Mo. brownfield tax credit program receives 'poor' audit rating

After nearly two decades of existence in Missouri, State Auditor Tom Schweich says the Brownfield Remediation Tax Credit program is in a state of disrepair.

Managed by the state Department of Economic Development, the BRTC program received a "poor" rating from the auditor's office, indicating the entity needs to significantly improve operations, including numerous findings that require management's immediate attention, according to a news release.

The DED authorized more than $185 million for 115 projects during fiscal years 2002-2013, including $127,836 in remediation tax credits in 2009 to Water Street Development LLC for a downtown Springfield redevelopment project at 213 W. Olive St. Qualifying projects include the redevelopment of commercial and industrial sites that are contaminated with hazardous substances and have been abandoned or underutilized for at least three years. 

The audit found DED and state Department of Natural Resources officials did not require parties responsible for environmental damage to be fully responsible for remediation costs. As a result, state taxpayers will end up primarily funding the remediation costs for a project through the issuance of $12.2 million in BRTCs.

The DNR also did not hold previous owners who likely generated some hazardous materials responsible for environmental damages for four additional projects, the audit reads.

Under Missouri laws, the DED must project at least 10 new jobs will be created or at least 25 jobs will be retained as a result of the completed BRTC project. However, in reviewing 15 projects, audit staff found developers projected nearly 2,500 jobs would be created, but only 116 full-time and 332 part-time positions were actually created.

According to the audit, because the DED uses these job creation estimates in the annual cost-benefit analysis submitted to the general assembly, the state economic impact of the BRTC is significantly overstated.