2007 CPEO Brownfields List Archive

From: Lenny Siegel <lennysiegel@gmail.com>
Date: 28 May 2007 04:51:28 -0000
Reply: cpeo-brownfields
Subject: [CPEO-BIF] Data on New York's Brownfields Cleanup Program
 
From Larry Schnapf
<LSchnapf@aol.com>

During the past few months, a number of environmental lawyers and consultants have graciously volunteered their time to help me gather certain information about sites that have been accepted into the New York State Brownfield Cleanup Program (BCP) and have either received Certificates of Completion (COCs) or are currently being remediated.

Our goals were to develop some objective information about the BCP projects as the new administration considers making changes to the law. We felt that the decision-makers should be armed with hard facts before they decide how to amend the program, and not be distracted by anecdotal accounts or research that might be influenced by the agendas or interests funding those research efforts.

When we started our initiative, we had no idea what the results of the our investigation would reveal or where it would take us. We decided to gather the following categories of information: Current Use; Proposed Use; Nature of Contamination; Nature of Remediation/cleanup track; Estimated Cleanup Costs (net of normal excavation/construction costs); Estimated No. of construction/permanent jobs; and Pre-Application Transaction Costs.

This task was made more difficult because there was no central repository for this kind of information. As a result, our volunteers had to do the arduous and tedious work of collecting data from persons involved in the BCP.

One of first conclusions we reached was that the percentage of cleanup costs to development costs does not appear to be a useful metric for determining the effectiveness of a brownfield program. For example, some projects in NYC have had very expensive cleanups at sites that have been dormant for decades yet the % of cleanup costs to project costs for these sites frequently hover around 1% to 2% because of the enormous vertical development costs of these projects. In contrast, the range cleanup costs at upstate sites seem to range between 5%-10%. Some upstate sites might have cleanup costs approaching 40% of the total costs yet all they're doing is pulling a few tanks and removing some soil. Contrary to conventional thinking, most of the 25 COCs issued during the past year are not from the NYC area but from upstate projects.

Another conclusion that seemed to jump out to me at least is that the number of sites cleaned up is not as important as the number of jobs created and the amount of cleanup dollars accomplished by the BCP that would not have ordinarily been accomplished or would have had to been incurred at the taxpayers expense.

Thus far, the preliminary results of our research indicate appears that BCP cleanup costs are averaging $1 MM to $10 MM per site with several NYC projects having cleanups approximating $20 MM. In region 2 alone (which is where NYC is located), it looks like the BCP has generated at least $100MM in cleanup costs-this is cleanup that would not have been done or cleanup dollars that would have been incurred by the taxpayers but for the BCP. The data we have collected thus far suggests that approximately 80% of the projects of the NYC projects exceed $40 MM in total development costs and 50% exceed $100 million.

It also appears that the transaction costs to get a site into the BCP are ranging from $25 K to $50 K. The cost vary depending on how much work the applicant does to prepare for the pre-application meeting and the resources it devotes to the application. In my opinion, the pre-application meeting is the single most important step of the BCP process since this is the only time that applicants will have a change to meet face-to-face with some of the staff who will be making the decision on their application and will also be able to learn what DEC will be expecting to see in the application. Applicants would be well advised to be fully adequately prepared to discuss their project, its benefits and how enrollment in the BCP is crucial to the success of the project.

The NYC jobs tend to generate around 200 construction jobs and 50-100 permanent jobs depending on the type of project, with residential generating less permanent jobs. Indeed, three of the COCs in NYC generated approximately 1756 jobs.

I think our preliminary data shows that the BCP is not "broken" but is, in fact, definitely accelerating cleanups. While the tax credits might be tweaked somewhat to encourage more cleanups in poorer neighborhoods and more affordable housing projects, it does seem that the BCP is accomplishing what it set out to do-namely incentivizing cleanup and redevelopment of sites. The very generous tax credits do seem to be attracting capital and investment to sites that have long underutilitized or "warehoused." A number of BCP applicants are implementing extensive source removal and site characterization at sites where remediation has been going on at a snails pace for a decade or more. The applicants were willing to take on the risk of site redevelopment without knowing the full range of site remediation costs because of the generous tax credits.

Another interesting issue that I have been encountering is the sheer volume of misinformation out there about the BCP. I seem to get a call every two or three weeks from for profit and affordable housing developers sharing with me some bizarre advice they have received about what the BCP is requiring and what sites are allowed into the program. I suspect this misinformation is based on individuals or groups extrapolating experiences with individual sites into programmatic policy. Each application is a site-specific determination and when one reviews the list of sites that have either been rejected or have withdrawn their applications, these anecdotal stories do not hold up under scrutiny. The most common misconceptions that I have heard to date: petroleum sites are not being admitted into the program, only upstate sites are being allowed into the program and that only sites with at least $1 MM in cleanup costs are accepted.

It has been a long and hard process and our volunteers have had sacrifice much of their personal time to dig up this information without any compensation. We hope to have our final findings by the end of June.

Larry


--

Lawrence Schnapf
55 E.87th Street #8B/8C
New York, NY 10128
212-876-3189 (h)
212-756-2205 (w)
212-593-5955 (f)
203-263-5212 (weekend)
www.environmental-law.net


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