Source: Times Union
Publication Date: June 10, 2008

DEC official wants changes to focus incentives on removing pollution, not new buildings

By BRIAN NEARING, Staff writer
First published: Tuesday, June 10, 2008

ALBANY -- State Department of Environmental Conservation Commissioner Pete Grannis on Monday fired a rhetorical shot at big developers who have reaped hundreds of millions of dollars under a state tax program aimed at cleaning and rebuilding on polluted land.

Calling on state lawmakers to revamp the five-year-old brownfield cleanup law, Grannis said it was "never the intent to make this a gold mine for developers in already thriving real estate markets."

So far, 54 projects approved in the waning days of the Pataki administration have put state taxpayers on the hook for about $1 billion in tax credits. A number of those are high-end buildings by politically connected developers on land that received only minor cleanups.

Developers get credits tied to the total cost of a redevelopment, rather than cleanup costs, meaning larger projects on lesser-polluted sites reap the biggest benefits. The state Budget Office has estimated that about 90 percent of the credits go toward new construction, rather than cleaning up pollution.

In Rensselaer, for example, removal of arsenic and other toxic chemicals from about 40 acres near the former BASF factory on Riverside Avenue cost plant developers Empire Generating Co. LLC about $800,000. In return, the corporation is eligible for a $40 million tax credit on the $400 million project.

Critics like Grannis said such projects have diverted the program's original intention away from cleaning urban blight and are unaffordable in a state wrestling with a multibillion-dollar deficit.

Because of the looming expense, the state Legislature imposed a moratorium on accepting new projects, but that expires July 23. More than 40 new projects are waiting for consideration, with the potential to cost the state further "hundreds of millions of dollars," said Grannis, during a press conference with environmental groups pushing for the law to be changed. "Some big developers remain very enthused about this program ... but it doesn't provide anything except more profit for the developers."

Grannis was joined by representatives from Scenic Hudson, New Partners for Community Revitalization, Sierra Club Atlantic Chapter, New York State Public Interest Research Group, New York League of Conservation Voters, Environmental Advocates of New York, Environmental Defense Fund and Natural Resources Defense Council.

Gov. David Paterson and the Democratic-led state Assembly have introduced proposals to cap brownfield tax breaks on new construction, while increasing incentives for stringent cleanups.

Paterson would cap tax credits for new buildings at $15 million per project, while a proposal by state Assemblyman Robert Sweeney, chairman of the Environmental Conservation Committee, would permit up to $50 million in credits toward buildings.

The Republican-controlled Senate, where developers have urged that the program be left unchanged, has not offered any proposals. Lawmakers are due to leave June 23 for the summer.

"We have had some good discussions, said Scott Reif, a spokesman for Senate Republicans. "Our expectation is that we will get something done and the Senate will take action in the near future."

Brian Nearing can be reached at 454-5094 or by e-mail at bnearing@timesunion.com.