Insights Blog

Hudson Yards: $1B in Commercial Subsidies

February 19, 2019

New York City's Hudson Yards project includes heavily discounted property taxes for Hudson Yards developers.

Tax breaks are provided to developers building commercial office buildings in the Hudson Yards project area through discounted payments in lieu of taxes, or PILOTS. PILOTs are property tax discounts of up to 40% for new, privately-owned, commercial developments in the project area. The amount of the PILOTs to be paid by the new developers was established by the New York City Industrial Development Agency (IDA) through the Uniform Tax Exemption Policy (UTEP). For more information, see SCEPA's "The Cost of New York City's Hudson Yards Redevelopment Project." 

According to the IDA, the cost to the city of the PILOT benefit, or the value of the
foregone property taxes, of seven current commercial buildings in the project area is over $1
billion over a 25-year period (see table). This estimate is considered low due to the IDA's use of a high discount rate of 6.25%. This figure is likely to
increase when new commercial and retail buildings are developed in the project area.

The agency’s decision to provide tax breaks for qualifying developers goes through a cost benefit
analysis. Below are links to the city's documentation for each building receiving tax breaks so far. These documents are the result of a FOIL request by SCEPA researchers due to the fact that some of the documents were not made publicly available. 

City Documentation on Hudson Yards Commercial Tax Breaks: 

50 Hudson Yards
30 Hudson Yards
10 Hudson Yards
55 Hudson Yards
The Spiral
3 Hudson Boulevard
One Manhattan West 

 

About SCEPA

SCEPA works to focus the public economics debate on the role government can and should play in the real productive economy - that of business, management, and labor - to raise living standards, create economic security, and attain full employment.