Moriarty, Rick. “A Clean Sweep.”
The Post Standard
S & W Redevelopment buys brownfields, removes the pollution and sells the properties for new uses.
Many developers shy away form polluted properties. And with good reason. There's the cost of cleaning them up before anything can be done with the land. Sometimes, it's just cheaper to develop a clean site.
Then there are the legal liabilities that come with getting your name, however temporarily, on the title to a polluted property. If there's a lawsuit over the pollution, you're sure to be named as a defendant, even if you were not the one who polluted the land.
But one Syracuse company is not shy when it comes to such properties. It's making a nice living getting involved in them.
Of the 25 properties around the state that were cleaned up last year under the states 's new brownfield cleanup program, S & W Redevelopment of North America, LLC did seven of them, making it the biggest user of the program.
S & W Redevelopment specializes in turning derelict into productive real estate. Sometimes, it acts as a consultant to the owners of polluted land, drawing up plans and overseeing cleanup. Other times, it buys polluted properties, cleans them up and sells or develops the land itself.
President David Stoner said the company is taking in $6 million in annual revenue and has seen its business jump with the state's implementation of the brownfield cleanup program. Once, the company had to go after clients aggressively, often responding to requests for proposals; now, clients come to it, he said.
"We're sort of in a position now where we don't compete for projects," he said.
"People come to us because of our expertise," said Robert Petrovich, executive vice president of the company. "We know all the ins and outs."
Until 2006, the state had what it called a voluntary cleanup program to deal with polluted properties. Under that program, owners who cleaned up a site under an agreement with the state Department of Environmental Conservation received a released from all state liability related to the pollution. That meant the state would never sue over the pollution, though it did not provide protection against lawsuit by some other party.
Under the new program, owners who clean up their land to the state's liking receive the same release, which it calls a Certificate of Completion. But the property owner also becomes eligible for state tax credits of 10 percent to 22 percent of costs associated with property taxes, site preparation, on-site groundwater cleanup costs, environmental insurance premiums and what is built on the property after the remediation.
That added benefit provides a huge incentive for companies to clean polluted properties and put them back into use. The program applies to nearly any property, the redevelopment or reuse of which may be complicated by the presence of a hazardous waste, petroleum, pollutant or contaminant.
S & W was founded in 1998 as a spin-off of the Stearns & Wheler LLC engineering firm in Cazenovia and has operated since 2001 from the former Boys Club building at 430 E. Genesee St., a building it renovated. It has 13 employees.
Initially, the companies had some common ownership. Early in 2006, that ended. S & W is solely owned by Stoner, Petrovich and Damian Vanetti, a vice president at the company.
Stoner said S & W still uses Stearns & Wheler for some engineering services. And soon, S & W will use a company other than Stearns & Wheler for some of its engineering needs. Vanetti formed Brownfield Engineering Services LLC, an environmental consulting firm, Jan. 1 to provide such services and is the company's president.
Two of the cleanup projects completed by S & W under the state's program are in Syracuse: the former American Bag & Metal Co. property on Spencer Street, and a former auto repair and service station at 1915 Erie Blvd. E.
At the Spencer Street property, S & W removed 2,500 tons of PCBs, paint waste, metals, solvents and other waste. It tried to sell the property to the Syracuse Industrial Development Agency so it could become part of the city's pedestrian walkway along Onondaga Creek, but the deal fell through over the price.
S & W is marketing both sites for commercial use. The other five sites on which it received a Certificate of Completion are scattered around the state.
Stoner said the company has been selective about the properties it acquires, especially Upstate because property values there are relatively low.
To make money, the value of a property after a cleanup must exceed the cost of buying it and cleaning it, he said. Downstate, property values are much higher, increasing the odds that a site's value will be higher than the cost of cleaning it up, he said.
"Nine out of every 10 sites we look at, we wind up rejecting for one reason or another," he said.
S & W is looking to do more than just clean properties and then sell them to a developer. It wants to become a developer, too.
It recently acquired the former Syracuse Plastics Co. facility in Fayetteville. It wants to demolish the buildings on the property, clean the site and then partner with a builder to construct 22 town houses. Named Ledyard Falls Townhomes, the houses would be priced in the $300,000 to $350,000 range.
The village is reviewing the company's site plans. In September, village trustees changed the zoning on the site from industrial to planned residential district.
"We're looking for a nicely done, urban, pedestrian-friendly development," said Petrovich.