Remember that $328 million subsidy for a shopping mall and skyscraper being developed by the Related Companies? Well, as expected, the city’s Industrial Development Agency went ahead and approved the massive giveaway despite questions about its propriety.
The 25-year tax exemption comes on top of a $106 million tax break for another skyscraper on the site. The project is also getting $3 billion in city bonds to extend the 7 subway line. The snail’s pace of building the platform, which will undergird the 13.3 million-square-foot project, has already cost the city more than $100 million in taxes it expected to have collected by now.
This latest subsidy will force the city to spend yet more money to meet the debt obligations of the subway bonds. As as we previously wrote, it’s a break from a previous Bloomberg era policy of denying subsidies for shopping malls.
City officials insist the subsidy is “consistent” with the original 2006 Hudson Yards plan and necessary because of the size of the project. In remarks before the IDA board, a Related official called the tax breaks “indispensable” to the project and insisted the area was “underutilized.”
However, property values are rising in the area, once again raising the question of why yet another tax break is needed for an area likely to blossom just from market forces.