City, state, and federal agencies have created assistance programs to help Lower Manhattan businesses recover and rebuild, as well as incentive programs to help retain existing businesses and draw new ones downtown. Each of the following programs is in effect now, and one or more may be applicable to your business.
Special WTC Rent Reductions
World Trade Center and 7 World Trade Incentives
These incentives, signed into law by Gov. George Pataki in August 2005, provide a $5-per-square-foot annual incentive and $3.80-per-square foot annual incentive for the first 750,000 square feet of commercial space leased at the World Trade Center site and 7 World Trade, respectively. They are subject to agreement between the State of New York, the Port Authority of New York and New Jersey, and Silverstein Properties regarding the specific terms. For additional information, please contact the Empire State Development Corporation at (212) 803-3133.
Job Creation and Retention Program (JCRP)
This program, jointly administered by the Empire State Development Corporation (ESDC) and the New York City Economic Development Corporation (EDC), is designed to restore the vibrancy of the downtown community by fueling job creation and attracting new businesses to help diversify the downtown economy. The program’s current priority is to encourage large firms to establish operations in Lower Manhattan and create jobs.
The program provides discretionary incentive grants to businesses with 200 or more employees that make a commitment to remain in or relocate to Lower Manhattan for a minimum of seven years. The level of assistance varies from business to business and is based on several factors including economic impact, the number of jobs created and/or newly relocated to Lower Manhattan, and an assessment of the need for public funds to encourage the project.
To determine whether or not your business qualifies for the JCRP, please click here or contact ESDC’s Steven Gold at (212) 803-3133.
Liberty Zone Tax Deductions
30% Bonus Depreciation of Property
This benefit allows businesses to deduct an additional 30 percent of the cost of office equipment, new technology, and other property to be depreciated by businesses in Lower Manhattan in the first year of ownership until December 31, 2006, providing a significant acceleration over normal IRS depreciations. The Alliance for Downtown New York website, www.downtownny.com, features a summary of the Job Creation and Workforce Assistance Act of 2002, which provides more information.
Increased Business Expense Deduction
This benefit allows businesses to reduce their taxable burden by $59,000 ($35,000 higher than normal) for each year until December 31, 2006, by writing off equipment. For more information, view a summary of the Job Creation and Workforce Assistance Act of 2002 at www.downtownny.com.
Accelerated Depreciation for Leasehold Improvement:
This benefit allows any leasehold improvement in Lower Manhattan to be depreciated over five years rather than the normal 39 years. For more information, view a summary of the Job Creation and Workforce Assistance Act of 2002 at www.downtownny.com.
Tax Abatements, Reductions, and Exemptions
$2.50-per-square-foot Real Estate Tax Abatement
This incentive reduces real estate taxes for pre-1975 buildings in Lower Manhattan for five years by up to $2.50 per square foot. It requires landlords to pass this savings directly through to tenants through reduced rents. Only leases executed before March 31, 2007, are eligible for this incentive. A summary of the Lower Manhattan Economic Revitalization Program, which provides more information, is available at www.downtownny.com.
Commercial Rent Tax Exemption
This incentive permanently eliminates the tax for all tenants at the World Trade Center site (the area bound by Church, Liberty, Vesey, and West Streets), as well as tenants of 7 World Trade. Additionally, it eliminates the tax for all retail tenants in the area generally south of Murray Street between South and West Streets. Businesses elsewhere south of Canal Street are eligible for a five-year tax exemption at an amount correlated to the base rent for the first year; for each of the next four years, the exempted amount is based on the lesser of the current year or the base year rent. Businesses with direct leases (no subleases) of at least five years commencing between July 1, 2005, and June 30, 2009, qualify for this incentive. In the case of a renewal lease, the existing lease must expire according to its terms during the eligibility period. For additional information, please visit www.nycedc.com, email LMincentives@nycedc.com, or call (212) 312-3600.
Exemption from Sales and Use Tax
This incentive provides sales-tax exemptions for office furniture, equipment, and build-out costs for commercial businesses that lease space at the World Trade Center site, 7 World Trade, and in Battery Park City (including the World Financial Center) for all direct leases of at least ten years commencing between September 1, 2005, and September 1, 2011. For renewal leases, the existing lease must expire before September 1, 2011, and the renewal lease must extend at least ten years beyond the term of the original lease. The exemption is available for costs incurred during the first year of the lease term for materials, equipment, and labor to install them. All eligible items must be installed or delivered no later than 90 days after the first year.
