Cuts to Environmental Clean-up Funds Concern Some Developers

Cleaning up contaminated property in Hennepin County is about to get more expensive for developers.

The Hennepin County Environmental Response Fund grant program expires in January.

According to Rosemary Lavin of Hennepin County Environmental Services, since the fund started in 2001 it has funded approximately $37 million in cleanup for sites that developers went on to build upon. The coffee shops, computer stores and other businesses on them have created an estimated 9,500 jobs.

Real Estate Recycling built the $30 million three-building complex on Lakebreeze Avenue North in Brooklyn Center, which houses Caribou Coffee's world headquarters. The complex houses other Minnesota businesses as well, which together employ some 500 people.

Paul Hyde, a partner in the company, says of the site "but for the grant funds none of this ever would have happened. There isn't private sector money available to pay for pollution cleanup."

The grant provided some $6 million dollars to clean up the site.

However, realtors applaud lawmakers' decision not to extend the program. Chris Galler, CEO of the Minnesota Association of Realtors explains, "It raises transaction fees. So at the same time that the same government officials will say we need to lower home prices, we need to make housing more affordable, they tack an additional fee on to the transaction which makes it less affordable."

The grant money comes from the mortgage registry and deed tax, which home buyers pay with their purchase. Together, they equal 0.02 percent of the price of the home.

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