PROGRAM DESCRIPTION

Developers of industrial space in designated areas in the City can seek a mortgage recording tax waiver and sales tax exemptions on purchases of materials used to construct, renovate or equip facilities.

ELIGIBLE COMPANIES

Developers seeking to acquire, construct or renovate facilities located within Empire Zones and Empowerment Zones that will be leased by manufacturers, distributors, warehousers and other industrial companies are eligible to apply for the benefits listed below. Developers seeking assistance through FRESH may also seek consideration.  Developers performing renovation-only projects must invest a minimum of $400,000 or 25 percent of the total assessed value of the building, whichever is greater, in improvements to qualify.

PROGRAM BENEFITS

SALES TAX EXEMPTION

The 8.875 percent sales tax on materials used to construct, renovate or equip facilities may be waived.

MORTGAGE RECORDING TAX WAIVER

Mortgage recording tax relating to the project's financing, equal to 2.05 percent of the mortgage amount for mortgages of $500,000 or less, and 2.80 percent for mortgages greater than $500,000, may be waived.

SELECTION CONSIDERATIONS

All NYCIDA benefits are discretionary. Selection considerations include need for financial assistance and the impact of the proposed project on New York City’s economy. Applicants must request NYCIDA assistance prior to entering into any facility lease, acquisition or renovation contracts, unless such contracts are contingent upon NYCIDA assistance. Applicants must demonstrate the ability to pay for their proposed projects either through commitment letters for loans obtained from a commercial lender of their selection or through the availability of developer funds. The environmental condition of the project site(s) and the developer’s liability and other insurance coverage must be satisfactory to NYCIDA prior to closing.

TRANSACTION STRUCTURE

To convey the above-described benefits, approved developers must lease their properties to NYCIDA, which leases the site back to the developer for a 25-year term. This ‘lease-back’ structure should not prevent developers from obtaining federal tax depreciation benefits on the property.

CONTACT INFORMATION

New York City Industrial Development Agency (212) 312-3600 www.nycedc.com/NYCIDA NYCIDA@nycedc.com