On April 28, 2014, the New York City Brownfield Partnership hosted the sixth annual Big Apple Brownfield Awards (BABAs) at New York Law School.  The approximately 200 attendees included developers, consultants, and attorneys as well as representatives from the non-profit and government sectors.  In addition to highlighting six exceptional New York City redevelopment projects, the Partnership also recognized Jody Kass, Executive Director and co-founder of New Partners for Community Revitalization, for her contributions to brownfield redevelopment. The keynote address was delivered by John Gearrity, Assistant Commissioner, New York City Department of Housing Preservation & Development (NYCHPD) who, in keeping with New York City’s “Poem in Your Pocket” initiative, read the following:

An Ode to Brownfields:

I sometimes sit and wonder Why,

Why – do we have such love for Brownfields

They may represent a time of great industrialization,

They may represent an age when people flocked to our shores seeking opportunity

But a Brownfield is a remnant, a brownfield is an eyesore

They remind us of divestment, of urban flight and selective-segregation

A time when it was acceptable to use, rather than to nurture

A time when it was acceptable to exhaust, rather than to conserve

A time when it was acceptable to hate and fear, rather than to love and embrace

So why do we love them, is it because they have taught us.

Taught us that when we communicate, we find that we can collaborate

Taught us that when we work together, we find we don’t need to stay apart

Is it because they show us

They show us thru mutual respect, we can overcome disparity

They show us – that by acknowledging the shortcomings of our past, we make for a stronger future

That must be why we love them

The attendees were welcomed by Deborah Shapiro, President of the Partnership’s Board of Directors, who recapped an eventful year that included sponsorship of a study examining the impact of the brownfield cleanup tax credits on cleanup and redevelopment of NYS brownfield sites, educational activities undertaken by the Legislative Committee and continued work by the Pro Bono Committee in advising property owners.  She concluded by thanking current members for their support, and encouraging those who are not members to consider joining the Partnership.

David Freeman, Past President of the Board of Directors, introduced the award segment, and Mimi Raygorodetsky and Kris Almskog, the event Co-chairs, introduced the following winning projects.

Economic Development Award

2329 Frederick Douglass Boulevard, Manhattan (H&H Builders, Inc.). This redevelopment site was formerly used for printing, dry cleaning, as a photo lab and for various types of manufacturing.  The historic fill on the property was contaminated with dry cleaning solvents, and fuel oil tanks were buried on the site. The 20,000 square-foot property was remediated under the New York City Voluntary Cleanup Program (VCP), with cleanup activities including removal of impacted soil, treatment of contaminated groundwater via hydrogen-releasing compounds, and installation of a vapor barrier and depressurization system. A Track 1 cleanup was achieved and the site is now a vibrant commercial center, generating 150 full time and 25 part time permanent jobs.

 Affordable/Low Income Housing Award

Putnam Court, Brooklyn (Dunn Development Corporation).  A former illegal parking lot and auto repair facility, this project was remediated through the NYC Office of Environmental Remediation (OER) E-designation program. Results of Phase II sampling indicated levels of metals (including barium, lead and mercury) above the pertinent NYSDEC Part 375 levels and the presence of semi-volatile compounds in historic fill material, and low-level volatile compounds in soil vapor.  Remediation included site-wide excavation concurrent with foundation ex The project, located in an area where gentrification is displacing the local population, has provided 59 rent-stabilized housing units, 34 of which are supportive housing for mentally ill, formerly homeless adults, who are provided full-time on-site support services by a Brooklyn-based social services agency.

Innovation Award

Former East Coast Industrial Uniforms, Brooklyn (39 Skillman Street LLC/Riverside Developers). Remediation of this former manufactured gas plant (MGP) and dry cleaner was accomplished using innovative remedial techniques integrated with construction activities.  In order to address chlorinated solvent and petroleum contamination concurrent with development and construction, a series of manifolded chemical oxidant injection galleries and well points were installed within the basement and living area of a residential building and routed into a parking garage area to allow remote access.  The property now contains three new six-story apartment buildings, designed to address the needs of the local Orthodox community.

