ICIP Tax Abatement - An OverviewNew York City moved from physical redevelopment to economic redevelopment through the ICIP tax abatement program. ICIP stands for Industrial and Commercial Incentive Program. ICIP was designed with the objective of preventing the shift of commercial and business enterprises into suburbs and retaining them in the main part of the city. Some important aspects of ICIP tax abatement form the scope of this article. For eligible physically improved, modernized, built, expanded, or rehabilitated commercial and industrial buildings, tax abatement or partial exemption of property taxes, for a period that may extend upto 25 years, is provided by ICIP. ICIP is due to expire on June 30, 2008. Location limitations: Manhattan, the south centerline of 96th Street, Murray, Frankfort, and Dover Streets (their north ends) forms the exclusion limits of the location eligibility limits of the ICIP tax abatement program. Except for the above limits, an applicant, who otherwise participates in ICIP, anywhere within New York City between the centerlines of 59th Street and 96th Street (except in Manhattan), can be considered for tax abatement provided he/she satisfies other eligibility criteria. Minimum required expenditure (MRE) targets: ICIP applicants need to meet MRE targets. MRE is a certain percentage of a project's assessed value in the year in which the building period was issued. In case of no-permit requirement, the year of construction initiation forms the basis, alternatively. For an exemption grant, a 10% MRE threshold must be met by an industrial project. Tax abatement will also be considered in the case of industrial projects that meet the 25% MRE threshold. A 20% MRE threshold is required for commercial renovation projects, south of 59th Street, in Manhattan. Other commercial projects are subject to a 10% MRE threshold. Requirements: Two applications, one Final, and the other a Preliminary Application For Certificate of Eligibility must be filed by an eligible applicant. An applicant is allowed to initiate construction or obtain a building permit only after submission of the Preliminary Application. The ICIP Unit needs to be provided 15 business days prior written notice by an applicant before initiation of renovation or construction. Before an applicant can initiate work, a 15 business days prior notification to the Division of Labor Services is necessary. In case of construction contracts that exceed $1 million in projects, an Employment Report also needs to be submitted to that same office. The Final application must be filed after receipt of the building permit by an applicant. ICIP tax abatement benefits: For commercial projects, a full exemption is available on the increase in assessed value that is attributable to the rehabilitation measures undertaken in properties in 11 years, followed by a four year phase out @ 20%. For those in special exemption areas, similar exemption is available in 16 years, with a 9 years phase out @ 10%. For industrial projects, the exemption is available in 16 years, with a 9 years phase-out @ 10%. Partial ICIP tax abatement for industrial projects is also available. |