NYCEDC - Financing & Incentives - Financing - Industrial Incentive Program

Financing

INDUSTRIAL INCENTIVE PROGRAM (IIP)

	Program Description
	Eligible Companies
	Program Benefits

	Selection Considerations
	Transaction Structure
	Contact Information

PROGRAM DESCRIPTION

The Small Industry Incentive Program (SIIP) and Industrial Incentive Program (IIP) provide eligible industrial companies with real estate tax reductions, mortgage recording tax waivers and sales tax exemptions on purchases of materials used to construct, renovate or equip facilities.

ELIGIBLE COMPANIES

Eligible companies include manufacturers, distributors, warehousers and other industrial companies seeking to acquire, construct or renovate facilities for their own operations.

Companies performing renovation-only projects must invest a minimum of $400,000 or 25 percent of the total assessed value of the property, whichever is greater, in improvements to qualify.

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

Companies with annual revenues $5 million or less and 100 or fewer employees should apply under Small Industry Incentive Program*.

Companies with annual revenues exceeding $5 million and 100 or more employees should apply under Industrial Incentive Program*.

* For either the IIP or SIIP program, the available program benefit categories are identical.

PROGRAM BENEFITS

REAL ESTATE TAX REDUCTIONS

Land Taxes
Land taxes in an amount of $500 multiplied by each full-time employee or part-time equivalent at time of application, may be abated for 25 years. The full value of land taxes may be abated for project sites located within Empire and Empowerment Zones. A phase-out of the benefit begins in year 21 and continues through year 25 at 20 percent each year. In year 26, land taxes increase to full amounts.

Building Taxes
Building taxes may be stabilized at the pre-improvement assessed value for 25 years. A phase-out of the benefit begins in year 21 and continues through year 25 at 20 percent each year. In year 26, building taxes increase to full amounts.

SALES TAX EXEMPTION

The 8.375 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. Companies 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 company funds. The environmental condition of the project site and the company’s liability and other insurance coverages must be satisfactory to NYCIDA prior to closing.

TRANSACTION STRUCTURE

To convey the above-described benefits, approved companies must lease their properties to NYCIDA, which leases the site back to the company for a 25-year term (equal to term of real estate tax reductions). This ‘lease-back’ structure should not prevent companies 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