Brownfield Law Reform
Yesterday New York Governor David Patterson signed a bill to motivate redevelopment of polluted building sites, otherwise known as brownfields. The governors office believes that they can reward developers that would like to endeavor such a huge task of environmental cleanup yet still levy stronger controls on tax breaks for new structures built on the site. Existing brownfield law left no tax credit caps on any given project, which was under high public scrutiny seeing how it would allow for a large amount of tax dollars to go to just a few developers for massive projects.
“It was the first time that I used a bit of coercion, because I knew that if I didn’t bring this bill in, all of these spending cuts that I have been talking about would be meaningless,” Governor Paterson said in a phone interview on Monday. “I wanted to shut off the potential of pouring billions of dollars into a program whose purpose was to clean up the environment, not clean out the Treasury.”
When the state comptroller’s office estimated that the projects already in the program were going to top out around roughly $3 billion in tax credits, the governor decided to act. The new law will ensure that tax credits earmarked for redevelopment and make sure that cleanup efforts have a certain monetary cap.
The governor said he expected the actual redevelopment tax credits for most new projects would be less than $35 million because the average cleanup cost is $5 million.
A higher cap will apply to sites that are ultimately used to build manufacturing facilities. They will be eligible for credits worth $45 million, or six times the cost of the environmental cleanup, whichever is less.
Along with the new law comes the creation of the 15 member brownfield advisory board consisting of developers, environmentalists and public health experts to ensure that the developers participating in brownfield rebuilds are proceeding in the correct manner. However, detractors from the new law claim that not all of the blemishes have been corrected. With eligibility requirements too restrictive, it is hindering New York from getting as much for their dollar as other states with similar programs such as in New Jersey. Developers see it differently:
“The program is about creating jobs and building a tax base by incentivizing the cleanup of dirty and unbuildable sites,” [developer Damon] Hemmerdinger said. He said the program’s critics were not factoring in the tax revenue that these projects would help generate.
