Westchester County Business Journal Brownfield gold
Brownfield gold
Lawmakers consider changes to tie tax credits to cleanup cost
With the Yonkers City Council about to start a lengthy and long-awaited public review of a $3.1-billion downtown redevelopment plan, the mayor and the city’s private partners worry that the project and its incentive tax credits for developers could be buried on another political front before a shovel is in the ground.
“A deal is a deal,” said Joseph V. Apicella, senior vice president at Cappelli Enterprises Inc., one of three companies in Struever Fidelco Cappelli L.L.C. (SFC), the city’s master developer in the transformation of downtown Yonkers into a retail, office, residential, recreational and transportation hub. He was referring to the state Department of Environmental Conservation’s approval last year of SFC’s proposed $850-million River Park Center project in Yonkers for the state’s Brownfield Cleanup Program.
“We view that as an economic development tool that has a certain value attached to it,” Apicella said of the brownfield program, which uses property tax credits to encourage developers to invest in environmentally and economically blighted areas. That developer’s tool would be devalued, though, if state lawmakers approve a Democrat-sponsored amendment to the state’s 2003 Brownfields Law that would greatly curb tax credits.
In Yonkers, where the SFC partners already have spent $17 million in planning their three-phase project, “To pull out the rug from under us will certainly be a problem to us,” Apicella said. Without the anticipated tax credits for the project’s first phase, “I don’t know how we could do it, actually. It will cut a huge hole in our budget.”
The existing brownfield program offers developers tax credits ranging from 10 percent to 22 percent of total costs of a project built after clean-up on an environmentally contaminated site. But Gov. Eliot Spitzer and other critics have called for reform of the 4-year-old program, saying it excessively rewards developers at the burdensome expense of taxpayers and the state treasury while some of the worst hazardous-waste and oil-contaminated sites in the state remain neglected or inadequately cleaned.
“We should not be paying developers to build large buildings” with brownfield credits, said State Sen. Suzi Oppenheimer, D-37th District, a co-sponsor of the proposed brownfield law amendment. “The dollars the state finances should go to remediation contractors; it should not go to building developers.”
State legislators this fall are considering a proposed overhaul of the brownfields law that would tie the state’s payments to the actual costs of site cleanup. Property tax credits for developers on brownfield sites would be capped at either $5 million or $10 million, depending on whether the project is within a designated Brownfield Opportunity Area (BOA). The BOA program, for which the city of Yonkers has applied, has been stalled in Albany since its creation four years ago.
The proposed bill also would create a Brownfield Shovel-Ready program under the auspices of the Empire State Development Corp. to assist expansion-minded manufacturing firms or affordable-housing developers in redeveloping cleanup sites.
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