Full text of Community Reinvestment Forum (Federal Reserve Bank of Cleveland) : The Community Reinvestment Act : A Growing Tool for Brownfield Redevelopment, Spring 2003

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brown•field

cr

What Is a Brownfield?

C O M M U N I T Y REINVESTMENT

Until recently, federal and state agencies had no consistent or official definition of a “brownfield.” Now, the Small Business Liability Relief and
Brownfields Revitalization Act of 2002 provides practitioners with a clear and helpful definition: “real properties, the expansion, redevelopment
1
or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant or contaminant.”
As the Environmental Protection Agency explains, brownfields are not Superfund sites. “Brownfields differ from Superfund sites in the
degree of contamination. Superfund sites pose a real threat to human health and/or the environment. Brownfields, on the other hand, do not
pose serious health or environmental threat. Instead they represent an economic or social threat, since they prevent development and therefore
2
stifle local economies.”

forum

Contacts
and Resources
U.S. Environmental Protection Agency
Brownfields Cleanup and
Revitalization Program

www.epa.gov/brownfields/index.html
The Development Fund
San Francisco, California

1. See www.epa.gov/brownfields/sblrbra.htm .
2. See cfpub.epa.gov/superapps/index.cfm/fuseaction/faqs.viewAnswer/question_id/104/category_id/7/faqanswr.cfm.

THE COMMUNITY
R EINVESTMENT ACT:

> CONTINUED

A Growing Tool
for Brownfield
Redevelopment

2

A 12,000-ton press formerly used by U.S. Steel Corporation, Homestead Steel Works, Homestead, Pennsylvania.

It is no accident that financial institutions in the Fourth Federal Reserve District are taking a
more active role in financing the redevelopment of former industrial sites known as
brownfields. Increasing demand for vacant urban land, high suburban real estate costs,
concerns about sprawl, and private-market incentives are encouraging greater financial
institution participation in brownfield developments. An additional incentive is provided
by the Community Reinvestment Act, the federal law that requires financial institutions
to ascertain and meet community needs, particularly in low- and moderate-income areas.
CONTINUED ON NEXT PAGE

FROM PAGE 1

Until recently, governmentfunded programs drove brownfield redevelopment. This
changed in 1995, when the
Community Reinvestment Act
(CRA) was dramatically overhauled. Revisions to the CRA
transformed the way financial
institutions comply with the
law through their lending,
investing, and service activities
—including loans and investments to brownfields. Now,
banks can receive CRA credit
for “loans to finance environmental cleanup or redevelopment of an industrial site as
part of an effort to revitalize
the low- or moderate-income
community in which the property is located.” 1 Bank loans
and investments qualify if the
financing leads to the removal of
contamination and contributes
to redevelopment activities (see
Compliance Corner on page 7).
Although banks’ participation
in brownfield projects has been
uneven, CRA has persuaded
some financial institutions to
invest in brownfield ventures.

“The availability of CRA credit
would be one component in
consideration of the economics
and the feasibility of a particular loan request,” explains Bill
Hinger of Columbus-based
Huntington Bank.
PNC Financial Services
Group has been active in
brownfield redevelopment
projects in the Pittsburgh area.
PNC evaluates brownfield
financing on the strength of
the deal, not just the ability to
receive CRA credit. “We weigh
brownfield deals on their business merits,” remarks Christine
Olshesky, PNC’s vice president
for environmental services.
“CRA is not a deciding factor in
our involvement, but it helps.”
Brownfield development
experts concur. “We see brownfield deals as simply development deals, not environmental
deals,” explains Craig Kasper of
Hull & Associates, a brownfield
consulting company in Columbus, Ohio. “Banks can provide
critical early-stage and gap
financing for private developers”
to make the deals work, he says.
According to Todd Davis,

Sid Johnston
Executive Director
415/354-5522

president of the Hemisphere
Corporation, a Cleveland-based
brownfield development firm,
“there’s no greater risk in
investing in a brownfield project
than any other project.”
Among other financial institutions in the Fourth District,
however, CRA remains an
underutilized tool for brownfield redevelopment. Fears of
lender liability and confusion
between mildly contaminated
brownfields and “Superfund”
sites—the most polluted locations with the greatest cleanup
costs—have made many financial institutions reluctant to
finance brownfield deals. “If
there are environmental issues
on the site, we generally want
this cleanup to occur prior to
our involvement,” explains
James Gutowski, a National
City Bank CRA officer.
Some lenders worry that
brownfield lending is too risky
to meet safety and soundness
requirements, while others lack
the in-house capacity to finance
CONTINUED ON PAGE 7

>

sjohnston@tdfsf.org
www.tdfsf.org

Jennifer Burke-Russell
Program Director
415/354-5527
jburke@tdfsf.org

Hemisphere Corporation
Cleveland, Ohio

Todd Davis
President
216/464-4105

tdavis@hemispherecorp.com
National City Bank
Pittsburgh, Pennsylvania

James Gutowski
Vice President and CRA Officer
412/644-7638
james.gutowski@nationalcity.com
Huntington Bank
Columbus, Ohio

Bill Hinger
Environmental Risk Manager
614/480-5559
bill.hinger@huntington.com

Hull & Associates, Inc.
Columbus, Ohio

Craig Kasper
Vice President
614/793-8777

ckasper@hullinc.com
PNC Financial
Pittsburgh, Pennsylvania

Christine Olshesky
Vice President, Environmental Services
412/768-8184
christine.olshesky@pncbank.com

Bank of the West
Walnut Creek, California

Gordon Smith
Senior Vice President, Corporate Compliance
925/942-8604
gsmith@bankofthewest.com

Phoenix Land Recycling Company
Harrisburg, Pennsylvania

Keith Welks
President
717/230-9700

kwelks@cs.com
www.phoenixland.org

>

AN EXCHANGE OF COMMUNITY DEVELOPMENT ISSUES AND IDEAS

3

Fourth District Profile
New Brownfield
Programs Create
Investment Opportunities

6

In My Opinion
The Road to
Successful Brownfield
Development

7

Compliance Corner
Financing Brownfields:
Is It Community
Development?

Waterfront Town Center,
Homestead, Pennsylvania.

brown•field

cr

What Is a Brownfield?

C O M M U N I T Y REINVESTMENT

Until recently, federal and state agencies had no consistent or official definition of a “brownfield.” Now, the Small Business Liability Relief and
Brownfields Revitalization Act of 2002 provides practitioners with a clear and helpful definition: “real properties, the expansion, redevelopment
1
or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant or contaminant.”
As the Environmental Protection Agency explains, brownfields are not Superfund sites. “Brownfields differ from Superfund sites in the
degree of contamination. Superfund sites pose a real threat to human health and/or the environment. Brownfields, on the other hand, do not
pose serious health or environmental threat. Instead they represent an economic or social threat, since they prevent development and therefore
2
stifle local economies.”

forum

Contacts
and Resources
U.S. Environmental Protection Agency
Brownfields Cleanup and
Revitalization Program

www.epa.gov/brownfields/index.html
The Development Fund
San Francisco, California

1. See www.epa.gov/brownfields/sblrbra.htm .
2. See cfpub.epa.gov/superapps/index.cfm/fuseaction/faqs.viewAnswer/question_id/104/category_id/7/faqanswr.cfm.

