a familial or business relationship with the party or entity that meets the criteria of 946 CMR 3.06(2) (e) 3.

a. and (2) (e) 3.

(3)Contents of an Application for Funding for an Environmental Site Assessment. An Applicant shall submit a completed Application to MassDevelopment to be considered for financing for an Environmental Site Assessment, which Application may contain, in addition to the requirements of 946 CMR 3.06(2), the following information:

(a) certification that the Project Site is located in an Economically Distressed Area;

(b) whether the Applicant and, if applicable, the current Owner of the Project Site:

1. owned or operated the Project Site at the time of the release of hazardous materials as defined under M.G.L. c. 21E;

2. caused or contributed to the release of hazardous materials, as defined under M.G.L. c. 21E, at the Project Site; or

3. has a familial or business relationship with the party or entity that meets the criteria of 946 CMR 3.06(2)(e)3.a. and (2)(e)3.b..

(c) certification that the proposed Environmental Site Assessment is not eligible for funding under M.G.L. c.21J, the Underground Storage Tank Fund;

(d) evidence that the Project will result in a significant economic impact interms of the number of jobs to be created or will contribute to the economic or physical revitalization of the Economically Distressed Area in which the Project Site is located and a significant level of community benefits shall be associated with the Project;

(e) certification as to whether the Applicant is subject to any outstanding administrative environmental enforcement action or judicial environmental enforcement action;

(f) in the case of an Application from a redevelopment authority, redevelopment agency, economic development and industrial corporation, community development corporation, or economic development authority, evidence of the enabling legislation or statutory authority;

(g) in the case of an Application submitted by a city or town, evidence of authority (by warrant, vote or otherwise) for such Application;

(h) certification that the Applicant will transfer the results of the Environmental Site Assessment to the appropriate regional office of the Department of Environmental Protection if the Borrower does not proceed with the development of the Project after the performance of an Environmental Site Assessment;

(i) the results of any Environmental Site Assessments or other reports previously conducted on the Project Site in the Applicant's possession;

(j) the historical use of the Project Site;

(k) a detailed explanation of the proposed reuse of the Project Site, if known;

(l) the Applicant's experience in the redevelopment of properties and experience in conducting the proposed reuse of the Project Site;

(m) a feasibility study or market analysis of the proposed reuse of the Project Site;

(n) the identity of the environmental professional (who should also be a Licensed Site Professional) who will direct the Environmental Site Assessment;

(o) a detailed estimate, broken down by cost per task, of the expenses involved in conducting the Environmental Site Assessment, prepared by the Licensed Site Professional identified in 946 CMR 3.06(3)(n);

(p) a detailed scope of services and schedule for the work involved with the Environmental Site Assessment prepared by the Licensed Site Professional identified in 946 CMR 3.06(3)(n);

(q) Applicant's certified financial statements for the past three years;

(r) the identity of the proposed end-user of the Project Site;

(s) evidence of community and municipal support. In the case of a Grant Application, the Applicant must submit three letters of community support from municipal or civic entities;

(t) evidence of other sources of funding, including the funding for the Requisite Match in the case of a Grant Application, which when combined with the Loan or Grant amount, shall total an amount greater than the total costs associated with the Environmental Site Assessment and the Project (if known);

(u) any other information required by MassDevelopment.

(4)Contents of Application for Funding for an Environmental Cleanup Action. An Applicant shall submit a completed Application to MassDevelopment to be considered for funding for an Environmental Cleanup Action, which Application may contain, in addition to the requirements of 946 CMR 3.06(2), the following information:

(a) certification that the Project Site is located in an Economically Distressed Area;

(b) whether the Applicant and, if applicable, the current owner of the Project Site:

1. owned or operated the Project Site at the time of the release of hazardous materials as defined under M.G.L. c. 21E;

2. caused or contributed to the release of hazardous materials, as defined under M.G.L. c. 21E, at the Project Site; or

3. has a familial or business relationship with the party or entity that meets the criteria of 946 CMR 3.06(2)(e)3.a. and (2)(e)3.b..

