2007 CPEO Brownfields List Archive

From: "peter " <petestrauss1@comcast.net>
Date: 28 May 2007 21:48:58 -0000
Reply: cpeo-brownfields
Subject: RE: [CPEO-BIF] Data on New York's Brownfields Cleanup Program
 
Larry:

I agree with the others that this is good and useful work, so please don't
take my comments as a major critique.

I have difficulty understanding the reasoning behind your first conclusion
(that the percentage of cleanup costs to development costs does not appear
to be a useful metric for determining the effectiveness of a Brownfield
program).  Wouldn't it be sound public policy to concentrate efforts that
have the most return?  Don't overall development costs represent a proxy of
expected economic return (as well as construction jobs)?  It seems to
indicate where you get the most bang for your buck. Perhaps the ratio is not
the only metric to be used when assessing the value of the BCP program, but
it seems to me that it is useful for policy makers.

I would also be interested in how you are determining Cleanup Costs net of
normal excavation/construction costs.  Are you able to get data on net
excavation/construction costs?

One qualitative factor that seems to be missing is the benefit to the
community.

Peter Strauss 

-----Original Message-----
From: brownfields-bounces@list.cpeo.org
[mailto:brownfields-bounces@list.cpeo.org] On Behalf Of Lenny Siegel
Sent: Sunday, May 27, 2007 8:52 PM
To: Brownfields Internet Forum
Subject: [CPEO-BIF] Data on New York's Brownfields Cleanup Program

 From Larry Schnapf
<LSchnapf@aol.com>

During the past few months, a number of environmental lawyers and 
consultants have graciously volunteered their time to help me gather 
certain information about sites that have been accepted into the New 
York State Brownfield Cleanup Program (BCP) and have either received 
Certificates of Completion (COCs) or are currently being remediated.

Our goals were to develop some objective information about the BCP 
projects as the new administration considers making changes to the law. 
We felt that the decision-makers should be armed with hard facts  before 
they decide how to amend the program, and not be distracted by anecdotal 
accounts or research that might be influenced by the agendas or 
interests funding those research efforts.

When we started our initiative, we had no idea what the results of the 
our investigation would reveal or where it would take us. We decided to 
gather the following categories of information: Current Use; Proposed 
Use; Nature of Contamination; Nature of Remediation/cleanup track; 
Estimated Cleanup Costs (net of normal excavation/construction costs); 
Estimated No. of construction/permanent jobs; and Pre-Application 
Transaction Costs.

This task was made more difficult because there was no central 
repository for this kind of information. As a result, our volunteers had 
to do the arduous and tedious work of collecting data from persons 
involved in the BCP.

One of first conclusions we reached was that the percentage of cleanup 
costs to development costs does not appear to be a useful metric for 
determining the effectiveness of a brownfield program. For example, some 
projects in NYC have had very expensive cleanups at sites that have been 
dormant for decades yet the % of cleanup costs to project costs for 
these sites frequently hover around 1% to 2% because of the enormous 
vertical development costs of these projects. In contrast, the range 
cleanup costs at upstate sites seem to range between 5%-10%. Some 
upstate sites might have cleanup costs approaching 40% of the total 
costs yet all they're doing is pulling a few tanks and removing some 
soil. Contrary to conventional thinking, most of the 25 COCs issued 
during the past year are not from the NYC area but from upstate projects.

Another conclusion that seemed to jump out to me at least is that the 
number of sites cleaned up is not as important as the number of jobs 
created and the amount of cleanup dollars accomplished by the BCP that 
would not have ordinarily been accomplished or would have had to been 
incurred at the taxpayers expense.

Thus far, the preliminary results of our research indicate appears that 
BCP cleanup costs are averaging $1 MM to $10 MM per site with several 
NYC projects having cleanups approximating $20 MM. In region 2 alone 
(which is where NYC is located), it looks like the BCP has generated at 
least $100MM in cleanup costs-this is cleanup that would not have been 
done or cleanup dollars that would have been incurred by the taxpayers 
but for the BCP. The data we have collected thus far suggests that 
approximately 80% of the projects of the NYC projects exceed $40 MM in 
total development costs and 50% exceed $100 million.

It also appears that the transaction costs to get a site into the BCP 
are ranging from $25 K to $50 K. The cost vary depending on how much 
work the applicant does to prepare for the pre-application meeting and 
the resources it devotes to the application. In my opinion, the 
pre-application meeting is the single most important step of the BCP 
process since this is the only time that applicants will have a change 
to meet face-to-face with some of the staff who will be making the 
decision on their application and will also be able to learn what DEC 
will be expecting to see in the application. Applicants would be well 
advised to be fully adequately prepared to discuss their project, its 
benefits and how enrollment in the BCP is crucial to the success of the 
project.

The NYC jobs tend to generate around 200 construction jobs and 50-100 
permanent jobs depending on the type of project, with residential 
generating less permanent jobs. Indeed, three of the COCs in NYC 
generated approximately 1756 jobs.

I think our preliminary data shows that the BCP is not "broken" but is, 
in fact, definitely accelerating cleanups. While the tax credits might 
be tweaked somewhat to encourage more cleanups in poorer neighborhoods 
and more affordable housing projects, it does seem that the BCP is 
accomplishing what it set out to do-namely incentivizing cleanup and 
redevelopment of sites. The very generous tax credits do seem to be 
attracting capital and investment to sites that have long 
underutilitized or "warehoused." A number of BCP applicants are 
implementing extensive source removal and site characterization at sites 
where remediation has been going on at a snails pace for a decade or 
more. The applicants were willing to take on the risk of site 
redevelopment without knowing the full range of site remediation costs 
because of the generous tax credits.

Another interesting issue that I have been encountering is the sheer 
volume of misinformation out there about the BCP. I seem to get a call 
every two or three weeks from for profit and affordable housing 
developers sharing with me some bizarre advice they have received about 
what the BCP is requiring and what sites are allowed into the program. I 
suspect  this misinformation is based on individuals or groups 
extrapolating experiences with individual sites into programmatic 
policy. Each application is a site-specific determination and when one 
reviews the list of sites that have either been rejected or have 
withdrawn their applications, these anecdotal stories do not hold up 
under scrutiny. The most common misconceptions that I have heard to 
date: petroleum sites are not being admitted into the program, only 
upstate sites are being allowed into the program and that only sites 
with at least $1 MM in cleanup costs are accepted.

It has been a long and hard process and our volunteers have had 
sacrifice much of their personal time to dig up this information without 
any compensation. We hope to have our final findings by the end of June.

Larry


--

Lawrence Schnapf
55 E.87th Street #8B/8C
New York, NY 10128
212-876-3189 (h)
212-756-2205 (w)
212-593-5955 (f)
203-263-5212 (weekend)
www.environmental-law.net


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