Commercial Revitalization Program (CRP)

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	Commercial Revitalization Program (CRP) The Commercial Revitalization Program was designed to increase tenant occupancy in office and retail space in lower Manhattan and in certain other areas of the City, and to reduce building obsolescence by encouraging investment in older commercial space or conversion to residential use. The CRP provides tax incentives through a property tax abatement and Commercial Rent Tax special reduction for nonresidential or mixed-use premises built before 1975 and located in designated abatement zones. Applicants are also required to make certain minimum expenditures to improve the eligible premises. Eligibility New Provisions for Fulton Street Hub Tenants Commercial Rent Tax (CRT) Special Reduction Requirements Level of Benefit - Including New Summary of Benefits Forms Deadlines Contact Us Frequently Asked Questions Eligibility Location To qualify for the CRP abatement benefit, premises must be located in an eligible building in the Title 4 abatement zone in lower Manhattan. This abatement zone is generally defined as the area bounded by Murray Street and Frankfort Street on the north, South Street on the east, Battery Place on the south, and West Street on the west. Lease Term The required lease term is based upon the number of persons employed in the premises sixty days after the rent commencement date. If 125 or fewer people will be employed in the space, the minimum required lease term is 3-5 years. If more than 125 people will be employed, the minimum required lease term is 10 years. The lease must be a "new," "renewal," or "expansion" lease. Sublets are not eligible for benefits. If a space that has benefits is later sublet, benefits will cease. Required Expenditures Expenditure for a 10-year lease is at least $10 per square foot (for renewal leases) or $35 per square foot (for new leases and where additional space is occupied under a renewal lease where the required lease term is already $35 per square foot). Type of Use The premises must be used for office or retail stores. Lease Commencement Date The lease must commence prior to March 31, 2010. [back to top] New Provisions for Fulton Street Hub Tenants A new law, Chapter 424 of the 2006 Laws of the State of New York, provides benefits for tenants in the Fulton Street Hub who previously received a certificate of abatement pursuant to the CRP. Those tenants whose leases have been terminated as a result of a taking by eminent domain to make way for the new Fulton Street Transportation Hub are now eligible to receive a second certificate of abatement if they meet the following conditions: Relocate to eligible premises within the Lower Manhattan abatement zone; Relocate within eighteen months after termination of the first lease, or eighteen months after July 26, 2006 (the effective date of the law), whichever is later; and Meet all other CRP eligibility requirements, including expenditure requirements. The Department of Finance will waive the $500 CRP application fee for Fulton Street Hub businesses that reapply for benefits. [back to top] Commercial Rent Tax (CRT) Special Reduction This benefit is a special reduction that is subtracted from the amount of rent that would otherwise be subject to the Commercial Rent Tax. Tenants who qualify for the CRP abatement automatically qualify for the CRT special reduction, however, they must submit the required supporting documents listed below. Tenants in non-government-owned buildings must apply for the CRP tax abatement to receive the CRT special reduction. Tenants who lease space in buildings that are owned by the government may qualify for the CRT special reduction without applying for CRP. If they are not applying for CRP, they do not have to meet CRP expenditure and owner requirements. Non-profit companies and businesses whose annual lease is under $200,000 do not pay commercial rent tax (also known as "occupancy tax") and, therefore, are not eligible for the CRT special reduction. The special reduction is an optional incentive program that requires both the tenant and the landlord to apply jointly. If either of these parties does not apply, the other will not receive the special reduction benefit. It is up to the parties to determine which will pay the $500 CRP application filing fee, if applicable. CRT Special Reduction for Lower Manhattan The program above has been expanded for certain leases that begin on or after July 1, 2005, and a provision for proration has been added. The expanded program includes buildings south of Canal Street that received their Certificate of Occupancy after 1975. The expanded program provides a base rent reduction for the first five years of the lease. The expanded program is available for leases (but not subleases) having a term of at least five years, beginning between July 1, 2005 and June 30, 2009. [back to top] Requirements Property Tax Abatement A completed CRP 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 CRP benefits. After CRP 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: CRP, 66 John Street - 13th floor, New York, NY 10038 so that Finance receives it by the June 30th deadline. CRT Special Reduction Either a Certificate of Abatement from Property Tax or a Certificate of Eligibility for Commercial Rent Tax Benefits (See Eligibility) and A Commercial Rent Tax Special Reduction Compliance Certification Form. [back to top] Level of Benefit The CRP property tax benefit is either a five- or three-year abatement, depending on the lease term. Qualifying leases with a minimum term of three years but less than five years are eligible for a three-year