Notes from the meeting held on Wednesday, February 14, 2001

5^th Floor Planning Department Conference Room

Edwin L. Crawford County Office Building, Binghamton, NY

Present: Stacy Merola, Tom Evans, Ron Brink, Ken Kamlet (Chair), Chip McElwee, Joe Graney, Paul Thompson, Michael Clugston (intern). Guest Experts: Bob Murphy (O’Connor, Gacioch), Mary Brophy (NYS DOT), Bernadette Blaisure (NYSEG—Economic Development), Bob Malecki (NYSEG—Environmental Ops.), Susan Cummins (GeoLogic), Tom Suozzo (NYS DEC), Bob Sweet (Empire State Development), and Julie Voigtlaender (SUNY – Independent Study). Public: Charles J. Moore (AHDU) and James ________ (?).

1. The meeting convened at 4:31 p.m.

2. Approval of Minutes: The minutes of January 23rd were approved as drafted.

3. Empire State Development: Bob Sweet, Deputy Regional Director of the Southern Tier Regional Office of Empire State Development (ESD), gave the subcommittee a 20-minute presentation and responded to a number of questions concerning ESD’s role.

He indicated that the Southern Tier Region, which includes 9 counties, is one of 9 regions of ESD. ESD assists companies seeking to expand as well as attempting to attract new companies from out of State who will bring net income into the state. ESD’s principal targets are large national and multi-national companies that provide good salaries and benefits. Companies attracted by EDS have created many hundreds of new jobs. EDS works closely with the Strategic Business Division in Albany and seeks to preferentially target certain desirable industries, such as Electronics, Food Service & Distribution, and Manufacturing.

ESD is primarily involved in providing “hard asset financing” –financing of such things as acquisition of land and buildings, purchase of machinery and equipment, construction or renovation of buildings, and construction or improvement of needed infrastructure. Financing can take the form of: interest subsidy grants of 2-4%; low interest loans (subordinate or bridge loans); and/or grants (which were unheard of 25 years ago). Bob pointed out that “the ante has gone up” in response to intense competition among states to attract desirable industry. For example, the State of Alabama redefined the rules of the game when it gave Mercedes Benz a subsidy of $250 million. Bob did point out, however, that he “has never known a company” to trade off a natural site advantage for an incentive.

To foster economic development in urban core areas and to encourage investment in under-invested areas, ESD has set aside specific geographic areas for development. These are known as Empire Zones. There are currently 52 Empire Zones, which are typically about 2-square miles in size. 6 new ones will be established in the coming year.

Large companies interested in relocating seldom contact government agencies directly—because they don’t want politicians lobbying their corporate officials. Typically, they retain site selection firms to evaluate sites for them. These firms typically solicit proposals from states on short notice.

New York State has good sites with bad characteristics. (It can be referred to as “urban renewal meets Superfund.”) Other states, particularly in the south and west, can offer sites in built-up urban areas that we can’t offer. One of our biggest strengths is that you can draw a 500-mile circle around Binghamton and incorporate virtually every major market in the northeast, mid-Atlantic, Midwest, and Canada.

Firms are often reluctant to invest in sites with potential environmental problems.

The Chairman asked whether ESD is able to get involved in funding building demolition and asbestos abatement kinds of projects to help make sites more attractive for redevelopment. Bob Murphy later asked why ESD doesn’t get involved in preparing “spec pads.” Bob responded that ESD can do infrastructure work and site-clearing. However, ESD’s preference is to finance “productive” projects with more immediate returns (in the form of new jobs, etc.) on its investment.

Paul Thompson questioned why environmental contamination operated as more of a deterrent to industrial site selection than other factors that can be more readily offset by incentives. If inherent site suitability overcomes incentives in most cases, why isn’t there more interest in a good site despite potential contamination? Bob agreed with Paul that it is often the uncertainty associated with contaminated sites rather than the fact of finite contamination that creates the deterrent.