Environmental Protection Award

264 North 10th Street, Brooklyn (250 North 10th Street, LLC c/o LCOR, Inc.).  Located in the Williamsburg section of Brooklyn, this site was formerly used as a chemical works, iron works, rubber products factory, bag filter manufacturer, auto painting shop, and metals manufacturing. Contamination on the 50,000-square foot property included elevated SVOCs and metals in soil and groundwater and elevated VOCs in soil vapor. The redevelopment plan includes a six-story residential building with an open common area connected to the base level parking garage. Site remediation, conducted under the New York City VCP, included removal of underground storage tanks and contaminated soil, installation of a vapor barrier, and development of a parking garage with a high volume air exchange system.

Green Building Award

Former Brooklyn Rapid Transit Rail Yard, Brooklyn (The Domain Companies).  A New York State Brownfield Cleanup Program (BCP) site, this property was formerly occupied by a rail car barn, warehouse, and rag distributor.  The site was addressed as a Track 1 cleanup, involving remediation of semi-volatile organics, metals, and petroleum via removal of contaminated soil and groundwater, chemical oxidation, and beneficial reuse of 10,500 tons of soil.  The property is currently being developed as a mixed-use, mixed-income rental development and has been designed to achieve LEED Silver Certification, Energy Start Certification and Enterprise Green Community Standards.  “Green” features include Energy Star appliances, high-efficiency HVAC and hot water systems, and use of green materials for all interior components.

Community Outreach

Borinquen Court, Bronx (West Side Federation for Senior and Supportive Housing). Remedial investigation of this 1.8-acre senior and disabled housing complex indicated significant impacts related to the site’s historic use as a gas station auto repair shop and car wash. Remediation was conducted under the NYS BCP and included removal of underground tanks and contaminated soil, and construction of composite cap to prevent future exposure. This project involved close collaboration with local housing and community groups and significant upgrades to the property. Borinquen Court is an excellent example of how community outreach can restore a needed project while remediating and restoring a property under the NYS BCP. The project is unique in that it entailed the preservation and refurbishment of existing low-income residences through collaboration among local community groups, the New York State Department of Environmental Conservation, and NYC HPD and NYC Housing and Development Corporation (HDC).

As in prior years, the Partnership also recognized the 2014 Abbey Duncan Brownfield Scholars and the 2013-2014 Brownfield Interns.

2014 Abbey Duncan Brownfield Scholars:

• Cody Bachu, CUNY Queens College
  
• Marlon Ramlogan, CUNY Queens College
  
• Satwika Reddy, CUNY Queens College
  

2014 Brownfield Interns

• Barbara Ang, CUNY Queens College
  
• Bianca Caraballo, NYU Polytechnic University
  
• Maggie Chan, NYU Polytechnic University
  
• Yi Jean Chow, Harvard University
  
• Katelyn Ciolino, Brooklyn Law School
  
• Meaghan Colligan, Pace University School of Law
  
• Garrett Gissler, Columbia University
  
• Catherine Hatt, Pace University School of Law
  
• Aaron Hopkins, Rutgers University School of Law
  
• James Huang, Stony Brook University
  
• Yili Jiang, CUNY Queens College
  
• Marcus Johnson, CUNY Queens College
  
• Catherine Lyster, Pace University School of Law
  
• Brian McGrattan, Columbia University
  
• Rebecca Sorenson, New York Law School
  
• Haijun Su, CUNY Queens College
  
• Yong Yu, Columbia University

The BCP reform, specifically changes to the Brownfield Tax Credits (BTCs) and the refinancing of the Superfund refinancing were not viewed as issues for 2014/15 fiscal year.

To read the complete article by Partnership Board member, Larry Schnapf of Schnapf LLC, please click HERE.

NYSDEC has announced streamlined procedures designed to expedite execution of environmental easements in the State’s Brownfield, Superfund and Environmental Restoration Programs. For most properties, the need for a title report and title insurance has been waived and the requirements for site surveys have been simplified.

