Turning California’s Brownfields into Assets

California Recycle Underutilized Sites (CALReUSE) Program: Turning California’s Brownfields into Assets

Turning brownfields – properties with actual or perceived contamination – into community assets has proven to accelerate the ability of California communities to improve their health and safety, housing, economic development, and climate resilience by removing significant environmental barriers. Turning brownfields into community assets also creates viable investment and development opportunities for local communities including Opportunity Zones.

Since 2001, California communities have benefited from the California Pollution Control Financing Authority’s (CPCFA) CALReUSE program. Since then, CALReUSE has invested more than $59 million for brownfield assessment and remediation of 74 projects throughout California. CPCFA is currently seeking funding to recapitalize the CALReUSE Program.

The CALReUSE Program’s ability to leverage private investment with public funds has proven valuable for California communities, especially those communities recently identified as Opportunity Zones. Looking back, thirty percent of the CALReUSE Program’s projects are located in census tracts recently tagged as Opportunity Zones. CPCFA calculated that $11 million of CALReUSE investments in those Zones leveraged over $560 million in additional housing development funding.

Other noteworthy CALReUSE accomplishments include:

  • Private and public investments in housing development exceeding $3.7 billion;
  • Construction of over 7,287, new housing units of which 50% are affordable;
  • Creation of 8,536 temporary jobs and 3,206 permanent jobs; and
  • Assessment and/or remediation of over 1,016 acres of contaminated land.

CPCFA is proud of this proven strategy to promote local economic development and public health. For more on Opportunity Zones and Brownfields, contact: opportunityzones@treasurer.ca.gov

Below are a sampling of success stories that highlight the outcomes of CALReUSE’s investment in Opportunity Zones.

CALReUSE Brownfield Assessment Loan for the Gilroy Cannery in Santa Clara County

The former Gilroy Cannery adjacent to the City’s downtown commercial district operated from 1917 to 1997 and was the town’s major economic driver. The site was used to pack tomatoes and eventually 50 varieties of fruits and vegetables. After it ended production, South County Housing Corporation (South County), a nonprofit affordable housing developer, was interested in redeveloping the 12-acre site, but was concerned about the potential contamination on the property. In 2001 South County applied for a CALReUSE forgivable brownfield assessment loan, which provided them with a “free look” at the complicated site.

The CALReUSE brownfield assessment loan program gave the developer and investment community the confidence to proceed with the 72-unit single family and townhome development that they might have otherwise passed on by providing a low-risk source of money to do the due diligence they needed to satisfy them that they could take on a project on contaminated Cannery property. South County Housing successfully investigated the site, secured acquisition and construction funds and repaid their loan in August 2005.

In this instance, funding for brownfield assessment helped transform the former industrial use to a mixed income neighborhood comprised of both single family and multifamily residences in California’s Santa Clara County that continues to stimulate and reinforce ongoing investment in Gilroy’s downtown area. Investment in the Cannery continues today as a $43 million 104 unit affordable housing complex is currently under construction.

The Cannery before CALReUSE project

The Cannery before CALReUSE project

Ongoing Investment in Gilroy's downtown area

The Cannery after CALReUSE project single family townhomes in background and multifamily housing under construction. Photo credit: Gilroy Dispatch, February 21, 2018

CALReUSE Brownfield Remediation Grant for La Valentina in Sacramento

Development of the site also required a significant amount of environmental remediation. Automobile repair shops once occupied the La Valentina property in downtown Sacramento and contaminated the soil with high levels of lead, mercury, and arsenic. In 2007, Domus Development partnered with the Sacramento Housing and Redevelopment Agency to redevelop 1.23 acres of brownfields on the northern edge of downtown in Alkali Flat, one of Sacramento’s oldest neighborhoods. The property was the latent asset that the City’s general plan identified as key to the city’s sustainable growth – a prime location at the Alkali Flat/La Valentina light rail station but vacant for more than 20 years after several failed attempts at redevelopment.

Brownfield remediation costs of $1.5 million were funded by a combination of grant funding from CALReUSE and tax increment financing from Sacramento’s Housing and Redevelopment Agency. The result of the project was a mixed-use development plan blending affordable housing with street-level commercial space, all with in the short distance of Sacramento’s downtown and just steps from mass transit.

La Valentina consists of two projects providing 81 units affordable to households at various income levels. Also of note, the sun shades that were integrated into to the project’s modern façade allow residents to enjoy the climate as well as the cost savings of energy efficiency. Ridership at the area’s light rail station have notably increased since the project opened in 2012.

La Valentina received the 2013 U.S. Environmental Protection Agency’s National Award for Smart Growth Achievement in the Built Projects category. The sustainable strategies for this project together with the progressive concept of the whole development has transformed a high-crime, neglected site next to one of the most utilized transit stops in Sacramento into a diverse, high-density, transit-oriented, mixed-use gateway to the downtown area.

La Valentina before picture

La Valentina before picture. Photo credit: Domus Development


La Valentina after picture

La Valentina after pictures. Photo credit: Bruce Dumante

La Valentina after picture

La Valentina after pictures. Photo credit: Bruce Dumante

La Valentina after picture

La Valentina after pictures. Photo credit: Bruce Dumante