SCHENECTADY — The Galesi Group, developer of the Mohawk Harbor project on Erie Boulevard, is seeking nearly $12 million in state brownfield tax credits for environmental cleanup work at the site, according to state data.
The credits against the company's 2016 corporate income taxes would be compensation for an extensive environmental cleanup at the 60-acre site on the south side of the Mohawk River, which was formerly occupied by the Alco locomotive plant.
Mohawk Harbor, the $500 million commercial and residential redevelopment project that includes the Rivers Casino & Resort, has been widely cited as a key part of Schenectady's revitalization efforts. While the casino opened last year, much of the Mohawk Harbor project remains under construction, with major work on the first of two phases scheduled for completion this year.
The state brownfield program, which is managed by the state Department of Environmental Conservation, is intended to offer private companies like Galesi an incentive to remediate contaminated industrial sites and reuse them. Galesi estimated, in documents filed with the state, that it spent $47 million on the cleanup work — a figure that is probably conservative, according to Galesi Group President and CEO David Buicko.
"My accountant tells me it was well north of $47 million," Buicko said.
Buicko said the Mohawk Harbor project wouldn't have happened without the brownfield incentives.
"This is a great example of how the brownfield program should be used," he added.
Of 112 projects that completed brownfield cleanups in 2017 and applied for credits, Mohawk Harbor was the only one in the Capital Region, according to the state Department of Taxation and Finance. While Galesi is entitled to the credit under its agreement with DEC, the Tax and Finance department still needs to approve the application.
While there are thousands of contaminated sites across the state — 560 of which have been successfully remediated over the past decade — the only other brownfield project that's been successfully completed in Schenectady is College Park on Maxon Road, where an empty Big M supermarket was replaced by the Price Chopper headquarters building in 2011. Galesi was also the developer of that project.
The massive Alco manufacturing buildings had loomed vacant over Erie Boulevard for decades before the Mohawk Harbor project got underway. They contained a significant amount of pollution from the land's industrial past, including petroleum products, PCBs, solvents in the soil and heavy metals, according to a DEC brownfield database.
During the cleanup, which took several years, thousands of tons of contaminated soil were removed and taken to specialized landfills. With the site needing to be made clean enough for residential use, Buicko said DEC Region 4 officials were closely involved in the process.
"We had a very good relationship with DEC," Buicko said. "They worked hand in glove with us, and they had someone on the site on a regular basis."
Galesi, which is based in Rotterdam, bought the Alco site in 2010 with plans for Mohawk Harbor, and sought to participate in the brownfield program soon after that. The redevelopment plans initially moved slowly but got a boost when the state, in 2014, awarded the Capital Region's only casino license to Rush Street Gaming, with its plans to operate a full-service casino at Mohawk Harbor.
With construction well underway and the casino nearly ready to open, DEC certified that the main brownfield cleanup work was complete in December 2016. Other cleanup work wasn't finished until this past December, according to Buicko.
The $11.9 million in state brownfield tax credits being sought will apply to Galesi's 2016 tax returns. The company will be able to apply next year for brownfield credits for the cost of any cleanup work completed in 2017, he noted.