In 2003, I was successful in getting the Brownfield Cleanup Program signed into law. This landmark law created a hazardous waste remediation program with the most stringent clean up standards in the United States. It offered tax credits to those willing to clean up and invest in abandoned brownfield properties.
Before enactment of the New York State Brownfield Program, very few developers were willing to touch a New York brownfield site regardless of location. Comprehensive tax credits were offered as an incentive to bring the developers to the table.
Recently under the capricious label of "tax reform" critics, including Governor Spitzer, have suggested that the tax credits should be severely reduced. Unfortunately, if this were to happen the program’s environmental clean up and economic development impact would be severely reduced.
Critics have called for the tax credits to be targeted to areas in economic need. The current credits do just that. Developers can receive a greater tax credit if they clean up and build on sites in Environmental Zones with at least a 20% poverty rate and an unemployment rate of at least 1 1/4 times the State rate.
For every dollar that New York State is providing through tax incentives, the private sector is spending over $6.00 up front to clean up contaminated real estate they did not pollute. Over $6 billion worth of redevelopment projects have evolved from the first 59 projects that have made it through the program, generating over 2,000 permanent jobs and 800 construction jobs. To date no other State development program has created more employment per incentive dollar.
There is little question that the Program’s large tax credits have attracted investment. A pattern of urban reinvestment is already taking place among developers who have participated in the Program. As shown by multiple application submissions by the same development companies, developers purchased their next brownfield project in anticipation of their first tax credits.
Some claim that the tax credits are too generous and are a loss to the State. They are wrong. These tax credits are not a loss because they are being re-spent right here in New York State. These developers not only create jobs for people who pay taxes, they put abandoned properties back on the tax rolls. They are not only recycling the land, they are recycling the tax credit dollars also.
Brownfield development helps eliminate the stigma of a blighted area and clearly results in increased property values for nearby sites as well as attracting new investment opportunities for the entire community. These benefits have occurred and should be part of any comprehensive evaluation of the Program.
In downtown White Plains, an urban area that has been depressed for decades has finally started to revive. One of the most successful projects is the Renaissance Square mixed use residential, retail, hotel and office complex in a designated blighted zone. $75 million in State tax credits has encouraged over $50 million in clean up of hazardous soils to the highest standards and $500 million in building construction. In addition, this one project has spurred over $2 billion in investment in adjacent properties that never would have occurred without the Program.
There should be no question about the Brownfield Cleanup Program also being an environmental justice program. Sixty percent of the sites with completed cleanups are located in areas with the highest unemployment and poverty rates. For every State dollar, close to five private dollars were put into cleanup and construction in underserved areas of our cities. For $367 million in tax credits $1.8 billion in private investments were made in inner city areas of the State that need them the most.
An example of this is the Clinton Green Development Project in Hells Kitchen, which involved the cleanup of an abandoned gas station, five industrial buildings and vacant lots, where illegal dumping occurred. The site was remediated to the highest standards and all the contaminated soil was removed down to bedrock. Two new residential towers were constructed that included a community theater and extensive retail space. This investment resulted in 100 permanent jobs; 200 construction jobs over 2 years and buildings worth $270 million are now on the tax rolls.
Some people have asked "who can receive the Brownfield tax credit?" The credits are available to all those who receive approval from the Department of Environmental Conservation, and have properly and completely cleaned up contaminated sites. The law specifically prohibits sites listed on the State Superfund list and those under a court ordered cleanup from entering the program.
It is clear that the New York State Brownfield Program has the potential to be the biggest environmental clean up program as well as the most effective economic development program in New York State history. The tax incentives are an integral part of that success. No developer has to redevelop a brownfield. It is easier, cheaper and faster to redevelop a "greenfield." If New York State really wants the private sector to continue to "front end" all the cleanup costs and redevelop brownfields, the current tax incentives must remain.
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