THE COMMUNITY
R EINVESTMENT ACT:

> CONTINUED

A Growing Tool
for Brownfield
Redevelopment

2

A 12,000-ton press formerly used by U.S. Steel Corporation, Homestead Steel Works, Homestead, Pennsylvania.

It is no accident that financial institutions in the Fourth Federal Reserve District are taking a
more active role in financing the redevelopment of former industrial sites known as
brownfields. Increasing demand for vacant urban land, high suburban real estate costs,
concerns about sprawl, and private-market incentives are encouraging greater financial
institution participation in brownfield developments. An additional incentive is provided
by the Community Reinvestment Act, the federal law that requires financial institutions
to ascertain and meet community needs, particularly in low- and moderate-income areas.
CONTINUED ON NEXT PAGE

FROM PAGE 1

Until recently, governmentfunded programs drove brownfield redevelopment. This
changed in 1995, when the
Community Reinvestment Act
(CRA) was dramatically overhauled. Revisions to the CRA
transformed the way financial
institutions comply with the
law through their lending,
investing, and service activities
—including loans and investments to brownfields. Now,
banks can receive CRA credit
for “loans to finance environmental cleanup or redevelopment of an industrial site as
part of an effort to revitalize
the low- or moderate-income
community in which the property is located.” 1 Bank loans
and investments qualify if the
financing leads to the removal of
contamination and contributes
to redevelopment activities (see
Compliance Corner on page 7).
Although banks’ participation
in brownfield projects has been
uneven, CRA has persuaded
some financial institutions to
invest in brownfield ventures.

“The availability of CRA credit
would be one component in
consideration of the economics
and the feasibility of a particular loan request,” explains Bill
Hinger of Columbus-based
Huntington Bank.
PNC Financial Services
Group has been active in
brownfield redevelopment
projects in the Pittsburgh area.
PNC evaluates brownfield
financing on the strength of
the deal, not just the ability to
receive CRA credit. “We weigh
brownfield deals on their business merits,” remarks Christine
Olshesky, PNC’s vice president
for environmental services.
“CRA is not a deciding factor in
our involvement, but it helps.”
Brownfield development
experts concur. “We see brownfield deals as simply development deals, not environmental
deals,” explains Craig Kasper of
Hull & Associates, a brownfield
consulting company in Columbus, Ohio. “Banks can provide
critical early-stage and gap
financing for private developers”
to make the deals work, he says.
According to Todd Davis,

Sid Johnston
Executive Director
415/354-5522

president of the Hemisphere
Corporation, a Cleveland-based
brownfield development firm,
“there’s no greater risk in
investing in a brownfield project
than any other project.”
Among other financial institutions in the Fourth District,
however, CRA remains an
underutilized tool for brownfield redevelopment. Fears of
lender liability and confusion
between mildly contaminated
brownfields and “Superfund”
sites—the most polluted locations with the greatest cleanup
costs—have made many financial institutions reluctant to
finance brownfield deals. “If
there are environmental issues
on the site, we generally want
this cleanup to occur prior to
our involvement,” explains
James Gutowski, a National
City Bank CRA officer.
Some lenders worry that
brownfield lending is too risky
to meet safety and soundness
requirements, while others lack
the in-house capacity to finance
CONTINUED ON PAGE 7

>

sjohnston@tdfsf.org
www.tdfsf.org

Jennifer Burke-Russell
Program Director
415/354-5527
jburke@tdfsf.org

Hemisphere Corporation
Cleveland, Ohio

Todd Davis
President
216/464-4105

tdavis@hemispherecorp.com
National City Bank
Pittsburgh, Pennsylvania

James Gutowski
Vice President and CRA Officer
412/644-7638
james.gutowski@nationalcity.com
Huntington Bank
Columbus, Ohio

Bill Hinger
Environmental Risk Manager
614/480-5559
bill.hinger@huntington.com

Hull & Associates, Inc.
Columbus, Ohio

Craig Kasper
Vice President
614/793-8777

ckasper@hullinc.com
PNC Financial
Pittsburgh, Pennsylvania

Christine Olshesky
Vice President, Environmental Services
412/768-8184
christine.olshesky@pncbank.com

Bank of the West
Walnut Creek, California

Gordon Smith
Senior Vice President, Corporate Compliance
925/942-8604
gsmith@bankofthewest.com

Phoenix Land Recycling Company
Harrisburg, Pennsylvania

Keith Welks
President
717/230-9700

kwelks@cs.com
www.phoenixland.org

>

AN EXCHANGE OF COMMUNITY DEVELOPMENT ISSUES AND IDEAS

3

Fourth District Profile
New Brownfield
Programs Create
Investment Opportunities

6

In My Opinion
The Road to
Successful Brownfield
Development

7

Compliance Corner
Financing Brownfields:
Is It Community
Development?

Waterfront Town Center,
Homestead, Pennsylvania.

4th district

profile
New Brownfield Programs Create
Investment Opportunities in the Fourth District

3

New legislation, grant programs, and innovative market-based
initiatives at the state and federal levels are helping communities to
transform brownfield sites into vibrant, mixed-use neighborhoods
throughout the Fourth Federal Reserve District.
Smokestacks and housing (background)
in Homestead, Pennsylvania.

Federal legislation passed in 2002, the Small Business Liability
Relief and Brownfields Revitalization Act, made sweeping changes
to the Superfund law, including liability protection for prospective
purchasers, landowners, contiguous property owners, and small
business owners. It provides $200 million to states, local communities,
and nonprofit organizations to assist in the cleanup and redevelopment of contaminated sites. The new law facilitates the return of
polluted properties to productive real estate.
Other federal programs that are available in the Fourth District
leverage resources for brownfield redevelopment. The U.S. Department of Housing and Urban Development administers the Brownfields Economic Development Initiative, a competitive grant program
designed to stimulate and promote the redevelopment of brownfield
sites. The Federal Home Loan Bank of Pittsburgh’s Community
Lending Program offers loans to member financial institutions which
provide financing for construction on brownfield sites in low- and
moderate-income communities.

