Brookfield seeks nearly $80M in tax breaks for 2 Manhattan West

Developer pegs overall project cost at $2.4B

May.May 28, 2019 06:55 PM
Two Manhattan West and Brookfield Managing Partner Ben Brown

Two Manhattan West and Brookfield managing partner Ben Brown (Credit: Manhattan West NYC and Brookfield)

It turns out Amazon could end up benefitting from some tax breaks in New York City after all – at least indirectly.

Brookfield Property Partners’ Two Manhattan West – where Amazon is reportedly interested in leasing space as part of a requirement for more than 100,000 square feet – is seeking nearly $80 million in real estate tax exemptions, public records show.

Brookfield filed an application with the New York City Industrial Development Agency seeking a 25-year real estate tax exemption for the yet-to-be developed tower, which the company estimates will have an all-in development cost of $2.4 billion.

The IDA, which will consider Brookfield’s application at its June 6 meeting, estimates the exemption will cost the city $78.9 million over the next 25 years in foregone taxes. In exchange for the tax incentive, the IDA estimates the development will generate $1 billion in direct and indirect taxes over that same time period.

A representative for Brookfield declined to comment.

Brookfield’s application comes as Amazon is reportedly considering its first major expansion in New York since it scuttled plans in February to locate part of its HQ2 in Long Island City. The economic incentives Amazon was set to receive for its Queens location spurred a vocal public backlash that ultimately played a role in scuttling the deal.

A spokesperson for the IDA, however, said the agency would not address whether political sentiment toward Amazon would impact its decision to offer tax breaks to Brookfield – noting that it would be precedent-setting to deny an applicant incentives over a potential tenant.

“The purpose of the NYCIDA is to provide discretionary tax benefits that help offset the high cost of construction in New York with the ultimate goals being the creation of more jobs for New Yorkers and getting a return on our investment over the life of the project,” the IDA spokesperson wrote in an email. “Whether its Brookfield Properties or a small industrial developer, NYCIDA reviews every application for what it is and determinations are based on criteria that directly benefit the City’s economy and helps uplift New Yorkers.”

Amazon is looking to potentially lease space at Brookfield’s One and Two Manhattan West office towers, as well as Vornado Realty Trust’s Farley Post Office redevelopment, the New York Post reported.

A spokesperson for Amazon declined to comment.

The greater Midtown West area – inclusive of Penn Plaza, Manhattan West and Hudson Yards – is one of four neighborhoods the New York City Economic Development Agency included in its pitch to lure Amazon to the city.

Brookfield is developing Manhattan West with the Qatar Investment Authority. The developer would look for a $1.4 billion construction loan to build Two Manhattan West, according to its IDA application.

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