brownfield opportunity area

Two parcels of property that are part of the city's brownfield opportunity area are advancing in the redevelopment process.

The City Council approved resolutions Monday night that will make it possible for the Batavia Development Corp. to take over ownership in order to prepare the property for sale to a private developer.

The transfer is contingent on a successful tax foreclosure process.

Both properties, at 40-52 Ellicott St., the former Dellapenna property, and 56-70 Ellicott St., the former Santy Tire's location, along with other businesses, have been elligible for tax foreclosure for some time, but the city has let the properties sit in limbo to avoid becoming responsible for the expense of environmental cleanup.

City Manager Jason Moliono wouldn't confirm that property title transfer to BDC signals that Economic Development Coordinator Julie Pacette has identified a specific private owner for redevelopment of the properties, but the resolutions passed by the council indicate a developer is waiting in the wings.

The resolutions both say, "the BDC has agreed to accept title to said property and work towards executing agreements with a preferred developer for redeveloment of the site consistent with the accept Brownfield Opportunity Area Step 2 Nomination Plan ..."

The BOA covers all of the city's central corridor and is 366 acres. It affords an opportunity to provide developers with assistance in revitalizing abandoned, blighted and underused properties.

The BDC has been working for years to establish the designation, identify properties for redevelopment and market those properties to potential developers.

There's no information available yet on who the developer might be, what is planned for the property, or when the next steps will be announced.

A vibrant and prosperous urban core in Batavia is vital to all of the economic development projects the Genesee County Economic Development Center is working to bring to fruition, said CEO Steve Hyde, during a presentation Monday night during Batavia's City Council meeting.

Hyde joined the discussion Monday about a projected called Batavia Path to Prosperity, or BP^2. The project is being set up to take some of the fees paid by developers in future projects in the city that receive PILOTS (Payments in Lieu of Taxes) from the GCEDC and allocate half of those funds to a pool of money that can help spur development of blighted properties, properties that are part of the city's Brownfield Opportunity Area.

"My passion all along has been about growth in our community," Hyde said. "How can we build economic growth outside so it will flow back into the inside. This is an opportunity to shine a bright light on troubled areas in our community so that we have a multifaceted redevelopment strategy so that we have a path of growth for our kids."

City Manager Jason Molino kicked off the discussion by saying the program can help address poverty in the city's most economically distressed neighborhoods, increase employment opportunities nad expand the city's tax base.

In the three census tracks considered distressed, the poverty rate is 30 percent (it need be only 20 percent to be considered distressed) and the unemployment rate in excess of 7 percent is more than 2 percentage points higher than the rest of the community.

Hyde, Molino noted, is fond of saying that economic development isn't a sprint, it's a marathon. But dealing with brownfield areas, Molino said, isn't a marathon. It's a triathlon, because the issues to deal with are so big and so complex.

Often brownfield properties need a great deal of environmental remediation, which substantially increases the cost of redevelopment and scares off those who might otherwise sink their investment dollars into a commercial or mixed-use project.

BP² will help address that issue by providing funds that can help with brownfield cleanup.

Hyde said he's seen attempts at creating other such projects around the state, but they never get off the ground because of infighting among the various taxing jurisdictions. He's encouraged by the cooperation so far from the city, county and school district.

At Monday's meeting, nary a negative question or comment came from council members, who will be asked at a future meeting to pass a resolution authorizing the city's participation in the project. Similar resolutions will need to be passed by the County Legislature and the Board of Trustees for Batavia City Schools.

Only projects within the city limits that are approved by GCEDC for PILOTs would contribute to the funds, and only brownfield projects in the three census tracks that make up the BOA could receive funds from the pool.

Under state law, development projects in all six census tracts in the city are eligible for PILOTs, even retail and commercial development, which are normally excluded, because of the highly distressed nature of three central census tracts.

The fund could be used, Molino said, to: mitigate the extraordinary cost related to hazardous material cleanup; demolish buildings that contribute to blight; rehabilitate buildings that can and should be saved; modernize infrastructure;  install broadband/WiFi downtown to support economic growth initiatives; and to advance the planning and engineering of the Ellicott Trail, which will run right through the heart of the BOA, and help secure more project capital for the BOA.

Within the BOA there are five critical, strategic sites:

• Creekside, behind the Falleti Ice Arena
• The Dellapenna building on Ellicott Street
• City Centre
• The medical corridor, particularly around where the old Elks Lodge used to be
• The Harvester Center

"If over the next five years we really spent some time trying to redevelop these areas, it could have a tremendous impact on our community," Molino said.

Hyde is optimistic about our community's future, reversing the trend that has seen Genesee County go from 5,000 manufacturing jobs in 1990 to 3,500 today.

"We're on the cusp of great growth here, especially in light of last week's announcement (the new project in STAMP)," Hyde said. "The state and feds are investing in the innovation economy, especially up and down the I-90 corridor, and we've now got the largest project in the state right along that corridor."

Batavia needs to be ready for that growth and strengthening the urban core is vital to benefitting from economic development elsewhere in the county. 