For more information, see the following pages on NYSDEC’s website:

• Title Requirements
  
• Survey Requirements
  
• Easement Checklist

Reproduced with permission from Daily Environment Report, 20 DEN A-7, 1/30/14. Copyright 2014 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com

More than 60,000 brownfield sites in New York with potential contamination make a robust state brownfield redevelopment program important, according to a report released Jan. 29.

This importance is reflected in a relatively consistent number of annual applications for the state’s brownfield cleanup program, said the report, ‘‘New York State Brownfield Cleanup Program and Tax Credit Analyses.’’ Applications number 30 to 40 per year, fluctuating with policy, court decisions and market conditions, the study said.

Sponsored by the New York City Brownfield Partnership (NYCBP), the study analyzes the impact of the New York State Brownfield Cleanup Program (BCP), and specifically the impact of brownfield tax credits, on the cleanup and redevelopment of brownfield sites in the state. NYCBP is a nonprofit, public-private partnership promoting the cleanup and redevelopment of brownfield sites in New York City.

Click to view full report.

The study was directed by Barry F. Hersh, Clinical Associate Professor at New York University’s Schack Institute of Real Estate, with financial support from the Partnership, and focuses on the impacts of the significant changes made to the Program in 2008. Key findings include:

• Sites admitted into the BCP since 2008 tend to be smaller, more geographically diverse, more likely to be located in low income areas, and more likely to have industrial or affordable housing end uses than sites admitted in the 2003-2008 period.

• The post-2008 projects are, at least to date, significantly less expensive to the state treasury than those admitted in the 2003-2008 period. The average tax credit cost for those sites to date is approximately $1 million, compared to $14 million for pre-2008 projects.

• A much greater percentage (74%) of credits of tax credits for post-2008 projects have been earned as a result of site cleanup expenses rather than development costs (26%). The comparable percentages for pre-2008 projects are 7% (cleanup expenses) and 93% (development expenses).

• The approximately $1 billion of the BCP tax credits has stimulated approximately $8 billion of direct investment of cleanup and development dollars. Using well-accepted economic modeling, the study estimates that the total economic activity stimulated by the BCP to date is approximately $15.5 billion.

Click here to view full study.

Please see below for an excerpt from the governor’s press release and a link to an article by Partnership Board member Larry Schnapf of Schnapf LLC.

“The Executive Budget includes legislation to extend the Brownfields Cleanup Program for ten years, with important reforms to protect taxpayers and promote brownfield redevelopment, particularly in Upstate New York. Under the reformed program, remediation tax credits will only cover actual cleanup costs and redevelopment credits will be available for sites that have been vacant for over a decade, worth less than the cleanup costs, or are priority economic development projects. In addition, the Budget includes a new $100 million appropriation to extend the State Superfund cleanup program, including $10 million through the Environmental Restoration Program to address municipally-owned brownfields.”

http://www.environmental-law.net/2014/01/governor-cuomo-proposed-amendments-to-brownfield-program/

70 Percent of all Brownfield Cleanup Sites are in Historically Disadvantaged Neighborhoods 

Properties in NYC Brownfield Cleanup Program have Average Vacancy of about 18 Years Prior to Enrollment and Cleanup

Mayor Michael R. Bloomberg today announced the completion of 14 environmental cleanup projects in Queens, Brooklyn and Manhattan as a part of the New York City Brownfield Cleanup Program. The cleanups resulted in the removal of more than 195,000 tons of soil and remediation of 5.6 acres of land. Construction of new buildings on these 14 properties is now nearly complete and will include over 1.7 million square feet of new industrial, commercial, retail and residential building space – representing over $820 million in new private capital investment. These fourteen projects will create over 500 new jobs, 250 units of affordable housing and generate over $147 million in new revenue for the City. The New York City Brownfield Cleanup Program, which was an initiative under PlaNYC, is the nation’s first municipally run cleanup program and is operated by the Mayor’s Office of Environmental Remediation. The Mayor also announced the launch of the New York City Clean Soil Bank, a landmark soil exchange that will enable recycling of clean native soil excavated during development of remediated properties for reuse on City and other construction sites, saving the City up to $5 million in soil purchase costs each year and lowering truck traffic, congestion and associated vehicle emissions. The clean soil can be used to elevate properties and build protective barriers to protect against storm surges and fulfills a milestone of the Special Initiative for Rebuilding and Resiliency. The NYC Brownfield Cleanup Program was established in January 2011 and has approved over 150 cleanup plans in its first 32 months of operation. Collectively, these projects will result in cleanup of over 320 tax lots and will enable approximately $4.5 billion in new capital investment, over 13 million square feet of new building space, over 2,200 units of affordable housing and will create over 4,400 permanent new jobs.