An increasing array of state-level initiatives assist in the assessment,
cleanup, and redevelopment of brownfield sites. In 2001, the Ohio
General Assembly created the Clean Ohio Revitalization Fund to invest
up to $200 million for the evaluation, cleanup, and redevelopment
of vacant and underutilized sites. The grants and low-interest loans,
which are awarded on a competitive basis, can be used for environmental cleanup, demolition, and upgrading or installing basic infrastructure in preparation for development activities. In 2002, 16 grants
totaling $39.7 million were awarded to 12 Ohio communities. This
fund, coupled with Ohio’s Voluntary Action Program, “provide a
comfort level for lending institutions when considering contaminated
sites to secure a loan,” says Bill Hinger of Huntington Bank.
In 2001, Kentucky initiated the Voluntary Environmental Remediation Program to provide a “covenant not to sue” for eligible applicants, including financial institutions. By encouraging brownfield
redeveloment, the program targets “growing concerns about urban
sprawl across the Commonwealth,” according to Herb Petitjean,
Kentucky’s brownfield coordinator.

In Wheeling, West Virginia, the city administers a $500,000
Brownfields Cleanup Revolving Loan Fund Pilot, which was
granted to the city by the Environmental Protection Agency in 1999.
“Once the brownfield sites have been cleaned, the city hopes to
work with local financial institutions, the West Virginia Department
of Environmental Protection, and other partners to redevelop these
locations,” explains Melissa Thompson, Wheeling’s community
development specialist.
In Ambridge, Pennsylvania, the Environmental Protection Agency
awarded the borough a $200,000 Brownfield Assessment Pilot
Grant in September 2002. The funds will be used to test the former
Ambridge Steel Works for contaminants. “Our ultimate goal is to
create a $15 million mixed-use commercial, industrial, retail, and
residential site,” remarks Borough Manager Pam Caskie.
In Pennsylvania, the statewide Financial Resources for the
Environment fund will provide financial institution capital to make
loans to borrowers that engage in brownfield site investigation and
cleanup. This innovative way of financing brownfield redevelopment
was established with help from the Cleveland and Philadelphia
Federal Reserve Banks, as well as many financial institutions, the
Development Fund, Phoenix Land Recycling Company, and the
Pennsylvania Departments of Environmental Protection, Community
and Economic Development, and Banking.
As a result of new public and private programs at the federal
and state levels, important new laws and sources of capital can be
utilized to facilitate brownfield revitalization throughout the Fed’s
Fourth District.
Housing on Washington’s Landing in
Pittsburgh, a former brownfield site.

The Value of
Brownfield
Redevelopment
Federal Reserve Board Governor Edward M. Gramlich
spoke about the value of brownfield redevelopment at
the Federal Reserve Bank of Cleveland’s conference,
“Livable Communities: Linking Community Development
and Smart Growth,” held November 7, 2002, in Cincinnati:
Given its industrial history of steel manufacturing, Pittsburgh has many contaminated
brownfields that it would like to redevelop.
Washington’s Landing, a forty-two acre island
near downtown Pittsburgh, was once the site of many of these
brownfields. It is now home to high-end housing, offices, retail
stores, light industry, and a public park. Collaboration was
critical to the success of this process, and private investment
was vital to economic sustainability. Public – private partnerships
can be an effective mechanism for developing mutually beneficial strategies that address both the needs of the community
and the needs of the business sector.

4th district

profile
New Brownfield Programs Create
Investment Opportunities in the Fourth District

3

New legislation, grant programs, and innovative market-based
initiatives at the state and federal levels are helping communities to
transform brownfield sites into vibrant, mixed-use neighborhoods
throughout the Fourth Federal Reserve District.
Smokestacks and housing (background)
in Homestead, Pennsylvania.

Federal legislation passed in 2002, the Small Business Liability
Relief and Brownfields Revitalization Act, made sweeping changes
to the Superfund law, including liability protection for prospective
purchasers, landowners, contiguous property owners, and small
business owners. It provides $200 million to states, local communities,
and nonprofit organizations to assist in the cleanup and redevelopment of contaminated sites. The new law facilitates the return of
polluted properties to productive real estate.
Other federal programs that are available in the Fourth District
leverage resources for brownfield redevelopment. The U.S. Department of Housing and Urban Development administers the Brownfields Economic Development Initiative, a competitive grant program
designed to stimulate and promote the redevelopment of brownfield
sites. The Federal Home Loan Bank of Pittsburgh’s Community
Lending Program offers loans to member financial institutions which
provide financing for construction on brownfield sites in low- and
moderate-income communities.

An increasing array of state-level initiatives assist in the assessment,
cleanup, and redevelopment of brownfield sites. In 2001, the Ohio
General Assembly created the Clean Ohio Revitalization Fund to invest
up to $200 million for the evaluation, cleanup, and redevelopment
of vacant and underutilized sites. The grants and low-interest loans,
which are awarded on a competitive basis, can be used for environmental cleanup, demolition, and upgrading or installing basic infrastructure in preparation for development activities. In 2002, 16 grants
totaling $39.7 million were awarded to 12 Ohio communities. This
fund, coupled with Ohio’s Voluntary Action Program, “provide a
comfort level for lending institutions when considering contaminated
sites to secure a loan,” says Bill Hinger of Huntington Bank.
In 2001, Kentucky initiated the Voluntary Environmental Remediation Program to provide a “covenant not to sue” for eligible applicants, including financial institutions. By encouraging brownfield
redeveloment, the program targets “growing concerns about urban
sprawl across the Commonwealth,” according to Herb Petitjean,
Kentucky’s brownfield coordinator.

In Wheeling, West Virginia, the city administers a $500,000
Brownfields Cleanup Revolving Loan Fund Pilot, which was
granted to the city by the Environmental Protection Agency in 1999.
“Once the brownfield sites have been cleaned, the city hopes to
work with local financial institutions, the West Virginia Department
of Environmental Protection, and other partners to redevelop these
locations,” explains Melissa Thompson, Wheeling’s community
development specialist.
In Ambridge, Pennsylvania, the Environmental Protection Agency
awarded the borough a $200,000 Brownfield Assessment Pilot
Grant in September 2002. The funds will be used to test the former
Ambridge Steel Works for contaminants. “Our ultimate goal is to
create a $15 million mixed-use commercial, industrial, retail, and
residential site,” remarks Borough Manager Pam Caskie.
In Pennsylvania, the statewide Financial Resources for the
Environment fund will provide financial institution capital to make
loans to borrowers that engage in brownfield site investigation and
cleanup. This innovative way of financing brownfield redevelopment
was established with help from the Cleveland and Philadelphia
Federal Reserve Banks, as well as many financial institutions, the
Development Fund, Phoenix Land Recycling Company, and the
Pennsylvania Departments of Environmental Protection, Community
and Economic Development, and Banking.
As a result of new public and private programs at the federal
and state levels, important new laws and sources of capital can be
utilized to facilitate brownfield revitalization throughout the Fed’s
Fourth District.
Housing on Washington’s Landing in
Pittsburgh, a former brownfield site.