For every high-tech job, studies show there are five additional jobs created along the economic chain, Hyde said. Those jobs only come to Batavia if Batavia is ready for the opportunity. That means upgrading the housing, increasing office space, fixing infrastructure and "making this place as beautiful as the people who live here."

Areas in urban communities known as brownfields can sometimes be expensive to redevelop because of the environmental cleanup costs, and that cost drives away potential developers because projects that might turn a profit without the cleanup quickly become unprofitable. 

To address that issue, local agencies, including the City of Batavia, have come together with a plan to help reduce the expense for developers who wish to complete projects on brownfield sites.

They're calling it the Batavia Prosperity Project, or BP², and the City Council will get a presentation on the proposal tomorrow.

"This is really a partnership, an example of cooperation among all the parties, city, county and schools, that recognizes the common interest in a revitalized urban core," said City Manager Jason Molino. "We can focus on this together because we recognize there is a greater reward for everybody concerned."

The program would take fees paid by developers on future projects in the city -- brownfield or otherwise -- that qualify for PILOTs (Payment in Lieu of Taxes) from each of the taxing jurisdictions and pool those fees in a common fund that could be tapped down the road by brownfield opportunity area (BOA) developers to help offset environmental remediation costs.

Such PILOTs would need to be approved by the Genesee County Economic Development Center and Steve Hyde, the CEO, will be at Tuesday's meeting to help explain how the program will work and the benefits for the community.

The program, as proposed, is the first of its kind on a citywide basis in the state.

"This could help us clean up contaminated sites, increase our tax base and increase employment opportunities," Molino said.

The city's three BOAs are all in what are identified as low-income, blighted neighborhoods, which means under New York State law, they are eligible for tax breaks for retail projects, which expands the redevelopment opportunities. And since under the law, census tracts next to low-income, blighted neighborhoods are also eligible for those same tax breaks, every census track in the city is eligible for such projects.

Molino isn't predicting that because of that big retailers are going to swoop in and build new stores, but that "isn't necessarily a bad thing," he said.

It's all up to the free market.

"I think the market is going to dictate what comes in here, and what can and what cannot work," Molino said.

Market studies show that what the urban core needs more of are restaurants, medical offices, office space, housing and warehouse space, so those are the kind of projects most likely to be attracted to development, brownfield or otherwise, in the city.

"There is an increased demand from people who want to live Downtown," Molino said. "I think mixed use is where we're going to see an increase in development."

The STAMP project recently announced -- solar company 1366 Technologies -- creates an opportunity for Batavia.

"We want to capture some of that overflow," Molino said. "This policy is another tool for dealing with development of our urban core."

The properties in the BOA have generated a good deal of interest, Molino said, ever since a development forum hosted by the city in 2013. There may be a project coming soon, but the city also needs another tool to help make development in the city more attractive to investors.

The City Council meets at 7 p.m. Tuesday at City Hall.

Press release: 

Less than a century ago, Batavia’s downtown was bustling with industry, where innovators relocated from New York City to mass produce farm implements to World War II incendiary bombs. These factories employed thousands of workers and took advantage of easy transportation, the railroad and nearby markets. But, the bygone era left a wake of deteriorating buildings, vacant lots and ground contaminants within City limits, a.k.a brownfield sites. Today, City leadership proclaims robust performance-based tax incentives available for the taking to return these underutilized or abandoned locations into vibrant mixed-use places.

In April, the New York Department of State (DOS) officially designated Batavia’s central corridor a Brownfield Opportunity Area (BOA) listing five strategic redevelopment sites. On a parallel track, the City’s local development corporation encouraged Councilmembers to adopt real property tax exemptions and they chased other tax credits to motivate real estate investment. Bold incentives are now in place.

“We could stand by and let these properties continue to decay the neighborhood or do something about it,” City Manager Jason Molino said.

Do something about it, they have. The City has worked to increase its bond rating to A1, turned a multimillion dollar deficit into a balanced budget with capital reserves and secured more than $5,000,000 in grants to improve existing industrial areas, upgrade infrastructure and study the longtime stagnant community.

A Community Improvement Plan was released in 2012 emphasizing an upgrade in housing stock followed by local adoption of real property tax exemptions that offer 12-year tax-bill discounts for converting non-residential buildings into mixed-use spaces. Shortly after, a sizeable $265,000 New York State Department of State BOA grant enabled local activists to grease the skids even further.

“It took four years but, the grant allowed us to hire a consulting team and organize a local Steering Committee to define market opportunities, investigate the ground and write a plan to move our central business corridor into the 21st century,” Molino said. “We know our small city can offer the conveniences and experiences of a larger city, but at an affordable price.”

The challenge was to determine if the real estate community would invest in the area. Now, the market reports and community confidence suggest they will.

The expert-led and community-inspired BOA plan was formally adopted by City Council in June 2014 and handed off to the City’s local development corporation to implement. The Batavia Development Corporation (BDC) immediately retained Harris Beach PLLC, a known deal-maker in the State to guide the efforts.

“It’s funny how the BOA designation appears like a badge of honor,” said Julie Pacatte, BDC coordinator. "It reads like a proclamation from DOS. In truth, it’s bittersweet. Sad we have these blighted areas but happy it sanctions bonus tax credits rewarding investment.”

