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- It fulfilled
a commitment made by Senator Clinton to The Greater Binghamton Coalition
on January 25, 2003.
- More than 200
people attended—from as far west as Rochester and as far north and east as
Albany.
- Politicians
who attended, in addition to Senator Clinton, included U.S. Rep. Maurice
Hinchey, Assemblyman Cliff Crouch, Broome County Executive Jeff Kraham,
and members of the Broome and Tioga County Legislatures. Assemblyman
Robin Schimminger of Tonawanda, NY (Chair of the Assembly Committee on
Economic Development) conveyed his regrets.
- The
Conference was sponsored by the National Brownfield Association (Chicago,
IL) and by several of their corporate members: AIG Environmental, BP,
Cherokee Investment Partners, Marsh, Weston Solutions, and Willis.
- At the
Conference, Senator Clinton and NBA Executive Director Robert Colangelo
announced that NBA will be establishing a
New York
State chapter.
- As a
follow-up to the Conference, Senator Clinton on May 7th sent a
letter to Governor Pataki, Senator Bruno, and Speaker Silver. The letter
cited the redevelopment of brownfields as “one of the most important
challenges facing New York State” and urged the State leaders “to work
toward prompt resolution of [the longstanding deadlock over establishing a
state brownfields law].” She referenced the “significant new influx of
federal resources into brownfields redevelopment activities” following the
signing of new federal brownfields legislation last year, and cited the
importance “that a prompt resolution is reached on the state level to
ensure that we do not miss this great opportunity to create jobs and
recycle our environment.”
- Conference
attendees heard speakers talk about the following and make the following
points:
- Senator
Clinton: Brownfield
sites are not Superfund sites and shouldn’t be treated as such. A new
Brownfields Assistance Redevelopment Act, which will provide an
additional $60 million a year in funding through the Department of
Commerce’s Economic Development Administration (EDA) has been reported
out of the Senate Environment & Public Works Committee. New York State
has received about $10 million in federal brownfields assistance to
date—about 10% of the total.
- Robert
Colangelo (NBA):
Brownfield redevelopment projects are “real estate transactions with an
environmental personality.” There are 3 types of BF sites: thousands
with negative value; tens of thousands with positive value; and hundreds
of thousands that are not clearly positive or negative (neutral). BF
sites are developed to: create jobs, reduce blight, attract investment,
change community image, generate a return on investment (or other
benefit), and as a catalyst for redevelopment (ripple effect). The
elements for successful BF redevelopment are: alignment of interests
(buyer, seller, community); creation of a sound risk management plan;
and use of government incentives and liability relief mechanisms. Risk
management tools include: structuring finances; insurance; contract
terms; technology; and information.
- Charlie
Bartsch (Northeast Midwest Institute):
Referenced 22 federal programs that can finance BF site reuse. See:
www.nemw.org/FedGuide2000.pdf
. He discussed HUD’s Commercial Development Block Grant (CDBG) program,
tax incentives, Army Corps of Engineers programs for water-oriented
projects, transportation-oriented programs, tax increment financing, tax
abatements, locally capitalized revolving loan funds, general obligation
bonds, etc. and gave examples of each. He acknowledged that New York
State’s brownfields program “needs some fine-tuning.” He summarized
some of the new opportunities opened up under the 2002 federal
Brownfields Revitalization and Environmental Restoration Act (BRERA):
coverage extended to low-risk petroleum contamination sites; ability to
use part of grant funds to pay for insurance premiums; ability of local
governments to use up to 10% of grants to monitor and enforce
institutional controls; and making it easier to use revolving loan fund
resources.
- Dave
King (Executive Director, SUNY Center for Brownfield Studies):
BFs “are an economic development issue; not an environmental issue.”
The study of brownfields could be termed “Enviro-nomics.” The
community’s role is to: provide a strategic vision; expand its tax base;
provide leadership and commitment; create incentive packages; and market
their BF sites. Many Upstate properties “couldn’t be given away”
because they don’t have the value of Downstate properties.
- Irv
Cohen (Managing Member, GreenEagle, LLC—affiliated with Cherokee
Investment Partners):
Controls a $650 million opportunity fund for BF redevelopment. The
ideal parameters an investor looks for are: a motivated seller (who
acknowledges he has a problem and is willing to set a realistic price);
a market for the site (you can create the market); adequate information
(the more, the better); in-place infrastructure; a supportive community;
a transaction that is market-driven and realistic; an in-place state
regulatory environment; and willing sellers (NJ DEP uses its clout to
prevent companies from “mothballing” their contaminated properties).
Has had a “tough time doing deals” in New York State because of the
disconnect between BFs and economic development. State regulators need
“to have the mindset that they’re part of the regulatory development
process.” The state program must be “risk-based.” Corporate America
owns more than $2 trillion worth of real estate. If the real estate is
contaminated, it is necessary to convince them that they can transfer
the risk to third parties who can take over the liability with an
indemnity that is structured to their situation. Companies also need to
be convinced that decisions about contaminated properties need to be
made by their CFOs.
- Ken
Cornell (Exec. V.P., AIG Environmental):
Insurance coverage is available to protect against cleanup cost overruns
as well as various environmental liability risks.
- Danielle
Cervino (VP & General Counsel, Environmental Waste Management
Associates): EWMA
offers a fixed price environmental management program called “SecureIt.”
It: establishes cleanup costs; allocates liability; and secures land-use
approvals. It is desirable to try to make cleanup and redevelopment
overlap. You have to be sure that the cleanup costs don’t exceed the
value of the property. The risks to be guarded against are: unknowns,
natural resource damage claims, re-openers of liability releases, and
third-party damage claims. EWMA completed 12 deals in 2002. Each deal
requires approximately 60-80 hours of work upfront. Insurance companies
won’t insure small projects (Ken Cornell would define small as less than
$1M.) For deals under about $325K, customers can’t afford the
insurance. Minimum insurance premiums range around $50K. Jokingly
referred to NJ’s former ECRA statute as “Environmental Consultants’
Retirement Act.”)
- Panel members
responded to audience questions—many of which related to deficiencies in
the New York State brownfields program.
- The
Conference concluded with remarks by Senator Clinton and Congressman
Hinchey, who both pledged their continued support to the community. Rep.
Hinchey noted that it is difficult to support communities that lack their
own “Plan.” Now that Greater Binghamton has the “BC Plan,” Hinchey
indicated that his own efforts could be more effective.
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