The Value of
Brownfield
Redevelopment
Federal Reserve Board Governor Edward M. Gramlich
spoke about the value of brownfield redevelopment at
the Federal Reserve Bank of Cleveland’s conference,
“Livable Communities: Linking Community Development
and Smart Growth,” held November 7, 2002, in Cincinnati:
Given its industrial history of steel manufacturing, Pittsburgh has many contaminated
brownfields that it would like to redevelop.
Washington’s Landing, a forty-two acre island
near downtown Pittsburgh, was once the site of many of these
brownfields. It is now home to high-end housing, offices, retail
stores, light industry, and a public park. Collaboration was
critical to the success of this process, and private investment
was vital to economic sustainability. Public – private partnerships
can be an effective mechanism for developing mutually beneficial strategies that address both the needs of the community
and the needs of the business sector.

of interest
Investment Tools for
Rebuilding Communities

June 6, 2003
Pittsburgh, Pennsylvania
Sponsored by the Federal Reserve Bank of Cleveland,
Pittsburgh History and Landmarks Foundation, and
Manchester Citizens Corporation
For information, contact Cathy McCollom at 412/471-5808
or cathy@phlf.org or Dan Holland at 412/261-7947 or
daniel.holland@clev.frb.org.

October 8, 2003
Erie, Pennsylvania
Sponsored by the Federal Reserve Bank of Cleveland
and Northwest Pennsylvania Regional Planning and
Development Commission
Contact: Dale Massie at 814/677-4800 or
dalem@nwplan.org or Dan Holland at 412/261-7947
or daniel.holland@clev.frb.org.

2003 Community Development
Policy Summit: New Approaches
for Building Stronger Communities

Big Ideas for Small Business
November 6, 2003
Cincinnati, Ohio
Sponsored by the Federal Reserve Bank of Cleveland
A conference for small business owners and entrepreneurs
designed to spark new thinking about opportunities for
success in a changing economy.
Contact: Jeffrey Gatica at 513/455-4281 or
jeffrey.gatica@clev.frb.org.

June 11, 2003
Cleveland, Ohio
Sponsored by the Federal Reserve Bank of Cleveland
In partnership with the Office of the Comptroller of the
Currency, FDIC, and Office of Thrift Supervision
The program will explore current and pending federal
legislation and the impact on community development
efforts throughout Ohio, Pennsylvania, Kentucky, and
West Virginia.
For information, contact Jeffrey Gatica at 513/455- 4281
or jeffrey.a.gatica@clev.frb.org.

Financial Education Roundtable: What
Is It and What Makes It So Important?
June 17 (Dayton), June 18 (Cincinnati),
June 24 (Cleveland), June 27 (Pittsburgh)
Sponsored by the Federal Reserve Bank of Cleveland and
local partners
The roundtables will discuss the Federal Reserve Bank of
Cleveland’s financial education survey results and explore
best practices for financial education programs.
In Dayton and Cincinnati, contact Candis Smith at
513/455-4350 or candis.smith@clev.frb.org;
in Cleveland, contact Virginia Hopley at 216/579-2891 or
virginia.l.hopley@clev.frb.org;
in Pittsburgh, contact Dan Holland at 412/261-7947 or
daniel.holland@clev.frb.org.
National Community Development
Lending School
September 14–18, 2003
Atlanta, Georgia
Georgia Tech Hotel and Conference Center
Sponsored by the Federal Reserve Banks of Atlanta and
San Francisco and Georgia Institute of Technology
For information, visit the Federal Reserve Bank of
San Francisco at www.frbsf.org/community
or call Bruce Ito at 415/974-2242.

opinion

Community Reinvestment
Special Reports Coming Soon

Conferences and Workshops

Pittsburgh Symposium
on Vacant Buildings and Land

in my

Reinventing America:
Communities for the 21st Century

November 5–7, 2003
Philadelphia, Pennsylvania
Sponsored by the Federal Reserve Bank of Philadelphia,
Brookings Institution, William Penn Foundation, and the
Reinvestment Fund
For information, contact Vera Bowders at 215/574-6570
or vera.bowders@phil.frb.org .
Seeds of Growth
Sustainable Community Development:
What Works, What Doesn’t and Why
Papers presented at the Federal Reserve System Research
Conference, March 27– 28, 2003, in Washington, D.C.,
are now available online at
www.federalreserve.gov/communityaffairs/national/
CA_Conf_SusCommDev/papers.htm.
Fed Launches Web Site For
Financial Education, Research
The Federal Reserve System launched an online resource for
financial education and research in April. The Financial
Education Research Center is designed for educators,
researchers, program directors, and others interested in
improving financial education. Researchers and educators
are invited to submit material for inclusion on the site.
Visit the new site at www.chicagofed.org/cedric/index.cfm.

The Road to Successful Brownfield
Development: Overcome the Risks,
Maximize Partnerships

Financial Education: What Is It
and What Makes It So Important?
May 2003
Results from the Federal Reserve Bank of Cleveland –
Community Affairs Office’s survey of financial education
programs, including information on program curricula,
delivery, and impact.
Fourth District Environmental Assessment
August 2003
Results from the Community Affairs’ survey of economic
development practitioners; covers trends affecting
community reinvestment and economic development
prospects in low- and moderate-income communities
within the Fourth Federal Reserve District.
Cincinnati Lending
in the Empowerment Zone
October 2003
For more information, contact Virginia Hopley at
216/579-2891 or virginia.l.hopley@clev.frb.org.
Cincinnati Community Leader
Named to Fed Consumer
Advisory Council
James King, president and chief executive officer of the
Community Redevelopment Group in Cincinnati, Ohio, has
been appointed to the Federal Reserve Board of Governors’
Consumer Advisory Council. He is one of 10 new members
who will serve three-year terms.
The council advises the Board on the exercise of its
responsibilities under the Consumer Credit Protection Act
and other matters relating to consumer financial services.
The Council meets three times a year in Washington, D.C.
In his role as president of the Community Development
Group, Mr. King administers the day-to-day operations of
residential and commercial development and construction,
marketing, and management for two community development corporations, the Avondale Redevelopment Corporation
and the Walnut Hills Redevelopment Foundation.
Mr. King is a member of the City of Cincinnati’s Economic
Development Task Force, the National Congress for
Community Economic Development, and the Neighborhood
Development Corporations Association of Cincinnati. He is
a co-chair of Cincinnati CAN (Community Action Now) and
a member of the Federal Home Loan Bank of Cincinnati
Advisory Council and the Cincinnati Park Board Master
Plan Advisory Committee. In 2001, Mr. King received the
James A. Johnson Community Fellow Award from the
Fannie Mae Foundation.

