New M-CORE Program to Incentivize Manhattan Office Renovations

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Summer Associate, Matthew P. Asnis, co-authored this article.

The New York City Economic Development Corporation (NYCEDC) and the New York City Industrial Development Agency (NYCIDA) have launched the Manhattan Commercial Revitalization (M-CORE) Program to incentivize owners and landlords to undertake investments in aging Manhattan office buildings with the goal of decreasing vacancies, attracting world class tenants and revitalizing commercial districts.  The M-CORE Program is the result of Mayor Adams’s and Governor Hochul’s Making “New York Work for Everyone” action plan.  It seeks to facilitate necessary renovations to 10 million gross square feet of qualifying office space.

Do you qualify?

The selection process for the M-CORE Program will be competitive.  To be eligible, a commercial office building must meet each of the following criteria:

  • Be located in Manhattan, south of 59th Street (excluding the Hudson Yards Financing Area and Penn Station General Project Plan Area)
  • Be built prior to 2000
  • Contain at least 250,000 gross square feet
  • Have a minimum capital investment of at least 75% of the project location’s current assessed value for land and building (as determined by the New York City Department of Finance for the most recent available year)

Participants in the program may receive a variety of benefits, including:

  • Stabilization of property taxes for land and existing improvements at the current rate and assessment and abatement of property taxes for project improvements, each for a period of up to 20 years (with a phase out of 20% per year over the final four years of such period)
  • Exemption from the 8.875% city and state sales and use tax on eligible materials used for project improvements
  • Deferral or partial exemption from the mortgage recording tax (2.5% of the 2.8% tax) for the project’s financing
Pre-Applications Now Being Accepted

Pre-applications are now being accepted, however applicants wishing to be considered for up to a 100% property tax abatement on project improvements (which will only be available for up to 2.5 million of gross square feet of qualifying office space) must submit their pre-applications no later than August 1, 2023. 

NYCIDA will evaluate applications based on the proposed project’s scope, budget, readiness, tenant attraction plan and compliance with local laws and regulations, including Local Law 97 emission-reduction targets.  NYCEDC’s press release advises that “[s]trong proposals must demonstrate near-term plans for significant renovations that will introduce new layouts, building systems, infrastructure, energy efficiency improvements, common areas, health and wellness measure, programming and/or amenities that are sought by tenants” and “should include thoughtful strategies around ground floor uses that will draw foot traffic and activate the surrounding commercial corridor.”

Partnership and leasing opportunities

NYCEDC has also issued a request for information seeking expressions of interest from prospective tenants and other potential partners that catalyze innovation, such as incubator and accelerator operators, operators interested in creating international landing pads, academic institutions and research and development organizations, for the purpose of making introductions to M-CORE Program applicants so they may potentially locate at a M-CORE Program site and/or enter into partnerships on a M-CORE Program project.  Responses to the request for information are due by 11:59 pm on July 18, 2023.

As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

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