IBO questions Cooper Union’s leases to private developers

June 05, 2013 03:00PM

Cooper Union, the Downtown university that recently announced it would start charging students tuition for the first time, received two tax breaks for real estate it has leased to Minskoff Equities and the Related Companies — raising eyebrows at the Independent Budget Office, Crain’s reported. The parcels are located at 51 Astor Place and 22-36 Astor Place, respectively.

The lot at 22-36 Astor Place was formerly a parking lot that the school leased to Related for a 21-story luxury residential build that opened in 2005.

Under the agreement, Cooper Union was exempt from taxes until the 2011 fiscal year. The IBO predicted the tax break could cost the city $2.1 million in tax revenue in this year alone.

The cost of The 51 Astor Place is not yet known, since the property has not opened yet. The school will occupy one floor of Minskoff’s 13-story building.

“The other universities don’t get to do these kinds of commercial deals,” Doug Turetsky, IBO chief of staff, told Crain’s.

Cooper Union also owns the land under the Chrysler Building, for which it doesn’t pay tax, in order to partly fund its budget. The city will lose $20 million in tax revenue from this deal.

“I don’t know if there is anything the city can do about these deals now that there is no more totally free tuition,” Turetsky told Crain’s. [Crain’s] –Zachary Kussin