Thanks, Peter, for your insightful comments.
The NYSDEC region office handling NYC brownfield projects now requires
cleanup cost estimates to be disclosed in the application. One problem is how to
calculate the costs. I have suggested it is the "delta" or extra costs incurred
to properly manage soil that was going to be excavated anyway. If a
developer was already going to remove 15 feet of soil, seems to me the true
"remediation" costs are those additional costs for special handling of the soil
that is contaminated, not the costs for disposing the entire volume of
soil...along with other remedial measures such as treatment of groundwater
during dewatering, costs of hiring Hazwopper-trained workers, installation of
vapor mitigation measures, O&M costs, etc.
There has been strong resistance from the development community about
disclosing the amount of tax credits that would be received if this would
require disclosing information on tax returns. I assume the state could estimate
the tax credits for disclosure purposes by determining if the taxpayer
would be entitled to the 10% or 12% base and then determine if the project
was entitled to the additional 2% for unrestricted cleanups and 8% for the site
being located in an environmental zone.
I still have a problem with the relative percentage of cleanup to total
development costs metric. A $10 MM cleanup at a $200MM project is only 0.5%
if my math is correct. That is a lot of cleanup $$ and seems to me to be just as
worthy of financial incentives for a $1MM project that incurs $100K in cleanup
costs to remove USTs but leaves residual contamination in the
ground. The cleanup costs would represent 10% of project costs but only
minimal cleanup was done as opposed to the 0.5% cleanup that removed all
contaminated soil.
At the EBANYS meeting two weeks ago, some upstaters floated the idea of
linking the amount of the brownfield financial incentive to the acreage. Most
NYC brownfield projects are 1 acre or less while upstate sites can range
up to 5 acres with some over 5 acres. One thought was to provide a cap
of $5MM for one acre or less sites, $10MM cap per acre for sites
up to 5 acres and a $20MM cap for any site over 5 acres. The cap
amounts were completely arbitrary. Do you think this approach makes
sense?
If the list serve is getting tired of this topic, let me know and I will
stop the string. I find it informative and can be a glutton for new
information but obviously not everyone shares my enthusiasm for this topic.
:)
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