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The spot in Lower Manhattan where Wall Street meets Broadway played host to nonprofit group Good Jobs New York’s outdoor press conference on a Wednesday morning in February. Participants called for increased transparency to public records and documents that detail deals made over the years between the city’s Industrial Development Agency and large financial giants who promised to retain or create new jobs in return for tax breaks and other sweeteners.

City Council member Eric Gioia, chair of the oversight and investigations committee along with Brooklyn council members Letitia James and David Yassky, also spokem as did Chris Keely, associate director of Common Cause New York, and Kristi Barnes from the group Jobs with Justice.

As unseasonably warm breezes blew, so too did charges that over the past 20 years, the city had provided several large houses of finance with around $2.5 billion in tax breaks and other subsidies, although some of that included 9/11 grants in Lower Manhattan. Of the current climate, they say public concerns over large infusions of cash from the federal government to Wall Street were doubly heightened in New York, where large tax breaks for many of the same firms have been negotiated and offered for 20 years.

To obtain the local benefits, the city’s Economic Development Corp. asks for demonstration of need, promises of substantial investment and likely job retention and creation under umbrellas of agreement to ‘significant’ enforceable commitments to the city. But details of the deals usually came through press releases or other means that GJNY says weren’t fully forthcoming.

The nonprofit says until recently, its questions over how firms like Citigroup, Bank of America and Bear Sterns “could enjoy enormous subsidies while falling short on jobs remained a mystery because the city refused to disclose the actual contracts.” But that changed during the administration of Mayor Michael Bloomberg.

The NYCEDC says it now reports on the transactions according to requirements listed in Local Law 48, which was developed in cooperation with the City Council. NYCEDC also said it continues to work with the city council and others like Good Jobs New York to make its transactions more open and transparent.

Still, the Downtown press conference participants say most of the agreements were negotiated and signed under then-Mayor Rudolph Giuliani’s administration. They assert the contracts were “porous,” allowing banks and other financial service firms to lay off large numbers of workers yet still receive the city’s financial incentives. However, while transparency is still questioned by many, it appears that the city has not been as generous in its corporate retention efforts.

“Since 2002, the city has entered into only a handful of non-industrial commercial incentive agreements that did not involve post-9/11 funds from the federal government,” NYCEDC’s president, Seth W. Pinsky, tells Real Estate New York. He adds that if the city does in fact enter an agreement, it uses a “strict return on investment approach to ensure that the city makes only those contributions to projects that are truly needed to make them feasible.

From 1994 through 2000, the city’s IDA closed on 52 commercial incentive agreements that totaled $739 million. That compares to the period from 2002 until 2008, when six deals were signed totaling $108 million in subsidies.

Among the earlier deals was one in 1997 that included 15 years of city and state tax breaks totaling $28 million for Merrill Lynch, a company recently acquired by Bank of America. When it was signed, the city stipulated that Merrill hire an additional 2,000 employees in New York City. But as GlobeSt.com recently reported, despite partial building ownership and a lease agreement at World Financial Center until 2012, the firm’s landlord Brookfield Properties has yet to receive confirmation over the firm’s commitment to the complex, uncertainty that Brookfield attributed to new management’s potential future personnel adjustments.

Looking back, some defenders of site incentives have said the agreements were a major impetus behind New York City polishing its crown jewel in a then-booming financial industry sector. It was that boom which led to one of the country’s most robust, prosperous and expensive local economies and a city tax base deemed healthy. In the days after 9/11, when threats by corporations to leave Manhattan appeared tangibly realistic, the city, with federal assistance, mostly in the form of Liberty Bonds, offered enticements to keep companies in the city verses less traumatized locations that had not been directly impacted by the horror of terrorism.

During the mid-February press conference, when asked about threats to leave Manhattan for places like New Jersey or Westchester, James said she and other had raised questions about whether or not, those threats were in fact legitimate.

Responding to a RENY question over what has become an perhaps an increased sense of urgency in city job retention, James says “there is an entire industry out there called site consultants who pit places like Jersey City against Brooklyn” and that “negotiations over subsidies are done behind closed doors,” beyond the eyes of the public. “Those cities don’t make their decisions on where to locate based on tax breaks.”

Interestingly, in his book The Great American Jobs Scam; Corporate Tax Dodging and the Myth of Job Creation, author Greg Leroy quotes Robert Ady as saying that taxes are a minor factor, accounting for about 4% to 5% of costs. “The major factors businesses look at are labor costs, transportation and utilities,” says Ady, president of Ady International, a site selection firm.

Pinsky tells RENY that “we have always been, and remain, committed both to structuring our agreements to ensure that the taxpayers of New York receive a positive return on their investments and that, in each case, the city receives the benefit of the bargain that it has struck.”

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