Closed-down gas station sites with contamination concerns and old, leaking fuel pumps that undoubtedly are at the bottom of developers' lists could get a new lease on life under a proposal being considered by the Hamburg Industrial Development Agency.
The IDA board Tuesday debated tax increment financing -- a specialized form of tax break linked to municipalities that pay for public improvements and cleanup of an otherwise undevelopable site so that it can become another business and once again generate tax revenue.
If adopted, such a policy would mean that the property tax generated by the redevelopment of distressed or unused land ends up repaying the public or government's costs that were necessary to redevelop that property.
The bond payments used to finance the government improvements would be paid by dedicating property tax receipts from the land to the bond payment until the bond was paid off. Once the bonds are fully paid, the taxes revert to the applicable taxing jurisdictions.
Typically, the plan is tied to brownfields remediation and urban redevelopment efforts.
The idea hinges on municipalities bringing ideas to development agencies about specific sites that are eligible for such financing.
"We probably could have done Ravenwood Industrial Park that way," said Nathan Neill, IDA attorney. "It would have to be a situation where a municipality would want to develop a brownfield site."
IDA Executive Director Michael J. Bartlett was cautious about the idea, saying the agency needs more information about the proposal that was passed on from the county Industrial Development Agency. The aim is to flesh out a policy among the county and suburban development agencies.
"I want to see what the Erie County Industrial Development Agency is doing, and try to walk forward and develop a common policy," Bartlett said.
Board member Andrew Loeb praised the idea. "I think it gives us some other avenue rather than to deny a project," he said.
For example, a municipality could pay to put roads and sewer improvements at a site that previously was not usuable -- and ultimately bond revenues will pay for those costs and tax revenues would be generated that otherwise would not have been on the property.
"It's a real shame to have all these parcels sitting, with roads nearby, but have them too costly to clean up and buy," Neill said. "Governments would end up doing some sort of cleanup . . . It's going to be a special deal, because it's got to involve a municipality. It won't be the run of the mill application."
Hamburg Supervisor Patrick H. Hoak noted that "otherwise, it (the property) could sit there without five lifetimes."
"I think there would be a lot of little parcels developed" because of this, Hoak said, pointing to vacant corner gas station sites as an example.
A public hearing on the issue will be held during the board's March 23 meeting. The board is hoping for comment from municipalities and school districts.
"It gives you an option -- another tool," Neill told the board. "You're not giving any real tax abatement, but paying for cleanup through the property's return to the tax rolls."