Deborah Lange
Executive Director
The Brownfields Center,
Carnegie Mellon University
dlange@cmu.edu

T

he “official” definition of
a brownfield can be ominous
and certainly intimidating
(see page 2). Truth be known,
however, the world has been
redeveloping old industrial sites
for years, we just did not call
them “brownfields” until the
federal brownfield program
was initiated in the mid-1990s.
What has changed, and why
is there all of this energy and
excitement about brownfield
development?
To encourage the re-entry
of less hazardous brownfield
properties into the market, the
U.S. Environmental Protection
Agency moved away from the
Superfund paradigm to create
the brownfield program. Three
key features of the new program
include the limitation of liability,
the availability of assessment
and remediation funds, and the
shift of authority from the

Deborah Lange is the executive director of the Brownfields Center at Carnegie Mellon University,
where she acts as an intermediary between universities and the brownfield development community.
She has created multidisciplinary education and training programs that have been effective in engaging
students with both private-sector and public-sector practitioners, and she has developed communitybased workshops that engage the wider spectrum of brownfield development stakeholders. She holds
a doctorate in civil and environmental engineering from Carnegie Mellon. Since 1998, she has worked
extensively in the Czech Republic, Slovakia, Hungary, and Poland.

EPA to state departments of
environmental protection. These
components set brownfields
apart legally and financially
from the more hazardous and
litigious Superfund sites.
New brownfields legislation
passed last year—the Small
Business Liability Relief and
Brownfields Revitalization Ac t—
limits liability, which protects
innocent landowners, prospective purchasers, and contiguous
properties owners so long as
the necessary proof can be
provided. Although the new
legislation does not let all parties
off the hook, it takes important
strides toward creating a
cooperative and encouraging
platform for transaction.
The new legislation also
provides grants and loans,
available on a competitive
basis, for site assessment and
remediation to jump start
activity on a stalled brownfield.

Up to $250 million per year
has been designated for cleanup
programs and state aid. Again,
this is not enough to remediate
all potentially contaminated
properties, but it is enough to
encourage hesitant stakeholders
to take the first steps in assessing
the problem.
More importantly, the new
legislation transfers the authority
for brownfield regulation to the
states. This is good news: If the
problem is at home, then so
should the solution. Many states,
including Pennsylvania and
Ohio, have developed voluntary
cleanup programs that also
provide for a limitation of
liability, financial incentives, and
realistic, risk-based cleanups
that consider the property’s
end use when establishing
appropriate and allowable
residual contaminant levels.

Federal legislation and
voluntary state programs have
opened the door and have
moved away from a commandand-control approach to a more
user-friendly mode—keeping
brownfield development a local
issue, where it belongs. This is
to say that brownfield development occurs where there is a
demand for the real estate and
where there is a willingness for
public –private partnerships
that result in shared environmental and financial risk. The
energy comes from the local
level and follows the adage
that “where there is a will,
there is a way.”
Yes, brownfield development
can be risky, and yes, it can be
intimidating. But it is feasible,
and the rewards can be great.
The regulatory and financial
frameworks are in place; it is up
to local stakeholders to build
partnerships and work within
the system to find solutions to
turn opportunities into reality.

6

of interest
Investment Tools for
Rebuilding Communities

June 6, 2003
Pittsburgh, Pennsylvania
Sponsored by the Federal Reserve Bank of Cleveland,
Pittsburgh History and Landmarks Foundation, and
Manchester Citizens Corporation
For information, contact Cathy McCollom at 412/471-5808
or cathy@phlf.org or Dan Holland at 412/261-7947 or
daniel.holland@clev.frb.org.

October 8, 2003
Erie, Pennsylvania
Sponsored by the Federal Reserve Bank of Cleveland
and Northwest Pennsylvania Regional Planning and
Development Commission
Contact: Dale Massie at 814/677-4800 or
dalem@nwplan.org or Dan Holland at 412/261-7947
or daniel.holland@clev.frb.org.

2003 Community Development
Policy Summit: New Approaches
for Building Stronger Communities

Big Ideas for Small Business
November 6, 2003
Cincinnati, Ohio
Sponsored by the Federal Reserve Bank of Cleveland
A conference for small business owners and entrepreneurs
designed to spark new thinking about opportunities for
success in a changing economy.
Contact: Jeffrey Gatica at 513/455-4281 or
jeffrey.gatica@clev.frb.org.

June 11, 2003
Cleveland, Ohio
Sponsored by the Federal Reserve Bank of Cleveland
In partnership with the Office of the Comptroller of the
Currency, FDIC, and Office of Thrift Supervision
The program will explore current and pending federal
legislation and the impact on community development
efforts throughout Ohio, Pennsylvania, Kentucky, and
West Virginia.
For information, contact Jeffrey Gatica at 513/455- 4281
or jeffrey.a.gatica@clev.frb.org.

Financial Education Roundtable: What
Is It and What Makes It So Important?
June 17 (Dayton), June 18 (Cincinnati),
June 24 (Cleveland), June 27 (Pittsburgh)
Sponsored by the Federal Reserve Bank of Cleveland and
local partners
The roundtables will discuss the Federal Reserve Bank of
Cleveland’s financial education survey results and explore
best practices for financial education programs.
In Dayton and Cincinnati, contact Candis Smith at
513/455-4350 or candis.smith@clev.frb.org;
in Cleveland, contact Virginia Hopley at 216/579-2891 or
virginia.l.hopley@clev.frb.org;
in Pittsburgh, contact Dan Holland at 412/261-7947 or
daniel.holland@clev.frb.org.
National Community Development
Lending School
September 14–18, 2003
Atlanta, Georgia
Georgia Tech Hotel and Conference Center
Sponsored by the Federal Reserve Banks of Atlanta and
San Francisco and Georgia Institute of Technology
For information, visit the Federal Reserve Bank of
San Francisco at www.frbsf.org/community
or call Bruce Ito at 415/974-2242.

opinion

Community Reinvestment
Special Reports Coming Soon

Conferences and Workshops

Pittsburgh Symposium
on Vacant Buildings and Land

in my

Reinventing America:
Communities for the 21st Century

November 5–7, 2003
Philadelphia, Pennsylvania
Sponsored by the Federal Reserve Bank of Philadelphia,
Brookings Institution, William Penn Foundation, and the
Reinvestment Fund
For information, contact Vera Bowders at 215/574-6570
or vera.bowders@phil.frb.org .
Seeds of Growth
Sustainable Community Development:
What Works, What Doesn’t and Why
Papers presented at the Federal Reserve System Research
Conference, March 27– 28, 2003, in Washington, D.C.,
are now available online at
www.federalreserve.gov/communityaffairs/national/
CA_Conf_SusCommDev/papers.htm.
Fed Launches Web Site For
Financial Education, Research
The Federal Reserve System launched an online resource for
financial education and research in April. The Financial
Education Research Center is designed for educators,
researchers, program directors, and others interested in
improving financial education. Researchers and educators
are invited to submit material for inclusion on the site.
Visit the new site at www.chicagofed.org/cedric/index.cfm.

