- REAL ESTATE EDUCATION
- GIVING BACK
Renewal in New York As 2017 Legislative Session Ends
July 4, 2017
As the 2017 legislative session ended in Albany, much of the attention was focused on the battle regarding mayoral control of New York City schools.
While an important issue for millions living throughout the five boroughs, you may not be aware that there were many other important programs that have been renewed.
These programs encourage job creation and economic growth, while ensuring that our city is an affordable location for companies to thrive as our population continues to grow.
The Commercial Expansion Program (CEP), the Energy Cost Savings Program (ECSP), and the Relocation and Employment Assistance Program (REAP) were all given a crucial three-year extension. In addition, the Industrial and Commercial Abatement Program, which is a benefit available citywide, was extended for three years.
Companies in the Bronx, Brooklyn, Queens, and Staten Island are twice as likely to hire local residents, unlike Manhattan employers. Between 2005 and 2014, more than 334,750 private primary jobs were created, and that number will continue to grow with the passing of these incentives.
By offering property tax abatements, the Commercial Expansion Program (CEP) is allowing commercial and industrial/manufacturing buildings built prior to 1999 to increase their tenant occupancy and has allowed new companies to flourish in buildings they may have otherwise not been able to afford. Small businesses like Edison Price Lighting and Aurora Lampworks have been able to expand in Long Island City and Brooklyn thanks to CEP.
With the Energy Cost Savings Program (ECSP), companies can reduce their regulated energy costs up to 45 percent, and reduce regulated natural gas costs up to 35 percent, allowing for businesses to run successfully with weight lifted off their shoulders.
REAP has been successful throughout the relocation of FreshDirect to the Bronx and the creation of a new 800,000-square-foot building for its several thousand employees.
On the economic development front, several other incentive programs were also extended during the legislative session: the Relocation and Assistance Employment Program (LMREAP), Commercial Revitalization Program (CRP), Lower Manhattan Energy Program (LMEP), and the Lower Manhattan Sales and Use Tax Exemption (LMSUTE).
These programs are important as 67 percent of those employed in Lower Manhattan live in the Bronx, Brooklyn, Queens, or Staten Island. The incentives will also be an inducement for the final 25 percent of planned space at the World Trade Center to be built, enabling the area to continue generating much-needed tax revenue for New York State. Remember that Lower Manhattan generated $2.4 billion in tax revenue for the state in Fiscal Year 2014 alone.
In Lower Manhattan, the Relocation and Assistance Employment Program (LMREAP) uses business income tax credits to encourage the attraction of jobs and the retention of companies to the area. For example, Pearson PLC utilized LMREAP to expand and add 600 jobs to Lower Manhattan in its renovated space at 330 Hudson Street
The Commercial Revitalization Program (CRP) has encouraged investments for the improvement of buildings for commercial tenants. The goal of CRP is to eventually increase commercial tenant occupancy in older buildings through tax incentives. Many major buildings that attract large employers, such as One Battery Park Plaza, One Liberty Plaza, and 120 Broadway are eligible for CRP.
Condé Nast utilized sales tax exemptions, such as the Lower Manhattan Sales and Use Tax Exemption (LMSUTE), in its successful move from Times Square to One World Trade Center.
REBNY applauds Governor Andrew Cuomo, Assembly Speaker Carl Heastie, Senator John Flanagan, Senator Jeffrey Klein, and the members of the Assembly and State Senate for the leadership they have shown in renewing these vital economic programs.
These actions follow the April 2017 budget agreement and the enactment of the Affordable New York Housing Program, formerly known as 421-a, which restored tax exemption benefits for new residential construction. The April budget agreement also included $2.5 billion for affordable and supportive housing programs.
Together, these 2017 legislative actions have established important programs that will result in the production of substantially more affordable rental housing, jobs, and economic growth that is critical to New York City’s future.