BREWER – More than half of this year’s federal environmental cleanup funds allocated to Maine communities from the U.S. Environmental Protection Agency are heading to South Brewer.

The EPA on Friday issued $2.3 million in redevelopment and revitalization funds, and Brewer took in $1.2 million.

The city was awarded $200,000 in grant funds and another $1 million in revolving loan funds under the EPA’s Brownfields Program, set up to help communities assess, clean and redevelop former abandoned, polluted or contaminated property.

The funds will be used to redevelop the 41-acre defunct Eastern Fine Paper Co. site, now owned by the city, which includes a half-buried hazardous waste dump and other identified environmental dangers.

“That pushes our redevelopment forward,” City Councilor Manley DeBeck, who worked 181/2 years at Eastern Fine, said after the announcement. “It takes the pressure off the developer, and it makes that project even more viable and attractive.

“That’s help,” he said.

The city estimates it will cost $2 million to $3 million to completely clean up the site. Depending on the type of redevelopment, however, a complete cleanup may not be necessary, according to city officials.

The $200,000 grant funds will be combined with a one-time $400,000 redevelopment gift issued recently to the city as part of the 2006-07 supplemental state budget, D’arcy Main-Boyington, Brewer economic development director, said Friday.

While nothing is set in stone, those funds could be used for environmental cleanup and for demolition at the South Main Street site, Main-Boyington said.

A portion of the $1 million in revolving renovation funds may be designated as grant funds, she said.

“Up to $400,000 of that can be granted to a nonprofit, including South Brewer Redevelopment LLC,” Main-Boyington said.

Those grant funds possibly could be used to move City Hall to the former, historic administration building for the former mill and for cleanup by the developer, she said.

The remaining $600,000 of the revolving renovation funds will be lent out, with Brewer setting the interest rate and other loan factors including such items as deferments, she said.

“It puts us a lot closer to our goal,” she said.

Eastern Fine closed in January 2004. In May of that year, the city gained ownership as part of the sales agreement of Eastern Fine’s parent company. South Brewer Redevelopment LLC was created to take ownership and the job of redeveloping the site.

Brewer selected a developer for the century-old industrial site last year, but after numerous changes were made to the original plans, officials decided to go out for a second round of concept plan proposals.

Three concepts – two for a “city within a city” with housing, retail space and entertainment areas and one for a water park – were submitted in April, and city leaders are expected to narrow the list to two within the next two weeks.

The city was awarded a brownfields $350,000 assessment grant last year to assess the property and 350,000-square-foot building for environmental issues, and expects a final report shortly.

“This demonstrates a strong commitment from our congressional delegation to see that the environmental issues at the Eastern Fine paper site are addressed,” City Manager Steve Bost said.

Mayor Gail Kelly, who also serves as state director for U.S. Sen. Olympia Snowe, thanked her boss, U.S. Sen. Susan Collins and U.S. Rep. Michael Michaud for their support for the city and its efforts to bring back jobs to South Brewer.

“We are very, very proud and pleased to have the EPA here,” she said. “The city has worked very hard with the EPA to apply for grants to help clean up the mill.

“We like this,” Kelly said. “We really like this.”

Carol Wood, deputy director for the New England EPA office, made the announcement at City Hall.

“I’m looking forward to coming back to Brewer” to see the positive changes, she said.

Rumford, Brunswick, Springvale and Westbrook split the remaining 2006 EPA cleanup funds.