The Road to Successful Brownfield
Development: Overcome the Risks,
Maximize Partnerships

Financial Education: What Is It
and What Makes It So Important?
May 2003
Results from the Federal Reserve Bank of Cleveland –
Community Affairs Office’s survey of financial education
programs, including information on program curricula,
delivery, and impact.
Fourth District Environmental Assessment
August 2003
Results from the Community Affairs’ survey of economic
development practitioners; covers trends affecting
community reinvestment and economic development
prospects in low- and moderate-income communities
within the Fourth Federal Reserve District.
Cincinnati Lending
in the Empowerment Zone
October 2003
For more information, contact Virginia Hopley at
216/579-2891 or virginia.l.hopley@clev.frb.org.
Cincinnati Community Leader
Named to Fed Consumer
Advisory Council
James King, president and chief executive officer of the
Community Redevelopment Group in Cincinnati, Ohio, has
been appointed to the Federal Reserve Board of Governors’
Consumer Advisory Council. He is one of 10 new members
who will serve three-year terms.
The council advises the Board on the exercise of its
responsibilities under the Consumer Credit Protection Act
and other matters relating to consumer financial services.
The Council meets three times a year in Washington, D.C.
In his role as president of the Community Development
Group, Mr. King administers the day-to-day operations of
residential and commercial development and construction,
marketing, and management for two community development corporations, the Avondale Redevelopment Corporation
and the Walnut Hills Redevelopment Foundation.
Mr. King is a member of the City of Cincinnati’s Economic
Development Task Force, the National Congress for
Community Economic Development, and the Neighborhood
Development Corporations Association of Cincinnati. He is
a co-chair of Cincinnati CAN (Community Action Now) and
a member of the Federal Home Loan Bank of Cincinnati
Advisory Council and the Cincinnati Park Board Master
Plan Advisory Committee. In 2001, Mr. King received the
James A. Johnson Community Fellow Award from the
Fannie Mae Foundation.

Deborah Lange
Executive Director
The Brownfields Center,
Carnegie Mellon University
dlange@cmu.edu

T

he “official” definition of
a brownfield can be ominous
and certainly intimidating
(see page 2). Truth be known,
however, the world has been
redeveloping old industrial sites
for years, we just did not call
them “brownfields” until the
federal brownfield program
was initiated in the mid-1990s.
What has changed, and why
is there all of this energy and
excitement about brownfield
development?
To encourage the re-entry
of less hazardous brownfield
properties into the market, the
U.S. Environmental Protection
Agency moved away from the
Superfund paradigm to create
the brownfield program. Three
key features of the new program
include the limitation of liability,
the availability of assessment
and remediation funds, and the
shift of authority from the

Deborah Lange is the executive director of the Brownfields Center at Carnegie Mellon University,
where she acts as an intermediary between universities and the brownfield development community.
She has created multidisciplinary education and training programs that have been effective in engaging
students with both private-sector and public-sector practitioners, and she has developed communitybased workshops that engage the wider spectrum of brownfield development stakeholders. She holds
a doctorate in civil and environmental engineering from Carnegie Mellon. Since 1998, she has worked
extensively in the Czech Republic, Slovakia, Hungary, and Poland.

EPA to state departments of
environmental protection. These
components set brownfields
apart legally and financially
from the more hazardous and
litigious Superfund sites.
New brownfields legislation
passed last year—the Small
Business Liability Relief and
Brownfields Revitalization Ac t—
limits liability, which protects
innocent landowners, prospective purchasers, and contiguous
properties owners so long as
the necessary proof can be
provided. Although the new
legislation does not let all parties
off the hook, it takes important
strides toward creating a
cooperative and encouraging
platform for transaction.
The new legislation also
provides grants and loans,
available on a competitive
basis, for site assessment and
remediation to jump start
activity on a stalled brownfield.

Up to $250 million per year
has been designated for cleanup
programs and state aid. Again,
this is not enough to remediate
all potentially contaminated
properties, but it is enough to
encourage hesitant stakeholders
to take the first steps in assessing
the problem.
More importantly, the new
legislation transfers the authority
for brownfield regulation to the
states. This is good news: If the
problem is at home, then so
should the solution. Many states,
including Pennsylvania and
Ohio, have developed voluntary
cleanup programs that also
provide for a limitation of
liability, financial incentives, and
realistic, risk-based cleanups
that consider the property’s
end use when establishing
appropriate and allowable
residual contaminant levels.

Federal legislation and
voluntary state programs have
opened the door and have
moved away from a commandand-control approach to a more
user-friendly mode—keeping
brownfield development a local
issue, where it belongs. This is
to say that brownfield development occurs where there is a
demand for the real estate and
where there is a willingness for
public –private partnerships
that result in shared environmental and financial risk. The
energy comes from the local
level and follows the adage
that “where there is a will,
there is a way.”
Yes, brownfield development
can be risky, and yes, it can be
intimidating. But it is feasible,
and the rewards can be great.
The regulatory and financial
frameworks are in place; it is up
to local stakeholders to build
partnerships and work within
the system to find solutions to
turn opportunities into reality.

6

> CONTINUED

FROM PAGE 2

complex brownfield deals.
Fortunately, new federal and
state legal waivers, voluntary
cleanup programs, and marketbased incentives such as CRA
reduce lenders’ risk exposure
and encourage greater privatemarket brownfield investing.
Financial institutions may be
eligible to receive CRA credit if
they provide capital to sharedrisk loan pools that finance
brownfield redevelopment,
such as the emerging Financial
Resources for the Environment
(FRE) fund in Pennsylvania.
Financial institution investors
may qualify for CRA credit
because brownfield development
qualifies as community development, passes the “community
welfare” test of Regulation Y,
promotes economic development, and meets the innovative
standard. 2 In the Fourth District,
Citizens Bank, Mellon Financial,
National City Bank, and PNC
Financial have been active
participants in the effort to
establish the FRE fund.
FRE is modeled after the
California Environmental
Redevelopment Fund (CERF).
Although no official regulatory
statement has stated that investments in such funds qualify for
CRA credit, correspondence
from the Office of the Comptroller of the Currency to Bank
of America in 2001 indicates
that the bank’s “investment
in CERF will primarily benefit

low- and moderate-income
areas of California,” a key
component of the CRA. Furthermore, the Federal Reserve Bank
of San Francisco approved
CERF as a “public welfare
investment,” a designation that
financial institutions need in
order to have regulatory permission to make the investment. FRE is pursuing similar
certification.
Financial institution investments in brownfield projects are
“a win-win scenario,” claims
Jennifer Burke-Russell of the
Development Fund in California,
a nonprofit that was instrumental in creating both FRE
and CERF. “Financial institutions which invest in brownfield
sites recognize decent returns
on investment, obtain CRA
credit, receive permanent
financing opportunities, and
establish long-term relationships,” she says.
“CRA was certainly a consideration for us to participate
[in CERF],” explains Gordon
Smith of Bank of the West in
California and chair of CERF’s
board of directors. “A very
elaborate risk-management
process was established to make
the deals work,” he says.
Not all brownfield loans and
investments qualify under the
Community Reinvestment Act.
But as a strategy for attracting
capital, CRA is a powerful tool
in the effort to return brownfield sites to productive uses
that will benefit low- and
moderate-income communities.

