A revamped brownfield program was agreed to last week by the state Legislature and Gov. David Paterson to provide more tax credits toward actual cleanup and less for subsequent development.
The brownfield program process in essence offers tax incentives to developers or municipalities to clean up tainted sites that may be contaminated at toxicity concentrations less than required to be designated as a superfund site. Though no official list catalogues all such tainted sites, state officials acknowledge there are thousands or tens of thousands of uncatalogued sites statewide, ranging from former coal gasification plants along the Hudson River to such ordinary businesses such as dry cleaners which may have released solvents into the ground during the course of operation. Former gas stations are often brownfields.
There has long been broad agreement on the need to rehabilitate such sites to return them to productive use. A state brownfield program has been in place for five years, dating to the Gov. George Pataki administration. However, the program has been under a moratorium since last year due to concerns that the brownfields program unfairly rewarded developers whose projects required little remediation of toxins, because the tax credits were tied to the total cost of a project, instead of being pegged to the costs of the cleanup at the project site.
On June 23, on almost the last day of the current legislative session, Paterson announced an agreement with legislative leaders to reform the brownfield program to better target incentives. “This legislation is an important step forward for improving both our environment and our economy,” said Paterson. “If properly targeted, these tax incentives have the potential to turn Brownfields into economic engines, particularly upstate.”
The legislation will in some cases more than double the current tax incentives for site cleanup, up to 50 percent of cleanup costs. The existing brownfield program offers developers tax credits ranging from 10 percent to 22 percent of total costs of a project built after clean-up on an environmentally contaminated site.
The new brownfield legislation will also limit redevelopment credits for nonmanufacturing projects to $35 million or 3 times the cost of site cleanup, whichever is less, and limit redevelopment credits for manufacturing projects to $45 million or six times the cost of site remediation, whichever is less. The changes also streamline the administrative regimen of the “brownfield opportunity area program,” which is under the aegis of the state Department of Environmental Conservation (DEC).
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There is a grandfather clause for project applications that were received prior to July 1, 2007, and applications that were already approved by the DEC, so they will continue to be eligible for current law tax credits.
“This agreement balances the need to both clean up sites and spur development with the need to provide fiscal controls and prevent situations where developers received unintended windfalls,” said Paterson.
News of the new brownfields program drew cautious praise from Yonkers Mayor Phil Amicone, who is also president of the New York chapter of the National Brownfield Association. “I’m pleased to see that our leaders in Albany have recognized the need for this crucial program to continue because of the important role it has played in the redevelopment of New York’s older industrial cities,” said Amicone, who is also the President of New York Chapter of the National Brownfield Association (NBA).
“Now it”™s up to state agencies, most specifically DEC, to get the program up and running again to make sure that New York’s cities will continue to realize the environmental and economic benefits of brownfield cleanups,” Amicone said.
There have been important cleanup projects initiated up and down the Hudson Valley. In Yonkers, for example, sites that have been redeveloped with benefits from the program include Hudson Park Apartments ($180 million residential project with more than 550 units), Main Street Lofts ($50 million residential project with more than 170 units), and i.Park Hudson ($50 million commercial redevelopment).
Two multi-billion projects pending before Yonkers officials, the $1.5 billion Sruever Fidelco Cappelli Phase 1 project, and the $2.3 billion Alexander Street Urban Renewal Plan were in jeopardy had the state legislature not improved the program and lifted the moratorium.
Another high-profile remediation projects using brownfield tax incentives is in Poughkeepsie, where the DeLaval site on the Hudson River waterfront is undergoing a $10 million brownfield cleanup for conversion from an abandoned farm machinery manufacturing facility to a mixed-use residential and commercial endeavor that will provide walkways and a marina for access to the river for citizens and tourists.
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