(c) certification that the proposed Environmental Cleanup Action is not eligible for funding under M.G.L. c.21J, the Underground Storage Tank Fund;

(e) certification as to whether the Applicant is subject to any outstanding administrative environmental enforcement action or judicial environmental enforcement action;

(f) in the case of an Application for a Grant, evidence of the enabling legislation or statutory authority for the redevelopment authority, redevelopment agency, economic development and industrial corporation, community development corporation, or economic development authority;

(g) in the case of an Application submitted by a city or town, evidence of authority (by warrant, vote or otherwise) for such Application;

(h) any Environmental Site Assessments, Massachusetts Contingency Plan ( 310 CMR 40.00etseq.) Phase I, II, or III reports, as applicable, or any other report previously conducted on the Project Site;

(i) the historical use of the Project Site;

(j) a detailed explanation of the proposed reuse of the Project Site;

(k) the Applicant's experience in the redevelopment of properties and experience in conducting the proposed reuse of the Project Site;

(l) a feasibility study or market analysis of the proposed reuse of the Project Site;

(m) the identity of the Licensed Site Professional who will direct the Environmental Cleanup Action;

(n) detailed estimate, broken down by cost per task, of the expenses involved in conducting the Environmental Cleanup Action, prepared by the Licensed Site Professional identified in 946 CMR 3.06(4)(m);

(o) a detailed scope of services and schedule for the work involved with the Environmental Cleanup Action, prepared by the Licensed Site Professional identified in 946 CMR 3.06(4)(m) which scope of services, in the Licensed Site Professional's opinion, should achieve a cleanup standard that is incompliance with the requirements of the Department of Environmental Protection and will result in a Permanent Solution, Remedy Operation Status, and in certain circumstances a Class C Response Action Outcome;

(p) Applicant's certified financial statements for the past three years;

(q) the identity of the proposed end-user of the Project Site;

(r) evidence of community and municipal support. In the case of a Grant Application, the Applicant must submit three letters of community support from municipal or civic entities;

(s) a detailed Project budget, which includes costs involved with the remediation of the environmental contamination and any acquisition costs, construction costs, operating costs, and any other costs associated with the Project;

(t) a detailed proposed work schedule prepared by and certified by the Applicant's architect and contractor;

(u) evidence of other sources of funding, including the Requisite Match, which when combined with the Loan or Grant amount, should total an amount greater than the total costs associated with the Environmental Cleanup Action and Project;

(v) copies of all applicable permits or completed applications for permits required for the Environmental Cleanup Action and the Project available as of the date of the Application; and

(w) any other information reasonably required by MassDevelopment.

(5)Eligibility.

(a)Threshold Requirements for Eligibility for Funding for an Environmental Site Assessment. In reviewing and evaluating each Application for funding for an Environmental Site Assessment for eligibility purposes, MassDevelopment must find that the Applicant and the Project Site satisfy the following requirements:

1. the Project Site is located in an Economically Distressed Area;

2. the Project will result in a significant economic impact in terms of the number of jobs to be created or will contribute to the economic or physical revitalization of the Economically Distressed Area in which the Project Site is located and a significant level of community benefits shall be associated with the Project;

3. the Applicant certified that it shall transfer the results of any Environmental Site Assessment to the regional office of the Department of Environmental Protection if the Applicant does not proceed with the development of the Project after the performance of an Environmental Site Assessment;

4. the Applicant certified that the Applicant

a. would be liable for the environmental contamination solely pursuant to M. G. L. c. 21E, § 5(a)(1);

b. did not cause or contribute to the release of oil or hazardous material at the Site;

c. did not own or operate the Project Site at the time of the release;

d. does not have a familial relationship or any direct or indirect business relationship, other than that by which the Applicant's interest in such property is to be conveyed or financed, with another party that is potentially liable under M.G.L. c. 21E with regard to the Project Site.

