New York’s Brownfield Cleanup Program is a broken system that has cost taxpayers $1.4 billion to clean up just 170 sites – an average payout of $8.2 million per site. Structural deficiencies within state law has left thousands of toxic brownfields off tax rolls, while taxpayers are instead footing a huge bill for projects that would have occurred regardless of the program’s existence. These costs are expected to balloon, as the state is liable for payouts totaling an additional $3.3 billion for projects currently in the system.
For Immediate Release: March 19, 2015
Travis Proulx: 518-462-5526 x238
170 Brownfield Cleanups Cost Taxpayers $1.4 Billion
Broken system ripe for reform in SFY2015-16 budget
Albany – New York’s Brownfield Cleanup Program is a broken system that has cost taxpayers $1.4 billion to clean up just 170 sites – an average payout of $8.2 million per site. Structural deficiencies within state law has left thousands of toxic brownfields off tax rolls, while taxpayers are instead footing a huge bill for projects that would have occurred regardless of the program’s existence. These costs are expected to balloon, as the state is liable for payouts totaling an additional $3.3 billion for projects currently in the system.
“Brownfields cleanup is crucial, particularly in a state with so many polluted sites holding back our communities,” said Peter Iwanowicz, executive director. “But the current program is out of control. It costs taxpayers too much and cleans up too little. While there are certainly pockets of success – like Erie County – these trends do not carry statewide. Taxpayers are footing the bill for an extraordinarily costly and broken system that is in desperate need of reform.”
For instance, since 2010, credits paid out for 17 development projects in Erie County totaled $15,562,827, for an average cost of $915,460. Comparatively, six Manhattan projects during that same period cost taxpayers $186,618,573 for an average cost of $31,103,096.
Ripe for Reform, the fourth analysis of the Brownfield Cleanup Program from Environmental Advocates NY, documents how:
- The existing program is a giveaway of taxpayer funds to developers who build high value properties in already competitive real estate markets. Since 2008, actual cleanups have cost $122 million, while $797 million (86-percent of total payouts) have been paid out in “redevelopment” credits.
- Several regions of the state that are most in need of public development incentives like the North Country and Southern Tier have been largely shut out of the program.
- Municipally-led brownfields cleanup through the now-unfunded Environmental Restoration Program (ERP) averaged less than $650,000 per site.
- The developer of the Syracuse-area Destiny USA, which bills itself as the sixth largest shopping center in America, has collected more than $67 million through the brownfields program – a figure that is expected to rise as current projects are eligible to collect for up to 10 years.
Recognizing the need for improving the Brownfield Cleanup Program, Governor Andrew Cuomo has proposed broad reforms in his 2015 Executive Budget. Most of these changes have been welcomed by both the environmental and business community, and largely align with the goals urged by Environmental Advocates in prior analyses, including:
- Targeting tax incentives to communities most in need of public investment, through different gateways, to drive development to areas with high unemployment rates and those desperate to turn an abundance of brownfields into an economic engine.
- Establishing the following redevelopment tax credit eligibility criteria: a site must be located in an economically disadvantaged area, cleanup costs must exceed the post-cleanup value of the property, or the project must provide a substantial amount of affordable housing.
- Separating eligibility for state certified cleanup credits from eligibility for redevelopment tax credits.
- Extending the program for 10 years to provide certainty for developers.
Governor Cuomo proposed many reforms in last year’s budget but he failed to lead the Legislature to a final plan. The result was that in the closing days of session the Legislature passed a proposal to extend the program without any of the needed reforms, which the Governor then vetoed.
Iwanowicz added, “If he leads this year, momentum is on Governor Cuomo’s side to ensure meaningful reforms are enacted in this year’s budget – reforms that will direct incentives to communities where they will do the most good, and ensure the brownfields program becomes the environmental and economic development engine it can be.”
Since 2008, just 27 of the state’s 62 counties have had projects receiving credits in the brownfields program, leaving well over half of the counties statewide, located predominantly in regions with high need, without any economic benefit from the program to date. Some examples:
North Country. The following counties – many of which are home to former manufacturing industries – have no sites which have claimed tax credits since at least 2008: Clinton, Essex, Franklin, Fulton, Hamilton, Jefferson, Lewis, Saratoga, St. Lawrence, Warren, and Washington. Herkimer County has had one project located in the southernmost area of the county southeast of Utica.
Central New York/Southern Tier. Onondaga has had several projects, most notably Destiny USA (which has cost taxpayers $67 million to date), Cortland, Madison, and Oswego counties have had no projects collect credits since at least 2008. Cayuga and Oneida counties were home to one project each. In the Southern Tier, Chemung, Chenango, Seneca, Steuben, and Yates have had no projects since at least 2008. Broome County has had three projects while Schuyler and Tompkins counties had just one apiece.
Lower Hudson Valley. Though Westchester County has benefitted significantly from the program, the rest of the region has not fared so well. Orange, Putnam and Sullivan counties have not had any projects collect credits since at least 2008. Ulster and Dutchess counties have had just one project each, while Rockland has had two.