(Updates with background on Fiscal Policy Institute, details on city bonds)
New York City’s Hudson Yards project – a $12 billion transformative development slated for Manhattan’s West Side – embodies several aspects of the Bloomberg administration’s strategies that infuriate critics while delighting boosters.
At a public hearing on Thursday, the developers will ask a city agency to approve $106 million of property tax breaks for the first office tower planned for the site. The new 46-floor, $1.27 billion building, which is expected to house luxury retailer Coach Inc, should start going up in October, and be finished in July 2015, according to the filing for the tax relief.
Critics say the developers – The Related Companies and Oxford Properties Group Inc – should not be tapping taxpayers’ wallets, but should instead be relying on their own deep pockets.
Argues James Parrott, chief economist for the Fiscal Policy Institute, a nonpartisan think tank whose funding comes primarily from foundations but which also gets some support from unions:
This represents the culmination in the evolution over the past 30 years of city business subsidies, first to manufacturing, then commercial in the outer boroughs, then Lower Manhattan commercial, then to ‘smart buildings,’ and now to prime mid-town commercial properties in already heavily subsidized areas … This is the first of what could be several mega-subsidy deals in the Hudson Yards area in the years to come. A testament to the ever-growing influence of the real estate sector.