946 CMR 3.06(5)(a)4.a. may be waived with the approval of the Board after full disclosure by the Applicant of the familial or business relationship with a potentially responsible party;

5. the Applicant is not subject to any outstanding administrative environmental enforcement action or judicial environmental enforcement action provided that, if the Applicant is subject to one or both of the foregoing enforcement actions, the Applicant shall have entered into an agreement with the Department of Environmental Protection or the Office of the Attorney General, as applicable, to resolve said enforcement action with respect to any Project Site under consideration for assistance from the Fund and with respect to any other properties located within the Commonwealth for which the Applicant is liable pursuant to M.G.L. c. 21E;

6. the financing requested complies with 946 CMR 3.04 and 3.05, as applicable; and

7. the Applicant demonstrates to MassDevelopment that it has the financial resources and experience to successfully undertake and finance the Environmental Site Assessment, and the Project, if the details of the Project are known at the time of the filing of the Application.

(b)Factors to Be Considered In Evaluating an Application for Funding for an Environmental Site Assessment. In reviewing an Applicant and Project Site and making findings pursuant to 946 CMR 3.06(5)(a)2. (if applicable based on the terms of the Application), MassDevelopment shall consider the following factors:

1. the level of unemployment and poverty in the Economically Distressed Area and in the census tract, if any, within the Economically Distressed Area in which the Project Site is located;

2. the presence of community benefits associated with the Project, including without limitation, the creation or revitalization of open space;

3. the proximity of the Project Site to existing transportation and utility infrastructure appropriate to support the proposed reuse of the Project Site;

4. whether the Project Site is located in an area designated as a Federal Empowerment Zone or Enterprise Community pursuant to chapter 120 of title 42 subsection 11501 et seq. of the United States Code;

5. whether the Project Site qualifies as a Priority Project; and

6. MassDevelopment shall give priority to a Project Site located in an Economically Distressed Area that is considered by the Ombudsman and the Department of Economic Development to be of substantial economic benefit to the community and which will result in the creation or retention of jobs for that community.

(c)Threshold Requirements for Eligibility for Funding for an Environmental Cleanup Action. In reviewing and evaluating each Application for eligibility purposes, MassDevelopment must find that the Applicant and the Project Site satisfy the following requirements:

1. the Project Site is located in an Economically Distressed Area;

3. assistance from the Fund is necessary to make the Project financially feasible;

4. the Applicant certified that it shall transfer the results of any Environmental Site Assessment to the regional office of the Department of Environmental Protection if the Applicant does not proceed with the development of the Project after the performance of an Environmental Site Assessment;

5. the Applicant certified that the Applicant

a. would be liable for the environmental contamination solely pursuant to M. G. L. c. 21E, § 5(a)(1);

b. did not cause or contribute to the release of oil or hazardous material at the Site;

c. did not own or operate the Project Site at the time of the release;

946 CMR 3.06(5)(c)5.d. may be waived with the approval of the Board of Directors of MassDevelopment after full disclosure by the Applicant of the familial or business relationship with a potentially responsible party;

6. the Applicant is not be subject to any outstanding administrative environmental enforcement action or judicial environmental enforcement action, provided that if the Applicant is subject to one or both of the foregoing enforcement actions, the Applicant shall have entered into an agreement with the Department of Environmental Protection or the Office of the Attorney General, as applicable, to resolve said enforcement action with respect to any Project Site under consideration for assistance from the Fund and with respect to any other properties located within the Commonwealth for which the Applicant is liable pursuant to M.G.L. c. 21E;

7. the financing requested complies with 946 CMR 3.04 and 3.05, as applicable; and

8. the Applicant demonstrates to MassDevelopment that it has the financial resources and experience to successfully undertake and finance the Environmental Cleanup Action and the Project.

