| | COMMERCIAL EXPANSION PROGRAM (CEP) |
| PROGRAM DESCRIPTION |  |
The Commercial Expansion Program (CEP) provides real estate tax abatement for new, renewal, or expansion leases for commercial office or industrial space in Manhattan north of 96th Street or in Brooklyn, Queens, the Bronx, or Staten Island.
| |
| ELIGIBILITY & TIPS | |
| ELIGIBILITY | | |
- Location: The premises must be (a) in Manhattan north of 96th Street or in Brooklyn, Queens, the Bronx, or Staten Island; (b) built before January 1, 1999; (c) used as offices or industrial space; and (d) at least 25,000 SF.
- Expenditures: Leasehold expenditures for improvements must be at least (a) $2.50 PSF for leases of less than 10 years and renewal leases of 10 years or more that include newly leased space; (b) $5 PSF for renewal leases of 10 years or more involving only previously occupied space; and (c) $25 PSF for new and expansion leases of 10 years or more.
- Lease: Minimum lease term must be at least (a) 3 years if 125 people or fewer will be employed in the premises; or (b) 10 years if more than 125 people will be employed in the premises.
- Lease: Lease must (a) start by June 30, 2010; and (b) not be a sublet or license agreement.
- Lease: Lease must provide that (a) any abatement of real estate taxes will be passed through to tenant; and (b) required leasehold expenditures will be made.
- Restriction: Tenant must not have accessed CEP previously for any space (except that, if tenant expands into new space and continues to occupy space for which CEP was accessed, tenant can receive benefits on expansion space).
| | |
| TIPS | | |
- Applications must be filed before lease is signed and/or leasehold improvements are made.
- For a new lease, evidence of leasehold expenditures and number of employees in premises must be submitted to the Department of Finance (DOF) within 60 days of rent commencement.
- For a renewal lease, evidence of leasehold expenditures must be submitted to DOF within 14 months of lease commencement and evidence of number of employees in premises must be submitted to DOF within 60 days of rent commencement.
- Similar benefits are available in Lower Manhattan under the Commercial Revitalization Program (CRP).
| | |
| PROGRAM BENEFITS | |
- For leases of 3 or 4 years: 3-year real estate tax abatement equal in the first year to the lesser of actual tax liability, and $2.50 PSF with a 2-year phase-out thereafter.
- For leases of 5 years or more: 5-year real estate tax abatement equal in the first 3 years to the lesser of actual tax liability, and $2.50 PSF with a 2-year phase-out thereafter.
| |
| EXAMPLE BENEFITS CALCULATION | |
XYZ Corporation, a financial services firm with 300 employees, signs a 10-year lease for 100,000 SF in Downtown Brooklyn. Without benefits, its annual real estate tax liability would be $3.20 PSF or $320,000.
| Year |
CEP Abatement Percent* |
CEP Property Tax Abatement |
| 1 |
100% |
$250,000 |
| 2 |
100% |
$250,000 |
| 3 |
100% |
$250,000 |
| 4 |
67% |
$166,667 |
| 5 |
33% |
$83,333 |
| Total (Nominal) |
|
$1,000,OOO |
| NPV (6.25%) |
|
$857,494 |
As shown above, CEP would result in aggregate savings of $1,000,000 in real estate taxes over 5 years. *CEP Abatement Percent is the percentage of the initial year’s benefit that is available each year. | |
| CEP PROVISIONS FOR INDUSTRIAL AND MANUFACTURING TENANTS | |
CEP Provisions for Industrial and Manufacturing Tenants with Leases Commencing On or After July 1, 2005
Real estate tax abatement for new, renewal, or expansion leases for industrial or manufacturing space in Manhattan north of 96th Street or in Brooklyn, Queens, the Bronx, or Staten Island. Qualified tenants in the Special Garment Center District in Manhattan are now eligible for this benefit.
The lease must be for a term of not less than 3 years and must begin on or after July 1, 2005 but not later than June 30, 2010. Individual condominium units in eligible buildings are considered separate eligible buildings. Improvements to the premises are required. Premises must be used or occupied for industrial or manufacturing activities, which do not include waste management or utility services. Premises occupied for retail, hotel, or residential purposes are not eligible.
For more information about CEP for industrial and manufacturing tenants, visit the New York City Department of Finance’s Website.
| |
| |
| CONTACT INFORMATION | |
For more information about CEP Visit the New York City Department of Finance’s section of the City’s Website.
Commercial Expansion Program (CEP)
66 John Street
New York, NY 10038
Phone: 311 or (212) NEW-YORK from outside NYC
| |
|
| | | | RELATED LINKS | New York City Map
Explore our interactive map of the 5 boroughs to find project locations, incentive areas and zoning. Economic Snapshot
Read our newsletter highlighting NYC employment, consumer spending, real estate and more. |
|  |
|
|