Why do hotels keep getting this city tax break meant to protect manufacturers?

A tax break designed to help manufacturers stay afloat in the city may actually have aided in pushing them out.

The city’s Industrial and Commercial Abatement Program was put in place in the 1970s to encourage developers to invest in their real estate and to bolster manufacturers. But the program has instead fostered the growth of hotels in industrial areas, like Gowanus, Williamsburg and Sunset Park, Crain’s reported. All Year Management’s William Vale Hotel, for instance, got a $1.7 million discount on its $1.8 million annual tax bill, according to the city’s Independent Budget Office. The Wythe Hotel and the Williamsburg Hotel have similarly benefited from the tax break.

“ICAP is a blunt instrument and unquestionably results in unintended or unforeseen consequences,” said Seth Pinsky, RXR Realty executive vice president and a former president of the city Economic Development Corp., who helped reform the program in 2008. “It would surely be in the interest of the city to look closely at ICAP again to ensure that it aligns with the needs and policy goals of today’s New York.”

Changes to ICAP would require action by the state Legislature. The de Blasio administration is seeking to require hotel developers to get a special permit for property zoned for manufacturing. The Real Estate Board of New York has opposed the idea. [Crain’s] — Kathryn Brenzel