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NYC sewer system construction costs rocket 1500% to $1.2B

NYC sewer system construction costs rocket 1500% to $1.2B

Dive Brief:

  • Costs for the Gowanus Canal sewage retention tank project in Brooklyn, New York, have shot up to $1.2 billion, more than 1500% higher than its original price tag of $78 million, the Brooklyn Daily Eagle reported. The new cost projection is also more than twice what the Environmental Protection Agency expected the cost of the entire Gowanus Canal Superfund cleanup initiative to be.
  • The cost differences stem from a combined sewer overflow (CSO) tank design that is different from the one the EPA recommended and from the city’s decision to build one tank on a private site acquired via eminent domain rather than on land it owned. The tanks will keep sewage and stormwater from releasing into the canal, while the city also plans on dredging contaminated industrial and sewer discharges.
  • The New York City Department of Environmental Protection said the EPA’s cost estimate was a conservative one and did not include preservation of the historic Gowanus Station Building. Adding to the costs also was the DEP decision to use a multichamber, multifunction model for the larger of the two tanks rather than the single-chamber one specified by the EPA. New York City, along with electricity and natural gas company National Grid, will pay for the cleanup and DEP will cover the costs of the tanks.

Dive Insight:

Spokane, Washington, has built several new CSO tanks through the years in an effort to keep combined sewage out of the Spokane River and in 2018, broke ground on the last three of a $79 million, nine-tank CSO program, according to the Spokane Journal of Business. Specialty contractors N.A. Degerstrom Inc. and Halme Construction picked up the final three contracts.

The EPA, under the Comprehensive Environmental Response, Compensation and Liability Act, designates some sites as Superfund if they have been contaminated by hazardous waste. The program goals are to have the parties responsible for polluting the site pay for the cleanup, like the Gowanus project. The EPA then oversees the site’s return to constructive use and pays for the cleanup if the government cannot determine a responsible party.

Brownfield sites are also contaminated pieces of land but don’t pose the same degree of health and safety hazards that Superfund sites do. They are more economic and social threats, according to the EPA, because they cannot be developed. There are a variety of federal grant and loan programs that will help with the cost of cleanup and redevelopment of these sites.

Some states also want to see the redevelopment of brownfield sites as long as they end up net-positive for state taxpayers. To that end, Michigan last year gave the green light to a plan proposed by Quicken Loans founder Dan Gilbert that will see more than $2 billion invested in four downtown Detroit projects. Tax increment financing and a state sales tax exemption will cover 15% of that investment, and Gilbert will cover the rest. Some of the $2 billion will go toward construction of a $900 million, mixed-use tower on the site of a now-demolished department store. The building could reach as high as 800 feet, but it is still in the design phase, according to Crains Detroit Business.

The Article was published on constructiondive.com

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