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Development License and Brownfields Tax Credits

Development License and Brownfields Tax Credits
Q: Does a Holder of a Development License Qualify for Brownfields Tax Credits? A: In some cases, a municipality that owns property may enter into a license agreement with a for-profit or not-for-profit developer that allows the licensee (developer) to construct housing (typically) on the city-owned property. Following completion, the housing would be transferred into a newly-created entity (e.g., condominium association) that would become the owner of the real estate. Often, especially for parcels in Boston or other long-developed cities (Salem, New Bedford, Gloucester, and many others), site development necessarily includes an environmental component and remediation. In such a scenario,

Q: Can a Mortgage Holder Qualify for Brownfields Tax Credits?

Q: Can a Mortgage Holder Qualify for Brownfields Tax Credits?
A: A sale where the seller “holds the paper” – in other words, sells the property to a buyer for no money down or a small deposit, with the balance of the selling price converted to a mortgage on the site is a common occurrence in the real estate industry, particularly with a contaminated property. This type of sale may be the best option when the site has known contamination that prevents a buyer from obtaining traditional bank financing, as many lenders shy away from extending loans on contaminated properties prior to receiving a Permanent Solution (colloquially known as a

Brownfields Tax Credit Regulations Proposed by MassDOR

Brownfields Tax Credit Regulations Proposed by MassDOR
On March 9, 2020, the Massachusetts Department of Revenue (DOR) released a “Working Draft Regulation: 830 CMR 63.38Q.1: Massachusetts Brownfields Tax Credit” for public comment. Cooperstown Environmental LLC staff have thoroughly read through the proposed guidance and have summarized some of our observations here for our clients and colleagues. Comments are due back to DOR by April 3, 2020. Many people will be surprised that the Brownfields Tax Credit program has operated since its inception in 1998 without a formal regulation in place. Instead, the DOR has operated on guidance and documents in the form of eight Technical Information Releases

Q: Is the sale of a Massachusetts Brownfields Tax Credit taxable?

Q: Is the sale of a Massachusetts Brownfields Tax Credit taxable?
A: Like it or not, the answer is almost surely “Yes”, the credits are taxable. A recent US Court of Appeals case regarding whether a recipient of New York State Brownfield credits had to pay tax on the credits again shines a light on this issue – in our experience, the question of if your tax credit will be taxed is one of the most common questions we field. In Massachusetts, the Brownfield tax credits became transferable in 2006, and a secondary market has developed where credit recipients can sell excess credits at a discount to face value to generate

5 Ways to Screw Up Your Brownfield Tax Credit Application

5 Ways to Screw Up Your Brownfield Tax Credit Application
How can one screw up an otherwise eligible Massachusetts Brownfield Tax Credit Application? It looks easy, but it's not! The Massachusetts Brownfield Tax Credit is a well-established incentive program designed to provide financial relief to innocent parties who incur significant costs to clean up contaminated properties for commercial use. A significant amount of information is available about the program online, including the application forms, leading some to conclude that a successful application should be straightforward. Unfortunately, there are actually many traps and dead-ends that can cause hopeful recipients to miss out on recovering eligible costs or, in some unfortunate cases,

Not an EDA, but can it be?

Not an EDA, but can it be?
Q: My site isn’t in an area designated as an Economically Distressed Area (EDA) according to the state, but it seems like it should be. Am I out of luck? A: It depends… while there are some areas that are correctly not listed as EDAs, there are a number of instances where the list of EDAs has not been updated in a timely manner. That is, a town or city or an area within a town or city may have been designated an EDA since the list on the Department of Environmental Protection (DEP) web site was last published. Cooperstown

Brownfields Tax Credit Terms & Definitions – Key Insights!

Brownfields Tax Credit Terms & Definitions – Key Insights!
Massachusetts has a well-established incentive program, the Brownfields Tax Credit Program, designed to provide financial relief to innocent parties (“Eligible Persons” is the term in the law) who incur significant costs to remediate contaminated properties. Some of the key Brownfields Tax Credit terms that appear in the statutory language can create confusion and cause problems for those trying to receive a brownfields tax credit. A significant amount of information is about the program available on-line, so it may be tempting to conclude that the process is obvious, or at least straightforward. The reality, however, is that there are many traps and