If you’re a real estate developer, be aware that you might be eligible for some sizable tax breaks for your development.
Many cities and states try to lure commercial companies into undertaking major capital investments that would create and retain a significant number of jobs in that city. One such capital investment is real estate development. And NYC is no exception.
To be eligible for benefits under NYC’s tax incentive program, a projected development must undergo a rigorous analysis that considers a number of factors: The company needs to relocate its headquarters to NYC and there needs to be substantial job growth (in excess of 500 new jobs). If the development passes the test, the City will bring out the bait, which can actually include city, state, and even federal benefits.
Case in point: once again, Extell Development.
Extell is putting the finishing touches on its 34 story International Gem Tower in the diamond district in Midtown Manhattan. Here’s the deal Extell was offered by the city, state, and federal governments: For filling 85% of the building with jewelry businesses, half of which to be either new to New York or expanding (there’s your relocating and job growth), Extell will be entitled to $49.6 million in City tax breaks, a $100 million State mortgage for future tenants, and having the federal government declare the building a Foreign Trade Zone, which means no custom duties for tenants. Pretty sweet. I guess after spending $28.6 million for air rights Extell was glad to save some money.
Moral of the story: learn from Extell. Get yourself a good lawyer and avail yourself of the benefits waiting for you.