Skip to main content

"Night of the living tax break": Forest City Ratner among big beneficiaries of canceled but still operating ICIP

The watchdog site New York World yesterday published Night of the living tax break:
Five years after state lawmakers killed a corporate property tax exemption that had outlived its original purpose, it’s still stalking New York City’s finances, to the tune of more than $650 million this year.
...Other windfalls went to the headquarters of News Corporation — the owner of the New York Post — whose tax bill is cut by some $2.2 million this year, and Manhattan’s East River Plaza mall, a project co-owned by real estate giant Forest City Ratner, which got two breaks totaling $8.1 million.
...These are among the more than 7,000 properties that continue to receive abatements on property taxes under the city’s Industrial and Commercial Incentive Program, or ICIP, first launched in the 1980s to encourage businesses to locate or remain in New York City.
That program was open to a wide array of business that built or made improvements to their properties. It expired in 2008, amid widespread criticism that it was too generous. But any company that had successfully applied for the break before then would continue to get it — for as long as 25 years.
In fact, the cost of the tax break to the city has swelled since it supposedly died, rising from $512 million in 2008 to a peak of $682 million in 2012. That’s because the properties, as a condition of the tax break, have undergone improvements that increase their value over time.
Forest City's totals

Forest City Ratner has three properties on the top 20 list: Forest City Myrtle Associates at 115 Myrtle Avenue (MetroTech), with a $5.9 million tax abatement; Tiago Holdings (a co-venture with Blumenfeld Development Group), with $8.1 million granted; and FC Queens Place, with $2.6 million from the Queens Place mall, of which Forest City sold 49% in 2011.

But that's not all. According to the database provided The New York World by Good Jobs New York, there are numerous Forest City properties (mostly retail properties, with that 49% share sold in 2011) on the list.

Note that the first column below is the tax abatement, the second the taxes paid, and that the abatement does not precisely match the number in the chart above. That's because the chart shows the 2013 abatements, while the downloaded info covers 2012.

What it means

As the New York World's Nathaniel Herz reported, the program "effectively reallocates the commercial property tax burden to other property tax payers,” said James Parrott of the Fiscal Policy Institute.

Former city official Alair Townsend described the tax incentive as a tactic launched by the struggling city to keep businesses in the late 1970s and early 1980s from moving to New Jersey or other suburbs:
The idea was to encourage job-producing construction — either new buildings, or renovations — by not immediately taxing owners on improvements to their property. Projects qualified on an “as-of-right basis,” not based on need — meaning that as long as they met a certain set of criteria based on location, use, and size of investment, they’d get the subsidy.
Following scathing audits of the program, the Bloomberg administration took a hard look at what all the tax breaks were paying for. A 2007 study by the city’s Economic Development Corporation revealed that more than 75 percent of participating projects — which cost some $2.8 billion in subsidies — would have gone ahead even without the ICIP exemption.
As with the 421-a tax relief program for market-rate construction, the program was not tinkered with until the city had clearly recovered. The NY World reports:
“This is an example of an as-of-right program run amok,” said Bettina Damiani, project director for the advocacy group Good Jobs New York, which supplied the New York World with ICIP data acquired from the Department of Finance through a public records request. (Download the data in CSV format.) “When you start subsidizing midtown retail and midtown office buildings, things have clearly gone awry.”
The exemptions also extend to several large Queens malls, where visitors and workers were surprised to hear about the value of the tax breaks being extended to corporate owners.
...After ICIP’s demise in 2008, the city replaced it with the Industrial and Commercial Abatement Program, which is more discerning in handing out property tax breaks — just over $5 million this year.
But Parrott said that lawmakers should be watching the new program closely, given the lingering cost of ICIP — which he noted was more than enough to cover the city Parks Department’s annual budget.
The East River Plaza announcement

A 7/26/2010 Forest City Ratner press release headlined East River Plaza grand opening:
New York City Mayor Michael Bloomberg and Bruce C. Ratner, chairman and CEO, Forest City Ratner Companies, were joined by public officials and business partners on Tuesday, July 20, for the official grand opening of East River Plaza.
Bringing Manhattan its first Costco and Target, East River Plaza represents a groundbreaking investment in the East Harlem Community and will contribute to the neighborhood’s continued revitalization. To date, the project has created over 1,100 construction jobs and over 1,000 permanent retail jobs. The development team and retailers have worked closely with New York City Council member Melissa Mark-Viverito, Manhattan Borough President Scott Stringer, the Upper Manhattan Empowerment Zone, the New York City Department of Small Business Services/Workforce 1 and the STRIVE non-profit organization to implement a local hiring program to maximize employment opportunities for local residents. Approximately 70 percent of the new jobs created have gone to residents of Upper Manhattan.
“The opening of East River Plaza culminates the historic transformation of a long vacant and polluted site into a vibrant retail center that is bringing a thousand permanent jobs, tens of millions of dollars in private investment and new shopping opportunities to East Harlem,” said Mayor Bloomberg. “With East River Plaza complete and construction of the nearby East Harlem Media, Entertainment and Cultural Center underway, East Harlem is undergoing a renaissance that will provide new housing, office and retail space and job opportunities for the local community.”
Bruce C. Ratner, chairman and CEO of Forest City Ratner Companies said, “East River Plaza represents the best of public-private partnerships in action. Given the tough economic times we are facing, East River Plaza offers a much needed boost to the economy of New York City, bringing new jobs and generating tax revenues for the City and State. The center also provides new shopping opportunities for East Harlem residents.”
East River Plaza, developed through a joint venture between subsidiaries of Blumenfeld Development Group and Forest City Ratner Companies, is a five-level, 527,000-square-foot retail center in East Harlem. Located on the FDR Drive between 116th Street and 119th Street with direct access to the 1,248-car attached parking facility. In addition to Costco and Target, East River Plaza tenants include national retailers Best Buy, Marshalls, Bob’s Discount Furniture, PetSmart, Kidstown, Old Navy, Verizon and GameStop.
Blumenfeld Development Group and Forest City Ratner Companies, working closely with the leadership of public agencies including the Upper Manhattan Empowerment Zone, Empire State Development Corporation and the New York City Economic Development Corporation, were able to turn this former Brownfield site, once occupied by the Washburn Wire Factory, into a great new shopping destination for all New Yorkers. East River Plaza again shows what is possible when all parties are committed to a successful outcome.


Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

No, security guards can't ban photos. Questions remain about visibility of ID/sticker system.

The bi-monthly Atlantic Yards/Pacific Park Community Update meeting June 14, held at 55 Hanson Place, addressed multiple issues, including delays in the project, a new detente with project neighbors,concerns about traffic congestion, upcoming sewer work and demolitions, and an explanation of how high winds caused debris to fly off the under-construction 38 Sixth Avenue building. I'll have more coverage.
Security issues came up several times at the meeting.
Wayne Bailey, a resident who regularly takes photos and videos (that I often use) of construction/operations issues that impact residents, asked representatives of Tishman Construction if the security guard at the sites they're building works for them.
After Tishman Senior VP Eric Reid said yes, Bailey asked why a guard told him not to shoot video of the site, even though he was on a public street.

"I will address it with principals for that security firm," Reid said.
Forest City Ratner executive Ashley Cotton, the …

Atlantic Yards/Pacific Park graphic: what's built/what might be coming + FAQ (post-dated pinned post)

This graphic, posted in February 2018, is post-dated to stay at the top of the blog. It will be updated as announced configurations change and buildings launch. Note the unbuilt B1 and the proposed--but not yet approved--shift in bulk to the unbuilt Site 5.

The August 2014 tentative configurations proposed by developer Greenland Forest City Partners will change. The project is already well behind that tentative timetable.

How many people are expected?

Atlantic Yards/Pacific Park has a projected 6,430 apartments housing 2.1 persons per unit (as per Chapter 4 of the 2006 Final Environmental Impact Statement), which would mean 13,503 new residents, with 1,890 among them in low-income affordable rentals, and 2,835 in moderate- and middle-income affordable rentals.

That leaves 8,778 people in market-rate rentals and condos, though let's call it 8,358 after subtracting 420 who may live in 200 promised below-market condos. So that's 5,145 in below-market units, though many of them won…

The passing of David Sheets, Dean Street renter, former Freddy's bartender, eminent domain plaintiff, and singular personality

David Sheets, longtime Dean Street renter, Freddy's bartender, eminent domain plaintiff, and singular personality, died 1/17/18 in HCA Greenview Hospital in Bowling Green, KY. He was 56.

There are obituary notices in the Bowling Green Daily News and the Wichita Eagle, which state:
He was born in Wichita, KS where he attended public Schools and Wichita State University. He lived for many years in Brooklyn, NY, and was employed as a legal assistant. David's hobby was cartography and had an avid interest in Mass Transit Systems of the world. David was predeceased by his father, Kenneth E. Sheets. He is survived by his mother, Wilma Smith, step-brother, Billy Ray Smith and his wife, Jane all of Bowling Green; step-sister, Ellen Smith Alexander and her husband, Jerry of Bella Vista, AR; several cousins and step-nieces and step-nephews also survive. Memorial Services will be on Monday, January 22, 2018 at 1:00 pm with visitation from 10:00 am to 1:00 pm Monday at Johnson-Vaughn-Phe…

Some skepticism on Belmont hockey deal: lease value seems far below Aqueduct racino; unclear (but large?) cost for LIRR service

As I wrote for The Bridge 12/20/1, The Islanders Say Bye to Brooklyn, But Where Next?, the press conference announcing a new arena at Belmont Park for the New York Islanders was "long on pomp... but short on specifics."

Notably, a lease valued at $40 million "upfront to lease up to 43 acres over 49 years... seems like a good deal on rent for the state-controlled property." Also, the Long Island Rail Road will expand service to Belmont.

That indicates public support for an arena widely described as "privately financed," but how much? We don't know yet, but some more details--or at least questions--have emerged.

An Aqueduct comparable?

Well, we don't know what the other bid was, and there aren't exactly parcels that large offering direct comparables.

But consider: Genting New York LLC in September 2010 was granted a franchise to operate a video lottery terminal under a 30 year lease on 67 acres at Aqueduct Park (as noted by Gov. Andrew Cuomo).


Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…