By: Matthew Bono, CHMM

Brownfield redevelopment is not going away, but the funding may be changing. Across the country, municipalities continue to face abandoned, tax-delinquent, and underutilized properties that drain local resources, erode the tax base, and often sit idle while communities need housing, business growth, and reinvestment.

How Municipalities Can Keep Brownfield Redevelopment Moving When Grant Funding Tightens

For the past several years, EPA Brownfields grants have helped municipalities assess, clean up, and reposition contaminated or underutilized properties. More federal dollars created more opportunities to move projects forward, especially for municipalities working to address long-standing blight, distressed properties, and environmental uncertainty.

Early signs suggest the EPA Brownfields funding landscape may become more competitive in future grant cycles.  Brownfields grants remain an important redevelopment tool, but they should be part of a broader funding strategy, not the entire plan.

In a more competitive funding environment, municipalities may need to evaluate additional tools, including state programs, local redevelopment tools, private investment, acquisition or redevelopment partnerships, and, where available, historical insurance policies that can help fund environmental investigation, cleanup, regulatory response, and legal defense.

EPA Brownfield Funding Is Becoming More Competitive

EPA Brownfields grants remain one of the most important tools available to municipalities working to return contaminated and underutilized properties to productive use.

However, the expanded funding environment of recent years may not continue at the same level. In FY 2025, EPA selected 207 communities for 214 Assessment, Revolving Loan Fund, and Cleanup (ARC) grant awards totaling more than $224 million, with an additional $42 million in Revolving Loan Fund supplemental funding announced separately.

Current planning estimates cited by PPM Consultants suggest the FY 2027 Brownfields grant cycle will feature fewer awards for a smaller pot of funds, resulting in stiffer competition for applicants.  PPM notes that current EPA planning materials anticipate approximately 93 competitive awards totaling roughly $64 million. PPM also states that, “If those numbers hold, EPA would be moving from 214 competitive ARC awards in FY 2025 to 93 projected competitive ARC awards in FY 2027”, which would represent “more than a 56% reduction in the number of competitive awards.”

That caveat matters. The actual FY 2027 competition may still change. Final funding levels, award numbers, and solicitation details may look different once EPA releases final materials. But municipalities should not build their brownfield redevelopment strategy around the assumption that the expanded funding atmosphere of recent years will continue.

A tighter grant landscape does not make brownfield redevelopment less important it does make a cohesive strategy more important.

Municipalities still need to address vacant factories, former dry cleaners, old gas stations, industrial corridors, and other properties that remain dormant because of contamination, legal uncertainty, ownership issues, or lack of funding.

When grant funding becomes more competitive, municipalities need to be more disciplined about which sites they prioritize, what tools they evaluate, and how they prepare properties for redevelopment.

Brownfield Redevelopment Needs More Than Grant Funding

Many municipalities have used Brownfields grants as the primary path for addressing contaminated and underutilized properties. But relying on grants alone can delay progress when applications are not selected, awards are insufficient, or a property requires action before the next grant cycle. Even when grant or loan funding is awarded, those dollars may come with restrictions, caps, timing limitations, or eligible-use requirements that do not fully support the municipality’s redevelopment vision.

A grant strategy is not the same thing as a redevelopment strategy.

The most successful municipal projects begin by identifying viable sites, understanding environmental and legal risks, evaluating available funding sources, limiting liability, and aligning cleanup goals with future use. That future use may be housing, commercial redevelopment, mixed-use development, public space, or another community priority.

This is especially important when municipalities are dealing with properties that appear too complicated to address. Former dry cleaners, gas stations, manufacturers, plating shops, machine shops, and other legacy commercial or industrial sites may seem like liabilities at first glance. But with the right strategy, they may also represent some of the best opportunities for redevelopment within desirable existing city limits.

For more on this approach, read our article, “Turning Challenges into Opportunities: Redeveloping Indiana’s Most Stubborn Properties.”

Brownfield Redevelopment Helps Municipalities Rebuild from Within

Brownfield redevelopment isn’t only about environmental issues. For municipalities, it is tied directly to housing, tax base growth, economic development, public health, and community reinvestment. When abandoned or contaminated properties sit idle, they discourage private investment, reduce surrounding property values, and limit opportunities for productive reuse.

Rather than expanding outward while centrally located land sits dormant, municipalities can reclaim the most desirable properties near existing roads, utilities, neighborhoods, downtowns, and commercial corridors. Once remediated and returned to productive use, these sites can support housing, jobs, business growth, and long-term revitalization.

For more on the connection between brownfield redevelopment and housing, read our article, “Addressing Indiana’s Housing Shortage: Unlocking Residential Development Opportunities on Brownfield Sites.”

Historical Insurance Policies Can Help Fund Environmental Cleanup

Some contaminated properties have a long history of commercial or industrial use. Former dry cleaners, gas stations, manufacturers, metal plating shops, machine shops, auto repair properties, industrial corridors, and tax-delinquent commercial sites may have operated during time periods when historical insurance policies were in place.

