February 13, 2014
The New York Green Bank, a renewable energy financing program proposed by Governor Andrew Cuomo in his 2013 State of the State address, launched this week with a request for proposals aimed at overcoming market barriers to clean energy development.
Last December, Governor Cuomo announced the allocation of approximately $210 million to fund the Green Bank, including approximately $44 million from the sale of emissions allowances through the Regional Greenhouse Gas Initiative (“RGGI”). Cuomo intends to increase the capitalization of the Green Bank to $1 billion in the years ahead.
Instead of providing loans or subsidies directly to energy providers or consumers, the Green Bank seeks to partner with financial institutions in order to spur private investment in clean energy development. For instance, the Green Bank could assume a portion of the default risk associated with clean energy loans or leases in return for a fee, or purchase smaller clean energy loans and bundle them into volumes that could be resold on secondary capital markets. The Green Bank’s initial request for proposals therefore requires the involvement of at least one private sector financial party, either alone or as a part of a team with other energy industry participants.
The Green Bank provides a list of renewable energy technologies and energy efficiency improvements potentially eligible for financial support, but has also invited applicants to propose projects involving other technologies that “demonstrate a potential for increased deployment of energy efficiency or renewable energy and/or a potential for greenhouse gas reductions in New York State.” Nuclear energy, municipal solid waste combustion, and adulterated biomass or biofuels are not eligible for participation.
For more information on renewable energy financing and development, contact Scott Furman.
February 10, 2014
In an eventful month for parkland alienation cases in New York City, two recent state court decisions interpreted different issues pertinent to the public trust doctrine, which requires approval from the New York State legislature before parkland may be alienated for non-park uses.
The rulings from New York State Supreme Court justices in Manhattan and Brooklyn addressed, respectively, what proof is required to demonstrate that a parcel has been dedicated as parkland by implication and what activities constitute an appropriate “park use.” In both cases, the Courts ruled that the City had violated the public trust doctrine and was required to seek the approval of the State Legislature before proceeding.
Raritan Baykeeper v. New York City, Index No. 31145/06 (Sup. Ct. Kings Cnty., Decided Dec. 20, 2013)
Filed in 2006, this long-running litigation involves a 20-acre composting facility operated by the City Department of Sanitation in Spring Creek Park in Old Mill Creek, Brooklyn. The facility was intended to process leaves and other organic waste collected from around the City for use as fertilizer in Spring Creek Park and other parks.
Petitioners alleged that the placement and operation of the composting facility within Spring Creek Park violated the public trust doctrine, on the basis that a solid waste management facility could not be considered an appropriate park use, that the public was deprived of recreational access to the area of the facility, and that the facility created an unbearable nuisance. The City argued that the composting facility fell within the meaning of a legitimate “park use” under the public trust doctrine because the compost would be used in park maintenance.
Interpreting the term “park use,” the Court focused on whether the use was consistent with the public’s recreational enjoyment of the park, and held that the composting facility was not, noting the incompatibility between the “industrial scale processing of waste” at the Spring Creek Park facility and traditional and legitimate park uses. The Court cited a spectrum of cases on which some private uses such as restaurants and holiday markets were held to be non-violative of the public trust doctrine while solid waste disposal sites were not legitimate park uses.
Under the terms of the Court’s order, the City is enjoined from operating the composting facility until it obtains legislative approval.
A full copy of the Raritan Baykeeper decision is available here.
Glick v. Harvey, Index No. 103844/12 (Sup. Ct. N.Y. Cnty., Decided Jan. 7, 2014)
The second recent parkland alienation decision concerns the City-approved expansion plans proposed by New York University (“NYU”) for an area in Greenwich Village south of West 3rd Street and north of Houston Street, on which NYU plans to build a number of new campus facilities. The litigation focused on the fate of four parcels of land within that area – known as Mercer Playground, LaGuardia Park, LaGuardia Corner Gardens, and the Mercer-Houston Dog Run – all of which the petitioners alleged to be dedicated parkland that could not be alienated under the NYU plan without the approval of the State Legislature.
Courts have repeatedly held that land can become parkland (and thus covered by the public trust doctrine) either through express or implied dedication. Long-continued use of a parcel for park purposes can constitute dedication by implication. Because the parcels at issue in this case are mapped as streets and not as parkland, the issue of implied dedication was central to the Court’s decision.
This high-profile case included testimony from a number of former City officials on behalf of the petitioners, including former commissioners of the Department of Transportation and the Department of Parks and Recreation. The Court looked to the affidavit of longtime Parks Commissioner Henry Stern in evaluating a list of factors that could help determine whether implied dedication had occurred, including long-time, continuous use of the land for park purposes, Parks Department signage, maintenance of the property by the Parks Department, and public statements by City officials identifying the property as parkland.
