Spitzer Chases Elusive Tax Breaks

Governor Spitzer was about limiting the lure of “off-the-shelf” tax incentives when he announced this morning that JP Morgan Chase had agreed to lease Site 5 at Ground Zero from the Port Authority. But he gave three different estimates on how much those tax breaks would be.

“They are all a part of pre-existing, lower Manhattan rent exemptions, the as-of-right statutory rent tax exemptions that would be available to anybody within certain geographic parameters,” he said at first. “That will have a value of perhaps $100 million to JPMC.

“From JPMC’s perspective it is a good, fair deal,” he said later, after noting that JP Morgan Chase executives, some of whom were in the room with him, should not feel like they did not negotiate hard enough. “Whether it is the commercial rent tax exemption, the lower Manhattan sales tax exemption or the sales tax exemption on core-and-shell, these are not insignificant numbers. Just those three alone probably come in at about $160 million dollars.”

Then, finally, after being asked for clarification, Governor Spitzer said, “There will be value that will pass to JPMC somewhere close to 200”—as in $200 million. “Measurement will be difficult to add up because of the various off-the-shelf benefits that will arise over time.”

He also suggested a new way to look at the 60,000-square foot trading floors, which will, because of the site’s small footprint, cantilever over the street and maybe even a church, and which have already drawn the ire of community residents. (The sketch above was done by a concerned neighbor and circulated at a community board meeting. Official renderings have not been released.)

“It will provide an opportunity to play chess even when it is pouring, because the cantilever will provide cover,” the Governor said.