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Tess Vigeland: New York City is distinguished by many an amazing feature: the Empire State Building, Broadway, Lady Liberty. As of today, you can add a feature that no city would boast about — a new Superfund site. The Gowanus Canal in Brooklyn now has the dubious distinction of ranking among the country’s most hazardous waste sites. The label clears the way for cleanup of the polluted waterway. But the city says it also threatens much-needed development in the area.

Marketplace’s Amy Scott reports.

AMY SCOTT: The nearly two-mile Gowanus Canal snakes through an old industrial section of Brooklyn. The chemical plants and coal yards are gone. But local artist Eric Joost says they left plenty behind.

ERIC JOOST: I’m sure that the first three feet of sediment under there is saturated with all kinds of chemicals.

Pesticides, heavy metals, and PCBs, to be exact. By designating the canal a Superfund site, the Environmental Protection Agency can force polluters to pay for the cleanup.

The city of New York had its own plan — to be paid in part by voluntary contributions from polluters. City officials say the Superfund process may take longer, open up legal battles and scare off potential developers.

BILL APPELL: It’s like putting a small pox designation on someone’s front door.

Bill Appell directs the Gowanus Canal Community Development Corporation. He fears banks won’t lend money to fund affordable housing projects near the Superfund site. Today the luxury developer Toll Brothers confirmed it’s abandoning plans to build condos in the neighborhood.

But the EPA’s Walter Mugdon says any stigma was already there.

WALTER MUGDON: It smells, you can see oily sheens on the water at any day of the year. And we think that actually, the prospect of now getting it cleaned up in a reasonable period of time may actually reduce whatever stigma there was attached to it.

Even a “reasonable” period could mean 10 to 12 years with a price tag of up to $500 million.

In New York, I’m Amy Scott for Marketplace.