Commercial Expansion Program (CEP)

The Commercial Expansion Program (CEP) provides property tax abatements for new, renewal, and expansion leases for commercial offices and industrial spaces to increase tenant occupancy in a designated abatement zone.  The abatement is passed through to the tenant as a reduction in rent.

CEP Industrial and Manufacturing Provisions
Level of Benefits - Including New Summary of Benefits

Eligibility
The lease must begin between July 1, 2000 and June 30, 2010 and cover a period of at least 3 years.  If more than 125 people will be employed, a 10-year lease is required. The premises must be in a nonresidential or mixed-use building that was built before January 1, 1999 in the designated abatement zone.  Premises occupied or used for retail, hotel, or residential purposes are not eligible.

Abatement Zone
The zone is defined as any area that is zoned C4, C5, C6, M1, M2, or M3 in Manhattan north of 96th Street or in any area in the other four boroughs.

The building must have an aggregate floor area of 25,000 square feet or more, and improvements to the premises are required.  The extent of required improvements varies by the length of the lease and the number of employees.  If more than 125 people will be employed, the minimum improvements are required.

Requirements
A completed Commercial Expansion Program application with Proof of Expenditure and Proof of Employment forms, and a $500 application fee (in the form of a money order or certified check) must be submitted within 180 days of the lease commencement date.  This is a statutorily required period. Applications received after the 180th day will result in a denial of CEP benefits.

New and Expansion Leases
Applicants must provide evidence regarding expenditures and the number of employees who are working in the eligible premises within 60 days of rent commencement.

Renewal Leases
If the application is for a renewal lease, applications must still provide employee proof within 60 days of rent commencement, but expenditure proof may be submitted within fourteen months of lease commencement.

Common area expenditures are only acceptable if work begins and expenditures are made between July 1, 2000 and December 31, 2010, provided that expenditures on improvements to the common areas of an eligible building that were made prior to three years before the lease commencement date are not included.

After CEP benefits have been granted, each tenant must file a Certificate of Continuing Eligibility between June 1st and June 30th of each year that the abatement is in effect.  This form will no longer be mailed to tenants.  Each tenant must download and print a Certificate of Continuing Eligibility from this web page, complete it, and mail it to NYC Department of Finance, Attn: CEP, 66 John Street - 13th floor, New York, NY 10038 so that Finance receives it by the June 30th deadline.

Level of Benefit
The CEP benefit is either a three- or five-year abatement, depending on the lease term.  Qualifying leases with a minimum term of three years but less than five years are eligible for the three-year abatement.

Commercial property owners will receive a final abatement benefit mailing in December 2007. The information included in the mailing will only be available online. Please read the mailing carefully as it will include the Application Number(s) that applies to your/your tenant(s) lease abatement benefits granted under  both the Lower Manhattan Commercial Revitalization and Expansion Programs.  Your application number is essential to accessing  information online. Click on the link below and enter your borough, block and lot numbers and then click on CRP/CEP Summary of Benefits.
 Summary of Benefits Lookup 

Three-Year Leases
In the initial year, the tax abatement is equal to the actual property tax liability per square foot, or $2.50 per square foot, whichever is less.  In years two and three, the abatement benefit is equal to two-thirds (year two) and one-third (year three) of the initial abatement.

Leases of Five or More Years
The abatement lasts for five years.  In the initial year, the tax abatement is equal to the actual property tax liability per square foot, or $2.50 per square foot, which is less.  In years four and five, the abatement is equal to two-thirds (year four) and one-third (year 5) of the initial abatement.

Forms

Commercial and Industrial/Manufacturing Expansion Programs Application
(includes Proofs of Employment and Expenditures forms)
Download Form (77.1k)

Certificate of Continuing Eligibility for Real Estate Tax Abatement and Commercial Rent Tax Special Reduction
Download Form (23k)

Deadline
By law, CEP applications must be filed within 180 days of the lease commencement. Applications received after the 180th day will be denied.

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