The Court ruled that despite some evidence presented by the City that the use of the parcels as parks was intended to be temporary, the Department of Parks and Recreation also treated three of the four parcels as parks through signage and maintenance efforts, limiting its ability to later claim that the parcels had not become parkland. The City must now seek approval from the State Legislature before the NYU plans for these parcels can move forward. The City Law Department has not announced whether it plans to appeal.
The Glick decision has important implications for the City’s use of non-parkland sites for long-term recreational uses in programs such as Greenstreets and GreenThumb gardens. Although the petitioners demonstrated longstanding use of three of the four parcels as parkland, the City had also maintained official Department of Transportation jurisdiction over the properties to allow for future non-park uses. Despite existing case law in the First Department holding that there could be no implied dedication where the owner has expressed contrary intent, the Court ruled that long-continued use of the land for park purposes may be sufficient to establish dedication by implication.
A full copy of the Glick decision is available here.
January 29, 2014
The New York State Department of Environmental Conservation (“DEC”) has proposed a draft general permit for bulkhead repairs on parts of the south shore of Long Island.
Where: General Permit No. GP-1-13-001 (the “General Permit”) would be available for use on the south shore of Long Island west of the Robert Moses Causeway to the Queens County border, excluding areas of vegetated tidal wetlands, any ocean shore, the ocean front of Long Beach Island, and all of the Jones Beach State Park and Robert Moses State Park barrier islands.
What: The General Permit would authorize
- The removal and replacement of a functional and lawfully existing bulkhead in the same location as an existing bulkhead, up to 18 inches higher in elevation than the existing bulkhead.
- A limited amount of maintenance dredging associated with replacement of the bulkhead.
The General Permit would obviate the need for individual permits under the following programs:
- Tidal Wetlands (Environmental Conservation Law (“ECL”) Article 25)
- Excavation and Fill in Navigable Waters (ECL Article 15, Title 5)
- Water Quality Certification (Clean Water Act § 401)
Official information about the General Permit is available on DEC’s website, here, here and here.
How: An applicant must submit to DEC a Request for Authorization Form containing a project location map, project plans, a survey depicting the bulkhead, recent color photographs of the site, and permission for DEC to inspect the property. The applicant must receive written confirmation of authorization before undertaking any work pursuant to the General Permit.
Why: According to DEC, the General Permit is a continuation of the emergency general permit for storm repair work issued in the wake of Superstorm Sandy in order to expedite recovery. That permit was originally issued in October 2012 and replaced in July 2013. The current permit is effective until October 31, 2014.
When: DEC is accepting written comments on its proposal until January 31, 2014. Comments may be sent to
NYS Department of Environmental Conservation
Division of Environmental Permits
625 Broadway, 4th Floor
Albany, NY 12233
SPR will keep abreast of future developments concerning this permit.
For more information about bulkhead permitting and/or Sandy recovery efforts, please contact Michael Bogin or David Yudelson.
November 26, 2013
On November 13, 2013, a New York State appellate court ordered the reinstatement of the New York State Department of Environmental Conservation’s (“DEC’s”) general permit covering municipal separate storm sewer systems (“MS4s”), almost two years after a lower court rejected the general permit as an “impermissible self-regulatory system.” The latest decision will allow “small MS4s” (covering populations of less than 100,000) to seek or resume coverage for their stormwater outfalls under the statewide general permit, as opposed to submitting individual permit applications for each outfall. The decision also means that, in all likelihood, the Industrial Stormwater (Multi-Sector) General Permit and Construction Stormwater General Permit are safe from any similar challenge.
Prior to discharging stormwater to surface waters within New York State, an MS4 must be covered by a State Pollutant Discharge Elimination System (“SDPES”) permit, which may be issued either on an individual basis or, for eligible municipalities, pursuant to DEC’s MS4 General Permit. To obtain coverage under the General Permit, a MS4 must submit to DEC a Notice of Intent (“NOI”) to be subject to the General Permit and must subsequently comply with the permit’s terms. The NOI also proposes an MS4-specific Stormwater Management Plan (“SWMP”) to effectuate pollution reductions, which must be developed and implemented within three years of gaining permit coverage.
In a January 2012 decision, Justice Joan Lefkowitz of the New York State Supreme Court, Westchester County annulled the MS4 General Permit as inconsistent with the Environmental Conservation Law (“ECL”). As detailed in an earlier blog post, the Court held that the DEC’s review of an NOI for “completeness” does not ensure that the MS4 will reduce pollutant discharges to the “maximum extent practicable,” as required by law. The Court also held that NOI submissions are the “functional equivalent” of individual permit applications, and must be therefore be subject to the same procedures, including an opportunity for a public hearing. The Court’s interpretation of the ECL had potential impacts upon construction site operators and other entities subject to general permits, as public hearings are not currently required under any of DEC’s general permits.
