The Brownfield Cleanup Program in the state and city offer incentives

A Brownfield site is typically defined as contaminated vacant or underused land. Brownfields currently cover approximately 7,600 acres in NYC. Left undeveloped Brownfields can pose an environmental, legal and financial burden on the community. New York State and New York City view these properties as powerful engines for economic vitality that can breed new jobs and life into communities once remediated and developed. Therefore, the New York State Department of Environmental Conservation (NYSDEC) and the New York City Mayors Office of Environmental Remediation (OER) offer incentives for the remediation and development of Brownfield Sites. The NYC program is referred to as the City Brownfield Cleanup Program and the New York State program is referred to as the State Brownfield Cleanup Program. The NYC Brownfield Cleanup Program (BCP) should be utilized during the development of properties with low levels of contamination (which may only be impacted by soil vapor) to moderate levels of contamination including those impacted only with urban fill or manageable petroleum spills. A basic phase II ESA could determine if your site is eligible for the NYC BCP program. The NYC BCP program offers four main incentives; (1) grants from ranging from $60,000 to $125,000; (2) The Federal Brownfield Tax Incentive (198(c)(1)(B) tax incentive); (3) liability release from New York City and New York State; (4) Green Property Certificate. The Federal Brownfields Tax Incentive is a new incentive recently offered by the city. It reduces a taxpayer's taxable income by the cost of eligible cleanup expenses on a property the year the cleanup costs are incurred. Without this incentive, remediation costs would be capitalized and depreciated over a period of years. By delivering the entire tax savings from remediation of a brownfield upfront, when the costs are incurred, this federal tax incentive, found at section 198(a) of the federal tax code, effectively boosts a project's cash flow. Eligible remediation expenses include: removal and/or treatment of contaminated soil, construction of cap or cover system, site assessment activities undertaken in connection with the abatement or control of hazardous substances or petroleum; and the implementation and monitoring of institutional and engineering controls. Taxpayers should rely on tax counsel to determine which project costs are eligible for the incentive. The OER will help parties enrolled in the city program obtain a Statement of Property Eligibility from DEC. Once prepared, OER will submit the application to DEC which will review and approve it, and then issue the taxpayer a Statement of Property Eligibility. Additionally, the NYC Brownfield Program can easily be coordinated with development being conducted under the City Environmental Quality Review (CEQR) process. This includes properties that have received a Restrictive Declaration, "E" Designation or that are receiving funding from the NYC department of Housing Preservation and Development (HPD). Additionally, other funding sources such as United States Department of Housing and Urban Development (HUD) require a local agency to oversee environmental work. This local agency should be the NYC OER under the Local Brownfield Program since remediation can be coordinated with the development. The New York State Brownfield Cleanup Program is designed to manage the remediation of highly contaminated properties. These properties are usually contaminated with hazardous materials such as metals or solvents. A property does not have to be under development to enter into the State BCP program. This program also qualifies the property for the Federal Brownfields Tax Incentive and NYS liability release. The State program has recently begun accepting new applications so if your property was previously not accepted into the program, Hydro Tech can help you reapply. Both the NYC and NYS Brownfield Cleanup program have been undergoing changes and offering additional incentives. It may be a good time for you to reconsider these programs or take your first look at them. Please contact Hydro Tech today to see how we may be able to assist you. Rachel Ataman, LEED AP, is VP of technical services for Hydro Tech Environmental Corp., Commack, N.Y.