World Trade Center incentives to stay in place

Subsidies continue until new towers are full, says owner

Cash incentives for corporate tenants who relocate to the rebuilt World Trade Center will continue to be offered by the US Government until the complex is fully occupied, the owner of the site has stated.

Speaking at a press briefing on the continuing reconstruction at Ground Zero, Larry Silverstein told reporters that the cash and tax exemptions given to firms that move into the new towers that will rise over the site in the coming years are part of the wider masterplan to regenerate New York’s financial district.

“Government incentives to relocate here will be offered until the site is fully rented. The Government wants to keep these companies in lower Manhattan and that is fair enough,” Silverstein said.

There has been growing protest over the ongoing subsidies offered to future occupants of the World Trade Center as commercial office occupancy rates in lower Manhattan have recovered to pre-9/11 levels. Critics charge that since the financial district has recovered from the haemorrhage of firms that vacated downtown in 2001-02, the subsidies should be abolished.

Among the incentives offered to new World Trade Center tenants are rent reductions of up to $5 per square foot and city and state sales tax exemptions for all property and services used to furnish space inside the rebuilt complex. A raft of other benefits are being extended to firms both large and small who move to lower Manhattan from elsewhere in New York City and beyond.

The benefits have proven a strong draw for large financial institutions. “Goldman Sachs is building a $2 billion tower just across the street from the site that will open in 2009, while JP Morgan Chase will eventually relocate its trading operations into World Trade Center building five,” said New York State Assembly Speaker Sheldon Silver.

“Substantial commercial incentives have been provided to firms who move to lower Manhattan and those incentives will have to continue. They are an important part of what makes the World Trade Center work,” Silver added.

The subsidies have not proved too attractive for all of the largest banks however. “We are working with Merrill Lynch to see to it that they stay downtown. It is no secret they’re assessing their options but I don’t anticipate that any deal with Merrill would involve any cash subsidies at all,” said Avi Schick, president of the Lower Manahattan Development Corporation.

All five buildings of the new World Trade Center, in addition to the centrepiece memorial to the victims of September 11, are expected to be open for business by 2012.