Don’t undercut brownfields tax credit

Changes threaten renaissance of Gateway Cities

WHEN AN ENVIRONMENTAL remediation program has thrived for a quarter-century — converting abandoned industrial sites into engines of job creation that address the ravages of environmental contamination — turning our backs on that progress seems unwise.

Nevertheless, the state is on the precipice of making an unfortunate error in ending decades of success under the state’s Brownfields Tax Credit, first conceived in 1998. Proposed regulatory changes would render this thoroughly successful policy all but useless by muddying the rules with unnecessary red tape, increasing the complexity of financing tools, and throwing up new roadblocks to redevelopment and growth.

Historically, businesses and non-profits could receive tax credits through the program, which can offset state tax liabilities or be sold to a third party, as long as the remediation adheres to the environmental rules laid out by the state Department of Environmental Protection. Remediation projects are expensive, enormously beneficial for cities and towns, and a major tool in the state’s economic tool kit.

A 2014 study conducted by NAIOP, the Commercial Real Estate Development Association of Massachusetts, found that the brownfields tax credit program had resulted in $7.74 million in new state tax revenue for each credit dollar, and $13.56 million in direct and indirect new tax revenues.

Brownfields redevelopment has been a vital linchpin in the renaissance of Gateway Cities. Without the tax credits, many of these redevelopment projects — integral to the success stories of places like my hometown of Worcester — never would have happened. Jobs would not have come back, brownfields would not have turned green, and water systems would not have been cleaned up by the remediation measures.

As the federal Environmental Protection Agency puts it, “Cleaning up and reinvesting in these properties protects the environment, reduces blight, and takes development pressures off greenspaces and working lands.”

Historically bipartisan — a tax policy that lifts up communities in an environmentally sustainable and economically beneficial way — the brownfields tax credit program should be allowed to continue to prosper. Obfuscating the core mission would be devastating to cities and towns trying to redevelop former industrialized areas, which is a matter of survival in many municipalities.

The development and real estate communities have been frustrated by changes to the tax credit program that have resulted in applications’ initial processing times taking six months or significantly longer. Wait times for appeals have spiked as well. And the state’s Department of Revenue has begun the “claw back” process on tax credits that have already withstood the vetting process, been approved, and sold.

Obviously, these moves have been destabilizing and have had an understandable chilling effect — not just on the cleanup of a few vacant lots and the construction of some new buildings, but on the very real progress in racial, environmental, and economic justice the program has achieved over the years.

The slowdown in utilization of the program is concerning, and we’re grateful that Lt. Gov. Karyn Polito has convened stakeholders, including the Department of Revenue and the Department of Environmental Protection, to review the policy.

As a former lieutenant governor myself, and I’m sure Lt. Gov. Polito would say the same, I could travel around the state and point to neighborhoods whose futures have been rescued by programs like the brownfields tax credit.

In Lawrence, a site that had been contaminated by fuel oil storage and automotive work became the new home of the Prospect Iron and Steel Corporation, a family-owned company that had been displaced from its home of 87 years by eminent domain.

A vacant box mill in New Bedford became a sprawling greenhouse farm. A former parking lot in Boston’s South End now hosts a residential building, helping alleviate the housing crunch.

And in Worcester, the utilization of the brownfields tax credit has enabled us to clean up and repurpose scores of sites, which has helped position our city on its current upward trajectory.

Now is not the time for us to back off environmentally sound economic redevelopment. In fact, we should push harder, streamlining and expanding the program to encourage communities and developers to see the potential in converting a neighborhood eyesore into an environmentally healthy site of job creation and tax-base broadening.

Meet the Author

Tim Murray

President and CEO, Worcester Regional Chamber of Commerce
If a worthwhile approach to urban redevelopment has fallen prey to administrative inefficiencies or fraud perpetrated by a few bad actors looking to make a quick buck, we should fix those inefficiencies and hold any bad actors accountable. But it would be an egregious mistake to undermine the legislative intent and enormously successful economic development and environment track record of the brownfields tax credit program.

Tim Murray is the president and CEO of the Worcester Regional Chamber of Commerce.