Murphy’s CLEAN UP Act Provides Tax Incentives To Revitalize Brownfields Sites & Expand Economic Development
HARTFORD – (RealEstateRama) — While touring a number of Connecticut’s priority brownfields sites with local elected officials and Department of Economic and Community Development (DECD) Deputy Commissioner Tim Sullivan, U.S. Senator Chris Murphy (D-Conn.) announced today the introduction of his new bill – the Creating Livable Environments and New Usable Property (CLEAN UP) Act – to incentivize the cleanup and redevelopment of contaminated industrial sites across Connecticut and the United States. Murphy’s CLEAN UP Act will pair two tax incentives to spur investment in the cleanup of brownfields sites and ultimately help cities and towns increase tax revenues, expand economic development, and protect the environment.
“Imagine how much better off we’d be if we cleaned up old industrial and factory sites and turned them into job-creating businesses. But today, because of contaminants and other dangerous substances that may have seeped into the ground decades ago, the cost of cleaning up these so-called brownfields often puts too high a price on redevelopment,” said Murphy. “I’m introducing the CLEAN UP Act to make it easier and less costly for developers and states like Connecticut to remove the contaminants and encourage people to build new businesses and housing developments that will create jobs. My bill will also relieve the incredible development pressures that threaten our state’s open spaces. I’ve toured brownfields all over Connecticut and I’ve seen firsthand that these areas are ready to explode with growth. My CLEAN UP Act is a great first step to making that growth a reality.”
Murphy’s CLEAN UP Act 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, allowing 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 would exempt 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. Murphy’s proposed tax incentive would be available to entities who incurred a cleanup charge exceeding $550,000 or 12% of the property’s fair market value. The incentive would not be available to parties who are potentially liable for the cleanup in the first place.
Over the last year, Murphy has toured nearly a dozen of Connecticut’s brownfields sites to learn about ways to transform these under-used industrial sites into major components of economic revitalization. Some of his visits have included tours of the former Remington Shaver factory in Bridgeport, the former Chromium Process Co. building in Shelton, the former Nidec Corporation factory in Torrington, O’Sullivan’s Island in Derby, and Freight Street in Waterbury.