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Testimony of the Real Estate Board of New York Before the New York City Industrial Development Agency in Support of the Hudson Yards Commercial Construction Project Application by 50 HYMC Owner LLC
January 5, 2017
The Real Estate Board of New York is a trade association with 17,000 owners, brokers, managers, and other professionals active in the real estate industry in New York. We are here today to support the next phase in the development of the Hudson Yards Plan, a plan that we have long supported and whose realization is important for the growth of our city’s central business district. Hudson Yards (generally bounded by 30th Street, 12th Avenue, 43rd Street and 8th Avenue) is expected to create 24 million square feet of new office space and 225,000 permanent jobs and 217,000 construction jobs.
As a catalyst for this development in this new commercial area, the New York City Industrial Development Agency (IDA) established the Hudson Yards Uniform Tax Exemption Policy (UTEP) benefits in 2006 for two purposes: (1) to incentivize commercial development in the Hudson Yards area; and (2) to provide a stream of revenue to service the $3 billion debt issued by the Hudson Yards Infrastructure Corporation that was used to construct the No. 7 line subway extension and related improvements. The subway extension, now completed, is a crucial component for the development in this area of the city.
When establishing the benefit, the IDA concluded that incentives were the minimum necessary to induce commercial development in a portion of Manhattan that had previously been underutilized and was away from the commercial core. Further, these real estate tax benefits last for 19 years and vary within the Hudson Yards area. In general the benefits increase the farther west you go, that is the farther away a site is from the Manhattan central business district.
The IDA eligibility requirements are that a project must have at least 75% class A or related commercial space and at least 1 million in square feet overall to apply for UTEP benefits. The 50 HYMC Owner LLC project will be a Class-A, LEED certified office tower of approximately 2.8 million gross square feet, including 50,000 gross square feet of retail space.
As we continue to expand our city’s central business district, this 50 HYMC Owner LLC project will generate approximately 7,479 direct construction jobs to the city economy and over 3,345 projected tenant jobs at the project.
This is the type of project our city and Hudson Yards needs. For these reasons we to lend our strong support for this important step in the realization of Hudson Yards.