Governor George E. Pataki today joined New York City Mayor Michael R. Bloomberg, Assembly Speaker Sheldon Silver, and local business and community officials to announce that he has signed legislation into law to provide significant tax incentives to attract new businesses and encourage existing business to recommit their operations and employees in Lower Manhattan, promoting economic growth downtown as the area continues to recover from the impact of September 11, 2001. The incentives are already producing tangible results. The Horn Group, an integrated technology communications firm, has committed to lease over 10,000 square feet of office space at 55 Broad Street, the heart of Downtown’s Technology District, and expects to triple their number of employees in the next two years.
“Lower Manhattan has a proud history as the birthplace of New York City and the financial capital of the world and has long-served as an economic catalyst for the rest of New York City and New York State generating hundreds of millions of dollars annually in tax revenue,” Governor Pataki said. “This legislation will revitalize Lower Manhattan through tax and other benefits that will pay for themselves many times over, as Lower Manhattan regains its prominence, expands its tax base, and attracts and retains new businesses and employees. 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.”
“Over the last four years, our Administration has created and implemented an overarching vision for Lower Manhattan’s future and we’ve brought downtown back from the effects of September 11th,” said Mayor Bloomberg. “We’ve established priorities and along with our partners in State government, we’re making investments that are attracting new businesses downtown and ensuring that the area will have a great future. Today, we are taking downtown’s revival to the next level with a new incentives package that will ensure that businesses at the World Trade Center site and in the surrounding area continue to grow briskly. 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.”
Senate Majority Leader Joseph L. Bruno said, “This bill will provide the necessary incentives for businesses to develop and grow in Lower Manhattan, one of the largest business districts in the country and a critical economic engine for the state and nation. These benefits will renew confidence in the city of New York, strengthen our long term commitment to revitalize our economy and recapture some of the 100,000 jobs that were lost on September, 11, 2001.”
Assembly Speaker Sheldon Silver said, “This ‘Marshall Plan for Lower Manhattan’ will restore this community to its rightful place as the financial and business capital of the world and breathe new life into a historic place that has contributed so much to our nation’s growth and prosperity. Rebuilding Lower Manhattan transcends partisanship and political legacy and rises to the level of moral obligation.”
Senator Martin J. Golden said, “I am pleased to be a supporter of this important legislation. A vibrant New York City demands a healthy downtown economy. This bill, through tax incentives, provides a solid boost to our efforts to stimulate Lower Manhattan development.”
Senator Serph Maltese said, “I commend Governor Pataki for continuing to work to strengthen New York City. With the anniversary of the World Trade Center attacks right around the corner, it is appropriate that we continue to work to stimulate the economy of our City and these new incentives will certainly help.”
Senator John J. Marchi said. “Governor Pataki’s approval of this bill marks a significant step forward in the effort to restore Lower Manhattan’s businesses to strong standing. It comes at an appropriate time as we approach the anniversary of the attack on the World Trade Center, the Pentagon and all of America. As a senator and as a New Yorker, I am proud to be involved with this legislation. It demonstrates the State’s total commitment to revitalizing the lower part of our city. Tax breaks for businesses locating or relocating their offices and people are entirely appropriate. I hope that his law will trigger fast action to get the job done.”
Senator Frank Padavan said, “We are doing a lot to revitalize the downtown business district. Revitalizing New York City serves to revitalize New York State. The tragic events of 9-11 effected nearly 70 percent of the business district in Manhattan. These new tax incentives will attract business, both old and new, renewing activity and building on our tax base. It will create more jobs and promote growth, strengthening New York City and building on our reputation as the financial center of the world.”
Charles A. Gargano, Chairman of Empire State Development said, “Earlier this year, in a speech to the Association for a Better New York, Governor Pataki gave an inspiring vision of what Lower Manhattan could and should be. He outlined a bold, ambitious plan to get us there, including the creation of incentives for Lower Manhattan in cooperation with Mayor Bloomberg and Speaker Silver, and today we reach that key milestone as we sign the legislation into law.”
Horn Group Agency Founder and President, Sabrina Horn said, “The Downtown Incentive Bill helps the Horn Group, and many other entrepreneurial companies like us, fuel our ongoing growth plans. We view our move downtown as a symbol of the ongoing renaissance taking place. We’re proud to be an integral part of the ongoing tech movement in Manhattan and 55 Broad Street represents the heart of this ongoing trend.”
Horn Group, Inc. provides integrated communications services to technology companies from start-ups to large corporations. Horn Group is leasing the entire 29th floor of 55 Broad Street for its current 15 employees. Horn Group expects to triple its workforce in the next two years. Fifty-five Broad Street, owned and operated by the Rudin Family, is the original home of New York’s technology community and thought by many to be the center of Silicon Alley.
William C. Rudin, Chairman of the Association for a Better New York said, “The newly adopted incentives program for Lower Manhattan is an essential component to the ongoing revitalization of Downtown. The plan will further encourage potential and current tenants to do business here and spur much-needed economic activity. As a property owner and Lower Manhattan supporter, I was proud to stand alongside Governor Pataki in 1995 when he signed the innovative Downtown Plan. Today, ten years later, I am just as proud to be back here at 55 Broad Street at this bill signing to support tenants both large and small, who continue to make Lower Manhattan the Financial Capital of the World.”
Steven Spinola, President of the Real Estate Board of New York said, “The signing of the Lower Manhattan incentive legislation, coupled with the infrastructure commitments from the city and state, will create a positive environment for tenant commitments in the Downtown area. I applaud the efforts of Governor George Pataki, Speaker Sheldon Silver, Majority Leader Joe Bruno and Mayor Michael Bloomberg for ensuring that the revitalization of Lower Manhattan remains one of New York State’s top priorities.”
Kathy Wylde, CEO of the NYC Partnership said, "These new incentives are just the catalyst that is needed to accelerate the restoration of Downtown as a world-class central business district. Although the entire city suffered from the devastating attacks of September 11th, Lower Manhattan bore 70% of the job losses and has not yet fully recovered. Transportation and critical infrastructure investments are the long-term solution, but the city and the downtown community must act now to ensure success and this new legislation is essential.”
Robert Douglass, Chairman of the Downtown Alliance, “We applaud Governor George Pataki, Mayor Michael Bloomberg, Assembly Speaker Sheldon Silver, and Senate Majority Leader Joseph Bruno for making these incentives a top priority. The continued commitment by our community leaders will help to ensure that Lower Manhattan remains a center of commerce and a premier business district.”
The legislation permanently eliminates the commercial rent tax at the World Trade Center area, and adds 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. Additionally, it permanently eliminates the tax for all retail tenants in the area generally south of Murray Street between South and West Streets.
The legislation also provides State and local sales and compensating use tax exemptions for purchases related to the outfitting, furnishing or equipping of commercial office space in leased premises of buildings at the World Trade Center site and in Battery Park City when tenants make at least a ten-year commitment. Other areas in Lower Manhattan will have a similar exemption, with certain restrictions. The legislation also provides for reduced rental rates via PILOT (payment in lieu of taxes) abatements of $3.80/sq. ft. for tenants that occupy the first 750,000 square feet of 7 World Trade Center and $5/sq. ft. for the first 750,000 square feet of the Freedom Tower and the World Trade Center site.
The legislation also calls for improvements to the Lower Manhattan Relocation Employment Assistance Program, which will offer refundable tax credits up to $3,000 per employees for 12 years to businesses, with a presence in Manhattan, that relocate employees to Lower Manhattan from outside of New York City. These tax credits can be used to reduce New York City taxes such as the general corporation tax, banking corporation tax, unincorporated business tax, or the utility tax.