Tenants in downtown buildings like 7 WTC to save

A new tax incentive package will eliminate or reduce commercial rent taxes for downtown businesses as well as provide exemptions for expenses involved in preparing commercial office space for use, legislators announced on Friday, June 24. The benefits are expected to exceed $50 million by 2010.

The agreement, announced by Gov. George Pataki, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver, will eliminate commercial rent tax for the World Trade Center site and immediate vicinity and add a five-year exemption from commercial rent taxes for new and renewed leases for properties within the New York City Liberty Zone but outside of the World Trade Center area.

Additionally, state and local sales tax exemptions will be made for purchases related to outfitting, furnishing, or equipping office space for lease in buildings at the World Trade Center site and in Battery Park City. Other areas in Lower Manhattan will be eligible for a similar exemption, though with some restrictions.

"We made a solemn vow to the residents of New York City, the victims and heroes of 9/11, and all New Yorkers that terrorism would never destroy our great city or its spirit," Pataki said in a statement. "We're proud that this new incentive package will build on our ongoing efforts to promote economic growth, develop new business opportunities, create jobs, and make Lower Manhattan stronger than ever."

The agreement also calls for the creation of a new Lower Manhattan Relocation Employment Assistance Program, which will offer tax credits to businesses that currently have a presence in Manhattan and choose to relocate employees to Lower Manhattan from facilities outside of the city. These credits can be used to reduce city taxes, including the general corporation tax, the banking corporation tax, the unincorporated business tax, or the utility tax.

Mayor Michael Bloomberg praised the incentive package, stating: "Today's action by Albany will be a shot in the arm to the redevelopment of Lower Manhattan and another example of this administration's commitment to downtown."

Beyond the incentive package, the governor and legislature also recently agreed to extend the World Trade Center Economic Recovery Power program, authorizing the New York Power Authority to provide additional three-year contract extensions to participating downtown businesses, and expressed continued commitment to plans to designate an Empire Zone in Chinatown.