LANSING?Gov. Rick Snyder on Friday signed legislation sponsored by Sen. Darwin Booher to give local and state officials flexibility to renegotiate brownfield redevelopment loans whose terms may not reflect current financial realities.
“Clean Michigan loans are an important tool the state offers local agencies to help support economic growth and job creation while protecting our environment through the reuse of existing property,” said Booher, R-Evart. “Unfortunately, sometimes market or economic conditions change during the loan period, resulting in local agencies struggling to repay the loan. This new law gives the state the flexibility to renegotiate repayment terms for these brownfield redevelopment loans.”
Public Act 115 of 2014 amends the Brownfield Redevelopment Loan Program to allow the Department of Environmental Quality (DEQ) to alter the terms of a brownfield loan, including the length of the loan, the interest rate and the repayment terms. Under PA 115, the loan can only be altered if requested by the loan recipient and if there was proof of a financial hardship related to the financed project.
“Importantly, the new law has safeguards to ensure this flexibility is used appropriately and is not abused,” Booher said. “This transparency will require a report to the Legislature on the number of loans refinanced, the local unit involved and the change in the loan terms.”
In previous testimony on the bill, Booher was joined by officials from Harrison and Clare County, who supported the bill and told the committee about their situation.
“This fix will help cities like Harrison that rely on increased property values to help pay off these loans,” Booher said. “Simply, it gives officials the ability to craft a workable solution that benefits both the state and the local agencies.”