"I'm actually surprised by how many people come to us with alack of awareness" about the benefits they may be entitled to, saysZuckerbrot, president of Long Island City-based Sholom &Zuckerbrot Realty. "Companies come out here from Manhattan to lookat a property, and no one has educated them about the differentprocesses they can go through and different programs that areavailable."

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In the outer boroughs, those programs include tax credits forrelocating to those areas, reductions in energy costs and exemptionfrom real estate taxes on increases in assessed value of eligiblecommercial buildings. Similar programs are available in designatedareas of Manhattan, including Downtown and north of 96thStreet.

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For tenants that are relocating or expanding, Zuckerbrot says,"Some programs have a 'con' aspect along with the 'pro'factor—there are tradeoffs. But at least tenants should go throughthe process of understanding it, and by and large, most of theprograms are still net beneficial. The cons might includepaperwork, some upfront costs, lawyers, things like that. But inthe final analysis, some of these incentives are particularlylucrative, especially if you have a sizable employee count. Many ofthem are tied in to your employees—for example, savings off yourtax returns based on your employees."

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While many of the incentives are intended for small businessesrather than large corporate tenants (although there areenergy-saving tax breaks and other breaks for big employers),economies of scale do enter into it. "For a guy who's opening up awarehouse with three or four employees, it's not that big a draw,"Zuckerbrot says. "It depends on your business. It's the same withoffice: there are enormous benefits to coming out to areas such asLong Island City that can equate to $15 to $20 per sf off your rentif you're in a high-density use. Those figures would be for a superhigh density situation, but all of them are at least $10 off foroffice space use."

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Part of the job of understanding what incentives could mean isgrasping the city's rationale behind offering them. "The city triesto act as master planner," Zuckerbrot says. "If they're saying toyou, "Look, we really don't want you operating in this part of thecity but we do want you to operate in that part of the city," youhave to understand what that means, evaluate the incentive packageand what effect it would have for your business to move, then makethe rational decision.

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Zuckerbrot says that lack of awareness is not the only reasonrelocating tenants pass up the incentives program. "So many peoplehear about it, but then they don't actually go through theprocess," he says. "Part of what we do as brokers is to help themorchestrate that process and get them to the right kind ofprofessionals early in the game, not late. That way, if they'relooking for certain incentives, they'll know whether or not theproperty they're looking at qualifies for the incentives they'reinterested in. To me, that's half of the brokering business, morethan just finding the property."

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Among the most familiar incentives available from the New YorkCity Department of Finance, the Relocation and EmploymentAssistance Program provides a tax credit for businesses thatrelocate from outside of the city or from Manhattan below 96thStreet to either Manhattan above 96th Street or in Brooklyn,Queens, the Bronx, or Staten Island. There is also a REAP availablefor lower Manhattan. Certain conditions must be met; for example,the property to which the business relocates must be eithereligible for the city's Industrial Commercial Incentive Program,leased from the New York City Industrial Development Agency, ownedby the city or leased from the Port Authority of New York and NewJersey or the New York State Urban Development Corp.

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The Energy Cost Savings Program is an energy discount programadministered by the city's Department of Small Business Services.The program reduces energy costs for businesses that relocate topreviously improved buildings in Manhattan above 96th Street or inBrooklyn, Queens, the Bronx or Staten Island, or make improvementsto the properties after they've moved in.

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For business relocating to lower Manhattan, the city offersbreaks such as commercial rent tax savings, sales tax savings andrent reductions for leasing space at existing or future World TradeCenter properties.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.