tax abatement. The tax abatement in the initial year 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 and one-third, respectively, of the initial tax abatement. For leases with a term of five years or more, the abatement lasts for five years. The tax abatement in the first three years is equal to the actual property tax liability per square foot or $2.50 per square foot, whichever is less. In years four and five, the abatement is equal to two-thirds and one-third, respectively, of the initial tax abatement. The 36- or 60-month Commercial Rent Tax Special Reduction Program begins with a special reduction that is equal to the base rent for the first twelve months (called the base year). With the 60-month benefit, the second and third year benefits are equal to the lesser of the initial year's special reduction and the base rent for the year in question. The last 2 years of benefits under both the 36 and 60-month programs are generally equal to two-thirds and one-thirds respectively of the lesser of the initial year's special reduction and the base rent for the year in question. 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 [back to top] Forms Lower Manhattan Commercial Revitalization Program Application (includes Proofs of Employment and Expenditures forms) Download Application (76.6k) Certificate of Continuing Eligibility for Real Estate Tax Abatement and Commercial Rent Tax Special Reduction Download Form (23k) [back to top] Deadlines By law, CRP applications must be filed within 180 days of the lease commencement. Applications received after the 180th day will be denied. For new leases, evidence regarding expenditures and the number of employees working in the premises must be submitted within 60 days of rent commencement. For renewal leases, employee proof must be submitted within 60 days; expenditure proof must be submitted within 14 months of lease commencement. [back to top] Contact Us For program policy and eligibility questions, contact Email Commercial Revitalization Program (CRP) For application status, contact Email Commercial Revitalization Program (CRP) [back to top] Frequently Asked Questions Was this program created in wake of 9/11? What specific types of "expenditures" can be attributed to the required threshold? What common area investments can be claimed? What percentage of an overall building's common area investments can an individual tenant claim? How far back can the investments be claimed? How much do I have to spend per square foot to qualify? Is the 180-day deadline flexible? What is the eligible area in Lower Manhattan? When does the 180-day deadline start ticking? Do subleases count? Are subtenants eligible for benefits? Are my benefits affected if I sublease space? If a lease has an "out-clause" (e.g. after 1 year), can benefits be claimed? Why does it have to be a pre-1975 building? Does the employee count include total company employment or solely the number of employees at that location? Why does the number of employees matter if the abatement is based upon square footage? How much time do I have to show you proof of expenditures? How many times a year is real estate tax collected in the abatement area? How will the landlord pass on the savings (monthly, quarterly, etc.)? How will I know how much the landlord is supposed to be passing on? How long is the abatement and what happens after the benefit runs out? If I don't qualify will I get my application fee refunded? How long does this program run? Is this program related to the Lower Manhattan Energy program (LMEP) or the Industrial and Commercial Incentive Program (ICIP)? Was this program created in wake of 9/11? No. This program is unrelated to the events of September 11 and has been in existence since April 1, 1995. What specific types of "expenditures" can be attributed to the required threshold? Eligible expenditures must be permanent, capital improvements to real property with a useful life of at least three years. This includes construction work such as electrical, plumbing, HVAC, drywall partition and associated painting, building-wide cabling/wiring, elevator and lobby work. Architectural and engineering costs to support such capital improvements are also eligible. It does NOT include expenditures for personal property like furniture including cubicles, computers and associated cabling/wiring, shelving or storage units. Expenditures for ordinary repairs, maintenance, replacements or decorations are also not eligible. What common area investments can be claimed? What percentage of an overall building's common area investments can an individual tenant claim? How far back can the investments be claimed? All common area expenditures that meet the definition of eligible expenditures can be claimed. There is no limit on the percentage of common area expenditures that may be applied to an individual tenant. However, a specific common area expenditure may not be applied to more than one tenant. Expenditures on common areas can be claimed no earlier than 3 years before the lease commencement date. How much do I have to spend per square foot to qualify? Expenditures are a minimum of five dollars per square foot for all premises requiring a lease term of at least three or five years. Expenditures of at least ten dollars per square foot are required for renewal space where there is a required lease term of ten years. Expenditures of thirty-five dollars per square foot are required for new leases and where additional space is occupied under a renewal lease where the required lease term is thirty-five dollars per square foot. Is the 180-day deadline flexible? No, by State Law it is not within the Department's discretion to waive the