The Chairman commented that the Massachusetts Business Development Corporation (and allied agencies) had recently joined forces with AIG Environmental and American International Specialty Lines Insurance Company to create a unique insurance program to protect developers from escalating costs of unknown legal liability, while at the same time protecting lenders from defaults due to environmental conditions. He pointed out that this was an effort by one state to overcome the “uncertainty” factor at sites with potential environmental problems. New York State has, apparently, not considered the same sort of public-private partnership.

Bob then described ESD’s “Re-BuildNow NY” initiative, which is designed to overcome such problems with contaminated properties by converting large brownfield sites with high economic development value into shovel-ready sites for users such as industrial, distribution, or business-park facilities with a strong potential to create skilled jobs. This is currently a pilot program, which has addressed 7 sites to date. Bob expects that it will address additional sites in the future. (Bob mentioned that the Governor and ESD have been attempting for some time to attract a “chip fab” manufacturing facility to locate in New York State. IBM recently agreed to bring such a facility to New York.)

The Governor has announced several brownfields-oriented initiatives for 2001. They include redeveloping brownfields, especially upstate, and extending Empire Zones in upstate New York. EZ projects average 10 or more acres. Large sites (at least 100 acres) will be eligible for enhanced benefits—even if not located in an Empire Zone. The Governor has also proposed a new Brownfields Renewal tax credit. All of these initiatives require Legislative approval.

Asked by a subcommittee member to provide his take on key ranking factors for prioritizing the redevelopment potential of brownfield sites, Bob listed the following factors: (1) vehicle access (proximity to interstate highways); (2) access to a suitable labor force; and (3) access to markets. Bob stated that access to rail facilities is no longer very important and is relevant only to bulk-break commodities. “Very few people use rail.”

The Chairman asked why, given the proximity of Binghamton to major population centers and markets, we don’t have more warehouse and distribution facilities here. Bob answered that this is primarily due to the lack of public water, and especially sewer capacity. The same problem exists in Tompkins County. The Binghamton / Johnson City Joint Sewage Treatment Plant has limited processing capacity. The maximum permitted capacity is 25 MGD. Present dry weather flow through the plant is 22-23 MGD. (The plant is a modular system—so additional treatment modules could be added.)

The question was asked whether Broome County localities should focus on this treatment capacity issue—for example, when they are developing comprehensive plan updates, as are the City of Binghamton and the Town of Vestal currently. The answer was no, since Johnson City and Binghamton are the entities that currently own and operate the Joint Treatment Plant. There is not much that other localities can do. One member suggested that possibly the County should consider taking over the operation of the sewage treatment system. Another member asked about the feasibility of large industrial plants establishing their own facility-specific sewage treatment plants. Bob noted that Frito-Lay did this, when it came to the area.

Tom Suozzo asked whether ESD has ever been approached to cover a municipality’s 25% share under the Brownfields Bond Act program. The answer was no. Tom noted that pending legislation to reauthorize the State Superfund program will “revamp” the brownfields program and make the program much more attractive to municipalities.

Paul pretty much summed up the key message that emerged from Bob’s presentation and the ensuing discussion: To make a brownfield site attractive for redevelopment, you need to make the added value of the site greater than the added liability.

The Chairman noted that Bob Sweet ‘s presentation had amply fulfilled its objective of stimulating creative thinking and provocative discussion by the group.

4. Discussion of Candidate Sites: The Chairman passed out to subcommittee members and guests several documents that had been prepared between meetings: (a) A proposed format for an Access database on candidate sites, prepared by Frank Evangelisti; (b) an update to the 2/2/01 Draft Tabulation, containing edits and additions made by Ron Brink (it bears the notation in the upper right “BCHD edits highlighted”); (c) an Excel tabulation of Potential Dump Sites for Redevelopment (dated 2/14/01) (this tabulation—adding sites ##37-65) was done by Michael Clugston from a list provided by Ron Brink); (d) a “List of Potential Brownfields” (dated May 21, 1999—prepared by Claudia Stallman); and (e) a Draft list of “Possible brownfields site that are available for development because of fires” (the list prepared by Ron Brink identifies 4 new sites in addition to the Hancor site in the Town of Union, plus 2 former E-J sites—one on Page Ave. in Endicott and one on Glendale drive in Union).

