New York’s Billion-Dollar Brownfields An Environmental Advocates of New York Analysis
November 2013
Costly State Subsidies Still Missing the Mark This is Environmental Advocates of New York’s third analysis of tax incentives associated with the New York State Brownfield Cleanup Program. Our 2013 analysis of these tax incentives reveals that after spending $1.14 billion out of pocket, New York State has cleaned up only 131 sites. Additionally, millions of dollars are promised to already-cleaned up sites that have yet to claim credits, with thousands of contaminated sites languishing across the state.
The price tag continues to grow. Of the 131 cleanups completed, 82 projects claimed tax credits between 2008-2012.1 From 2006 through 2012, New York taxpayers spent more than $1.14 billion on Brownfield Cleanup Program Tax Credits and many completed projects have yet to collect from the state, further increasing the program’s short-term costs. Additionally, projects claiming tax credits are rarely located in areas of high unemployment, high poverty, or communities of color where public incentives are most needed to attract new development.
Our review of community demographics and tax credit data from 2008-2012 reveals that the state’s poorly targeted tax credits are not directed to the communities most in need of state investment and clean-up. And none of these tax dollars are attached to standard accountability measures like job creation.
New York’s Brownfield Cleanup Program can be summed up in two words: costly and off-target. In short, while it is critical these environmentally toxic sites be cleaned up and put back into use, New York’s Brownfield Cleanup Program can be summed up in two words: costly and off-target. 2
New York’s Billion-Dollar Brownfields An Environmental Advocates of New York Analysis
Most Recent Data
Number of Projects
# of Projects
In 2012, 42 sites claimed brownfield tax credits totaling $108 million.2 This includes 14 sites that have not claimed credits in previous years, whose locations have been integrated into our updated demographic analysis. Redevelopment credits, for buildings placed on properties after remediation has been completed, made up 89 percent of all tax credits claimed. 52 percent of all tax credits were claimed by a mall located outside of a census tract with elevatBrownfields Funds Flow to Chart 1: Brownfield Incentives Flow to Better ed poverty and unemployment Communities Least in Need Situated Communities with Low Unemployment rates. This site entered the pro60 60 gram prior to 2008 when project 50 50 40 40 tax caps were instituted. New 30 30 York State taxpayers are still on 20 20 10 10 the hook for the largesse of pre00 20-29 10-19 0-9 No Data vious payouts to developers. 20-29% 10-19% 0-9% No Data Percent Unemployed % Unemployed
Detailed Findings
Number of Projects
# of Projects
State spending to clean-up contaminated former industrial sites or “brownfields” has cost New York taxpayers $1.14 billion. This price tag is largely the product of tax incentives based on the value of buildings placed on the redeveloped lot, not on the clean-up costs. Our research shows that almost 60 percent of projects that have claimed tax credits are located in areas with unemployHigh Poverty Communities Falling Chart 2: High Poverty Communities are Falling ment levels of less than 10 perBehind in Brownfields Investment Behind in State Brownfield Investment cent, and 60 percent of projects 3030 2525 are located in areas that have 2020 less than a 20 percent poverty 1515 rate among families. Additionally, 1010 55 less than one-third of projects 00 are located in predominantly 50-59 40-49% 40-49 30-39% 30-39 20-29% 20-29 10-19% 10-19 0-9% 0-9 No NoData Data 50-59% African American and/or Latino Families Below Poverty Line Line % ofPercent Families Below Poverty neighborhoods. 3
4040 3030 2020 1010 00
Number of Projects
# of Projects
Chart 3:Minority and Ethnically Diverse Minority & Ethincally Diverse Communities Communities Receive Fewer State Brownfield Receive Fewer Brownfields Investment Investments
75-100 75-100%
50-74.9 50-74.9% 25-49.9% 25-49.9 Percent Caucasian
0-24.9% 0-24.9
% Caucasian
Total Credits Claimed (in Millions) 3 2006
$71
2007
$216
2008
$190
2009
$175
2010
$100
2011
$279
2012
$108 4
Total
$1,139
Fixing the Brownfields Program Brownfield program tax credit reforms enacted in 2008 limited generous redevelopment tax credits to a multiplier of cleanup costs but have failed to sufficiently target valuable public support in communities struggling to attract development. Governor Cuomo and the State Legislature should reform these off-target tax incentives as follows: Separate eligibility for state certified cleanups from eligibility for redevelopment tax credits.
Target redevelopment tax credits in neighborhoods in need of public incentives to attract private investment.
Extend Brownfield Cleanup Program tax credits for 10 years to provide program certainty.
Establish redevelopment tax credit eligibility criteria such as; whether the site is located in an economically disadvantaged area, the site is being developed to conform to community planning, or the property’s value is upsidedown.
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New York’s Billion-Dollar Brownfields An Environmental Advocates of New York Analysis
Project Description
About
Environmental Advocates of New York combined data from the New York State Department of Taxation & Finance annual reports with project information from the Department of Environmental Conservation’s (DEC) Environmental Site Remediation Database to compile a list of sites that have received Certificates of Completion and have filed claims for tax credits. We overlaid this data with 2010 Census statistics on income levels and demographics.
For more than 40 years, Environmental Advocates of New York has defended New York’s air, water, landscapes, wildlife, and community health. We have been at the center of every major environmental issue since 1969, monitoring state government, evaluating proposed laws, fostering collaboration across the environmental community, and championing practices and politics that ensure responsible stewardship of our shared environment.
End Notes
The average unemployment rate for New York State is currently 7.6 percent (Bureau of Labor Statistics).
1. Tax credit reports began to be public for tax year 2008. Only aggregate data is available for tax years 2006 & 2007.
The poverty rate for families in New York is 11.5 percent (2010 Census). Forty-four percent of New Yorkers are people of color (2010 Census).
2. An $87 million amended claim filed by Empire Gen Holdings is calculated in the claim’s original tax year not in 2012 data. 3. 2006 and 2007 data from the Annual Report on New York State Expenditures: 2012-13 State Fiscal Year; 2008-2011 data from the Department of Tax and Finance Brownfield Credit Reports. 4. An $87 million claim made in 2012 amending a 2011 claim is included in the 2011 yearly total; the year the claim was first recognized as a liability to the state.
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