FOR IMMEDIATE RELEASE
August 31, 2005
MAYOR BLOOMBERG AND ASSEMBLY SPEAKER SILVER JOIN GOVERNOR PATAKI FOR SIGNING OF AGGRESSIVE ECONOMIC DEVELOPMENT PACKAGE TO ATTRACT AND RETAIN BUSINESSES TO LOWER MANHATTAN
New Legislation Creates Tax Incentives for Small and Large Businesses Moving to Lower Manhattan or Making Long-Term Commitments
Integrated Technology Communications Firm Horn Group Moves Headquarters from Midtown and Expands Downtown at 55 Broad Street, Making Use of Incentives
Mayor Michael R. Bloomberg, Assembly Speaker Sheldon Silver and Senator Martin J. Golden today joined Governor George E. Pataki as he signed legislation into law to provide significant tax incentives to attract new businesses and encourage existing businesses to recommit their operations and employees in Lower Manhattan, promoting economic growth downtown as the area continues to recover from the impact of September 11, 2001. The incentives are already producing tangible results: the Horn Group, an integrated technology communications firm, has committed to lease over 10,000 square feet of office space at 55 Broad Street, the heart of Downtown's Technology District, and expects to triple their number of employees in the next two years.
"Over the last four years, our Administration has created and implemented an overarching vision for Lower Manhattan's future and we've brought downtown back from the effects of September 11th," said Mayor Bloomberg. "We've established priorities and along with our partners in State government, we're making investments that are attracting new businesses downtown and ensuring that the area will have a great future. Today, we are taking downtown's revival to the next level with a new incentives package that will ensure that businesses at the World Trade Center site and in the surrounding area continue to grow briskly. These measures demonstrate our Administration's commitment to ensure that Lower Manhattan remains the world financial leader, while also attracting businesses like the Horn Group to an increasingly lively and vibrant downtown area."
"Lower Manhattan has a proud history as the birthplace of New York City and the financial capital of the world and has long-served as an economic catalyst for the rest of New York City and New York State generating hundreds of millions of dollars annually in tax revenue," said Governor Pataki. "This legislation will revitalize Lower Manhattan through tax and other benefits that will pay for themselves many times over as Lower Manhattan regains its prominence, expands its tax base, and attracts and retains new business and employees. This new incentive package will build on our ongoing efforts to promote economic growth, develop new business opportunities, create jobs, and make the new Lower Manhattan stronger than ever."
"This 'Marshall Plan for Lower Manhattan' will restore this community to its rightful place as the financial and business capital of the world and breathe new life into a historic place that has contributed so much to our nation's growth and prosperity," said Assembly Speaker Silver. "Rebuilding Lower Manhattan transcends partisanship and political legacy and rises to the level of moral obligation."
"This bill will provide the necessary incentives for businesses to develop and grow in Lower Manhattan, one of the largest business districts in the country and a critical economic engine for the state and nation," said Senate Majority Leader Joseph L. Bruno. "These benefits will renew confidence in the city of New York, strengthen our long term commitment to revitalize our economy and recapture some of the 100,000 jobs that were lost on September, 11, 2001."
"I am pleased to be a supporter of this important legislation," said State Senator Martin J. Golden. "A vibrant New York City demands a healthy downtown economy. This bill, through tax incentives, provides a solid boost to our efforts to stimulate Lower Manhattan development."
The legislation permanently eliminates the commercial rent tax at the World Trade Center area, and adds a five-year exemption from commercial rent taxes for new and renewed leases for property located in the New York City Liberty Zone but outside the World Trade Center area. Additionally, it permanently eliminates the tax for all retail tenants in the area generally south of Murray Street between South and West Streets.
The legislation also provides State and local sales and compensating use tax exemptions for purchases related to the outfitting, furnishing or equipping of commercial office space in leased premises of buildings at the World Trade Center site and in Battery Park City when tenants make at least a ten-year commitment. Other areas in Lower Manhattan will have a similar exemption, with certain restrictions. The legislation also provides for reduced rental rates via PILOT (payment in lieu of taxes) abatements of $3.80/sq. ft. for tenants that occupy the first 750,000 square feet of 7 World Trade Center and $5/sq. ft. for the first 750,000 square feet of the Freedom Tower and the World Trade Center site.
The legislation also calls for improvements to the Lower Manhattan Relocation Employment Assistance Program, which will offer refundable tax credits up to $3,000 per employees for 12 years to businesses, with a presence in Manhattan, that relocate employees to Lower Manhattan from outside of New York City. These tax credits can be used to reduce New York City taxes such as the general corporation tax, banking corporation tax, unincorporated business tax, or the utility tax.
Horn Group Founder & President Sabrina Horn said, "The Downtown Incentive Bill helps the Horn Group, and many other entrepreneurial companies like us, fuel our ongoing growth plans. We view our move downtown as a symbol of the ongoing renaissance taking place. We're proud to be an integral part of the ongoing tech movement in Manhattan and 55 Broad Street represents the heart of this ongoing trend."
Horn Group, Inc. provides integrated communications services to technology companies from start-ups to large corporations. The Horn Group is leasing the entire 29th floor of 55 Broad Street for its current 15 employees. Horn Group expects to triple its workforce in the next two years. 55 Broad Street, owned by the Rudin Management Company, is the original home of New York's technology community. Association for a Better New York Chairman William C. Rudin said, "The newly adopted incentives program for Lower Manhattan is an essential component to the ongoing revitalization of Downtown. The plan will further encourage potential and current tenants to do business here and spur much-needed economic activity. As a property owner and Lower Manhattan supporter, I was proud to stand alongside Governor Pataki in 1995 when he signed the innovative Downtown Plan. Today, ten years later, I am just as proud to be back here at 55 Broad Street at this bill signing to support tenants both large and small, who continue to make Lower Manhattan the Financial Capital of the World."
Real Estate Board of New York President Steven Spinola said, "The signing of the Lower Manhattan incentive legislation, coupled with the infrastructure commitments from the City and State, will create a positive environment for tenant commitments in the Downtown area. I applaud the efforts of Governor George Pataki, Speaker Sheldon Silver, Majority Leader Joe Bruno and Mayor Michael Bloomberg for ensuring that the revitalization of Lower Manhattan remains one of New York State's top priorities."
NYC Partnership President & CEO Kathy Wylde said, "These new incentives are just the catalyst that is needed to accelerate the restoration of the Downtown as a world-class central business district. Although the entire city suffered from the devastating attacks of September 11th, Lower Manhattan bore 70% of the job losses and has not yet fully recovered. Transportation and critical infrastructure investments are the long-term solution, but the city and the downtown community must act now to ensure success and this new legislation is essential."
Downtown Alliance Chairman Robert Douglass said "We applaud Governor Pataki, Mayor Bloomberg, Assembly Speaker Silver and Senate Majority Leader Bruno for making these incentives a top priority. The continued commitment by our community leaders will help to ensure that Lower Manhattan remains a center of commerce and a premier business district."
Edward Skyler/Jennifer Falk (212) 788-2958
Joanna Rose (Governor) (212) 681-4640
Christopher Faust (Horn Group) (212) 931-5207