(d)Factors to Be Considered In Evaluating an Application. In reviewing an Applicant and Project Site and making findings pursuant to 946 CMR 3.06(5)(c)2., MassDevelopment shall consider the following factors:

1. the level of unemployment and poverty in the Economically Distressed Area and in the census tract, if any, within the Economically Distressed Area in which the Project Site is located;

2. the likelihood that the proposed response action will be adequate to cleanup the Project Site in accordance with the requirements of applicable laws;

3. the presence of community benefits associated with the Project, including without limitation, the creation or revitalization of open space;

4. the proximity of the Project Site to existing transportation and utility infrastructure appropriate to support the proposed reuse of the Project Site;

5. whether the Project Site is located in an area designated as a Federal Empowerment Zone or Enterprise Community pursuant to chapter 120 of title 42 subsection 11501 et seq. of the United States Code; and

6. whether the Project Site qualifies as a Priority Project.

7. MassDevelopment shall give priority to a Project Site located in an Economically Distressed Area that is considered by the Ombudsman and the Department of Economic Development to be of substantial economic benefit to the community and which will result in the creation or retention of jobs for that community.

(6)Application Review and Approval Process.

(a) MassDevelopment shall review each Application and shall make findings as to whether:

1. the Applicant satisfies the requirements contained in 946 CMR 3.04, 3.05 and 3.06, as applicable; and

2. the Project Site satisfies the requirements and criteria contained in 946 CMR 3.06 and qualifies as an Eligible Project for financing from the Fund.

(b) After reviewing each Application and making a determination as to whether the Applicant and the Project Site are eligible for funding, MassDevelopment may present its findings to its Board at its next scheduled meeting for the Board's vote of approval on the Applications that have been recommended by MassDevelopment for funding.

(c) Upon approval for funding by the Board, MassDevelopment shall notify the Applicant that its Application and Project Site have been approved. MassDevelopment shall assign a staff member to the Project, who shall be responsible for drafting a commitment letter or notice setting forth the terms and conditions of the Loan or Grant, and who shall work with the Applicant to process the Loan or Grant.

(d) MassDevelopment shall notify those Applicants whose Application or Project Site are:

1. note ligible for funding; or

2. not approved for funding by the Board.

(7)Changes to Approved Applications Requiring Amendments. The Applicant must notify MassDevelopment of any material changes in an Eligible Project, or to an Applicant, Matching Party, or Guarantor, after approval of an Application by MassDevelopment but prior to the closing of the Loan or Grant. If such a material change occurs, an amendment to the Application may be required. The term "material changes" shall include, but not be limited to, the following:

(a) an increase in the amount of the Loan or Grant of more than 10%; or

(b) an increase in the term of a Loan by more than one year;

(c) any material change in the status of the Borrower, the Recipient, the Project, the Guarantor, or the Matching Party; or

(d) any other change that, in the discretion of MassDevelopment, may affect the:

1. financial soundness of the Loan or Grant;

2. feasibility of the Eligible Project;

3. reserve requirements of the Fund; or

4. compliance of the Application with the purposes and objectives of the Fund and 946 CMR 3.00.

(8)Approval of Amended Applications. The Board must approve an amended Application prior to the actual funding of the Loan or Grant, except where:

(a) the amendment only adds the name of the Matching Party where such name was previously unknown or omitted; or

(b) such amendment and such Matching Party are approved by the Executive Director of MassDevelopment.

(9)Applications Initially Not Identifying Source of Requisite Match.

(a) At the time that an Applicant files an Application, the Applicant shall not be required to have a commitment from, or list the identity of, the Matching Party participating in either a Loan or a Grant, provided that the Applicant certifies in the Application its good faith intention to seek such financing.

(b) Notwithstanding that an Application does not identify the Matching Party, MassDevelopment may determine that a Project Site is an Eligible Project and recommend approval to the Board, provided that any approval shall be subject to the Applicant's amendment of its Application, prior to the three month anniversary date of Board approval, to add the identity of the Matching Party and the terms and conditions of such Requisite Match, to the extent that such terms and conditions differ materially from the terms and conditions contained in the Application.

(10)Time Limitations. MassDevelopment may establish time limitations governing the period during which its approval of an Application shall remain in effect.

946 CMR 3.06