NOTES
1. Community Reinvestment Act regulations,
vol. 60, no. 086, part III, 60 FR 22156,
May 04, 1995.
2. Federal Financial Institutions Examination
Council, “Community Reinvestment Act:
Interagency Questions and Answers Regarding
Community Reinvestments,” July 12, 2001.
Available at www.ffiec.gov/cra/qnadoc.htm.

Hiking trail along the former LTV Steel
Works site in Pittsburgh.

corner

compliance

CR FORUM
Dan Holland, Editor in Chief
Cassandra McConnell, Managing Editor
Deborah Ring Zorska, Copyeditor
Michael Galka, Graphic Design

Financing Brownfields:
Is It Community Development?

Please contact the following members of the
Community Affairs staff if you have questions or
would like additional copies of this publication.

John Sabath
Consumer Affairs Examiner
Federal Reserve Bank of Cleveland

CLEVELAND

Typically, financial institutions are not eager to finance land
development deals. Most banks come to the table after developers
and local municipalities have secured a majority of their funds
from state or federal sources. Throw in contaminated soil or water,
and the project becomes too complex for traditional commercial
financing, thus eliminating most banks, particularly smaller ones.
Nevertheless, there is room for banks to participate in brownfield
development.

216/579-2044

Mark Sniderman
Senior Vice President
and Director of Research

Many opportunities for community development lending are
available in the Fourth District. Eastern Ohio, western Pennsylvania
and parts of West Virginia, in particular, are home to sites that
are available for affordable-housing and small business and farm
development. Under the CRA, community development investments should meet one of the following criteria:
■

■

■

■

Provides affordable housing (as a percentage of units) for lowand moderate-income individuals
Provides a service (child care, educational services, health
services, social services) targeted to low- and moderate-income
individuals
Promotes economic development by financing small businesses
or farms or by creating, retaining, or improving jobs for lowand moderate income individuals or in low- and moderateincome geographies that have been targeted for redevelopment
(such as empowerment zones)
Revitalizes or stabilizes low- and moderate-income geographies
through permanent job creation, retention, or improvement.
CONTINUED ON PAGE 8

>

mark.s.sniderma n@clev.frb.org
Ruth Clevenger
Vice President
and Community Affairs Officer

216/579-2392
ruth.m.clevenger@clev.frb.org
Cassandra McConnell
Community Affairs Manager

216/579-2474
cassandra.e.mcconnell@clev.frb.org

7

Virginia Hopley
Research Analyst

216/579-2891
virginia.l.hopley@clev.frb.org
Maria J. Thompson
Senior Advisor

216/579-2903
maria.j.thompson @clev.frb.org

> CONTINUED

FROM PAGE 7

Institutions that meet any one of these criteria by working with brownfield developments should yield
CRA consideration during the exam.
Some financial institutions, varying in size and business strategy, have been able to participate in brownfield development. Seattle-based ShoreBank Pacific, a subsidiary of ShoreBank Corporation—the
nation’s oldest and largest community development bank —invests in conservation groups that clean
up contaminated sites. ShoreBank Pacific loaned $900,000 to a developer to build homes and businesses
on 16 acres of land where a former lumber operation stood. Wainwright Bank and Trust in Boston also
has made environmental lending part of its business model. But unlike ShoreBank and most other lending
entities, Wainwright is involved in funding cleanup costs, and it has been hailed as a “conventional bank
doing unconventional things.” 1 The bank created a senior management position dedicated to community
development lending, and it has loaned over $140 million to nonprofit organization over the past 10 years.2
Wainwright has received an outstanding rating in its last three examinations.
Under the CRA, the consideration that banks receive for community development lending is measured in
terms of the qualitative affect on low- and moderate-income communities, rather than the quantitative
affect or dollar amount. A similar analysis is applied for the lending test: For instance, a smaller community development loan may return greater CRA credit than a larger loan with less innovation or impact
on the community.
John Sabath is a consumer affairs examiner at the Federal Reserve Bank of Cleveland’s Cincinnati Branch. He has participated in the
management of CRA programs at U.S. Bank and National City Bank and assists community organizations in their revitalization and
organizing efforts.

Laura Kyzour
Administrative Assistant

NOTES

216/579-2846

1. Wainwright Bank and Trust Company, Boston, Massachussetts, Community Reinvestment Act Performance Evaluation, June 2002.

laura.l.kyzour@ clev.frb.org

2. Ibid.

CINCINNATI
Jeff Gatica
Senior Advisor

513/455-4281
jeffrey.a.gatica@clev.frb.org
Candis Smith
Community Affairs Liaison

513/455-4350
candis.smith@clev.frb.org

PITTSBURGH
Dan Holland
Senior Advisor

412/ 261-7947
daniel.hollan d@ clev.frb.org

Visit us on the World Wide Web
www.clevelandfed.org

We welcome your comments
and suggestions—send them to
daniel.holland @clev.frb.org.

The views stated in Community Reinvestment Forum
are those of the individual authors and are not
necessarily those of the Federal Reserve Bank of
Cleveland or of the Board of Governors of the
Federal Reserve System.
Materials may be reprinted provided that the
source is credited. Please send copies of reprinted
materials to Community Affairs, Federal Reserve
Bank of Cleveland, P.O. Box 6387, Cleveland, Ohio
44101-1387.

FEDERAL RESERVE BANK OF CLEVELAND

P.O. BOX 6387
CLEVELAND, OH 44101-1387

FIRST CLASS MAIL
U S POSTAGE PAID
CLEVELAND, OHIO
PERMIT NO. 385

8

> CONTINUED

FROM PAGE 2

complex brownfield deals.
Fortunately, new federal and
state legal waivers, voluntary
cleanup programs, and marketbased incentives such as CRA
reduce lenders’ risk exposure
and encourage greater privatemarket brownfield investing.
Financial institutions may be
eligible to receive CRA credit if
they provide capital to sharedrisk loan pools that finance
brownfield redevelopment,
such as the emerging Financial
Resources for the Environment
(FRE) fund in Pennsylvania.
Financial institution investors
may qualify for CRA credit
because brownfield development
qualifies as community development, passes the “community
welfare” test of Regulation Y,
promotes economic development, and meets the innovative
standard. 2 In the Fourth District,
Citizens Bank, Mellon Financial,
National City Bank, and PNC
Financial have been active
participants in the effort to
establish the FRE fund.
FRE is modeled after the
California Environmental
Redevelopment Fund (CERF).
Although no official regulatory
statement has stated that investments in such funds qualify for
CRA credit, correspondence
from the Office of the Comptroller of the Currency to Bank
of America in 2001 indicates
that the bank’s “investment
in CERF will primarily benefit

