July 29 (Bloomberg) -- New York Governor Andrew Cuomo has collected at least $650,000 in campaign contributions from recipients of tax credits to redevelop industrial sites during the past four years, a review of state data show.
Related Cos., its executives and entities controlled by the New York-based developer of Time Warner Center were the biggest donor, giving at least $262,700 to Cuomo, who is running for a second term. Syracuse shopping-mall magnate Robert Congel, members of his family and executives at his Pyramid Cos. contributed $143,250.
Critics of the incentives, which have cost taxpayers more than $1 billion since 2006, say they benefit wealthy developers and have done little to clean up contaminated industrial sites. Unlike other states, New York doesn’t limit the program to cleanup costs, and a study found that 94 percent of its brownfields tax credits have been used for redeveloping properties instead of remediating blighted land.
“It’s all too common in Albany for recipients of aid from the state government to be among the biggest campaign contributors,” said Bill Mahoney, who studies campaign-finance data for the New York Public Interest Research Group, a government watchdog. “Even if decisions aren’t being directly influenced by checks, there’s definitely an idea in Albany that interest groups will be less successful if they don’t find a way to funnel money to elected officials.”
The brownfields program, approved in 2003, entitles developers to income- or corporate-tax credits for redeveloping sites where hazardous materials may be present, such as former gas stations or abandoned factories. The credits are refundable, meaning that if a developer’s tax liability is less than the full credit, they’re eligible for a cash refund of the difference.
When he first ran for governor, Cuomo, a Democrat, promised to review the program to make sure it was targeted to communities that need it most. Now, as he gears up for re-election, Cuomo, 56, has said he’ll likely sign a bill that extends it until 2017.
Though his January budget proposal included a plan to limit the credits developers can claim, it was left out of the final version lawmakers approved in March. Cuomo says he still wants to pursue the changes.
“There is a comprehensive reform to the program that is long overdue,” he said June 24 in Buffalo.
Rich Azzoparrdi, a spokesman for Cuomo, said yesterday that trying to make a connection between campaign donations and the tax credits “might be the most far-fetched pay-to-play claim in history because immediately after these donations, the governor became an even more aggressive fighter for brownfield reforms -- a cause that he will continue to pursue.”
As a candidate in 2010, Cuomo vowed to outlaw Albany’s pay-to-play culture by limiting contributions from companies and individuals that do business with the state. He also called for public financing of campaigns.
Cuomo’s pledge took a hit last week when the New York Times reported that a top aide sought to keep an anti-corruption panel the governor created from investigating his real estate industry backers and a firm that helped him with campaign ads. Government watchdog groups called on Cuomo to turn over internal documents from the commission.
In New York, where individuals can donate as much as $150,000 a year to Cuomo, the contributions from recipients of brownfields credits represent only 1 percent of the almost $61 million that he’s collected since January 2010. As he gears up for the November election, the governor has more than $35 million in his war chest, almost 15 times more than Republican challenger Rob Astorino.
Cuomo has promoted the redevelopment of polluted sites as an economic booster since he was head of the U.S. Housing and Urban Development Department under President Bill Clinton in the late 1990s. As governor, he’s touted the use of brownfield credits and other tax breaks, saying they have encouraged developers to bring and their businesses to the state.
The study of New York state tax credits, by Donald Boyd of the Nelson A. Rockefeller Institute of Government and Marilyn Marks Rubin of John Jay College, found that in almost 10 years, only 133 of the state’s estimated 10,000 brownfields sites were cleaned up through the incentives.
“The brownfield credits were intended to remediate and restore blighted land, but they have functioned more as a real estate development program,” the report said.
Related, a partner in the Hudson Yards development on Manhattan’s far West Side, claimed $2.6 million of credits as part of a $500 million development of a 913,000-square-foot mall in the Bronx. Pyramid claimed $64.4 million in 2012 and 2011 to fund a mall expansion in Syracuse.
Joanna Rose, a spokeswoman for Related, declined to comment. Tim Kelly, Pyramid president, didn’t immediately respond to a request for comment on the donations.
Other recipients of credits that have contributed to Cuomo include Syracuse developer Michael J. Falcone, who donated more than $64,000, and Queens-based builder Muss Development LLC, which gave $23,000.
Cuomo’s January budget proposal included a plan to refocus the program on environmental cleanup. It would focus on properties that have been vacant for more than a decade, are worth less than the cost of fixing the environmental hazard or are “priority economic development projects,” according to budget documents. The move was meant to target areas of upstate New York that have lost manufacturing jobs.
The plan didn’t pass because the Democratic-led Assembly wanted to tie it to a long-term hazardous waste fund that the Cuomo administration didn’t want to commit to because it could push the state too close to its debt limit, said Peter Iwanowicz, executive director of Environmental Advocates of New York, which supported some of Cuomo’s changes.
“Real estate interests are fine the way things are, and developers have done quite well with the current structure,” Iwanowicz said. “We’ve seen with the governor that when he puts his shoulder behind something, and gets the apparatus moving, he gets the legislature behind it and gets it done. It would be nice if he gave that kind of effort in this.”
Cuomo said last in Buffalo that his powers of persuasion had limits.
“Just because I support something doesn’t necessarily mean it’s going to happen,” the governor said. “There is something called the legislature and the legislative process.”
Brownfield tax credit recipients that have contributed to Cuomo:
Related Cos., its executives and entities: $262,700
Pyramid Companies/Congel Family: $143,250
Michael J. Falcone (Pioneer Companies): $64,317
Conifer LLC/Tim Fournier: $51,000
Martin Ginsburg (GDC): $30,000
Larry Silverstein (Silverstein Properties): $25,000
Ron Moelis (L&M Development): $25,000
Louis Cappelli (Cappelli Organization): $20,000
Muss Development: $23,000
Great American Construction Corp: $6,000
Source: campaign and tax filings.
To contact the editors responsible for this story: Stephen Merelman at email@example.com Mark Schoifet