Tuesday, December 25, 2007

Deals that lead to lost property taxes

From: MDDWhite
Date: Tue, 25 Dec 2007 23:03:15 EST
Subject: Fwd: another way city losing property taxes
To: reysmont@yahoo.com

You are probably aware of this by now but- (Nice to get your own personal coverage like today- Always scary about how much the press will get right though.)

Michael D. D. White

Deals that lead to lost property taxes
Thursday, December 20th 2007, 4:00 AM

New York City lost more than $100 million in property taxes last year because of privately negotiated deals with some of the world's richest companies.

The companies - including behemoths like JPMorgan Chase, Pfizer and NBC - have paid a fraction of their normal property tax bill for years through these little-known deals, commonly called PILOTs (Payments in Lieu of Taxes).

An internal Bloomberg administration report obtained by the Daily News shows:
The giant American International Group paid nothing in PILOTs for fiscal 2007, saving $4.1 million on its annual property tax bill.

The American Stock Exchange, that symbol of the free market, paid a mere $1,070 in PILOTs - far less than a South Bronx homeowner would pay in taxes. The exchange's tax break from City Hall saved it nearly $1.5 million.

JPMorgan Chase paid just $1.9million in PILOTs, 20% of the $9.6 million in property taxes it normally would be assessed.

Most New Yorkers are aware of the outrageous $10 million property tax exemption Madison Square Garden has enjoyed for decades, courtesy of the state Legislature.

So why haven't we heard much about these other tax giveaways in, say, the liberal New York Times? Maybe because the newspaper of record is feeding at the same trough.

The Times paid $219,000 in PILOTs last year for its new printing plant in College Point, Queens, the report said. That's a paltry 13% of the $1.7 million assessed tax on the Times plant.

The undisputed king of PILOTs is real estate developer Bruce Ratner. His Forest City/Ratner firm paid the city $9.7 million last year for half a dozen commercial buildings the company owns in downtown Brooklyn. That sounds like a lot of money - until you realize it's only one-third of the company's actual $26.3 million property tax bill.

That doesn't even count PILOTs that have yet to kick in for Forest City's Atlantic Yards mega-project.

Forest City spokesman Loren Riegelhaupt defended the company's success at landing PILOT subsidies.

"A lot of those buildings in MetroTech were constructed when downtown Brooklyn was not what it was today," Riegelhaupt said. "Many businesses were fleeing to New Jersey in the 1990s, and we were willing to invest in that area when others wouldn't."

City Hall has routinely doled out these PILOT deals for decades, usually as part of a larger incentive package to get companies to stay in town or expand their business.

Government watchdog groups say the absence of uniform standards makes the whole PILOT program open to abuse, because each company gets to negotiate its own private deal. In addition, companies that fail to meet their original job creation promises rarely get penalized.

Until recently, no one knew exactly how much the tax breaks were costing the city. Then in 2005, after city Controller William Thompson released an audit blasting the city's poor monitoring of PILOTs, the City Council passed a law requiring the mayor's office to supply the Council speaker with a report of all PILOT revenues and expenditures.

The News recently obtained copies of those reports, which are sent quarterly from the city Office of Management and Budget to City Council Speaker Christine Quinn.

They reveal that some 300 companies and nonprofit groups enjoy long-term PILOT deals. A few of those deals date back to the Koch and Dinkins eras, but most were arranged under Mayors Rudy Giuliani and Bloomberg.

Last year, discounted PILOTs amounted to $107 million in lost revenue to the city, with abatements averaging a whopping 60% per company.

It should come as no surprise that some of the city's powerhouse companies landed the juiciest deals. Just 15 companies enjoyed more than two-thirds of the total tax savings in fiscal 2007, the report shows.

Besides Forest City, AIG, Chase and The Times, top beneficiaries include Morgan Stanley, Bear Stearns, NBC, Pfizer, McGraw-Hill and the Hearst Corp. In NBC's case, the company has received three separate PILOT deals over the past 20 years from Koch, Giuliani and Bloomberg.


"New York City lost more than $100 million in property taxes last year because of privately negotiated deals with some of the world's richest companies.";

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JTDietrich Dec 20, 2007 6:38:39 AM Report Offensive Post I think a lot of cities across the country give property tax breaks to businesses - especially wealthy businesses - because it gives the business an incentive to stay, form jobs, keep talented money-making people local, and ultimately enhances the NY City tax income. If JP Morgan stays in NYC because of a tax break, then the story in NY should be "thank God." But leave it to a liberal city like NY to see it no other way than "tax cuts for the wealthy." You need those jobs to stay local. JT, Fargo, ND

lefty58 Dec 20, 2007 10:30:07 AM Report Offensive Post You have to take what Juan Gonzalez writes with a grain of salt. If it were up to him, we would be all living in a Socialist State like Cuba. Don't know why he is still employed by the NEWS, he's a waste!