In some cases, historical commercial general liability policies may provide coverage for environmental claims, depending on site history, policy language, applicable law, and the specific facts of the claim.

Finding that coverage often requires insurance archaeology, the process of uncovering evidence of historical insurance policies that may no longer be readily available in a property owner’s files. Through insurance archaeology municipalities and property stakeholders may be able to identify insurance assets that would otherwise remain hidden.

When available, historical insurance may help fund environmental investigation, remediation, regulatory response, and legal defense associated with environmental claims. Though historical insurance is not available for every site, it should be evaluated early, especially when municipalities are assessing and prioritizing distressed or tax-delinquent properties with potential contamination.

The time to evaluate historical insurance is not after a grant application is denied. It is before the municipality decides how to approach the property.

To learn about the insurance archaeology process, read PolicyFind’s article, “How Does It Work: Insurance Archeology and CGL Policies.”

Municipalities Need a Brownfield Funding Stack, Not a Single Funding Source

In a more competitive funding environment, municipalities need a funding stack, not a single funding source.

A broader brownfield redevelopment strategy should integrate multiple tools to support cleanup and reuse, such as EPA Brownfields grants, state brownfield programs, local redevelopment tools, tax increment financing, private investment, owner contributions where appropriate, historical insurance recovery, acquisition or redevelopment partnerships, and legal or regulatory strategy.

Some sites may be strong candidates for Brownfields grants. Others may be better suited for state funding, private redevelopment, responsible party recovery, insurance recovery, acquisition strategies, or a combination of tools. The right answer depends on the property’s history, contamination concerns, ownership status, redevelopment potential, and available funding pathways.

For certain properties, the right strategy may also involve a redevelopment or acquisition partner that can step into a distressed site, manage environmental risk, coordinate cleanup and funding strategy, and help position the property for future reuse. This can be especially valuable when a municipality wants to see a property returned to productive use but does not want to assume unnecessary environmental, legal, or financial risk without a clear plan.

Not every site is the same and understanding early in the process which sites have redevelopment potential, insurance recovery opportunities, or no practical funding path without public support allows municipalities to make better decisions and stretch limited resources further.

This is a message EnviroForensics has shared with Indiana municipal leaders for years. Steve Henshaw, Founder and CEO, has presented on this topic at the AIM Ideas Summit, including sessions on taking ownership of distressed properties and finding value in problem properties. The practical idea is simple: distressed properties do not have to remain stagnant because of contamination, legal uncertainty, or lack of funding when the right tools are evaluated early.

Before Acting on Contaminated Properties, Municipalities Need a Plan

Before taking ownership, applying for funding, or initiating environmental investigation, municipalities should understand a site’s history, potential liability, regulatory implications, funding options, and redevelopment goals. Environmental investigation can create new obligations if contamination is discovered and reported without a plan already in place. That does not mean municipalities should avoid investigation. It means they should first be aware of what could happen next.

Before the next grant deadline, ownership transfer, or environmental investigation, municipalities should evaluate:

• The likely source of contamination
• Site history and past operations
• Current and former owners and operators
• Whether historical insurance policies may exist
• Potential liability and regulatory pathways
• BFPP or other liability protection options before acquisition
• Funding sources beyond federal grants
• Whether an acquisition or redevelopment partnership could help move the site forward
• Realistic reuse outcomes, including housing, commercial redevelopment, mixed-use development, or other community priorities

The goal is to protect the municipality while advancing outcomes that support the broader community. This preparation can strengthen grant applications while also identifying alternative funding pathways for properties that may not receive public funding.

Brownfield Redevelopment Can Still Move Forward in a Tighter Funding Environment

A tighter funding environment does not mean municipalities should stop pursuing brownfield redevelopment.

Distressed properties still hold value. Former dry cleaners, gas stations, industrial sites, tax-delinquent properties, and underutilized parcels can still become housing, commercial space, public assets, or other productive uses.

Across country, municipalities have already shown that complicated sites can be returned to productive use when the right strategy is in place. Former manufacturing sites, dry cleaner properties, and other legacy commercial or industrial sites can become valuable redevelopment opportunities when funding, liability, cleanup, and reuse planning are aligned.

EnviroForensics has seen this firsthand, including through the redevelopment of our own headquarters at 825 North Capitol Avenue in Indianapolis, a former Brownfields site impacted by historical auto repair operations. Our headquarters demonstrates the broader point: when environmental risk, funding, cleanup, and reuse are aligned, contaminated properties can become productive assets again.

To learn how contaminated property can be repositioned for redevelopment, read our article, “Cleaning Up and Restoring Contaminated Properties for Development: Finding Valuable Property Amongst the Blight.”

Before your municipality acts on a brownfield property, make sure you understand the funding path, liability considerations, and environmental risk. Contact EnviroForensics to evaluate your options and develop a practical plan for cleanup and redevelopment.