Gov. George Pataki (file photo) approved legislation to create new business incentives

Gov. George Pataki, joined by Mayor Michael Bloomberg and Assembly Speaker Sheldon Silver, approved legislation on Aug. 31 that will provide tax incentives to attract new businesses to Lower Manhattan while encouraging existing business to remain downtown.

The legislation calls for:

Commercial Rent-Tax Exemption:   To eliminate the commercial rent tax in the area surrounding the World Trade Center and add a five-year exemption from commercial rent taxes for new and renewed leases for property located in the New York City Liberty Zone but outside the World Trade Center area. The law also permanently eliminates the tax for retail tenants south of Murray Street between South and West Streets.

Sales-Tax Exemption: To provide sales-tax exemptions for purchases related to the outfitting, furnishing, or equipping of commercial office space in buildings at the World Trade Center site and in Battery Park City when tenants make at least a ten-year commitment to lease space. Other areas in Lower Manhattan will have a similar exemption, but with certain restrictions.

World Trade Center and 7 World Trade Incentives: To provide for reduced rental rates via PILOT (payment in lieu of taxes) abatements of $3.80 per square foot for tenants occupying the first 750,000 square feet of 7 World Trade Center and $5 per square foot for the first 750,000 square feet of the Freedom Tower and the World Trade Center site.

Lower Manhattan Relocation Employment Assistance Program: To offer refundable tax credits up to $3,000 per employee for 12 years to businesses that operate in New York City and relocate employees from locations outside of the city to Lower Manhattan. These tax credits can be used to reduce city taxes such as general corporation tax, banking corporation tax, unincorporated business tax, or utility tax.

"This new incentive package will build on our ongoing efforts to promote economic growth, develop new business opportunities, create jobs, and make the new Lower Manhattan stronger than ever," Pataki said in a statement.

During the Aug. 31 press conference, the governor also announced that the Horn Group, an integrated technology communications firm, has taken advantage of this new incentive package. The firm has committed to lease more than 10,000 square feet of office space at 55 Broad Street and expects to triple its number of employees in the next two years.

"These measures demonstrate our administration's commitment to ensure that Lower Manhattan remains the world financial leader, while also attracting businesses like the Horn Group to an increasingly lively and vibrant downtown area," Bloomberg said in a statement.