NY's Brownfield Cleanup Incentives Not Flowing to Minority or Struggling Communities

ALBANY, NY (01/31/2011)(readMedia)-- The state government watchdog group Environmental Advocates of New York today released an in-depth analysis of tax credits doled out to developers under the state's Brownfield Cleanup Program. Established in 2003 to encourage the cleanup of contaminated areas blighted by former industrial sites, the intent of the program was to stimulate economic development in low-income neighborhoods and communities of color, while making such communities healthier and safer. Click here for a list of sites and related tax credits.

Environmental Advocates' review of Department of Environmental Conservation (DEC) records of remediated brownfield sites, as well as records from the state Department of Taxation & Finance, revealed that developers have claimed nearly $365 million in tax credits to clean up brownfield sites during calendar years 2008 and 2009. But these tax credits are not encouraging cleanups in predominately African American or Latino neighborhoods, or in areas with high rates of unemployment or families living in poverty.

"While New York's leaders are busy looking under the couch cushions for loose change, taxpayers have lined the pockets of real estate developers with hundreds of millions of dollars in the form of state tax incentives that are missing the mark," said Alison Jenkins, Fiscal Policy Director, Environmental Advocates of New York. "Targeting these incentives to bolster struggling city neighborhoods would guarantee taxpayers get a better bang for the buck."

According to Environmental Advocates' research:

Predominately African American or Latino neighborhoods are home to zero projects claiming tax credits. Nearly 33 percent of projects claiming credits are located in neighborhoods that are at least 90 percent Caucasian per the census. (See Table 1).

A total of only four projects that claimed tax credits, or 10 percent, are located in areas where the percentage of families living in poverty was greater than 30 percent (Table 2).

Thirty-five percent of projects claiming tax credits are in areas where the percentage of families living below the poverty line was lower than nine percent. The statewide average of families living below the poverty line was 11.5 percent; the New York City average was 17.5 percent (Table 2).

Only 7.5 percent of projects claiming credits are located in areas with unemployment rates above 10 percent. Per 2000 Census data, the statewide unemployment average was 4.7 percent; the New York City average was 5.8 percent. Half of projects claiming tax credits are located in neighborhoods with less than four percent unemployment (Table 3).

Environmental Advocates used the DEC's environmental remediation database to compile a list of projects that have received a certificate of completion and overlaid that list with additional information including: detailed census statistics on income levels and demographics, and information on tax credits claimed by developers from reports published by the Department of Taxation & Finance. Environmental Advocates used statistics from the 2000 Census, which provides the most complete data available but is likely to under-report current unemployment and poverty statistics.

Despite the fact that the state's 2010 budget defers payments on brownfield tax credits in excess of $2 million until after 2013, the bill will eventually come due.

A brownfield is an abandoned or underused piece of land where redevelopment is complicated by environmental contamination. Brownfields blight communities and pose both health threats and obstacles to economic redevelopment. Unused urban land is a fiscal burden because it is unproductive in terms of job creation, revenue generation, or contribution to the tax base.

A new report from the Department of Taxation and Finance with data on tax credits claimed in calendar year 2010 will be available on Monday, January 31, 2011.

-30-

Environmental Advocates of New York's mission is to protect our air, land, water and wildlife and the health of all New Yorkers. Based in Albany, we monitor state government, evaluate proposed laws, and champion policies and practices that will ensure the responsible stewardship of our shared environment. We work to support and strengthen the efforts of New York's environmental community and to make our state a national leader.