New York State's recently enacted brownfields legislation received opposition from the Western New York delegation for not meeting the needs of former industrial cities such as Buffalo. The legislation did, however, provide significant incentives to parties willing to remediate and redevelop brownfields. These incentives came in the form of refundable tax credits that could total 22 percent of a project's total remediation and redevelopment costs.
In Buffalo, brownfield redevelopment is crucial to economic development, and tax incentives are crucial to making brownfield redevelopment economically feasible. These tax incentives have given rise to a significant increase in developer interest in our brownfield sites.
New York State is now trying to significantly reduce the availability of those incentives to local projects. It appears that budgetary concerns arising from a massive allocation of tax credits for a single project in Manhattan have forced the state to come up with ways to limit the availability of these incentives.
State law provides specific criteria for eligibility for tax incentives. The state now wants authority to reject sites or projects -- even ones that meet the eligibility criteria as set forth in the law -- based upon vague and subjective criteria. This new criteria will greatly increase the state's discretion to reject an otherwise eligible project.
The state wants to be able to reject a project where the costs of remediation are disproportionate to the costs of the project. Large projects are essential to restoring the city's tax base and returning good jobs to the urban core. However, such large-impact projects will be threatened by the loss of these tax incentives where the remediation costs are deemed disproportionate to the reinvestment costs. Inserting these criteria will threaten the success of the governor's program, and will have the effect of encouraging smaller, less expensive projects, an effect that will not rebuild communities.
The state is also looking to reject projects where the site contamination is primarily "background contamination." Background contamination could result from a parcel's location downwind from a coal-burning plant. Based on Buffalo's past as a home for steel manufacturing facilities, hundreds if not thousands of acres could be deemed to have background contamination in the form of elevated levels of lead, and therefore rejected from the program. A site with the exact same chemistry located in New York City would be allowed into the program and could receive these valuable incentives.
Brownfields represent the biggest challenge to our urban recovery. Brownfields result in lost tax revenue, lost development opportunities and destabilized neighborhoods. Property values do not justify the remediation expenses necessary to make a city site competitive with the suburbs. Incentives are essential to attracting investment.
Proposed state policies that reduce or eliminate eligibility for these incentives will be devastating to former industrial cities, like Buffalo.
Tim Wanamaker is executive director of the city's Office of Strategic Planning.