New York State Brownfield Cleanup Program
A Developer’s Perspective to Redeveloping Tough Sites
Krog – Brownfield Project Experience
CertainTeed – 1ST COC in NY State, 277,000 sf Architectural Products
Riverwalk Medical Office – 85,000 sf Medical Facility
Cobey – 90,000 sf Engineered Products Manufacturer
Hydro-Air – 150,000 sf HVAC Products Manufacturer
Watkins Glen Harbor Hotel – 104 Room Four Diamond Boutique Hotel
Welded Tube – 110,000 sf OCTG Pipe Manufacturer
1000 Islands Harbor Hotel – 105 Room Four Diamond Boutique Hotel
Olean Gateway – Proposed Destination Retail/Hotel Project and Solar Farm
Krog – Brownfield Project Experience
Krog – Brownfield Project Experience
Trico Building – 480,000 sf Mixed-Use, $85 Million
Extended Stay Hotel
Market-Rate Apartments
Commercial
Indoor Parking
70 + Acres, Multi-Owner, Commercial and Solar redevelopment of former
refinery site in Buffalo, NY
Indoor Vertical Farming/hi-tech growing facility 70,000 sf building on the
former Bethlehem Steel site
On the Drawing Board
Site Selection
Getting from This….
Site Selection
To This….
And This
Site Selection
Site Selection
Tough Redevelopment Site Challenges
Property Sale/Acquisition Complications: Environmental condition Negative Stigma Substantial Risk Factors
Cost Uncertainty Long-term Liability Long-term OM&M
Physical constraint Abandoned infrastructure Parcel sizes Subsurface conditions and obstructions
Regulatory Uncertainty Program changes Tax & Finance audit risk
Site Selection
Why consider a Brownfield Site
Same due diligence as “greenfield” sites Transportation Labor pool Utility availability and capacity Proximity to low-cost power Geotechnical Land cost
Environmental Conditions Impacted soil Impacted groundwater Structural remediation and demolition Long-term operation and maintenance of remedial
measures Soil vapor extraction Sub-slab depressurization Groundwater pump & treat Engineering oversight
Site Selection
Benefits of a Brownfield Site
Land availability Most of the largest tracts in urban
areas have had prior use, especially those with multi-modal transportation access
Lower land cost due to remediation/rehabilitation costs
NYS Brownfield Cleanup Program Site Prep Tax Credit
offsetting remediation
NYS Brownfield Cleanup Program Tangible Tax Credit
offsetting vertical construction
NYS Brownfield Cleanup Program Liability release
Leveraging other incentives Local, State, Federal and
Utility Company
Brownfield Cleanup Program
Economic Incentives – 2015 Reforms
Site Preparation Tax Credit - Refundable Tangible Property Tax Credit - Refundable
• Baseline 10% • En-Zone +5%• BOA +5%• Track 1 Cleanup +5%• Maximum 24%• Capped at 3 or 6 x Site Prep Cost or $35M/$45M
(non-manufacturing v. manufacturing) 10 Year Eligibility Limited Liability Release Eliminates DEC Oversight Costs
Buyer/Seller Liability Protections
Environmental Liability Release
Upon issue of COC, State releases the COC holder and previous owners from liability arising out of the presence of contamination at the Site
This release extends to successors and assigns and is transferable to future owners
Transfer of property often includes environmental liability transfer Preferred Purchaser indemnifies seller of future environmental liability Pollution Legal Liability insurance for third party claims and unknown conditions
Brownfield Cleanup Program
Brownfield Cleanup Program
Developer’s Perspective What’s working?
• WNY Continuing to benefit from redevelopment of numerous brownfield properties
• Key component to the revitalization of downtown Buffalo and Upstate NewYork
• Increased controls to BCP entry limit the State’s exposure• Lenders understand and monetize tax credits
What could be better?• NYSDEC and DOH reviews delay project schedules• NYSDTF delays refunding the tax credits• Federal income taxes applied to State tax credit
What’s next?• Provide a similar program at the Federal level
Utilizing the Brownfield Cleanup Program and Other Incentives to Redevelop Tough Sites
A Developer’s Perspective