Act on brownfields

First published in the Albany Times Union, May 29, 2007

New York's landmark 2003 brownfield law is flawed and needs fixing. It also happens to be a textbook example of what can go wrong when negotiations are held in the middle of the night, rather than in public, as Governor Spitzer now insists, as he and legislative leaders try to reach agreement on pending issues.

The law was rushed through during one of the Legislature's infamous marathon sessions, albeit with the best of intentions. Lawmakers had hoped to spur development of contaminated sites, mostly in urban areas and upstate, by offering developers generous tax incentives to build there.

But it didn't take long before the flaws were exposed. Tax credits of up to 22 percent were pegged not only to a developer's cost of cleaning up a contaminated site, but also to the cost of construction itself. That meant big developers in Manhattan could save millions of dollars even if their cleanup costs were relatively modest. A case in point: The firm behind the New York Times Tower in midtown Manhattan applied for $170 million in tax credits for the $850 million project, even though cleanup costs were less than $1 million.

When the loophole was exposed, embarrassed state officials moved to rewrite the rules and disqualify the Times project. But they also tightened rules to a point that discouraged smaller development projects that could have large community benefits, such as affordable housing. And the overall goal of the credit program, to clean up thousands of contaminated sites statewide, remains elusive. So far, only 25 projects have been approved, with another 148 applications under review.

All this could change for the better, however, if Governor Spitzer and legislative leaders add brownfield reform to their priority list for the end of this year's regular session. As it happens, there is a blueprint for just such reform in a new report by the New Partnership for Community Revitalization, a not-for-profit organization of banks, community groups, builders and environmentalists. The group wisely suggests that the tax credit program be targeted at areas plagued with poverty, crime or dwindling population. Just as important, the report recommends separate tax credits for clean-ups and redevelopment.

Many brownfield sites are in urban areas that, sadly, fit the group's criteria all too well, which is why most lenders today will not finance any redevelopment there. But a tax credit program properly targeted to areas most in need of revitalization could lure the financing needed to get things done. First, though, Mr. Spitzer, Senate Majority Leader Joseph Bruno and Assembly Speaker Sheldon Silver must act -- and soon.