A tax credit viewed as crucial to saving Downtown was renewed, and a new incentive to lure companies to the Big Apple from out of state established for the first time, in a down-to-the wire vote by the state Senate late Wednesday.
The cliffhanger extension of the state’s Relocation Employment Assistance Programs, known as REAP and LM-REAP, came despite opposition by lawmakers who regarded them as needless giveaways by the city.
The Post on Monday predicted the favorable votes after rejection seemed certain. “Downtown might be finished without REAP,” one real estate executive told The Post.
The original REAP, set up in the 1980s to stem an exodus of companies to New Jersey, provides annual tax credits of up to $3,000 per employee to companies that relocate from out of the city or from parts of Manhattan to designated areas in the outer boroughs.
LM-REAP, begun in 2003, gave the same relief specifically to companies moving to Downtown Manhattan in the wake of 9/11. It was credited with supporting 16,000 city jobs and helping to lease hundreds of thousands of square feet of office space in the troubled market.
Although landlords clammed up when asked to identify REAP tenants, sources said they were widely spread across the area, from the World Trade Center to antiquated prewar buildings
Proponents of the programs said that if LM-REAP was allowed to expire on June 30, tens of thousands of jobs and the future of scores of Lower Manhattan office buildings would be at risk.
The measures were left out of the state’s budget announced in April and appeared doomed as lawmakers were set to break for the summer.
Both measures sailed through the Assembly 143-4, but their fate remained up to the Senate.
Although the renewals were backed by Gov. Kathy Hochul, the Downtown Alliance business advocacy organization and by US representatives who warned, “Now is not the time to end LM-REAP,” deputy majority leader Michael Gianaris argued that REAP cost the city too much in foregone taxes — $33 million by 2033 — to justify the economic benefits the additional jobs would bring.
But, “There was a full-court press on Gianaris,” a source told The Post. “From the real estate industry, from federal lawmakers and from Mayor Adams, who had a good talk with Gianaris this week.”
The Senate vote was a narrower 41-18, Gianaris voting yes.
The lawmakers also approved a new program called Relocation Employment Assistance for Employees, or RACE, which offers a $10,000 annual tax credit per employee to companies that move to anywhere in the city from outside New York State.
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
