A new report by a statewide environmental group calls Erie County one of the few “pockets of success” for the state’s Brownfield Cleanup Program, even as it criticized the overall program as a “broken system” that has left taxpayers “footing the bill” for projects in wealthier markets that would get done, anyway.
The report by Environmental Advocates of New York comes as state lawmakers and Gov. Andrew M. Cuomo have presented dueling visions for the program, which will expire at the end of the year unless it is extended. Cuomo, the State Senate and the Assembly would all extend the program, but their proposed changes differ sharply and must be reconciled before any legislation can proceed.
The brownfields program provides tax credits to developers as an incentive for cleaning up and redeveloping former industrial properties. It is strongly backed in Erie County, where developers and community leaders say its expiration would halt a lot of redevelopment. But it has been criticized by taxpayer groups and some state politicians, particularly by Cuomo, as a wasteful giveaway that needs to be fixed to prevent abuse. A new Ritz-Carlton Hotel in White Plains is often cited as the poster child for what is wrong with the program.
The Ripe for Reform report asserts that taxpayers have spent $1.4 billion to clean up just 170 toxic sites across the state, or about $8.2 million per site. That’s expected to more than triple, with the state already on the hook for an additional $3.3 billion in tax credits for projects now in progress or being processed, the report said, based on estimates by the State Comptroller’s Office.
The report says that many projects involve “high-value properties in already competitive real estate markets,” where the project “would have occurred regardless of the program’s existence.” Meanwhile, many other properties that need help – in areas of the state such as the North Country and the Southern Tier that are most in need of development incentives – “have been largely shut out of the program.” Just 27 of the state’s 62 counties – less than half – have had projects in the program since 2008, including eight that had only one or two examples in the last seven years.
“Brownfields cleanup is crucial, particularly in a state with so many polluted sites holding back our communities,” said Peter M. Iwanowicz, executive director of Environmental Advocates. “But the current program is out of control. It costs taxpayers too much and cleans up too little.”
The report did identify exceptions, most notably Erie County, where developers have been among the most active users of the credits to clean up and redevelop a host of aging and polluted industrial properties into viable buildings with a mixture of commercial, residential and retail uses. The group noted that brownfield credits in Erie County have totaled $15,562,827 for 17 projects since 2010, or an average of about $915,460.
That’s in stark contrast to six Manhattan projects costing $186.6 million, or an average of $31.1 million, the report said. And in the Syracuse area, the Destiny USA project for the sixth-largest shopping mall in the country, has received $67 million in credits already, with more to come over the next 10 years.
Overall, according to the Environmental Advocates report, the costs for taxpayers of the actual cleanups statewide since 2008 totaled $122 million, but the program’s much higher credits for redevelopment have yielded $797 million in benefits for developers. By comparison, cleanups by municipalities through the Environmental Restoration Program averaged less than $650,000 per site.
A legal advocate for developers, however, rejected the group’s assertions as false and noted that the tax credits – which are only paid out once a project is done – leverage $8 billion in private development spending to restore the properties. Linda R. Shaw, an environmental attorney in Rochester who works with developers and attorneys around the state, countered that for every taxpayer dollar spent on brownfield credits, the state gets more than twice that back in taxes over the next 20 years after the property is redeveloped and returned to tax rolls, citing a February 2014 report by the New York Developers Brownfield Alliance. And that doesn’t include local taxes.
The developers report also said that more than 15,000 permanent jobs were created from just 96 of the 142 projects completed at the time of the report, not including indirect jobs and investments resulting from those projects.
“It is a lie,” Shaw said of the Environmental Advocates report. “It is also not true that most of the projects are going to high-value developers.”
According to data provided by Shaw, which she said she compiled from the state Department of Environmental Conservation, 399 projects have been submitted to the Brownfield Cleanup Program from June 2008 to March 11 this year, although not all have been completed. Of those, 219, or 55 percent, were in Westchester County, New York City and Long Island, while the rest were upstate. New York City alone had 129 sites. Buffalo was second with 96.