With this month’s decision, the Second Department of the Appellate Division reversed the Supreme Court and reinstated the MS4 General Permit. The appellate court held “the General Permit does include a variety of enforcement measures that are sufficient to comply with the maximum extent practicable standard,” such as DEC’s review of the best management practices set forth in an NOI and DEC’s authority to revoke or amend the General Permit. The Court also found “it was not arbitrary and capricious for the DEC to limit the opportunity for public hearings to those situations in which a new general permit is proposed or an existing general permit is renewed,” as opposed to requiring a hearing on each individual NOI.
For more information on the Court’s decision and the permitting of stormwater discharges in New York State, contact Michael Bogin.
November 15, 2013
The Division of Environmental Remediation of the New York State Department of Environmental Conservation (DEC) has released its 2012-2013 Annual Report, noting key developments of the past State Fiscal Year (April 1, 2012 – March 31, 2013).
As reflected in the Annual Report, DEC’s environmental remediation programs affect many businesses across the state. For example, in the 2012-2013 State Fiscal Year, there were more than 18,000 actions that required intervention by the Division of Environmental Remediation; additionally, DEC had jurisdiction over 109,000 petroleum bulk storage tanks and 4,600 chemical bulk storage tanks.
Key developments discussed in the annual report include the following:
Brownfield Cleanup Program:
The past year saw an uptick in the number of projects approved to enter the state Brownfield Cleanup Program (BCP). In the past State Fiscal Year, 45 projects were approved, with 29% of these projects located in New York City. In prior reporting cycles since 2007, that number has ranged from 28-34. The increase in approved applications likely reflects the race to qualify for tax credits under the BCP, which are being phased out and will not be available for parties that do not receive their BCP Certificate of Completion by the end of 2015.
State Superfund Program
DEC’s authorization to bond new funds for the State Superfund Program has expired. DEC can use appropriations from prior years and cost recoveries to support the program. DEC received $12.1 million in cost recovery revenue in the past State Fiscal Year.
In the past State Fiscal Year, 13 “Class 2” sites, which are deemed to pose a significant threat to human health and/or the environment and require action, were added to State’s Inactive Hazardous Waste Site Registry. This number represents a decline from prior years; there had been at least 19 new Class 2 listings annually from the 2006-2007 through 2011-2012 State Fiscal Years.
Environmental Restoration Program
Funding for DEC’s Environmental Restoration Program, which reimburses municipalities for brownfield cleanup and redevelopment, has been revived: “Under the Cuomo administration’s New York Works capital infrastructure program, the 2013/2014 New York State Budget included $12 million which DER will use to complete cleanup of projects where funding had previously not been available.” New applicants to the program had not been approved since 2008 due to lack of funding.
Bulk Storage Program:
Revisions to the state’s Petroleum Bulk Storage and Chemical Bulk Storage regulations are under way, pursuant to a two-phase public participation process. In Phase One, initial informal draft revisions reflecting changes in federal law were released for public comment. Phase Two comprises the release of formal drafts and the acceptance of public comments thereon; the formal drafts would account for further changes in state and federal law and are expected to be issued in the 2014-2015 State Fiscal Year.
Liquefied Natural Gas:
DEC has proposed new regulations for the siting, storage and transport of liquefied natural gas in New York State. The agency expects to finalize and promulgate the regulations in the present State Fiscal Year. Public comments on the proposed regulations are being accepted until December 4, 2013.
Draft revisions to DEC’s regulations on the prevention and control of radioactive material are expected to be released in the present State Fiscal Year. New regulations establishing cleanup criteria for remediation of radioactive contaminated sites are also expected in the present State Fiscal Year.
Vapor Intrusion Initiative:
DEC identified 421 sites to be evaluated for vapor intrusion, where a remedial plan had been approved before vapor intrusion was recognized as a major concern. As of March 2013, 318 of these sites have been evaluated and 108 sites are undergoing such evaluation.
Former Manufactured Gas Plants Initiative:
As of March 2013, DEC has issued or entered into cleanup orders or agreements for 213 of 221 identified former manufactured gas plant facilities.
For more information on the Division of Environmental Remediation’s programs, please contact Michael Lesser.
November 6, 2013
On October 24, 2013, the Occupational Safety and Health Administration (“OSHA”) announced the availability of a new annotated table of Permissible Exposure Limits (“PELs”) for chemicals in the workplace, along with alternative standards that “may serve to better protect workers” than the existing federal limits. OSHA has, in the past, issued regulations establishing mandatory PELs for various chemicals, but most of these regulatory standards have not been updated since they were first issued decades ago. According to its October 24 press release, OSHA now believes that many of the regulatory PELs are out of date and do not sufficiently protect employee health.
