Brooklyn's Progress
August 2004

The Brooklyn Chamber of Commerce supported reauthorization of REAP during its Annual Lobbying Trip to Albany in 2003.

The Relocation and Employment Assistance Program (REAP) was renewed last month by the State Legislature and was signed by NY Governor George Pataki on July 6.

The legislation is the product of months of negotiations with the city aimed at improving the program's effectiveness by providing enhancements in the program's existing areas and by ensuring that premises in the federally designated Resurgence and Liberty zones in Lower Manhattan are REAP eligible.

The REAP program, originally enacted in 1987, encourages businesses to relocate to New York City and provides incentives to businesses that are considering leaving the city to instead relocate within the city to areas in need of economic stimulus.

Under the new program, Lower Manhattan will be added to the list of city communities where businesses considering other competitive locations, such as New Jersey, can relocate to and obtain economic incentives. Under the original law, eligible areas were limited to the outer boroughs and Manhattan north of 96th St.

The legislation extends the program through 2008 and provides a refundable, per employee tax credit. The benefit is $3,000 per employee in most eligible areas and is conditioned upon improvements to the premises to which the firm is relocating. The benefit calculation is improved to better assist growing businesses and eligibility criteria are expanded to make the program more accessible to potential tenants.

Other enhancements to the program include extending the benefit calculation time period from four to six years and establishing benefit portability improvements. 

Following is a description of the provisions:

• Tax credit of $3,000 per job per year for 12 years for each job relocated or added within five years (was three years) of the initial relocation, capped at the greater of 100 jobs or two times total employment before the move
• Refundable for the first five years if company has insufficient tax liability; unused credits in years 6-12 can be carried forward for five years
• Available to companies that relocate employees from Manhattan below 96th St. or outside of the city to Manhattan above 96th St. or an outer borough or to companies with no operations in NYC that relocate jobs to Manhattan below Houston St.
• Companies must locate in a building that has been improved by 50 percent of its assessed value or must sign a lease of at least three years and spend $25 per square foot on improving their own space
• Companies must have been in business for 24 months before the year of relocation
• Companies in the middle of a twelve-year REAP term that relocate within an eligible area can continue to receive the balance of their REAP benefits
• Availability of REAP benefits for companies moving more than 100 jobs from Lower Manhattan is subject to the discretion of the Mayor