ECONOMIC DEVELOPMENT/Agencies partner for brownfield cleanup, jobs
The Los Angeles County Community Development Commission (CDC) recently partnered with Santa Fe Springs, Calif., and locally based Golden Springs Development to finance the completion of a 5.1-million-square-foot business park on a 265-acre brownfield site. The CDC expects the Golden Springs Business Center, which is scheduled for completion in 2004, to provide 679 full-time jobs for low- and moderate-income residents and stimulate economic activity in the area.
Situated in Santa Fe Springs, the brownfield was the site of an oil refinery that closed in 1997. Oil spills spanning more than 60 years contaminated the soil and groundwater, and the high cost of cleanup and remediation prohibited the site’s redevelopment.
That changed in 1997, when the site owner turned to Santa Fe Springs for financial assistance. The city provided approximately $8 million worth of grant money to remediate a portion of the site and to construct 16 office buildings.
“The city has its fair share of brownfield sites and knows the obstacles involved with redeveloping those properties,” says Thaddeus McCormack, administrative analyst for the city. “The city’s motivation to partner with the developer was to help create jobs, and to see an environmental and aesthetic eyesore transformed.”
In 1999, the developer planned to expand the project by building 11 more offices. However, it needed additional funding to move forward.
Santa Fe Springs approached the CDC to get assistance in applying for federal grants. The CDC decided to get involved with the project because the site bordered the county’s unincorporated area, and the potential for new jobs affected residents within the county.
The CDC applied for an Economic Development Initiative grant and a Brownfields Economic Development Initiative grant in 1999 — each of which offered up to $2 million — from the U.S. Department of Housing and Urban Development (HUD) to help finance the project’s expansion. As a grant requirement, the CDC leveraged the funds with a $20 million HUD Section 108 Guarantee Loan.
As the recipient of the federal funds, the CDC provided the city with the $20 million loan and $3.75 million in grant funds in August 2001. The city, in turn, provided the same funds in an identical manner to the developer. The developer is contributing about $110 million toward the project and is using the $23.75 million in federal funds as gap financing.
The site expansion is under way. So far, the Golden Springs Business Center has about 30 tenants.