IDA Life Sciences Program
The IDA Life Sciences Program (ILSP) provides eligible Life Sciences companies and developers of Life Sciences space 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 include Life Sciences companies and developers of Life Sciences space that are seeking to enter into long-term lease agreements, and planning to construct, or renovate, space for their own operations or to lease it to third parties.
The full value of land and building taxes may be abated for term determined by the agency necessary to incentivize the development of science space. A phase-out of the benefit begins in year four years prior the last year of the term and increases with 20% until the taxes are increased to the full amounts.
Sales Tax Exemption
The 8.875% 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% of the mortgage amount for mortgages of $500,000 or less, and 2.80% for mortgages greater than $500,000, may be waived.
New York City Industrial Development Agency (NYCIDA) will accept proposals from interested developers and landlords in three separate ‘rounds’ where each round will be no longer than six months. Each round will offer up to a maximum of $100 million through a combination of real estate tax reductions, mortgage recording tax waiver, and sales and use tax exemptions. The first round will offer benefits at an interest rate to the developer of up to 9.0%, the second round will offer benefits at an interest rate to the developer of up to 7.5%, and the final, and third round, will offer benefits at an interest rate to the developer of up to 6.0%.
The proposals will be evaluated on a number of key aspects, including:
- Jobs and economic impact
- Size of development
- Benefits per square foot
- Term of leases to tenants
- Ratio of laboratory to office space
- Rents offered to tenants
- Current usage of the development
- Anchor tenant/partnership
- Project timing
Landlords and developers should in their proposals respond with a specific property that will partly or in its entirety, and as a result of the incentive, be repositioned as a Life Sciences asset.
To convey the above-described benefits, approved companies must lease their properties to NYCIDA, which leases the site back to the company for a 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.