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The following incentive programs, administered by various City and State agencies, may be available for businesses that locate in Lower Manhattan. Please click on the program name for more information. If you have additional questions, please call our Incentives Hotline at 212-835-2790 or email us at incentives@downtownny.com.
To access the Downtown Alliance’s Incentives Calculator, which can help you determine how much your business could save, click here.
To download a PDF summary of all of the available Lower Manhattan incentives, click here.
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The Commercial Revitalization Program (CRP) was developed with the goal of rehabilitating older building stock in Lower Manhattan. The New York City Department of Finance provides benefits under CRP through two tax incentives: $2.50 real estate tax abatement and a Commercial Rent Tax Special Reduction. These benefits apply to nonresidential or mixed use premises built located in designated abatement zones. Applicants are also required to make certain
minimum expenditures to improve the eligible premises. For both portions of CRP, the following guidelines apply:
- Tenants must submit their application within 180 days of lease commencement.
- Tenants who relocate to Lower Manhattan from one of the outer boroughs are not eligible for CRP.
- Tenants can only receive benefits under CRP once, even if they move to a new location. However, the benefit may be continued or increased if additional space is leased.
- Subleases are not eligible.
Real Estate Tax Abatement
Under CRP, the Department of Finance offers a $2.50 per square foot real estate tax abatement for up to 5 years for commercial tenants that locate in non-residential pre-1975 buildings in Lower Manhattan and make improvements to their space. Leases must commence prior to March 31, 2010.
- Leases may be 3, 5, or 10 years, depending on the number of employees. Firm with less than 125 employees may have 3 or 5 year leases (or longer) and will receive the benefit for 3 to 5 years, depending on the length of lease. Firms employing over 125 people must have 10 year leases, and will receive the benefit for 5 years.
- Tenants receive the benefit as a pass-through from their landlord and must jointly apply for the tax abatement with their landlord.
- Expenditures required are based on the number of employees and length of lease, and range between $5 per square foot and $35 per square foot.
- Expenditures must be documented and submitted to the Department of Finance.
Commercial Rent Tax Special Reduction
The CRT portion of CRP offers an exemption on commercial rent tax for retailers and commercial businesses with an annual rent of over $200,000 per year. To be eligible, the tenant must be located in a non-residential building south of Canal Street, and leases must commence prior to June 30, 2009. This program does not apply to nonprofits and other small businesses with an annual rent under $200,000.
For Retailers:
- Permanent elimination of Commercial Rent Tax for all retail tenants in the area generally south of Murray Street, between West Street and South Street.
For Commercial Businesses:
- Permanent elimination of Commercial Rent Tax for all tenants in the World Trade Center site, 7 World Trade Center, or 130 Liberty Street (Site 5).
Exemption for 5 years for commercial businesses south of Canal Street (the amount of exemption is tied to your base rent).
To access the website for the Commercial Revitalization Program, click here.
For a list of buildings that qualify for the real estate tax abatement portion of CRP, click here.
For a map of buildings that qualify for the real estate tax abatement portion of CRP, click here.
ICIP, administered through the New York City Department of Finance, is a benefit for developers that provides a partial exemption from or abatement of property taxes for up to 25 years for eligible industrial and commercial buildings south of Murray Street that are built, modernized, rehabilitated, expanded, or otherwise physically improved. Eligibility for ICIP benefits may also allow a participant to receive reduced energy rates through the Lower Manhattan Energy Program (LMEP—see below for more information).
- Developers of commercial projects must make expenditures of at least 20% of the assessed value of the project in the year the building permit is issued.
- New commercial construction receives a full exemption on improvements for 11 years, followed by a 4-year exemption period with benefits declining by 20% per year. Commercial renovation projects receive a full exemption on the increase in assessed value due to the improvements for 8 years, followed by a 4-year exemption period with benefits declining by 20% per year.
- Two applications are required--a preliminary application and a final one. The preliminary application must be filed before building permits are issued.
- Hotels can qualify for ICIP provided they do not include any permanent dwelling units.
- Expires: June 30, 2008.
To access the ICIP website, click here.
The Lower Manhattan Energy Program (LMEP), administered by the New York City Department of Small Business Services (SBS), was recently given a 3-year extension, and will now expire on June 30, 2010. The program can reduce energy costs by up to 45% for 12 years for eligible buildings and commercial tenants in those buildings. Government agencies, personal service providers, public benefit corporations, and retailers are not eligible.
Building Owners:
- A building located south of Murray and Frankfort Streets is eligible for LMEP if renovations in excess of 20% of the property’s assessed value have been made, and the building has been approved by the Industrial & Commercial Incentive Program (ICIP) or the New York City Industrial Development Agency (IDA).
- City and state-owned buildings that have been improved are also eligible.
- The building owner or developer must submit an application to SBS before a building permit is issued for the construction or renovation.
Commercial Tenants:
- Tenants do not need to submit an application for LMEP. Tenants located in an eligible building should receive an energy credit from their landlord. * When negotiating a lease, tenants should confirm the status of the building either with the building manager or the Department of Small Business Services.
Expires: June 30, 2010.
To access the LMEP website, click here.
To view a map of buildings participating in LMEP, click here.
The LM-REAP program, administered by the New York City Department of Finance, provides a $3,000 tax credit per employee, per year to businesses that relocate to Lower Manhattan from outside of the 5 boroughs. The credit may be taken against the NYC General Corporation Tax, the Banking Corporation Tax, the Unincorporated Business Tax, and / or the Utility Tax.
- Companies must have been in business for at least 24 months before relocating or expanding to Lower Manhattan and must move at least one employee to the Lower Manhattan location from offices outside the city.
- Companies must relocate to a non-residential building that has been improved by construction or renovation, or must sign a lease of at least three years and spend $25 per square foot on improving their space themselves.
- Retail businesses and hotels are not eligible.
- The tax credit is capped at either 100 jobs, or two times the total employment prior to the relocation, whichever is greater.
To access the LM-REAP website, click here.
This program, administered by the New York State Department of Taxation and Finance, provides an exemption from the sales tax on goods purchased for the build-out of office space in Lower Manhattan (south of Murray Street).
- Lease terms must be at least 10 years, and must commence prior to September 1, 2011. Only direct leases are eligible (no subleases).
- Businesses that locate in the World Trade Center, 7 World Trade, The World Financial Center, or Battery Park City, can receive an exemption on sales tax for all goods purchased, including personal property such as furniture and equipment.
- Businesses located in all other areas south of Murray Street can receive an exemption only on those goods purchased for a build-out, which will result in permanent capital improvements to the space. Personal property, furniture, and other non-permanent goods do not qualify.
- Retail businesses are not eligible.
To download a PDF with more information on the Sales Tax Exemption program, follow this link: http://www.empire.state.ny.us/wtc/m05_12s.pdf.
This program, administered by the Empire State Development Corporation (ESDC) offers a reduction in rent for those companies taking space at the new World Trade Center (WTC) complex of $5 per square foot (benefit no longer available for 7 WTC).
- Only available for the first 750,000 square feet of space leased at the Trade Center, and leases must be signed before December 15, 2015.
- Must be at least a 5 year lease (but maximum benefit term is 20 years) and must be a commercial business.
To download a PDF with more information on the WTC Rent Reduction, follow this link: http://www.empire.state.ny.us/wtc/WTCRentReductionGuidelines.pdf.
To download an application, follow this link: http://www.empire.state.ny.us/wtc/WTCRentReductionApplication2007.pdf.
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