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 of the PILOT benefit to the city, or the value of the foregone property taxes, of eight current commercial buildings in the project area is over $1.1 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: