Bill Would Grant Funds to Communities Concerned about Development at Hazard Sites
State legislators representing Lower Manhattan have sponsored and secured passage of a bill that will, if signed by Governor Kathy Hochul, make new resources available to communities in which “brownfields” are being redeveloped near schools.
State Senator Brian Kavanagh and State Assembly member Grace Lee have shepherded through their respective houses of the Albany legislature a proposed law that aims to allocate grants to communities in which polluted former industrial sites are being repurposed for housing or other uses. Under regulations established by the State’s Department of Environmental Conservation (DEC), the term “brownfield” denotes land at which one or more contaminants are present at levels exceeding health-based or environmental standards.
This legislation sponsored by Mr. Kavanagh and Ms. Lee is directly relevant to Lower Manhattan, because two such sites in the community are currently being developed: 250 Water Street and 111 Washington Street (also known as Eight Carlisle Street). The former is the site of a former thermometer factory, which left the ground beneath laced with mercury. The latter is the location of a onetime scrap metal dealership, and the site of a buried fuel tank.
The DEC’s brownfield cleanup program aims to encourage private-sector cleanups of contaminated sites, leaving the actual cleanup to property owners and the contractors they hire while providing technical oversight and three kinds of incentives: funding to offset the cost of cleanup, tax credits, and liability relief, which absolves the land owner of future legal claims by State regulators related to any contaminants that were removed from the site during the cleanup.
The brownfield cleanup program has inspired criticism because these subsidies were originally calculated as a percentage of the overall value of a development project, rather than only the cost of the cleanup. For example, the developers of the Clinton Green project, a 15-story luxury residential and retail development in Midtown, claimed $47.2 million in such tax credits, after incurring just $13.6 million in brownfield cleanup costs. Similarly, a power-plant owner in Rensselaer was able to claim an $86 million tax credit in 2012, based on the price for building a new generating station. That same year, a shopping mall owner in Syracuse claimed a tax credit for $56 million after cleaning up a site in that city that paved the way for a $561 million expansion of an existing retail complex. In all of these cases, the cost of the brownfield cleanup was believed to be a tiny fraction of the amount claimed in tax credits.
In response to a public outcry, the State legislature and the DEC moved to rein in such windfalls, and the program now limits participants to tax credits totaling no more than 24 percent of the overall project cost, with dollar amounts capped at the lesser of either $35 million or three times of the cost of the actual cleanup.
Mr. Kavanagh’s and Ms. Lee’s Brownfield Technical Assistance Grant Act—which was inspired in part by the fact that Ms. Lee’s child attends school across from 250 Water Street—also makes communities eligible for grants to hire technical consultants to represent them during the remediation processes.
The bill now awaits the signature or veto of Governor Kathy Hochul.
The dangers of exposure to mercury and other environmental hazards like it are well documented and are unfortunately, and persistently present in lower Manhattan. It was an industrial neighborhood as we know, where many of these substances were used regularly in the manufacturing of not only thermometers but hats, shoes, and textiles. And they aren’t easy to get rid of. The development of this as-of-right site right in front of Peck Slip School has been surprisingly difficult to mitigate so we can thank Senator Kavanaugh and Assembly Member Lee for taking the important step in creating legislation that will regulate how situations like this are handled moving forward.
Also important is the exposure of the tax credit abuse. Adding the technical assistance grant is something I’ve never seen in my community board tenure and is incredibly important as corporate resources can so easily outpace community ones.
These are important precedents. Hopefully, Governor Hochul will do the right thing and sign this into law.