Elsewhere in the area south of Frankfort and Murray Streets, sales tax is eliminated on build-out only (not furniture and equipment). The exemption is available for costs incurred during the first year of the lease term for materials, equipment, and labor to install them. All eligible items must be installed or delivered no later than 90 days after the first year. An eligible new space lease must be a direct lease with a term of ten years or more between September 1, 2005, and September 1, 2011. For renewal leases, the existing lease must expire before September 1, 2009, and the renewal lease must extend at least ten years beyond the term of the original lease.
For additional information, please visit www.nycedc.com, email LMincentives@nycedc.com, or call (212) 312-3600.
421g Tax Exemption
These tax incentives, for converting commercial buildings to residential or mixed-use facilities, expire on June 30, 2006, one year earlier than originally scheduled. To be eligible, building owners must secure building permits by that date.
Employment Assistance Programs
Lower Manhattan Relocation Employment Assistance Program (LMREAP):
Businesses with operations both within and outside of Manhattan that relocate employees from locations outside of New York City to Lower Manhattan (south of Houston Street) are now eligible for a tax credit of $3,000 per job per year for 12 years for each job relocated or added within five years of the initial relocation. To qualify, businesses must have a lease of three years or more. Additionally, leasehold improvements of at least $25 per square foot must be completed after June 30, 2005, or building-wide improvements equal in cost to 50 percent or more of the building's assessed value must be completed. The job increase attributable to new employees from outside New York City must be at least 25 percent of the business's existing New York City job base or 250, whichever is less. For more information, please visit www.nycedc.com, email LMincentives@nycedc.com, or call (212) 312-3600.
New York State Shared Work Program:
This program, designed to avert layoffs, allows an employer with at least five employees to reduce staff hours or wages from 20 to 60 percent per week by subsidizing those wages through unemployment insurance benefits. For more information, call (518) 457-5807 or visit www.labor.state.ny.us and look on the Unemployment Insurance page for a link to the Shared Work Program.
Lower Manhattan Energy Program (LMEP):
Through this incentive program, the costs of transporting and delivering electricity are reduced by up to 45 percent for 12 years. For four years more (called the phase-out period) the rate decreases by 20 percent each year. The program is available to offices, but not to gyms, retail spaces, or residences. A tenant is eligible for savings only if its building's owner has, since 1995, improved the building by 20 percent of assessed value. For more information, phone (212) 618-8729 or visit www.nyc.gov/smallbiz and look for LMEP on the Business Incentives page.
Helping Handbook from Law Offices of Morrison & Foerster:
- This online "Helping Handbook" includes legal information for businesses affected by the World Trade Center tragedy. To link to the handbook, visit the Morrison & Foerster website.
- For referrals, businesses may also contact the Association of the Bar (ABA) of the City of New York at (212) 626-7373 (English) or (212) 626-7374 (Spanish).
- For Insurance and Terrorism Claims, please see the information under "Insurance Assistance" below for the Task force created by the American Bar Association (Insurance Committee of the Section of Litigation).
For a map of the frozen zones for insurance purposes visit the Office of Emergency Management website.
National Insurance Consumer Hotline:
For assistance with the location of insurance companies and answers to insurance-related questions, call (800) 942-4242.
New York State Department of Insurance:
This department is also available to answer questions you may have. Please call (800) 339-1759 or (212) 480-5265.
Task Force on Insurance and Terrorism Claims:
The American Bar Association (Insurance Coverage Litigation Committee of the Section of Litigation) has created this task force to address issues arising out of the terrorist attacks on the World Trade Center and the Pentagon on September 11, 2001. This bi-partisan committee has prepared a general checklist for making claims under property insurance policies and an additional checklist of additional information that may be required in making a claim under business-interruption coverage. The materials also include a sample claims calculation for use by small businesses. To view this information, visit the American Bar Association website.
Real Estate Assistance
Downtown Space Finder:
A search tool created by the Alliance for Downtown New York, the Downtown Space Finder helps organizations interested in moving to Lower Manhattan find the perfect office or retail space. The tool lets organizations indicate preferred size, rent, location, and specific building characteristics and then pulls matching available real estate from its database. To use the Downtown Space Finder, visit the Alliance’s website at www.downtownny.com. http://listings.downtownny.com/cust/dwalli/dwalli_set.html
Downtown Incentives Calculator:
The Alliance for Downtown New York website also features a Downtown Incentives Calculator to help businesses realize the significant cost savings available in Lower Manhattan. An organization need simply enter its specifics -- such as number of employees, location on 9/11/01, energy costs, rent, and others -- for the calculator to determine how much could be saved by remaining in or relocating to Lower Manhattan. http://listings.downtownny.com/cust/dwalli/calculator/incentivescalc.asp