“The NYC Brownfield Cleanup Program is bringing dozens of dormant and contaminated properties back to life throughout the five boroughs,” said Mayor Bloomberg. “Working with private developers we are cleaning up these lots and building housing and commercial space that will attract families and businesses to the communities where they are located. In just 2.5 years, this unprecedented program is making possible 13 million square feet of residential and commercial development – including 2,200 units of affordable housing – that will generate more than 4,000 permanent jobs.”

“The NYC Clean Soil Bank matches projects that generate clean soil with city and other construction projects that need it,” said Deputy Mayor for Operations Cas Holloway. “This program will lower brownfield development costs and accelerate cleanups. The Clean Soil Bank will not only reduce City construction costs, it is an innovative reuse of material that otherwise would have ended up in landfills, open solid waste transfer stations and at sites outside of the city. Congratulations to Dr. Dan Walsh and his team on their tremendous success on the Clean Soil Bank and the entire NYC Brownfield Cleanup program.”

The NYC Clean Soil Bank enables transfer of clean, native soil excavated from remediated brownfield sites on nearby City capital construction projects and brownfield projects that need clean soil, eliminating soil disposal and purchase costs and reducing transport costs. The program is expected to recycle over 100,000 tons of clean native soil each year.

“For decades, vacant brownfield properties have accumulated in some of our most disadvantaged neighborhoods,” said Dr. Daniel Walsh, Director of the NYC Mayor’s Office of Environmental Remediation which operates the Brownfield Cleanup Program. “The City Brownfield Cleanup Program is now achieving high quality cleanups on these brownfield sites, reversing this harmful trend and enabling community growth and revitalization. This would not have been possible without PlaNYC and the strong support of community leaders, the environmental industry and Commissioner Joseph Martens and his staff at the New York State Department of Environmental Conservation.”

“The NYC Clean Soil Bank provides the City with sustainable and cost-effective tools to make properties more resilient to climate change,” said Daniel Zarrilli, Director of Resiliency for the City of New York. “Clean soil from this program could be used to raise low-lying properties and vulnerable shorelines to reduce the risks of sea level rise and storm surge. This initiative is helping to build a stronger, more resilient New York.”

“Reuse of soil within the NYC Clean Soil Bank is consistent with the State’s goal to maximize beneficial reuse of recyclable material,” said New York State Department of Environmental Conservation Commissioner Joe Martens. “This cost effective solution advanced by our partnership with New York City promotes sound environmental practices. We are pleased to work with OER to help provide the basis to operate this innovative new program.”

“Mayor Bloomberg made a major commitment to cleaning up brownfields when he released PlaNYC in 2007,” said Marcia Bystryn, President of the New York League of Conservation Voters. “Now we are seeing the return on that commitment, with 150 cleanup projects underway in communities throughout the City. The NYC Brownfield Cleanup Program not only makes our communities healthier to live in, it has also shown other cities around the nation that local government can play a major role in revitalizing blighted land.”

“The Brownfield Cleanup Program, coupled with smart rezoning, demonstrates the success the City can achieve by repurposing underutilized, contaminated land and focusing future development on job creation and the expansion of economic opportunity,” said Kathryn Wylde, President and CEO of the Partnership for New York City.

“New York City Environmental Justice Alliance believes that brownfield cleanup in our low income communities must be a high priority,” said Eddie Bautista, Executive Director of the New York City Environmental Justice Alliance. “I am very glad to see that the NYC Brownfield Cleanup Program has made so much progress in this area. We need to continue to build on this success.”