Frunkus Dec 20, 2007 10:44:35 AM Report Offensive Post Wow, what a waste of internet space, Juan doesn't factor in that these companies also pay some of the highest rent in the WORLD, these breaks are an incentive to stay in the city instead of taking all their jobs to Jersey. Juan is a idiot.

Kewylewy Dec 20, 2007 12:25:59 PM Report Offensive Post If JTDetrich was paying attention they would know that Jpmorganchase outsourced more than half that company starting two years ago so the People of NY are not reaping the benefits of them staying here. Most of that company is in Ohio and Chicago remember they merged Mr. Dimon is the CEO now. (BAnk One) Alot of long time Chase/Chemical/Jpmorgan/ employees lost their jobs. You see they do not even have 2CMP anymore. Layed off and moved a whole building. Try their site at 1985 Marcus in LI. Whole site wiped out including the cafeteria. So all Jpmorgan in NY is mostly branches. No major operations. Mr. Dimon does not even live here. All they hire is part timers and consultants. How does that help NY?

Desiderata Dec 20, 2007 8:19:19 PM Report Offensive Post Right and they probably lost twice that much in handouts to Illegals

BigJake Dec 20, 2007 8:24:45 PM Report Offensive Post To put the tax breaks in perspective, this columnist or the NYC City Council need to compare the tax dollars lost through PILOTs with the revenues gained through city income taxes on the job either created or saved by the tax breaks. Kewylewy says that half the jobs at one company were outsourced. That does not answer the question about current revenue for NYC from the remaining jobs. Whoever is negotiating these tax breaks should balance them against related revenue streams & factor the amount of the break against the alternative income tax revenue.

marceloalexi Dec 21, 2007 12:25:54 AM Report Offensive Post first of all there is no way in God's green earth that JPMorgan is going to Iowa! The jobs they create are almost worthless to the city because most of their employees live outside the city(NJ,LI,Westchester) These companies make more than enough and should have to pay their fair share. Private homeowners should not be paying more property tax than fortune 500 companies. This is exactly the kind of corporate robbery that will continue to take place with businessmen posing as politicians(Mr. Bloomberg). You look down on socialized Cuba but at least they care enough about their citizens to provide health care. Or maybe you enjoy paying more for the MTA. Give me a break this is wrong. Kudos to Mr. Gonzalez and the news for reporting it and allowing it to be printed!

marceloalexi Dec 21, 2007 12:38:03 AM Report Offensive Post just wondering what does this have to do with immigrants? Or are they also to blame for the Knicks, Jets, and the fare hike. Hey let's go all the way with it and blame everything on illegal immigrants. It's funny how nobody complains about illegals that cook your food in every restaurant you go to. These kind of crooks are the reason you have illegal immigrants. This is an outrage!

Desiderata Dec 21, 2007 7:25:50 AM Report Offensive Post To Marcel... Who the " H " do you think cooked our food before those illegals swam, waded, across the river, or took a truck acrosss the desert ? To listen to you illegal supporters, you'd think we Americans were all sitting on our hands waiting for you to come here and rescue us , from our siestas. Where did the Industrial Revolution start , in Mexico ? Who invented the cotton Gin, Pancho Villa ? Did Vincente' Fox put the first Airplane, or car together ? Get real. They're not undocumented workers. They're illegal. They'r felons and they're breaking the law. They are committing crimes, stealing , causing car accidents, raping , and commiting drug related crimes. Plus bringing in illegal drugs... When they clean up their act, and when Mexico cleans up all the corruption down there, and creates it's own jobs and pays a living wage, we will all live a lot better, and be a lot happier.

mrbeachy Dec 21, 2007 9:35:43 AM Report Offensive Post Kewylewy you are completely correct; I know of 3 jp morgan/chase employees who lost their jobs. One is still unemployed after close to two years;the second went to work at a credit union for much lower pay;and the third is now attending graduate school. If i had my way, unless a company keeps a certain amount of its employees and its operations in nyc,they should lose the tax exemptions and any other deals as well.

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