Eric Deutsch, president of the Alliance for Downtown New YorkInc., tells GlobeSt.com that the program has been extremelyimportant in the development of downtown over the last decade. Thebill was originally introduced in 1995 after the economic down turnto provide businesses an incentive to stay or come downtown. Thebill was renewed for the second time just after 9/11, which Deutschsays really aided in the redevelopment of the area.

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"I think it is very important that Downtown continues to receivefavorable treatment as its transportation and other infrastructureimprovements still need to be fully realized in order for themarket to be squarely where we all believe it is going," Grubb& Ellis' Joe Harkins tells GlobeSt.com. "The state was properlyguided with regard to keeping this in place."

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The bill provides incentive for Midtown businesses to move southbut is also encourages owners to maintain their property as officespace. Deutsch tells GlobeSt.com that the Downtown market has asmuch office space to residential development in the last coupleyears as it lost on 9/11. In addition to a number of residentialprojects getting off the ground, especially in 2006, there were anumber of office transactions. Deutsch says over 120 businesseshave moved into Lower Manhattan since 2005.

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Some of the largest leases were signed for space atSilverstein's 7 World Trade Center, with Moody's Corp. taking600,000 sf on 15 floors, which Harkins says was transformational tothe whole area. But this leasing activity has not continued into2007. Harkins says that during Q1 roughly 8.9 million sf of dealswere completed throughout Manhattan with just less than 900,000 sfof that coming in the form of Downtown deals.

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Deutsch and Harkins agree that incentives like the CommercialRevitalization Program help to put Downtown into the minds oftenants, especially those looking for another option than the highMidtown rental rates. Deutsch says the tax abatement alsoencourages tenants to ride out the construction wave that iscurrently transforming the area, which can be a deterrent torelocating south.

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