Moriarty, Rick. “We’re Really Risk Managers.”
The Post Standard 19 Oct. 2003: E-2
Most developers run the other way when they come across polluted properties. S&W Redevelopment runs to them. The company spun off from the Stearns & Wheler engineering firm in Cazenovia 6 years ago and set up shop in the former Boys’ Club building at 430 E. Genesee St. in downtown Syracuse.
Rather than avoiding polluted urban properties known as “brownfields,” S&W specializes in buying them, cleaning them and redeveloping them.
“We take the risk,” said David Stoner, the company’s president. “We’re really risk managers.”
In contrast, most developers — and local governments and lenders — will not touch such properties because of the financial risks and legal liabilities they pose. For that reason, polluted properties in many cities remain vacant eyesores for decades.
S&W uses its expertise in environmental services to investigate polluted land, clean it and get it ready for commercial development. The company employs 12 people and works closely with Stearns & Wheler.
It has five projects under way in Onondaga County and recently began branching out to communities outside of Central New York. It has a project in Potsdam, in northern New York and one in Kingston, south of Albany.
And it hasn’t stopped looking for more opportunities.
“We’re looking in western New York, and we’re looking at Long Island,” said Stoner.
“There are lots of brownfields on Long Island.”
S&W is hoping that a new state law will bring it even more business.
The State Brownfields Program is designed to encourage private investment in brownfield cleanup and redevelopment through liability reform, tax incentives and a predictable process for cleaning up and redeveloping polluted properties.
The program was approved by the Assembly in June and the state Senate in September. It was signed by Governor George Pataki on October 9th in Utica.
Stoner said the state’s new program will establish a “sliding scale” of cleanup standards for polluted sites. The most stringent standards will apply to properties that are to be redeveloped for residential use. Somewhat less stringent standards will apply to properties that will be redeveloped for commercial use.
With residential use, it’s assumed that people’s exposure to contaminants in the soil would be greatest, Stoner said, with commercial use — in which much of a property is built on or paved over — there would be less exposure to substance buried deep in the soil, he said.
The standards have not yet been established by the state Department of Environmental Conservation. That process is expected to take about 18 months, Stoner said.
In the past, developers negotiated cleanup plans with the DEC on a case-by-case basis. The department would agree to release a developer from any liability for past pollution on a property as long as the developer cleaned up the land according to the agreement that was reached.
But the old process took time, and there was no guarantee that an agreement could be reached. Stoner said. Typically, the process took three years, he said.
“It scared a lot of developers away from brownfields,” said Stoner. “A lot of developers don’t have the patience.”
The new law’s biggest benefit to developers might be the tax credits it makes available to companies that clean brownfields and build something in their place. Developers can receive state income tax credits equal to 12 percent to 20 percent of the cost of cleaning up a site and the cost of building on it.
“If you spent $2 million on a building you could get up to $400,000 in tax credits,” said Stoner.
In Potsdam, S&W has acquired a former railroad depot that is contaminated with petroleum and coal residue. It plans to remove the pollutants, and then sell the property to a hotel developer.
In Kingston, it is making plans to clean up three parcels of land that contained a dry cleaning business, a gas station and a trolley barn. Stoner said the properties are polluted with dry-cleaning chemicals and petroleum. After the cleanup, they could be sold to a drugstore, he said.
S&W’s projects in Onondaga County are in various stages.
It acquired a former has station property at 531 Liberty Street from the city of Syracuse for $1,000 and removed gasoline contaminated soil from the site.
Redevelopment of the Liberty Street site has been put on hold, however, because of a lakefront building moratorium imposed by the city. The Pyramid Co.’s and the Lakefront Development Corp. requested the moratorium to prevent development that might be incompatible with Pyramid’s proposed Destiny USA retail and entertainment center.
S&W owns the former American Bag & Metal Co. property at 400-404 Spencer Street, which is polluted with paint waste, metals, solvents and polychlorinated biphenyls. S&W had planned to sell it to Syracuse Industrial Development Agency, which wanted it for an extension of the city’s pedestrian walkway along Onondaga Creek.
The deal fell through when the agency and the company could not agree on a price for the land once it is cleaned up. Stoner said S&W plans to go ahead with the cleanup and seek a commercial tenant for the property. The property is close to the Syracuse Inner Harbor, which might be turned into a marina next year.
“It’s going to be a wonderful location for somebody.” Stoner said of the Spencer Street property.
The company owns three properties off West Street. It plans to clean them and sell them to Hanford Pharmaceuticals, which has plans to expand its plant. Stoner said S&W might redevelop a total of 12 properties for Hanford.
S&W has cleaned the site of a former gas station on the northwestern corner of Erie Boulevard East and Peat Street and is marketing it to potential commercial tenants.
It’s also making plans to clean up an industrial site at 315 Wavel Street, DeWitt, and will lease it back to a specialty tools shop on the property or to another tenant, Stoner said.