The cost of buying and getting a nearly 150-acre portion of the former Bethlehem Steel property in Lackawanna ready for re-use as an industrial park is going up by more than 10 percent.
The reason: Putting a protective layer over the contaminated property will cost about $700,000 more than expected because development officials have decided to use more expensive top soil to cover the polluted ground, rather than the less costly slag that they originally intended.
The more costly solution, officials said, is needed because they are facing an end-of-the-year deadline to complete the ground-cover work so the project can meet environmental standards and qualify for more lucrative tax credits that will be available only through the end of 2017.
Officials at the Erie County Industrial Development Agency said Wednesday that they had hoped to use the less expensive slag covering, but that they had not yet received approval from regulators at the state Department of Environmental Conservation and they doubted that it would be received in time to meet what they described as an already tight schedule in order to claim the more generous tax credits. The DEC had "raised issues" with the use of the slag, IDA officials said.
The brownfield tax credits can be used by future users or developers of that land, making it more desirable and valuable. But the covering work on a 90-acre portion of the property must be completed and certified before the end of the year to receive the higher tax credits under the DEC's Brownfield Cleanup Program.
"It will increase the value of this property in the long run," said Erie County Executive Mark Poloncarz, who has been a big supporter of the IDA's efforts to acquire nearly 148 acres of land along Route 5 for $6.7 million from the former steel plant site's owner, Tecumseh Redevelopment.
The project's supporters believe it will bring a chunk of prime industrial land back into local hands and allow it to be turned into a shovel-ready site that could be quickly used by manufacturers seeking a new location. And by reclaiming a brownfield site, it potentially reduce sprawl by providing attractive sites on already developed land, rather than green fields.
The money that the IDA set aside for the remediation work earlier this year was enough to cover the higher cost of the top soil cap on 70 of the 90 acres. The additional $700,000 in funding will cover the cost of installing the top soil cap on the other 20 acres, said John Cappellino, the IDA's executive vice president. The cap already has been put in place on between 50 and 55 acres within the parcel.
The IDA is funding the installation of the foot-thick barrier, but Tecumseh is doing the work because, as a private entity, it qualifies for an estimated $175,000 in sales tax breaks, lowering the overall cost of the initiative. The arrangement also allowed the work to proceed faster — an important consideration considering the deadline for claiming the brownfield tax credits.
The work also includes clearing the site, preparing the subgrade layer and placing a plastic demarcation layer over it, building in construction-related storm-water controls, and setting up air-monitoring systems. Public roads and utilities would also be added.
The IDA is purchasing the Bethlehem Steel property in four stages, throughout this year. It closed on the first parcel in late July and the second earlier this month.