Controversial tax credit to save Downtown Manhattan on verge of getting renewed: sources

The push by real estate dealmakers for Albany to renew a controversial tax-credit critical to saving Downtown Manhattan turned into a real 'cliffhanger' – but appears poised for approval, The Post has learned.
The citywide Relocation Employment Assistance Program and a similar one specifically for Lower Manhattan, known as LM-REAP, provide 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 or to Downtown Manhattan.
Tens of thousands of jobs and the future of scores of Lower Manhattan office buildings would be at risk if the little-known REAP programs were not renewed when they expire on June 30, according to landlords and business advocates.
3 Tens of thousands of jobs and the future of scores of Lower Manhattan office buildings would be at risk if the little-known REAP programs were not renewed when they expire on June 30, according to landlords and business advocates.
Christopher Sadowski
The measures were left out of the state's budget plan announced in April and appeared doomed as lawmakers in the state Senate and Assembly were set to escape for their summer break.
But there was movement on an extension over the weekend, a knowledgeable Albany source told The Post on Monday.
'It finally got key approvals in the Assembly, and it's looking good tomorrow in the Senate, which was where the hangup was,' the source said.
Michael Gianaris, the State Senate Deputy Majority Leader from Queens, among others, had argued that REAP cost the city too much in foregone taxes — up to $33 million by 2033, according to the Department of Finance — to justify the economic benefits the additional jobs would bring.
3 Michael Gianaris, the State Senate Deputy Majority Leader from Queens, had argued that REAP cost the city too much in foregone taxes to justify the economic benefits the additional jobs would bring.
Hans Pennink
But renewing the program 'is critical to COVID recovery, preserving affordable office space and promoting job growth in small and medium-size businesses,' argued a rep for the Alliance for Downtown.
Supporters say LM-REAP costs the city a negligible $5 million a year — a pittance weighed against the tax benefits it helps generate in property and incomes taxes, although those figures are harder to quantify.
REAP began in 1987 to stem an exodus of tenants to New Jersey. The Lower Manhattan plan, launched in 2003, is credited with supporting 16,000 city jobs and helping to lease hundreds of thousands of square feet of office space in a market that's had more downs than ups since 9/11.
One source predicted a fresh wave of flight to New Jersey if REAP is allowed to die.
'They're actively recruiting New York businesses with programs offering up to $8,000 per job and $250,000 relocation grants. It's clear that if New York steps back, New Jersey will step in,' the source said.
The REAP renewals, as well as creation of a new program called the Relocation Assistance Credit for Employees (RACE), are backed by Gov. Kathy Hochul.
But fearing that the measures would be allowed to die, local congressional representatives threw their voices into the fray.
3 The REAP renewals are backed by Gov. Kathy Hochul.
Lev Radin/Shutterstock
Gregory Meeks, Grace Meng, Ritchie Torres, Thomas Suozzi and Adriano Espaillat wrote to State Senate Majority Leader Andrea Stweart-Cousins and Assembly Speaker Carl Heastie that with 'record high office vacancies downtown, 'Now is not the time to end LM-REAP.'
The REAP programs have also brought jobs to Dumbo, MetroTech and the Navy Yard in Brooklyn and to Long Island City in Queens.
But the heat's mostly on Lower Manhattan, where more than 20% of nearly 90 million square feet of offices in the nation's second-largest commercial district stand vacant — and it might get worse.
'I believe the numbers being cited for current and future vacancies are too low, especially on Water Street,' said one Downtown executive who asked for anonymity told The Post. 'The REAP program is essential to keeping downtown competitive.'

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Miami Herald

23 minutes ago

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Donald Trump's SNAP Benefit Cut Plans Suffer Blow

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Some Senate Republicans want to achieve at least $2 trillion in spending cuts over the next decade, but Johnson has remained firm in his belief that the bill should go deeper and return to pre-COVID-19 pandemic spending levels. Others, including Sens. Susan Collins, R-Maine, Josh Hawley, R-Mo., and Lisa Murkowski, R-Alaska, are upset with tweaks to Medicaid, and the impact those changes could have on rural hospitals and working people on the healthcare program's benefit rolls. 'IT JUST BAFFLES ME': SENATE REPUBLICANS SOUND ALARM OVER MEDICAID CHANGES, SPENDING IN TRUMP MEGABILL Thune has to strike a precarious balancing act to sate the concerns of his conference, given that he can only afford to lose three votes. It's a reality he acknowledged and described as trying to find "the sweet spot" where he can advance the bill back to the House. He's been meeting with the factions individually, communicating with the White House and working to "make sure everybody's rolling in the same direction." "Everybody has different views about how to do that, but in the end, it's cobbling together the necessary 51 votes, so we're working with anybody who is offering feedback," he said. Collins and others are working on the side to create a provider relief fund that could offer a salve to the lingering issues about the crackdown on the Medicaid provider rate tax in the bill. The Senate Finance Committee went further than the House's freeze of the provider tax rate, or the amount that state Medicaid programs pay to healthcare providers on behalf of Medicaid beneficiaries, for non-Affordable Care Act expansion states, and included a provision that lowers the rate in expansion states annually until it hits 3.5%. 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Meanwhile, as negotiations continue behind the scenes on ways to address issues among Senate Republicans, the Senate Parliamentarian is currently chunking through each section of the greater "big, beautiful bill." The parliamentarian's role is to determine whether policies within each section of the bill comport with the Byrd Rule, which is the arcane set of parameters that govern the budget reconciliation process. Thune has made clear that he would not overrule that parliamentarian on Trump's megabill, and re-upped that position once more. The reconciliation process gives either party in power the opportunity to pass legislation on party lines and skirt the Senate filibuster, but it has to adhere to the Byrd Rule's requirements that policy deals with spending and revenue. CLICK HERE TO GET THE FOX NEWS APP However, he countered that Senate Republicans planned to take a page from Senate Minority Leader Chuck Schumer, D-N.Y., when Democrats rammed former President Joe Biden's agenda through Congress. "The Democrats with the [Inflation Reduction Act] and [American Rescue Plan Act], for that matter, they dramatically expanded the scope of reconciliation and what's eligible for consideration," he said. "So, we've used that template, and we're pushing as hard as we can to make sure that it allows us to accomplish our agenda, or at least as much of our agenda as possible, and fit within the parameters of what's allowed," he continued. Print Close URL