“Zombie” building tax break to cost NYC $650M

April 15, 2013 03:00PM

Even tax breaks have an afterlife. The owners of some 7,000 buildings are still receiving a tax abatement under a city program that expired five years ago, the New York World reported. Known as the Industrial and Commercial Incentive Program, the tax break will cost the city $650 million this year alone.

For example, JPMorgan Chase’s Park Avenue headquarters will get a tax break of $8.2 million this year. Forest City Ratner’s co-owned East River Plaza in East Harlem received two breaks amounting to $8.1 million. The former Toy Building at 1097 Broadway in the Flatiron District is slated to get a break of nearly $5 million.

The program, which dates back to the late 1970s and early 1980s, was aimed at encouraging businesses to remain in New York City. Companies that applied for the tax break before the program expired in 2008 were eligible for a 25-year abatement, according to the New York World.

The cost to the city has largely increased since the program ended — peaking last year at $682 million, up from $512 million in 2008 — because landlords have improved their properties, which was a condition of receiving the tax break.

The city Department of Finance, which oversees the program, did not respond to the New York World’s request for comment. [New York World]Zachary Kussin