The Voluntary Cleanup Program in Brownfields Development

							Brownfield & Economic Development
Financial Incentives
Oswego Brownfield Opportunity Area
Program
April 26, 2012

Robert G. Murray, Esq. - bmurray@harrisbeach.com
Frank C. Pavia, Esq. - fpavia@harrisbeach.com
Roberta Jordans, Mgr. of Economic Development - rjordans@harrisbeach.com

Harris Beach Public Finance and Economic Development Practice Group



          716-200-5050 | www.harrisbeach.com
Financial Incentive Planning Tip

   Plan Early – Get a team in               Overlap – Overlap financial
    place ASAP and Establish                  Incentive planning with site
    Timelines                                 acquisition, permitting, and
        Attorney                             lending considerations and
        Accountant                           timing
        Architect/Engineer                       Project Description for permits and
        Lobbyist                                  incentives need to match
        Project Manager/Owner’s                  Need to tell a good story and get
         Representative                            community and NYS buy-in
        Community Relations Consultant                Job Creation
                                                       Investment
   Identify All Incentives                            New Real Property Taxes
    Up-Front – CFA - Best to
    identify/analyze all benefits
    together
Brownfield Opportunity Program (BOA)
Benefits

   The BOA has already (most likely) undertaken
    initial data collection and the BOA provides an
    additional 2% REFUNDABLE tax credit as part of
    the Brownfield Cleanup Program (BCP)
   Thus – the BOA introduces time and costs
    savings re data collection plus additional financial
    incentives to develop a brownfield site
   Note – do not need to be in a BOA to use NYS
    Brownfield Cleanup Program
BCP Tax Benefits: Three Refundable New
York State Tax Credits

   1. Brownfield Redevelopment Tax Credit (BRTC)
        Refundable investment credit based on cleanup and build out and
         equipment costs (site prep, groundwater treatment, tangible
         property)
   2. Tax Credit for Remediated Brownfields (TCRB)
        Refundable Real Property Tax Benefit (Up to 100% refund of all
         real property taxes/PILOT paid)
   3. Environmental Remediation Insurance Credit
    (ERIC)
        Refundable insurance premium credit (up to $30,000 based on
         cost of premium for environmental insurance)
BCP: BRTC is the most Significant
Refundable NYS Tax Credit

   Site Preparation and Groundwater Remediation
    Component
        Ranges from 22% to 50% of all cleanup costs
   Cleanup to Soil Cleanup Objectives as follows:
    Use              Unrestricted   Residential   Commercial Industrial
    Track 1              50%           N/A           N/A         N/A
    Tracks 2 and 3        N/A          40%           33%         27%
    Track 4               N/A          28%           25%         22%

    Result = More tax credit available/generated for cleaner cleanups
BCP BRTC Tax Credits
BCP Tangible Property Credit Component

   1. BRTC for Tangible Property Credit Component
        10-24% Refundable Investment Tax Credit
   2. BRTC Cap – BRTC that is claimed cannot
    exceed lesser of :
        For non-manufacturing project: $35mm or Product of (Site Prep
         and groundwater remediation costs) x (3)
        For manufacturing project: $45mm or Product of (Site Prep and
         groundwater remediation costs) x (6)
   Summary
        22% to 50% refund of site prep/cleanup costs
        Additional $3 or $6 refund for every $1 spent on site
         pre/cleanup based on capital investment
Other Potential Financial Incentives

   Local                                     Federal
        Industrial Development Agencies           HUD Community Development
        Revolving Loan Funds                       Block Grant
        Local Development Corporations            Economic Development
                                                    Administration (EDA)
   New York State
                                                   HUD Brownfield's Economic
        BOA Enhanced Tax Credit                    Development Initiative (BEDI)
        Brownfield Cleanup Program                New Market Tax Credits
        NYS Rehabilitation Tax Credits            Federal Historic Tax Credits
        Excelsior Program
                                              Other
        Build Now New York
                                                   EB-5 Foreign Investment Program
        Linked Deposit Program
                                                   Many others!
        NYSERDA
Case Study: Remington Lofts on the Canal
North Tonawanda, New York




   Adaptive Reuse of historic 176,000 square
    foot former manufacturing facility for mixed-use
    purposes – 81 work/live lofts with parking and 1st
    floor commercial/retail space
Case Study: Remington Lofts on the Canal
North Tonawanda, New York

   Approximately $20,500,000 remediation/rehabilitation costs
   Approximately $1,700,000 in BCP tax credits
   Approximately $3,975,000 in Federal Historic Tax Credits
   Approximately $3,975,000 in State Historic Tax Credits
   $1,000,000 Restore New York Grant
   $750,000 New York State Capital Projects Grant
   NCIDA Sales Tax, Mortgage Recording Tax, and PILOT
   NY Canal Corp Grant for canal improvements
Final Thoughts – You Cannot Plan Too Early

   Do not be afraid of contaminated Property - seek it out!
   Pursue all available local, state and federal level incentives
   Consult with qualified economic development attorney,
    accountant, and economic development-minded
    engineer/architect/professional
   Properly understand timing issues related to permit
    approvals, funding/grant/incentive approvals
   Obtain Incentives Analysis – work with attorney and
    accountant to identify and pro forma incentives