“The high quality cleanup of brownfield sites that is achieved in the city Brownfield Cleanup Program is an important mechanism for improving our communities,” said Deborah Shapiro, President of the New York City Brownfield Partnership. “The NYC Brownfield Cleanup Program and the other new programs that the Office of Environmental Remediation has established have made brownfield cleanup more predictable and more cost effective than ever before. We look forward to continued success of the program in the years ahead.”

“In just a few years, the NYC Brownfield Cleanup Program has become an effective and highly regarded government program to facilitate environmental cleanup and provide essential liability protection for developers cleaning up brownfield sites,” said Steven Spinola, President of REBNY. “Considering the large number of brownfield sites in New York City, this program is important for development and an important environmental legacy for the Bloomberg administration.”

“The NYC Brownfield Cleanup Program kept our project on schedule and helped us with funding that made cleanup of the property more affordable,” said Eric Bluestone, a partner in Bluestone Jamaica I, LLC which developed one of the sites cleaned up in the NYC Brownfield Cleanup Program. “OER staff put a lot of effort into our project to help it succeed.”

The fourteen recently completed cleanups are located at 90-11 161st Street in Jamaica, Queens; 23-10 41st Avenue in Long Island City, Queens; 39-16 Prince Street in Flushing, Queens; 224-01 Merrick Blvd in Laurelton, Queens; 2329 Frederick Douglas Blvd in Harlem; 312 West 37th Street, 400 Park Avenue South, and 529 West 29th Street in Manhattan; 105 Metropolitan Avenue, 386 Wallabout Street, 264 North 10th Street, and 210 North 12th Street in Williamsburg, Brooklyn; 547 Myrtle Avenue in Clinton Hill, Brooklyn; and 125 Flatbush Avenue Extension in Downtown Brooklyn. This brings the total number of completed Sites in the NYC Brownfield Cleanup Program to twenty-one. Each of these properties will receive the New York City Green Property Certification, demonstrating that the new buildings are among the safest places in New York City to live and work.

See below for an article by Board member Larry Schnapf of Schnapf LLC.

During the Great Recession, many brownfield sites in the lost their project financing. In New York, sites that were remediated and received a Certificate of Completion (COC) remain valuable because owners have ten years to develop the sites and claim the lucrative qualified tangible property (QTP) tax credit (explained below). As market conditions have stabilized, these remediated New York brownfield sites have become attractive investments for developers.

Since the new investors may have development plans that differ from the original project, it may be necessary for the purchaser to incur additional cleanup costs. Recently, the New York Department of Taxation and Finance (DTF) issued an advisory opinion discussing if a purchaser of site with a COC could claim additional site preparation tax credits for additional remediation expenditures incurred to prepare the site for construction of an industrial manufacturing facility.

Under the BCP, applicants may be eligible for a number of tax credits including the Site Preparation Tax Credit and the qualified tangible property (QTP) tax credit. The BCP tax credits are only available for costs incurred after the brownfield cleanup agreement as been executed. Only those parties on the BCA may be named on the COC and only those parties on the COC may claim the BCP tax credit unless the COC is subsequently transferred in accordance with NYSDC regulations.

The site preparation costs include all costs incurred to prepare the site for development and includes cleanup costs as well as costs of excavation, shoring, sheeting, dewatering, fencing, etc. that are incurred to qualify the site for a COC. Additional site preparation tax credits may be available for five taxable years after the COC for costs that are incurred to place the property into service. Since this site was accepted into the BCP in 2006, the site preparation tax credit would be equal to 12% of the site preparation costs paid or incurred by the taxpayer. The applicable percentage that may be claimed could be increased by 8% if the property is in an environmental zone and another 22% if the property been remediated to a track 1 (unrestricted) cleanup standard for a maximum percentage of 22%. This credit component can be first claimed in the taxable year in which the effective date of the COC occurs and it is available for up to five taxable years after the issuance of the COC.