Rather than issue new regulations, OSHA is recommending that employers consider using the alternative PELs presented in the new annotated PEL tables. These tables present, side by side, OSHA’s existing regulatory PEL, the PEL established by the California Division of Occupational Safety and Health (“Cal/OSHA“), the Recommended Exposure Limits (“RELs”) established by the National Institute for Occupational Safety and Health (“NIOSH“), and the Threshold Limit Values (“TLVs”) and Biological Exposure Indices (“BEIs”) established by the American Conference of Governmental Industrial Hygienists (“ACGIH“).
The alternative standards are generally more stringent than OSHA’s PELs. For example, the OSHA PEL for perchloroethylene (PCE) is 100 parts per million, while the Cal/OSHA PEL and the ACGIH TLV for PCE are both 25 parts per million.
Even though the alternative PELs are not federally enforceable, they may encourage state regulators to adopt the stricter exposure limits. Even without official state adoption of the stricter exposure limits, OSHA’s endorsement of those limits could encourage regulators to press for more stringent cleanup standards at contaminated sites, and could broaden the scope of conditions recognized as problematic in Phase I and Phase II due diligence reviews. OSHA’s recognition of the stricter exposure limits could also increase pressure on employers to adopt stricter voluntary standards for chemical exposure in the workplace. As recently discussed on our blog, similar consequences could follow from other agencies’ actions with respect to chemical exposure, such as the New York State Department of Health’s recently-issued guidance revising the maximum recommended concentration of PCE in indoor air to 30 mcg/m3, or 4.4 parts per billion.
OSHA’s new annotated PEL tables are accessible here. For more information, contact Christine Leas.
November 1, 2013
In a recent Advisory Opinion, the State Department of Taxation and Finance (DTF) opined that a taxpayer may not claim tax credits under the site preparation credit component of the Brownfield Redevelopment Tax Credit more than five years after the site received a Certificate of Completion (COC) under the Brownfield Cleanup Program (BCP). This interpretation is consistent with statutory language. However, its implications may cause difficulties for property developers who intend to build multiple buildings on remediated property on a staged timeline, and raises questions about the availability of tax credits for post-COC costs.
The taxpayer who requested the Advisory Opinion was considering purchasing property which had already been remediated to the satisfaction of the Department of Environmental Conservation and for which a COC had been issued, but for which additional environmental cleanup would be necessary to prepare the property for its intended use as an industrial manufacturing facility. The additional cleanup would occur more than five years after the issuance of the COC.
Section 21(b)(2) of the Tax Law defines “site preparation costs” to include remediation, excavation, demolition, and other costs related to preparing a site for future development. The statute divides such costs into two categories:
(i) costs incurred in connection with a site’s qualification for a COC, and
(ii) all other costs incurred in connection with preparing the site for a building or other improvement or otherwise to establish the site as usable for its intended purpose.
Section 21(a)(2) provides that category (i) costs may be claimed in the tax year in which the COC is issued, whereas category (ii) costs may be claimed in the tax year in which the improvement to which the costs apply is placed in service, for up to five taxable years after the issuance of the COC. The post-COC remediation expenditures at issue in the advisory opinion appear to fit the definition of category (ii) site preparation costs.
The advisory opinion concludes, “[m]ore than five years have passed since the COC was issued, so the taxpayer is not allowed to claim the site preparation credit component.”
The advisory opinion does not address why the taxpayer claimed the costs at issue under the site preparation component in the first place. It is unclear why the taxpayer could not include those costs in determining its cost basis for the industrial facility and claim them under the qualified tangible property (QTP) component of the Brownfield Redevelopment Tax Credit set forth in Section 21(a)(3) of the Tax Law. QTP credits apply to qualified tangible property such as personal property, buildings, and structural building components, and may be claimed for the years in which such property is placed in service on the site, for up to ten years after the issuance of the COC.
Although this issue is not addressed in the Advisory Opinion, the statute is not entirely clear as to how to treat costs that may be characterized as either site preparation costs or QTP costs. Tax Law section 21(b)(2) states that site preparation costs cannot be qualified tangible property costs. Clearly, this provision prevents double counting under both credit components. But it does not specify whether costs that meet the statutory definition of either component must be claimed as one or the other.
One reasonable interpretation is that the statute’s provisions regarding category (ii) site preparation costs are primarily directed at remediation that is conducted prior to the COC. Post-COC costs that are directly related to an improvement would be claimed under the QTP Component, even if the time to claim the site preparation component has passed.
For more information on this Advisory Opinion or about the Brownfield Redevelopment Tax Credit, please contact Paul Casowitz.
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