TenantWise
Home Search For Space My Tenantwise About TenantWise Contact



Login

Register
Search for Manhattan Office Space





Municipal Incentive Programs

On behalf of the State of New York, we created the following website to introduce incentives available in Lower Manhattan. (See: Downtown NY Incentives)

Municipal Programs That Reduce Estate Taxes

The City offers a variety of incentive programs that reduce taxes. We describe two of the more common ones below.

Industrial & Commercial Incentive Program (ICIP)

This program is available to owners, not tenants, of certain commercial properties. The purpose of this program is to encourage owners of commercial and industrial structures to improve their buildings. If the proposed building improvements meet the program's requirements ("Approved Improvements") and the appropriate pre-approval procedures are followed, the program will exempt the increase in value associated with the new improvements from the property's assessed value. For Manhattan north of 96th Street and south of 59th Street, taxes attributable to the Approved Improvements will be fully exempt for the first eight years after receipt of a Certificate of Eligibility and the exemption is phased out in 20% increments over the following four years beginning at 80% in the ninth year.

The ICIP can be a benefit and a cost to a tenant. The benefit can be caused by the pass-through of tax reductions in the real estate escalation clause. However, depending on the wording in a lease's operating clause, the costs of the capital improvements can often be passed through to tenants in their proportionate share. Tenants should review the escalation clauses in their leases to understand how an ICIP might be handled. Tenants are not guaranteed to receive certain benefits under this program, it all depends on their agreement with the landlord as outlined in the lease. The program is periodically updated and approval by the state legislature is required.

Lower Manhattan Plan

During the early 1990's, New York City public officials and private interests lobbied the state legislature for an incentive program to revitalize older office buildings (pre-1975) in Downtown Manhattan and to attract tenants to these buildings. The program was initially approved in 1995 and has now been extended through March 2001. The Lower Manhattan Plan offers tenants incentives to move Downtown and offers property owners incentives to convert buildings to residential and mixed use properties.

Tenant Incentives. The incentives offered to tenants who sign leases in buildings in the qualified area by March 31, 2001 include: (1) Real Estate Tax Abatements; (2) Commercial Rent Occupancy Tax ("CROT") Reductions and (3) Energy Cost Savings through Con Edison, if the building they occupy was approved for the plan. For tenants to qualify under the plan, they have to meet certain requirements:

 

Tenant Classification Number Employees Minimum Lease Term Minimum Investment Benefits
Large >125 10 Years $35 psf 100% abatement of real estate taxes in years 1-3, (to a maximum of $2.50 psf), then reducing to 2/3 in year 4 and 1/3 in year 5. 100% abatement of commercial rent occupancy tax in years 1-3, then 2/3 in year 4 and 1/3 in year 5
Small <125 5 Years $5 psf 100% abatement of real estate taxes in years 1-3, (to a maximum of $2.50 psf), then reducing to 2/3 in year 4 and 1/3 in year 5. 100% abatement of commercial rent occupancy tax in years 1-3, then 2/3 in year 4 and 1/3 in year 5
Small <125 3 Years $5 psf 100% abatement of real estate taxes in year 1, (to a maximum of $2.50 psf), then reducing to 2/3 in year 2 and 1/3 in year 3. 100% abatement of commercial rent occupancy tax in year 1, then 2/3 in year 2 and 1/3 in year 3


back to top
 
Goods & Servicese     Privacy     Press     Terms of Use