Understanding Tax Credits in the New York State Brownfield Cleanup Program

The New York State Brownfield Cleanup Program (NYSBCP) began as a means to encourage the cleanup and redevelopment of privately owned sites across the state in an effort to promote the revitalization of economically and environmentally blighted areas. Brownfield tax credits are one of the notable benefits the BCP offers to developers who have successfully enrolled their Sites in the program.

The program offers two types of tax credits to developers: intangible credits and tangible credits. The intangible tax credits are based upon costs incurred during site preparation and remediation of on-site groundwater. Site preparation and on-site groundwater costs cover investigation, remediation, demolition, excavation, fencing, security, and other capital account costs to make the site usable for redevelopment, excluding site acquisition costs. Eligible costs may be claimed for up to five years after the issuance of the Certificate of Completion (COC). The amount of credit awarded will depend on when the site was accepted into the BCP.

Tangible credits are related to the costs of redeveloping the site, and can include the costs of building construction completed within 10 years after the COC is issued. The amount of tangible tax credits awarded to a site depend on the cleanup level obtained, whether it is in an EN-Zone (Environmental Zone) or Brownfield Opportunity Area, the end use of the site, and when the site was accepted into the BCP.

As per the 2015 Enacted Budget Brownfield Cleanup Program Reforms, sites located within the five boroughs of New York City must meet certain criteria in order to be eligible for tangible tax credits. All BCP sites outside of New York City continue to be eligible for tangible property credits. This change came about in an effort by the state to avoid awarding excessive credits to redevelopments located in strong real estate markets that are not considered to be in need of financial assistance.

For redevelopments located in New York City, tangible brownfield tax credits

may be applied to:

  • Properties which are located in EN-Zones, which are areas with high poverty and/or unemployment levels;
  • “Upside down” properties, where the cost of cleanup is 75 percent or more of the property value as if uncontaminated, or “underutilized” properties, which DEC will define by regulation; or
  • Sites that will be redeveloped for affordable housing projects, as defined by DEC, in consultation with the Division of Housing and Community Renewal.

Walden has a team of engineering professionals that can assist in navigating the BCP process, from the investigation and application process to the Certificate of Completion. Please call us today at (516) 624-7200 to get started on your project. And check out our Solid Waste Updates webpage.

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