Mayor Adams wants to entice companies from abroad and out-of-state to fill pandemic-era vacancies in the city, announcing a pilot program he hopes will bring 15 new corporations to fill over 800,000 square feet of unused office space.
While most sectors of the city’s economy have recovered from the pandemic, commercial vacancy rates have remained stubbornly high at least in part due to remote work.
“We’re going to go bigger and bolder at every stage of the game, bringing in new businesses, even as we build more capacity,” Adams said from the City Hall rotunda on Monday, saying he wants to see international companies settled in New York.
“Our plan will establish a powerful new incentive to attract established businesses to New York City and make it easier for companies from around the globe to expand here.”
The pilot program, dubbed the “Relocation Assistance Credit for Employees,” or RACE, which would give big businesses who move into some of the city’s slightly older stock a credit of $5,000 per employee, with a cap of 3,000 employees.
The credit only applies to office and manufacturing spaces — not retail or other spaces — and it will need state approval to move forward.
The program will drive an estimated $150 million in additional tax revenue over the next ten years, according to First Deputy Mayor Maria Torres-Springer.
The mayor said the new program would not work against the city’s efforts to transform vacant office space into housing, since the city is looking at multiple ways to tackle the problem.
“We are now freeing up all these dams that prevented the sea of opportunity to be produced,” Adams said. “And that’s what this team has done. It’s not a one-size-fits-all.”
Adams said he was not worried President Trump’s recent moves, including announcing tariffs on Canada, Mexico and China, would work against the city’s efforts to attract businesses from around the globe.
“This is a resilient city, and it has always been, and this is a resilient country, and I think we need to find a proper balance, and that is what this is all about,” Adams said.
The mayor added that he doesn’t want to make a “knee-jerk” reaction to the president’s policies. Later in the day, the White House announced a pause in the tariffs after reaching agreements with Mexico and Canada.
The mayor also announced he would support the extension for five more years of a program that has been in place since the 1980s aimed at expanding employment outside of Manhattan’s central business district.
A separate, long-term program, instated in the 1980s, gives companies an annual credit of $3,000 for twelve years from eligible employees.
That program has faced backlash from fiscal watchdogs for transferring millions from taxpayers to corporations without clear proof that it works.
“New York has a habit of perpetuating and extending whatever without looking into whether you’re getting a bang for your buck,” Andrew Rein of the non-partisan group Citizen Budget Commission said.
In recent weeks, the Real Estate Board of New York and other groups have pushed for its renewal. To continue for another five years, the program will need legislative support in Albany.
The program, which has been renewed several times, was set to expire in June.
Adams also said Monday the city would re-up a program to upgrade outdated, vacant office space and establish a “landing pad” network that will be awarded to three corporations.
He made the announcement at alongside members of the labor unions 32BJ and the Hotel and Gaming Trades Council — whose leaders met with him at Gracie Mansion last week to speak about his re-election bid.