Dinkins, Vallone present revised ICIP legislation - New York, New York Mayor David N. Dinkins and City Council Speaker Peter Vallone; Industrial and Commercial and Incentive Program

Real Estate Weekly, June 17, 1992 by Therese Fitzgerald

New York City Mayor David N. Dinkins and City Council Speaker Peter Vallone announced proposed revisions for its commercial and industrial incentive program that would increase the benefits to existing buildings in need in all five boroughs and reduce the incentives for new construction in Manhattan below 96th Street.

The mayor and the speaker will be asking the state legislature to enact legislation that will allow it to revise its Industrial and Commercial and Incentive Program (ICIP) that is due to expire in its current form this month. They are proposing it be extended for seven years.

Provisions of the proposed legislation are: *Deepening benefits for commercial and industrial projects in Bronx, Queens, Staten Island and Brooklyn and Manhattan above 96 Street *Eliminating all benefits for new construction in Manhattan South of 96th Street *Providing tax exemptions for the renovation of aging office projects in lower and Midtown Manhattan *Establishing a program for minority and woman-owned businesses in ICI-Prelated construction *Making exemptions available to mixed-use -- residential and commercial -- properties for the first time

The ICIP provisions for industrial buildings will remain the same throughout the city -- a 22-year real property tax exemption for new construction and renovation work that is phased out from the 14th and 22nd year. In Manhattan and Long Island City, Queens, the waiting period for conversions of industrial properties to commercial use remains four years. In other areas of the city the wait will be reduced to two years.

No New Construction in Manhattan

The legislation is not as generous for midtown Manhattan properties. All ICIP benefits for new construction in the borough will be eliminated by 1993. The new program would allow a 12-year tax exemption for renovation in Manhattan for older commercial buildings. Buildings in midtown Manhattan will be permitted two years to apply for the renovation, and must complete the work on an accelerated basis. Buildings below 23rd Street, because of their age and the higher vacancies, will have the full seven years to apply.

The bill would provide a six-month window to help stalled renovation programs not previously eligible get finished. This would apply to only substantial renovations and would have to be completed on an accelerated basis. In all other areas, the renovation program will continue to be available as of right.

Steven Spinola, president of the Real Estate Board of New York (REBNY), said his group is encouraged by the proposed legislation. They are glad, he said, that the city has found it vital to keep the program alive and deepen its provisions. They will, however, he said, be looking for bolder moves from the city.

"It's a positive first step," he said. "We would like to see additional announcements of economic development benefits to complement these."

Spinola said he was disappointed to see the benefits for new construction in Manhattan eliminated. It is a misconception, he said, that discouraging new construction of office buildings in Manhattan will lead to their development in the outer boroughs. And, if Manhattan doesn't need anymore office properties, neither do the boroughs, he said.

"The reality is the entire region is dependent on the central business district [of Manhattan]," he said.

Spinola believes political pressures from elected officials representing the outer boroughs led to such a change.

The mayor said the changes were in response to the changed economic conditions.

Assemblyman George Friedman of the Bronx will be the sponsor of the legislation.