New York City Brownfield Partnership Releases NYU Study on New York State Brownfield Cleanup Program
The New York City Brownfield Partnership, a non-profit public-private partnership promoting the cleanup and redevelopment of brownfield sites in New York City, has just released a study analyzing the impact of the New York State Brownfield Cleanup Program (BCP) on the cleanup and redevelopment of brownfield sites in New York State. The study was directed by Barry F. Hersh, Clinical Associate Professor at New York University’s Schack Institute of Real Estate, with financial support from the Partnership. The study provides timely and valuable information to the debate over proposed changes to the program.
The study’s findings indicate that the most seriously-criticized aspects of the BCP have, to a large degree, been successfully addressed by changes made to the program in 2008 by the state legislature.
The key conclusions of the study include the following:
- Sites admitted into the BCP since 2008 tend to be smaller, more geographically diverse, more likely to be located in low income areas, and more likely to have industrial or affordable housing end uses than sites admitted in the 2003-2008 period.
- The post-2008 projects are, at least to date, significantly less expensive to the state treasury than those admitted in the 2003-2008 period. The average tax credit cost for those sites to date is approximately $1 million, compared to $14 million for pre-2008 projects.
- A much greater percentage (74%) of credits of tax credits for post-2008 projects have been earned as a result of site cleanup expenses rather than development costs (26%). The comparable percentages for pre-2008 projects are 7% (cleanup expenses) and 93% (development expenses).
- The approximately $1 billion of the BCP tax credits has stimulated approximately $8 billion of direct investment of cleanup and development dollars. Using well-accepted economic modeling, the study estimates that the total economic activity stimulated by the BCP to date is approximately $15.5 billion.
Many provisions in Governor Cuomo’s proposals to reform the BCP are designed to address problems with the Program which, this study suggests, are already well on their way to being solved by the 2008 amendments. Accordingly, the study will surely fuel the already vigorous debate as to the necessity and wisdom of further restricting the BCP along the lines recommended by the Governor.