ALBANY (AP) -- New York's top court ordered conservation officials Thursday to allow the Lighthouse Pointe redevelopment project in Rochester into the state's brownfields cleanup program, making it eligible for an estimated $25 million in tax credits and release from further liability for old contamination after the job is done.
The Court of Appeals concluded that the 47 acres along the Genesee River and Lake Ontario are sufficiently contaminated to qualify and that the Department of Environmental Conservation threshold was too high.
The Destiny USA mall project in Syracuse will also be eligible for an estimated $200 million to $700 million in tax credits from the program after the court rejected the state's appeal of a lower court ruling. That motion to appeal was denied Thursday without comment.
Judge Susan Read wrote for the unanimous court that the brownfields legislation was meant to address "the unforeseen consequences" of the state imposing on property owners strict liability for costly cleanups. "This caused even marginally polluted property to become virtually unmarketable because of the chance that a cleanup of unknown dimension and expense might someday be required."
That made lenders reluctant to finance projects, the court noted. "As a result, former industrial and commercial properties languished, while development spread to unspoiled land."
The Lighthouse Pointe project envisions townhouses, condominiums, restaurants, a hotel and marina on two parcels where the Genesee River meets Lake Ontario. One parcel once contained the city landfill for residential refuse, ash, slag, construction debris and sewage sludge. The other also had some household waste, construction debris and sludge.
The developer's environmental consultant reported several contaminants in soil and groundwater samples beyond cleanup standards, estimating a cleanup at $4 million to $8 million. In 2006, Lighthouse applied to the brownfields program, which has tax credits ranging from 10 percent to 22 percent of various costs.
The DEC rejected the request a year later, finding most samples were well within its post-cleanup limits and the site did not meet the statutory definition of a brownfield. It is defined as property whose redevelopment or reuse "may be complicated by the presence or potential presence of a contaminant," meaning "hazardous waste and/or petroleum."
However, the seven judges described a low eligibility threshold consistent with the statute's legislative history, "so long as the presence or potential presence of a contaminant within its boundaries makes redevelopment or reuse more complex, involved or difficult in some way."
Alan Knauf, attorney for the developers, said it's a great waterfront site, one what wouldn't be available now except for the environmental issues, and they plan to move ahead. "We had financing, but the people would not go forward without the DEC signing off on the release of liability," he said.
Knauf said the tax credits over the probable 10 years of the project will be exceeded "many times over" by the economic benefit from property taxes, new jobs and other taxes and development of a new visitor destination for Rochester.
State conservation officials declined to immediately comment.
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