low- and moderate-income
areas of California,” a key
component of the CRA. Furthermore, the Federal Reserve Bank
of San Francisco approved
CERF as a “public welfare
investment,” a designation that
financial institutions need in
order to have regulatory permission to make the investment. FRE is pursuing similar
certification.
Financial institution investments in brownfield projects are
“a win-win scenario,” claims
Jennifer Burke-Russell of the
Development Fund in California,
a nonprofit that was instrumental in creating both FRE
and CERF. “Financial institutions which invest in brownfield
sites recognize decent returns
on investment, obtain CRA
credit, receive permanent
financing opportunities, and
establish long-term relationships,” she says.
“CRA was certainly a consideration for us to participate
[in CERF],” explains Gordon
Smith of Bank of the West in
California and chair of CERF’s
board of directors. “A very
elaborate risk-management
process was established to make
the deals work,” he says.
Not all brownfield loans and
investments qualify under the
Community Reinvestment Act.
But as a strategy for attracting
capital, CRA is a powerful tool
in the effort to return brownfield sites to productive uses
that will benefit low- and
moderate-income communities.

NOTES
1. Community Reinvestment Act regulations,
vol. 60, no. 086, part III, 60 FR 22156,
May 04, 1995.
2. Federal Financial Institutions Examination
Council, “Community Reinvestment Act:
Interagency Questions and Answers Regarding
Community Reinvestments,” July 12, 2001.
Available at www.ffiec.gov/cra/qnadoc.htm.

Hiking trail along the former LTV Steel
Works site in Pittsburgh.

corner

compliance

CR FORUM
Dan Holland, Editor in Chief
Cassandra McConnell, Managing Editor
Deborah Ring Zorska, Copyeditor
Michael Galka, Graphic Design

Financing Brownfields:
Is It Community Development?

Please contact the following members of the
Community Affairs staff if you have questions or
would like additional copies of this publication.

John Sabath
Consumer Affairs Examiner
Federal Reserve Bank of Cleveland

CLEVELAND

Typically, financial institutions are not eager to finance land
development deals. Most banks come to the table after developers
and local municipalities have secured a majority of their funds
from state or federal sources. Throw in contaminated soil or water,
and the project becomes too complex for traditional commercial
financing, thus eliminating most banks, particularly smaller ones.
Nevertheless, there is room for banks to participate in brownfield
development.

216/579-2044

Mark Sniderman
Senior Vice President
and Director of Research

Many opportunities for community development lending are
available in the Fourth District. Eastern Ohio, western Pennsylvania
and parts of West Virginia, in particular, are home to sites that
are available for affordable-housing and small business and farm
development. Under the CRA, community development investments should meet one of the following criteria:
■

■

■

■

Provides affordable housing (as a percentage of units) for lowand moderate-income individuals
Provides a service (child care, educational services, health
services, social services) targeted to low- and moderate-income
individuals
Promotes economic development by financing small businesses
or farms or by creating, retaining, or improving jobs for lowand moderate income individuals or in low- and moderateincome geographies that have been targeted for redevelopment
(such as empowerment zones)
Revitalizes or stabilizes low- and moderate-income geographies
through permanent job creation, retention, or improvement.
CONTINUED ON PAGE 8

>

mark.s.sniderma n@clev.frb.org
Ruth Clevenger
Vice President
and Community Affairs Officer

216/579-2392
ruth.m.clevenger@clev.frb.org
Cassandra McConnell
Community Affairs Manager

216/579-2474
cassandra.e.mcconnell@clev.frb.org

7

Virginia Hopley
Research Analyst

216/579-2891
virginia.l.hopley@clev.frb.org
Maria J. Thompson
Senior Advisor

216/579-2903
maria.j.thompson @clev.frb.org

> CONTINUED

FROM PAGE 7

Institutions that meet any one of these criteria by working with brownfield developments should yield
CRA consideration during the exam.
Some financial institutions, varying in size and business strategy, have been able to participate in brownfield development. Seattle-based ShoreBank Pacific, a subsidiary of ShoreBank Corporation—the
nation’s oldest and largest community development bank —invests in conservation groups that clean
up contaminated sites. ShoreBank Pacific loaned $900,000 to a developer to build homes and businesses
on 16 acres of land where a former lumber operation stood. Wainwright Bank and Trust in Boston also
has made environmental lending part of its business model. But unlike ShoreBank and most other lending
entities, Wainwright is involved in funding cleanup costs, and it has been hailed as a “conventional bank
doing unconventional things.” 1 The bank created a senior management position dedicated to community
development lending, and it has loaned over $140 million to nonprofit organization over the past 10 years.2
Wainwright has received an outstanding rating in its last three examinations.
Under the CRA, the consideration that banks receive for community development lending is measured in
terms of the qualitative affect on low- and moderate-income communities, rather than the quantitative
affect or dollar amount. A similar analysis is applied for the lending test: For instance, a smaller community development loan may return greater CRA credit than a larger loan with less innovation or impact
on the community.
John Sabath is a consumer affairs examiner at the Federal Reserve Bank of Cleveland’s Cincinnati Branch. He has participated in the
management of CRA programs at U.S. Bank and National City Bank and assists community organizations in their revitalization and
organizing efforts.

Laura Kyzour
Administrative Assistant

NOTES

216/579-2846

1. Wainwright Bank and Trust Company, Boston, Massachussetts, Community Reinvestment Act Performance Evaluation, June 2002.

laura.l.kyzour@ clev.frb.org

2. Ibid.

CINCINNATI
Jeff Gatica
Senior Advisor

513/455-4281
jeffrey.a.gatica@clev.frb.org
Candis Smith
Community Affairs Liaison

513/455-4350
candis.smith@clev.frb.org

PITTSBURGH
Dan Holland
Senior Advisor

412/ 261-7947
daniel.hollan d@ clev.frb.org

Visit us on the World Wide Web
www.clevelandfed.org

We welcome your comments
and suggestions—send them to
daniel.holland @clev.frb.org.

The views stated in Community Reinvestment Forum
are those of the individual authors and are not
necessarily those of the Federal Reserve Bank of
Cleveland or of the Board of Governors of the
Federal Reserve System.
Materials may be reprinted provided that the
source is credited. Please send copies of reprinted
materials to Community Affairs, Federal Reserve
Bank of Cleveland, P.O. Box 6387, Cleveland, Ohio
44101-1387.

FEDERAL RESERVE BANK OF CLEVELAND

P.O. BOX 6387
CLEVELAND, OH 44101-1387

FIRST CLASS MAIL
U S POSTAGE PAID
CLEVELAND, OHIO
PERMIT NO. 385

8