N.Y.’s Silent Catalyst for Development

Hundreds of companies are taking advantage of little-known incentive programs offered by the New York City Industrial Development Agency, The agency provides a host of incentives including low-cost, double, and triple tax-exempt Industrial Revenue Bonds that assist eligible companies in financing business expansion within the city’s five boroughs. These organizations may also qualify for other benefits, such as abatements or exemptions on their mortgage recording, real estate taxes, sales taxes, and possibly a 25-year term of real property tax abatement and exemption.An eligible project must create or retain permanent jobs in New York City and must demonstrate a need for IDA financing and/or benefits. Bond proceeds must be used for acquiring land, acquiring a building, constructing a new facility, renovating an existing facility, purchasing machinery or equipment, or leasing a facility.Recently, a significant number of not-for-profit corporations have taken advantage of these benefits.St. Francis College, a private college founded by the Franciscan Brothers on Baltic Street in 1858, was the first private school in the Diocese of Brooklyn. In 1885, St. Francis College conferred its first Bachelor of Arts degree. In 1960, the school moved to Remsen Street in Brooklyn. At 10 a.m. this morning, the city’s Industrial Development Agency is scheduled to hold a public hearing on the approval of about $25 million of tax exempt revenue bonds. The bonds are requested in connection with the demolition of a 28,000-square-foot building at the college headquarters at 180 Remsen St., the construction of a new 35,000-square-foot building, and purchase of new machinery and equipment. Additionally, the college is seeking an exemption from city and state mortgage recording taxes.* * *The United Jewish Appeal-Federation of New York owns the building at 130 East 59th St. It acquired the building in 1954. The property is directly across the street from the new headquarters of Bloomberg L.P. at 731 Lexington Avenue, the luxury residential condominium One Beacon Court, and major retailers including an 83,000-square-foot Home Depot and the Swedish clothing retailer H&M.The UJA-Federation has decided to divide the building into three condominiums. One will house the retail operations already occupying the ground floor and basement and will now include the second floor of the building. A second condominium will house the office of the UJA-Federation, and the third will be rented to commercial office tenants.This past May, the agency reviewed its application for financial assistance of about $70 million in civic facility bonds to renovate and equip the 252,000-square-foot building and an exemption from city and state mortgage recording taxes.At the same meeting, the agency reviewed an application by the Riverdale Country School in connection with the construction, renovation, expansion, and equipping of four buildings on its Hill Campus in the Riverdale section of the Bronx. The school will also use a portion of the $31 million bond issuance to refinance earlier IDA bond transactions for prior acquisitions and renovations. According to a press release from the IDA, using tax-exempt bonds will allow the school to keep its tuition costs competitive and avoid reducing its financial aid programs.* * *Also on the agenda for the May hearing was the application by Pace University for financing the construction of the proposed 330,000-square-foot condominium. The unit is in the building planned by Forest City Ratner Companies on the parking lot site owned by the NYU Downtown Hospital. The condominium site will be leased by the university. The space is planned to be used for the Lubin School of Business and will include a dormitory residence hall with room for 600 students. The university is seeking the benefit of payments in lieu of real estate taxes. On May 19, the chairman of the Liberty Development Corporation, Charles Gargano, announced that FC Beekman Associates LLC, the entity owned by Forest City Ratner Companies that has a contract to purchase the parking lot site, will receive an inducement of $243 million in commercial Liberty Bonds. The money will go to construction of the lower 25 floors of the planned tower that will serve Pace University and the NYU Downtown Hospital.* * *A number of schools have benefited from the issuance of tax exempt bonds. The Trey Whitfield School received $6 million for the acquisition and renovation of its 58,000-square-foot building in the East New York section of Brooklyn. The school educates more than 500 children from nursery school through eighth grade. Another $7.5 million in triple tax-exempt bonds were approved for the Brooklyn Heights Montessori School for its facility on Court and Bergen streets. The Professional Children’s School received $9 million in bond financing for the construction of an eight-story tower and renovation of its current building at 132 W. 60th St. The Calhoun School located on the Upper West Side received $28.5 million in triple tax-exempt bonds for the renovation of its building at 433 West End Ave. and the refinancing of an acquisition loan for its facility at 304 West End Ave. The Lycee Francais School received $94.1 million of tax exempt bonds for its new state-of-the-art building on East 75th and East 76th streets between York Avenue and the FDR Drive. The Magen David Yeshiva, a school for students up to twelfth grade, benefited when the development agency issued $38.5 million in triple tax-exempt bonds for the refinancing, construction, and equipping costs for a larger facility in the Bath Beach section of Brooklyn. The Agency also partially waived the 2.75% mortgage recording taxes, saving the school $87,500.Industrial Development Agency bond financing assisted the Urban Resource Institute, a provider for social services to Inner City residents that creates and administers programs for people with mental disabilities. The agency provided $9.8 million in tax-exempt financing for the purchase and renovation of two buildings to create 64 apartments for victims of domestic violence and to provide meeting and office space to accommodate support services.The American Society of Technion-Israel Institute of Technology was provided $14.6 million in bonds to refinance, renovate, purchase equipment, and cover soft costs for a commercial condominium at 55 E. 59th St. The Society received a mortgage tax waiver of about $400,000. Four more employees are expected to be hired over three years.Since 1994, the New York City Industrial Development Agency has catalyzed more than $25 billion in private investment throughout the city.The city, through the New York City Economic Development Corporation and the New York City Industrial Development Agency, has helped hundreds of companies undertake capital expansion and become more competitive by having their headquarters in the city or by expanding existing operations. These opportunities are available for companies that take the time to investigate incentives offered by the city. These incentives have benefited the city’s economy by creating new jobs and helping companies to keep their operations in New York City. While the tax abatements and exemptions represent significant loss of revenue to the city, the benefits from retention of businesses, the expansion of services to the community, and creation of new jobs outweigh any loss in tax revenue.

N.Y.’s Silent Catalyst for Development

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