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CAMPRIELLO:
Brownfields must be cleaned before anything can be built on them. For example, work is going on at a site in Manhattan on West 61st Street, near Eleventh Avenue.
AMBIENCE UP, RUN THROUGH "MILLIONS OF DOLLARS," THEN FADE OUT.
CAMPRIELLO:
Brownfields that don't get cleaned are left abandoned. A highly contaminated site in an expensive area, like Westchester County and Manhattan can cost millions of dollars to clean up. So, to encourage remediation, the State of New York has been offering tax credits as incentives for contractors to take on this work since 2003.
In the past, the State Department of Environmental Conservation, or DEC, could accept or reject a developer's application to clean up a Brownfield based on "public interest". But several developers whose applications were denied filed lawsuits against the DEC. In December of last year, a court in Rochester threw out the department's criteria for determining eligibility, and said that every site has to be admitted to the program.
Val Washington is a deputy commissioner of the DEC.
AX WASHINGTON (5.0 seconds)
It's in everybody's interest to have this get fixed sooner rather than later.
CAMPRIELLO:
But admitting every site could cost a lot of money.
AX WASHINGTON (21.2 seconds)
The first 25 projects that have gone through the Brownfield system are worth $1 billion--that's billion with a "B"--for 25 development projects. Four of them, three in New York City and one in Westchester County account for over half of that, over $500,000, and that's not sustainable over time.
CAMPRIELLO:
So, to stave off a budget crisis, former Governor Eliot Spitzer proposed in January a cap of 15 million dollars in tax credits for Brownfield cleanup projects.
Joel Landes works for Langan Engineering, a firm that performs Brownfield remediation. He says that everyone had been looking to the Governor to solve the problem.
AX LANDES (13.3 seconds)
I think his proposal was developed along those lines, to solve that issue, so that more developments can get into the program, to become eligible and they can go through the program without bankrupting the state.
CAMPRIELLO:
Now that ALL sites are approved automatically, developers face a NEW obstacle because their tax credits are set AFTER they've been accepted into the program. For developers to get the credits, Landes says:
AX LANDES (6.3 seconds):
They're going to have to show that without the tax credits, the project is not financially feasible.
CAMPRIELLO:
But not all projects in New York State are created equal. Those which are Downstate tend to cost much more than those Upstate. Yet, Brownfields are evenly distributed throughout the state. So Landes worries that projects Upstate will benefit more than those Downstate.
Val Washington of DEC sees a clear division, too.
AX WASHINGTON (24.2 seconds)
Under the current program to get 15 million dollars you'd have to have a 68 million dollar development. But a 68 million dollar development is a substantial development. And essentially that's more or less the cut off point where you'd do better in the new program than the current program. So clearly right there Downstate - LARGE Downstate projects - wouldn't do as well under the current program.
CAMPRIELLO:
There's a second problem with the proposal: The cap will apply only to sites whose clean-up agreements were signed after July 1, 2007.
An environmental lawyer thinks that's unfair to a developer who was promised, for example, twenty million dollars in tax credits under the old system, but would now receive only fifteen million. The lawyer worries that developers might be inclined to pull out of the program. Joel Landes, of Langan Engineering, agrees, but says that developers will have to work within the proposal if it goes into effect.
AX LANDES (5.2 seconds)
There's not much they can do about it. They can argue, and take the State to court, but that's always a chanc-y thing.
CAMPRIELLO:
Val Washington of DEC says developers who are angry about the loss of tax credits can find a way to make up the difference. They can appeal to a number of State development programs to procure funding.
AX WASHINGTON (10.0 seconds)
They layer these funding sources, so I find it hard to be sympathetic that people are unhappy about getting fifteen million dollars for developing a Brownfield site.
CAMPRIELLO:
Washington says that New York State has the best program in the nation. She also says that fifteen million dollars is a lot of money.
New York State's new Governor, David Paterson, has submitted the proposal to the State legislature. If it's approved, the Brownfield tax credit cap will go into effect on April 1.
Susan Campriello, Columbia Radio News.