Murphy touts incentives for brownfield development to Naugatuck Valley communities

By:  Luther Turmelle
News Times

U.S. Sen. Chris Murphy, D-Conn., met with members of the Naugatuck Valley Council of Governments Wednesday to announce legislation he will introduce to encourage clean up and redevelopment of contaminated industrial sites nationwide.

Murphy’s legislation, called the Creating Livable Environments and New Usable Property (CLEAN UP) Act, pairs two tax incentives to spur investment in the cleanup and redevelopment of the polluted sites, commonly referred to as brownfields.

“My CLEAN UP Act will incentivize private developers to come in and take on these big cleanup projects so that new businesses can put down their Connecticut roots and start creating jobs,” Murphy said. “I know there’s bipartisan support for these tax incentives, and I’m going to work hard to get this passed into law.”

Murphy’s legislation would reenact two expired tax incentives.

The first would allow developers to fully deduct the costs of environmental cleanups on brownfields sites in the year those costs are incurred,. That would allow developers to realize the full savings of the deduction in the first year of investment as opposed to incrementally benefiting from the deduction over several years.

The second expired incentive involves exempting qualified developers from paying unrelated business income taxes on profits earned from the sale or exchange of certain brownfield properties. Under current law, developers are fully taxed on the change in value of the land when they sell it — even if the change in value was a direct result of cleanup efforts.

Waterbury Mayor Neil O’Leary called Murphy’s legislative proposals “welcome news” for members of Council of Governments. O’Leary said promoting development of brownfields requires innovative thinking,

“For years, we couldn’t get prospective companies to go anywhere near brownfields,” he said. That changed to some extent, O’Leary said, when the city began buying brownfield properties.

Jim Byrne, program lead for clean up and state funding in the federal Environmental Protection Agency’s New England region, said offering tax credits for redeveloping brownfields “really matters for any project outside of Boston.”

“These credits really make or break projects,” Byrne said. I’ve seen projects go down be because of (the lack of) a few hundred thousand dollars (in incentives).”

Efforts last year to redevelop the former Lifetouch property in Derby into a school for advanced manufacturing fell through when the owner balked at paying for clean-up costs.

“They didn’t know how hot it was, what they were getting into (in terms of environmental clean up),” Derby Mayor Richard Dziekan said.

Byrne also urged Murphy to advocate for legislation that would provide the EPA with more flexibility in how it is able to use funding for brownfield clean-up efforts. Right now, he said, the money the agency has to dole out can only be used for ultra-specific categories.

“Give EPA a little more flexibility in terms of taking the temperature within the region and allocating the money accordingly,” Byrne said.

Sheila O’Malley, Ansonia’s economic development director, said additional incentives to promote redevelopment of brownfield properties “would be a great opportunity” for the community.

“It’s really all the developable land that we have left,” O’Malley said.

John Marini, Ansonia’s attorney, said the ability to redevelop the city’s brownfields “really makes a difference if we are going to able to move the community forward or not.”