The Daily Dirt: State wants to cap incentives that lured Amazon

TRD NEW YORK /
Jan.January 10, 2020 11:35 AM
Sen. Michael Gianaris and Long Island City (NY Senate, Wikipedia)

Sen. Michael Gianaris and Long Island City (NY Senate, Wikipedia)

The state legislative session just began, and we’re already talking about Amazon.

That’s because state legislators are eyeing subsidy programs that were at the center of the HQ2 debates. New York’s Relocation and Employment Assistance Program — or REAP — and the state’s Industrial & Commercial Abatement Program (ICAP) are respectively slated to sunset this summer and in early 2022.

Sen. Michael Gianaris — one of the elected officials blamed for Amazon’s decision to nix its plans in Long Island City — said he wants to make changes to both programs, Eddie Small reports. Though the programs expire at different times, Gianaris said it makes sense to reform both simultaneously.

“The things need to be capped so that no one project can avail itself of hundreds of millions, if not over a billion dollars, the way Amazon was doing,” he said. “So I’d like to start there.”

It’s not yet clear what these reforms would look like beyond limiting the size of the incentives. The REAP program could’ve provided $900 million in tax credits to Amazon, and the company would’ve enjoyed an abatement worth $386 million under ICAP. Elected officials and advocates had criticized the $3 billion in state and city incentives promised to Amazon, arguing that a package of that size wasn’t needed to convince a major corporation to move to NYC.

Katerra just inked another contract for thousands of housing units in Saudi Arabia.

The SoftBank-backed construction tech company signed a $650 million deal to build more than 8,000 housing units in the country. This follows an agreement announced last year to build 4,101 units — both of which are part of a $40 billion non-binding agreement to deliver hundreds of thousands of homes in Saudi Arabia.

The company is doubling down on its international work as it faces headwinds in the U.S. The company recently closed down its first factory in Phoenix and laid off some 200 employees. As TRD previously detailed, Katerra grew rapidly through dozens of acquisitions and more than $1 billion in funding from SoftBank.

At the same time, the company has walked away from projects, faced massive cost overruns and struggled with logistical challenges with U.S. projects. In December, Katerra told TRD that it had more than 300 projects in its pipeline, and was on track to complete more than two dozen by the end of 2019. The company’s progress on that goal was not immediately clear Thursday.

What we’re thinking about: Can someone please send us a copy of that bizzarro poster Gov. Andrew Cuomo had printed to illustrate the nautical metaphors he crammed into his State of the State address? Please? It’s for journalism. Send a copy to 450 West 31st Street, Fourth Floor, New York, New York, 10001, Attn: Kathryn Brenzel. [email protected].

CLOSING TIME

Residential: The priciest residential closing recorded Thursday was for a condo unit at 182 West 82nd Street on the Upper West Side, at $9.2 million.

Commercial: The most expensive commercial closing of the day was for an industrial property at 1317 36th Street in Borough Park, at $8 million.

BREAKING GROUND

The largest new building filing of the day was for a retail building at 1905 Third Avenue in East Harlem. The Carlyle Group filed the permit application.

NEW TO THE MARKET

The priciest residential listing to hit the market was for a condo unit at 53 West 53rd Street in Midtown, at $15.7 million. Corcoran Sunshine has the listing. — Research by Mary Diduch

A thing we’ve learned…

Winter Properties basically got its start via a mechanic’s lien. Steven Winter, founder and co-chief executive of 40 North Management’s real estate arm, told the New York Times in 2015 that his great-grandfather was a painter on the Upper West Side. One of his clients defaulted on a $5,000 contract, and he took over the property — launching his family’s business. Thank you to Kevin Sun for spotting this bizarre piece of history.

Elsewhere in New York

— This is not a drill! The Flatiron District is getting a Harry Potter-themed store, the Wall Street Journal reports. Alas, Community Board 5’s landmarks committee took issue with some aspects of the store’s proposed design. Turns out muggles aren’t big on fiberglass dragons.

— Burger King is giving free Whoppers to Bronx residents. Why? Because some residents were upset that the stairs connecting Shakespeare and Anderson Avenues became a tourist attraction due to the movie “Joker,” Gothamist reports. It’s not really clear why this is a thing.

— City Comptroller and mayoral hopeful Scott Stringer says he won’t be accepting donations from the real estate industry, the New York Post reports. It’s not clear whether or not he’ll return money he’s already received from the industry.


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