Downtown becoming tax haven for tenants

GroupM's potential 3 WTC lease could come with millions in savings
August 26, 2013 10:40AM

Tenants who move Downtown can avail themselves of generous tax breaks and incentives.

Droga5, a trendy advertising firm that recently took 92,000 square feet over five floors at 120 Wall Street, received $800,000 from the state’s World Trade Center Job Creation and Retention Program (JCRP) to be paid out over the life of its 15-year lease. The company will also be eligible, through a tax reduction program available Downtown, for up to $2.50 per square foot off its rent, which could be worth $225,000 annually, Crain’s said. In exchange, the company will add 154 jobs by the end of 2017.

Tax breaks are likely to cost the city $224.9 million through 2015, according to a report by the Independent Budget Office seen by Crain’s. In addition, $252 million in JCRP funds have been awarded so far, with another $43 million to come.

Such benefits have been par for the course in Lower Manhattan post 9/11, but are coming under greater scrutiny as the area’s popularity grows, according to Crain’s.

Advertising giant GroupM, which is in talks to take about half a million square feet at 3 World Trade Center, could get millions of dollars in breaks. [Crain’s]  – Hiten Samtani