Billions to Subsidize Cleanups by Builders, But Not a Penny for Local Environmental Monitors
Governor Kathy Hochul in December vetoed a bill sponsored by two State legislators representing Lower Manhattan that would have made new resources available to communities in which “brownfields” are being redeveloped adjacent to schools.
State Senator Brian Kavanagh and State Assembly member Grace Lee shepherded to unanimous passage in their respective houses of the Albany legislature a proposed law that would have allocated 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. The bill would also have directed the State’s Director of Environmental Conservation to funnel these grants either to the local New York City community board with jurisdiction over such a site, or to a non-profit organization in any community affected by a brownfield site remediation program. Such funds would typically be used to hire an independent environmental monitor to oversee the brownfield remediation on behalf of the community.
The legislation sponsored by Mr. Kavanagh and Ms. Lee was 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 an 19th-century 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 bill was inspired, in part, by the fact that Ms. Lee’s child attends school across from 250 Water Street.
Governor Hochul justified her veto by citing possible fiscal impacts on the State, but Mr. Kavanagh and Ms. Lee argue that the funds for these grants would have come from a modest share of massive State subsidies already being given to developers engaged in a brownfield cleanup.
New York State’s 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, which 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 subsidy amounts capped at the lesser of either $35 million or three times of the cost of the actual cleanup. Why developers are entitled to taxpayer money equaling three times the cost of an environmental cleanup remains an open question. In any case, official data indicates that through 2020 (the last year for which statistics are available), the State has given away more than $2.6 billion in brownfield cleanup grants to developers.
“Our legislation would have required developers to provide such a community share whenever the site poses a significant threat to public health or the environment or is located adjacent to a school or day care center,” Mr. Kavanagh and Ms. Lee said in a joint statement. “Communities would then have the resources and expertise necessary to understand the cleanup process from the outset, hiring health and safety experts and actively participating in decisions potentially affecting their health and environment.”
“This veto sends a troubling message,” they continued, “that informed public participation in a process that affects the health and safety of under-resourced communities is not a priority. We are deeply disappointed with this outcome, but remain committed to fighting for environmental justice and the well-being of all New Yorkers. Together, we will seek new avenues to ensure that our communities receive the support and protection they need and deserve.”
In a related development, Governor Hochul also vetoed in December a second bill that would have imposed prevailing wage requirements on brownfield remediation work that receives public money. This would have closed a loophole that makes brownfield remediation work unique among State-subsidized building projects, because all similar benefit programs force developers to pay prevailing wages on the work they do with taxpayer funds.