Likewise, the QTP tax credit component for this property would be equal to 12% of the cost of the improvements that were constructed on the brownfield site but could be increased to 22%. The QT tax credit for the tax year that the property is placed into service and for up to ten years after the COC has been issued.

Previously, the DTF has ruled that new buildings, including structural components of buildings, constructed on remediated land meet may be eligible for the QTP tax credit. NY Adv Op Comm T & F TSB-A-04-(1)I. Moreover, the DTF has ruled that costs incurred to rehabilitate existing buildings and construct of new buildings will be eligible for QTP tax credit. NY Adv Op Comm. T & F TSB-A-05-(4)C.

As is the practice with advisory opinions, the identity of the petitioner and the site were redacted. The generic facts are that the petitioner was considering purchasing approximately 15 acres of currently vacant land that had been was accepted into the BCP in 2006. DEC subsequently issued a COC (the date of the COC was redacted) to the current owner. The purchaser planned to enter into an amendment to the Brownfield Cleanup Agreement (BCA) and arrange to have the COC transferred to it in accordance with NYSDEC regulations. The Purchaser planned to construct a manufacturing facility on that site and lease that facility to another entity whose name was also redacted.

Because the additional site preparation costs would have been incurred more than five years after the COC was issued, the DTF concluded that the purchaser could not claim the site preparation credit. NY Adv Op Comm. T & F, TSB-A-13(10)C, Petition No. C130607A (9/10/13).

Beginning in December 2013, the New York City Office of Environmental Remediation may issue a letter providing the results of Environmental Review and Assessment where the presence of light to moderate contamination at private property in the city of New York may affect the closing of a financial transaction.

OER will issue an Environmental Review and Assessment letter (ERA letter) that may comfort parties engaged in a financial transaction where it determines that existing conditions at a property are protective of public health. An ERA letter is generally not issued where contamination requires further action beyond that contemplated under the transaction to render a property protective for its intended use.

A party that requests an ERA letter will meet with OER to discuss the nature of the financial transaction, the property, prior and current site uses and operational history, known site contamination of soil, groundwater and soil vapor, the extent of current site development, the requestor’s plans for the property, the site’s future use following the anticipated financing and an indication of the role the ERA letter from OER may play.  The requestor must also provide OER with copies of all environmental reports on the property, including a Phase I and all Phase II studies, and environmental data and information, including information about any environmental violations at the property.

OER will review and assess the property data and information, compare reported contamination levels with state cleanup standards found at 6 NYCRR §375, consider customary requests for public health protection and determine whether it can provide a written assessment indicating that existing or proposed property conditions are protective of the property’s future use. Where further environmental study or remedial action is indicated by the review, at the agreement of both parties, the ERA letter will identify those studies and remedial actions in the agreement or the request for the letter may be withdrawn.

If the requesting party decides it wants an ERA letter, it shall submit payment to OER of $3,500 to cover the cost of the office’s review, preparation and issuance of the ERA letter.

OER reserves the right to elect not to issue an ERA letter if, upon completion of its review, it determines the site is not protective of public health, or for other factors at the sole discretion of the director.

The New York City Brownfield Partnership is pleased to announce that Dr. Daniel A. Walsh, Director of the New York City Mayor’s Office of Environmental Remediation, will be presented with the 2013 American Bar Association Award for Excellence in Environment, Energy and Resources Stewardship.

The Partnership, and three of its Directors, David Freeman, Roberta Gordon, and Larry Schnapf, nominated Dr. Walsh in recognition of his leadership and significant contributions to brownfield redevelopment in New York City.  Past recipients of the Award include a founder and early President of the Environmental Law Institute, one of the nation’s leading environmental think tanks; the President of CERES, a prominent coalition of corporations, investors and public interest groups that promotes sustainable investment; and the Director of Environmental Support for the company responsible for arranging for remediation of hundreds of former General Motors Corp. properties nationwide.

This prestigious award will be presented at the ABA Section of Environment, Energy, and Resources Fall Conference on Friday, October 11, 2013 at the Hilton Baltimore. A number of Partnership Directors and members are planning to attend the awards ceremony and hope that others will consider joining us to honor Dan on October 11.