statutory filing deadline even if there are unique or extraordinary circumstances that caused the filing delay. The legislation governing the program does not provide for any extension to the filing deadline. Section 499-d of the NYS Real Property Tax Law explicitly states, "[N]o abatement pursuant to this title shall be granted unless the applicant files..., within one hundred eighty days following the lease commencement date..." What is the eligible area in Lower Manhattan? The eligible area in Lower Manhattan, called the abatement zone, is the area bounded by Murray Street and Frankfort Street on the north, South Street on the east, Battery Place on the south and West Street on the west. Please note that this area is different than that for Liberty Zone benefits. When does the 180-day deadline start ticking? The first day of the 180-day filing period is the date of lease commencement. This is the date set forth in the lease on which the term of the lease commences. Do subleases count? Are subtenants eligible for benefits? No. Premises that are subleased and / or occupied by a subtenant (or similar entity such as a licensee) are not eligible for benefits. Are my benefits affected if I sublease space? Yes. Benefits will cease as of the date of the sublease. The applicant must inform Finance within thirty days of a change in the use of space. If a lease has an "out-clause" (e.g. after 1 year), can benefits be claimed? An eligible lease may not have an early-out clause by either the landlord or tenant prior to the minimum lease term required for program eligibility. The only exceptions are when: the eligible premises are damaged or destroyed by fire or casualty; the eligible premises are rendered unusable for any reason not attributable to any act or failure of either tenant or landlord; the eligible premises are acquired by eminent domain; and the tenant or landlord is in default of any of such party's obligations under the lease. Why does it have to be a pre-1975 building? The legislation governing the program defines an eligible building as a non-residential or mixed-use building located in the abatement zone that received its initial certificate of occupancy or initial temporary certificate of occupancy prior to January 1, 1975. Where an otherwise eligible building has increased its square footage subsequent to January 1, 1975 such additional space is not eligible for benefits pursuant to this program. Does the employee count include total company employment or solely the number of employees at that location? Employee requirements pertain solely to the application for the eligible premises in an eligible building. In other words, only those employees who work at that location. Why does the number of employees matter if the abatement is based upon square footage? The number of employees is used to define the minimum lease term, which in turn impacts the program's expenditure requirement. For example, if you have more than 125 employees you are required to have a 10-year lease. For example, if you have fewer than 125 employees, you are required to have a 3-year lease for a 3-year benefit, or a 5-year lease for a 5-year benefit. The square footage is used only to define the total amount of the benefit by multiplying the adjusted square footage by the tax liability per square foot. How much time do I have to show you proof of expenditures? For new and expansion leases, you are required to submit proof no later than sixty days following rent commencement (the date set forth in the lease on which the obligation to pay basic fixed rent commences). For renewal leases, you are required to submit proof no later than fourteen months following lease commencement. How many times a year is property tax collected in the abatement area? Property tax is billed semi-annually except where a parcel's assessed valuation (value) is less than $80,000; then it is billed quarterly. How will the landlord pass on the savings (monthly, quarterly, etc.)? The legislation does not dictate the manner in which the benefit must be passed from the landlord to the tenant. This is considered a business matter to be determined by the landlord and tenant. How will I know how much the landlord is supposed to be passing on? Benefits are issued as a credit on the landlord's tax bill. A summary of benefits report is mailed twice a year to both landlord and the tenant. Each report covers a six-month period. How long is the abatement and what happens after the benefit runs out? Abatement benefits are a one-time benefit of either three or five years. As noted above, the length of the benefit is dependent on the number of employees and the term of the lease. Please note that a tenant may only receive one benefit pursuant to this program even where the tenant moves to a different building. The only exception is where the tenant takes additional space and such new benefit would be limited to the additional space. If I don't qualify will I get my application fee refunded? No, the application fee is non-refundable. How long does this program run? The program is due to sunset March 31, 2010. This means that a lease must commence by this date and an application must be filed by September 27, 2010 or within 180 days of lease commencement whichever is earlier. Is this program related to the Lower Manhattan Energy program (LMEP) or the Industrial and Commercial Incentive Program (ICIP)? No. This program operates independently from LMEP and ICIP although applicants make take advantage of all these programs that provide a comprehensive package to attract and/or retain business in the lower Manhattan area. [back to top]

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