For the benefit of visiting members of the public, the Chairman pointed out that these lists are highly preliminary and should not be disseminated outside the meeting room—because the presence of a site on a “brownfields” list could cause a stigma to attach to it, which might make it more difficult to sell or redevelop it, which is exactly the opposite of the Subcommittee’s objective.

Several minutes were spent discussing the proposed Access database. It was agreed that Frank had taken us an important step forward. Several modifications and additions to the Draft provided were suggested. (a) on the first page, in addition to listing the “Owner’s Name,” there should be an entry for “Other Responsible Parties?” (b) There should also be space to identify any “Cleanup Volunteer[s].” (c) On page 2, in the box dealing with “Extent of Contamination,” in addition to “No Contamination Found,” there should also be check-boxes for “Contamination Suspected,” “No Information Available,” and “Documented Contamination Present” (the latter category could serve as a heading for the 5 check-boxes provided regarding the medium and mobility of contamination). (d) Chip McElwee suggested that a “link” could be created in the database to provide more information on the type of contamination—petroleum vs. hazardous substance, heavy metal vs. chlorinated organic vs. solvent vs. PAH vs. VOC vs. SVOC vs. Other, and severity of contamination—below detection limits vs. detectable but below DEC and/or EPA action levels vs. requiring corrective or remedial action. (e) The “EMC Record Number” shown in the upper left should, at least for the time being, correspond to the number of the site as tabulated on the Candidate Site List. (f) On page 3, the EPA column on the right should duplicate many of the entries under the DEC column to the left: i.e., all entries in the box from “Site Characterization” through “Emergency Response Action.” (g) In the DEC column, two sub-items should appear beneath “Site Characterization”—“Phase 1 ESA” and “Phase II ESA.” (h) In the EPA column, instead of a box on “NPL Status,” there should be a box at the bottom with the following checklist items: “NPL Site,” “Active CERCLIS Site,” “NFRAP Archived Site,” “Subtitle D Landfill,” and “Hazardous Waste (Subtitle C) Treatment, Storage or Disposal Facility.” (i) Also, in the DEC column, the lower box should include two additional check-box items—“Hazardous Substance Site,” and “Petroleum Spill Site.” (j) Finally, there should be a box that indicates the site’s regulatory status with DEC and EPA and contains the following checklist items—“Cleanup Underway,” “Investigation Pending,” “Enforcement Action Pending,” “Cleanup Completed,” “Case Closed,” and “Status Unknown.”

Tom Suozzo commented that, because it will take a lot of effort to add a site to the Access database, the group should ensure that only high-potential candidate sites be addressed in this fashion. It was agreed that second- and third-tier sites don’t belong in this database. (They may still be worth retaining in a retrievable Excel database—especially since Excel files can, apparently, be readily incorporated into Access.)

The Excel tabulation of Potential Dump Sites for Redevelopment provides information for each site under the following headings: Site Location, Site Description, Site Operator; Surrounding Use; Cleanup; and Comments. It might have been helpful to try to categorize the sites, to the extent possible, under the same column headings (and ranking factors) as used in the Table of Candidate Sites (Land Use & Planning Factors, Legal & Financial Factors, and Environmental & Public Health Factors.)

Someone (Tom Suozzo?) mentioned two “Railroad Roundhouse” sites—one in Binghamton, one in Conklin—that may be worth adding to the Candidate Site List.

5. Future Meetings: The next meeting is scheduled for (Wednesday) March 14—at 4:30 p.m. at EMC’s offices. The subcommittee agreed to schedule a second, shorter meeting on (Friday) March 30^th—at 4:00 rather than 4:30 p.m.—to accommodate Mark Gregor, who will be visiting from the City of Rochester. Mr. Gregor will brief us on Rochester’s approach toward promoting the redevelopment of brownfield sites. The March 30^th meeting will be limited to one hour.

6. The meeting adjourned at 6:00 p.m.

Recorder, Ken Kamlet

2/19/01