Gaining access to that tax credit program is a whole different process, according to Pacatte.

The BDC Board authorized cash reserves to extend environmental investigation and to hire Harris Beach and LaBella Associates to prepare the New York State Department of Environmental Conservation Brownfield Cleanup Program (BCP) application. DEC serves as the gatekeeper to request access to the State tax credit program.

“It is a 643-page document enumerating data with compelling narrative to justify access to the program,” Pacatte said. “The BDC Board is clearly determined to advance the BOA plan.”

Unfortunately, their ambitious goal to go to market last year was stalled by expanded data collection, typical land assembly delays and uncertainty with the BCP as it under-went reform during the State’s budget process. Nevertheless, advocates still believe Batavia remains milestones ahead of other communities.

“The BDC’s approach is aggressive and recommended,” said Bob Murray, partner, Harris Beach PLLC. “To enter the BCP prior to marketing the property assures a preferred developer significant refundable NYS tax credits potentially worth up to 64 percent of total costs incurred for remediation, site preparation and new capital expended on that parcel. Not many communities are as proactive and committed.”

The BDC has released its first request for proposals addressing “Ellicott Station” a four-acre downtown redevelopment area that has confirmed acceptance to the BCP. The proposals are due next month, by Aug. 12.

“It was a no-brainer to spend the time and money necessary to line up these credits,” said Ray Chaya, BDC Board president. “No longer do we need to stand by to wait for investors, we are bringing the ROI to them.” 

For more information, visit the BDC Web site.

The governor's office announced the designation of 12 brownfield opportunity areas today, including one in Batavia. Here's a portion of the press release. We've included the top overview portion of the press release and the section about Batavia.

Governor Andrew M. Cuomo today announced the designation of 12 brownfield opportunity areas in economically challenged communities across New York State. The Brownfield Opportunity Areas Program helps local communities establish revitalization strategies that return dormant and blighted areas into productive areas to spur economic development. This designation is based upon plans of varying focus that reflect local conditions, and projects receiving this designation are given priority status for grants and additional Brownfield Cleanup Program tax credit incentives.

“By designating these sites as brownfield opportunity areas, we are helping to reimagine their potential as vibrant parts of the surrounding communities,” Governor Cuomo said. “This distinction allows us to put their rehabilitation on the fast-track with additional state resources, and that means new development, jobs and opportunities in the future. This is another way that our administration is joining with local partners to revitalize blighted areas across the state, and I look forward to seeing their transformation continue in the days to come.”

Prior to their designation, these communities received planning grants financed through New York’s Brownfield Opportunity Areas (BOA) Program to complete a nomination that set forth revitalization strategies and promoted sound redevelopment and enhanced environmental quality within the affected areas. The Department of State accepted the nominations for these BOAs and has determined they meet the necessary requirements and criteria for designation. Developers, property owners and others with projects and properties located within a designated BOA will be eligible to access additional Brownfield Cleanup Program tax incentives and receive priority and preference for State grants to develop projects aimed at transforming dormant and blighted areas in their communities and putting them back into productive use.

Brownfields Reform and State Superfund
Separate from the sites receiving BOA designation today, the 2015-16 State Budget extends the Brownfields Cleanup Program for 10 years, and includes important reforms to protect taxpayers and promote brownfield redevelopment, particularly Upstate. The Budget also includes a new $100 million appropriation and extends the State Superfund cleanup program for ten years. The Superfund has been instrumental in identifying, investigating and cleaning up hazardous waste sites throughout the State.

Secretary of State Cesar A. Perales said: “These designations will serve as tremendous environmental and economic development engines for communities in need of public and private investment. The added incentives will afford these communities great opportunities for new housing development, businesses and job creation, and overall beautification.” The Secretary of State is charged with the designation of BOAs after a community planning process.

Val Washington, president, New Partners for Community Revitalization, said: "From Buffalo to the Bronx, from Wyandanch on Long Island to Lewis County in the North Country, New York's BOA Program is showing its worth. Uniquely, it brings community and municipal leaders together to develop plans to revitalize neighborhoods impacted by multiple brownfields. We applaud and support Governor Cuomo's important announcement today, and appreciate his leadership in increasing state government support for developers who will work in these designated areas."

...

Batavia Opportunity Area, Genesee County -- This consists of a 366-acre area characterized by an estimated 75 potential brownfield sites located within the Batavia Central Corridor. The primary community revitalization objectives include: cleaning up and redeveloping underutilized, vacant and brownfield properties with appropriate uses; stabilizing existing neighborhoods; and continuing the revitalization of the Downtown Business District. A $266,508 BOA Program grant financed planning activities.

City of Batavia Manager Jason Molino said: “We would like to thank the Department of State for providing the funding and guidance to complete Batavia’s Batavia Opportunity Area plan. The Batavia BOA has been an overwhelming success and we have already seen significant developer interest in our brownfield sites. To date we have already received more than $2 million in grant funding for TEP, NY Main Street and CDBG applications that advance recommendations in the Plan.”