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ALBANY, NY-Developers who remediate polluted sites through the state’s Brownfield Cleanup Program Act will get a bigger tax break than they would have under legislation that then-Gov. Eliot Spitzer introduced in January. Gov. David Paterson and New York legislative leaders agreed Monday on revisions to the BCPA that environmental attorney Charles S. Warren says are “more generous” than what Spitzer had proposed.

Under the agreement worked out in Albany yesterday, developers will be reimbursed up to 50% of the cost of cleaning up a brownfield, compared to 22% in the current program. It sets a cap for redevelopment credits on non-manufacturing projects to $35 million or three times the cost of site cleanup, whichever is less. For manufacturing projects, the cap is higher: up to $45 million or six times the cost of cleanup. Spitzer’s bill would have set a maximum cap of $15 million. “There was a recognition on all sides that you needed some type of a cap,” says Warren, the New York City-based chair of the environmental department at Kramer Levin Naftalis & Frankel LLP. “That was a major sticking point in the negotiations.”

Noting that the cap is higher on cleaning up sites that will be turned into manufacturing facilities, Warren observes, “I think that’s a nod to upstate, where you’re likely to see some manufacturing projects, whereas you probably won’t see those types of projects downstate.”

The BCPA, enacted in 2003, has drawn criticism for favoring downstate cleanup projects. According to a statement from Paterson, “The current program has not achieved desired redevelopment in struggling areas, and has provided large windfalls for some projects that were not meeting the state’s goals of assuring environmental cleanup while spurring economic development.”

That situation led Paterson and the legislature to enact a moratorium–which ends July 23–on accepting or rejecting any more proposed cleanup projects. Spitzer’s bill sought to address this imbalance by reimbursing developers only for environmental costs associated with brownfield cleanup.

Project applications received prior to July 1, 2007 will be grandfathered under the current program. Spitzer’s original bill, Warren says, “had a retroactivity provision that went back much further.”

As GlobeSt.com reported in September, Yonkers Mayor Philip Amicone testified in Albany that brownfield tax credits are critical in attracting investment to urban areas across New York State. “The Brownfield Cleanup Program is one of the most important factors that have contributed to our success in redeveloping the Downtown,” Amicone told a joint session of the Assembly and Senate Environmental Conservation committees. “Without it, most of the new projects that have been built or are being built would not have happened and that means the new jobs and revenues that come with those projects would not have happened either.”

The revisions must still be approved by the legislature; although the current legislative session technically ended yesterday, lawmakers are expected to remain in Albany through week’s end to vote on last-minute bills hammered out by their leaders. Warren says he assumes the changes will pass, but adds, “We’ll have to see if there are any details in there; right now it’s a little sketchy.”

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