Press Release: Groups Oppose $1.1 Billion Tax Subsidy to the New York Stock Exchange
For immediate release
Bettina Damiani, Good Jobs New York phone: 212.414.9394 cell: 646.246.4093
Jahahara Alkebulan-Ma'at, Alliance for a Working Economy phone: 718.857.4865
Groups Oppose $1.1 Billion Tax Subsidy to the New York Stock Exchange
Strongly Agree to Public Investment in Lower Manhattan After Terrorist Attacks, But Urge Drastic Modifications to Current NYSE Subsidy Deal Before it Depletes Office Space in Affected Area
(New York, NY - October 25, 2001) At the city's only scheduled public hearing regarding the largest tax payer subsidy in New York State history this Friday, October 26th, Good Jobs New York and the Alliance for a Working Economy will oppose the city's plan to use $1.1 billion in taxpayer funds to build a new trading floor for the New York Stock Exchange across the street from the Exchange's current site. The hearing will take place before the New York City Industrial Development Agency, 110 William Street in Manhattan at 10:00 am.
In 1998, New York City and State announced the subsidy deal after the NYSE threatened to move its operations to New Jersey. The deal provides for a 600,000 square foot trading floor and a privately financed 900 foot tall office tower at the corner of Broad and Wall, across the street from the current home of the NYSE. In order to build the trading floor, the city has moved to acquire the entire block for the proposed facility, which currently has 1.7 million square feet of office space - nearly half a million square feet more than in the proposed plan. The city has allocated at least $380 million to purchase the properties from the building owners who include Rockrose Development and JPMorgan Chase.
"Undoubtedly, public investment in Lower Manhattan will be needed to restore the dynamics of the city and nation's financial center," said Bettina Damiani project director of Good Jobs New York. With looming multi-billion budget gaps, the city can ill afford to subsidize on this scale a new building that does not figure into a comprehensive vision for rebuilding the site of the World Trade Center complex. In addition, this deal would cost more than three quarters of a million taxpayer dollars per job and actually reduce the amount of office space in the area. "Clearly the plan created prior to September 11th does not fit current circumstances," adds GJNY's Bettina Damiani.
"The lack of public participation in this deal is disturbing," says Jahahara Alkebulan-Ma'at, Citywide Coordinator for the Alliance for a Working Economy (AWE). "The New York City Economic Development Corporation has consistently been remiss in informing the public about the details of this deal. It seems they have forgotten they are using taxpayer dollars to fund it." Some state estimates show that the cost of the project could reach as high as $1.7 billion.
The 1998 deal proposes an office tower with approximately 1.3 million square feet of office space to be built above the trading facility. While the office tower will be financed privately, any net revenue from the rents of the tower would be returned to the city to offset the colossal investment in site acquisition and in building the trading floor. The city and state plan to pay for the deal by having the New York City Industrial Development Agency issue $950 in million tax-exempt bonds. Payments to the holders of these bonds, which will include the repayment of the principal amount and approximately $490 million in interest payments, will come from the city and state budgets for the next twenty years. The city and state will also provide the NYSE with tax breaks and other subsidies worth much more than the "discounted" amount ($160 million) that they have publicized.
Should the IDA board approve the NYSE subsidy, the city should consider serious revisions to the deal. Many people, among them Richard Kahan, the former president both of the New York State Urban Development Corporation and the Battery Park City Authority, have been quoted suggesting that the new NYSE trading facility be incorporated into the rebuilt World Trade Center. Good Jobs New York and AWE believe this idea has merit; it will allow for the buildings at the Wall Street site to be rehabilitated and/or upgraded to provide office space for displaced businesses quickly, and it will place the new trading floor at a site in need of new construction, especially of the sort that would help re-anchor the area as a financial capital.
GJNY and AWE agree with those development experts who believe that public investment in the area of the World Trade Center must benefit the entire community, making it a viable place to do business and attractive to a variety of stable corporate tenants. This includes rebuilding and expanding the transportation system and diversifying the economy of the area by way of cultural institutions, as well as securing a marquee anchor businesses such as the NYSE. Adequate attention must also be given to the creation of a memorial.
While there are reports that the NYSE subsidy deal has been put on hold, the EDC has yet to officially announce such plans or any modifications. The lack of information about new developments on the deal continues the pattern of secrecy with which the city and state have pushed this deal through.
The hearing this Friday, which is mandated by state law, is the first and possibly the only one the city will hold. The New York State Urban Development Corporation held eminent domain hearings earlier this year in conjunction with its effort to take over the entire block for the proposed facility by eminent domain.
"This was a bad deal for New York before September 11th, and unless officials modify it to address our new reality, it remains a bad deal for New York," said GJNY's Bettina Damiani.
The New York City Industrial Development Agency (IDA) is empowered by New York State to issue revenue bonds to provide financing or qualified projects. The IDA is housed under the NYC Economic Development Corporation.
Good Jobs New York: GJNY is a project of the Fiscal Policy Institute with offices in Albany and New York City and Good Jobs First, based in Washington, DC. Good Jobs New York seeks to ensure government and corporate accountability in the use economic development subsidies.
Alliance for a Working Economy: AWE is a coalition of New York City unions, community organizations, and advocacy groups that promotes the effective use of public resources for the creation of living-wage jobs for New York City residents.
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