N.Y. fixes brownfields law

Cara Matthews- Albany bureau
ALBANY — Gov. David Paterson signed legislation Wednesday that will provide more incentives to clean up polluted sites, cap tax credits for redevelopment to limit the state's liability and increase fiscal accountability for the tax breaks.


The legislation revamps a program created in 2003 to clean up some of New York's 10,000 polluted properties, called brownfields. Lawmakers and the governor wanted changes because a small group of developers reaped tens of millions of dollars in refundable tax credits for properties that likely would have been redeveloped anyway.


That's because tax credits were based on the total cost of cleanup and redevelopment, and there was little incentive to remediate sites beyond minimum standards.


The new law gives more incentives for cleanup, and it will save the state money because there will be a limit on tax credits for redevelopment.


"The purpose of the brownfields law was to clean up the environment, not clean out the state treasury," Paterson, who signed the bill in Buffalo, said in a statement. "We will now be able to break down barriers to economic development in struggling neighborhoods across New York."


The brownfields law was among the more than 30 bills Paterson signed Wednesday. He has signed about 200 laws in recent weeks and has vetoed about 25 bills since April.


Like Buffalo, Rochester is dotted with brownfields in need of remediation.


Mark Gregor, manager of the city of Rochester's environmental quality division, said applying nationwide estimates to Rochester suggests there are between 1,000 and 3,000 commercial and industrial properties in the city whose value is affected by environmental impairment.


At any given time, fewer than 100 of those sites are being addressed by city efforts or by private owners, he said.


In April, Mayor Robert Duffy argued in favor of changing the law to scale back the use of tax credits on big-ticket developments "so that the many potential sites in Rochester and other upstate cities can be dealt with."


The law signed Wednesday by Paterson addresses that issue, but did not provide new funding for another state program that had funneled grants to municipalities cleaning up brownfields themselves.


"That's been a very important program, and we hope there's some funding for it in the future," Gregor said.


Concern about the cost of the brownfields program led to a 90-day freeze in applications this spring so public officials could agree on how to make the system more equitable.


The consensus was that not enough money had made its way to urban areas, particularly upstate.


"Up until now, low property values and depressed economic conditions upstate have limited the number of brownfield projects undertaken by the private sector — even in prime locations like waterfronts," said Andrew Rudnick, president and CEO of the Buffalo Niagara Partnership.


The organization belongs to Unshackle Upstate, a coalition of business and trade organizations that represent more than 45,000 employers and has pushed for brownfields reform.


Since 2003, fewer than 100 acres of brownfields had been remediated upstate, said Chris Wiest, vice president of public policy and advocacy for the Rochester Business Alliance, another coalition member.


Developers of property upstate don't have as high a return on their investments as downstate, Wiest said.


The new legislation is a good start, but more work needs to be done, Wiest said. For example, developers have complained that the process of applying for the brownfields program takes too long and should be streamlined.


Until now, the program provided tax incentives between 10 percent and 22 percent of the total price tag for cleanup and redevelopment, without a cap.


The state has approved 240 projects, according to the state Department of Environmental Conservation. Forty-six more developers have asked to apply for the credit but the program has been frozen. (The moratorium ended Wednesday.)


The state expects the first 25 cleanup sites will cost New York taxpayers about $1 billion in credits.



The new brownfields law will:


Provide tax incentives that total 22 percent to 50 percent
of the cost of cleanup, depending on how much remediation is
needed. The credits are more than twice what has been available.


Limit redevelopment credits for non-manufacturing projects
to $35 million or three times the cost of cleanup and site
preparation, whichever is less, and $45 million or six times the
cost of remediation and site preparation for manufacturing
projects, whichever is less.


Require detailed financial reports from developers who are
claiming tax credits.


Add 2 percent in tax incentives for projects in line with
planning developed in low-income communities that participate in
the state's Brownfield Opportunity Areas program.


Set up a panel to provide input to the state on how the
brownfields program is working.