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Business Incentives
Recently there has been a flurry of opinion pieces regarding the efficacy of local governments attracting jobs by providing incentives to businesses. Attention on this type of incentives has increased during the past year given the already fixed resources and strained budgets experienced by local government.
The arguments against business incentives as a way to attract jobs are varied: some argue that communities should not forgo revenue through reduced property, corporate, and payroll taxes. Others point to financially strapped cities engaging in what amounts to bidding wars with neighboring locales over the same jobs.
While there can be some truth to these arguments, incentives can play a very important role in complementing growth and policy goals of a particular community – and even responding the economic fall-out from emergencies. Many of New York City’s incentives are designed to promote economic development needs: from modernization of older commercial property to retrofitting buildings for energy efficiency to hiring workers who were displaced from events such as Hurricane Sandy.
Many of the programs I have referenced in earlier posts are designed to incentivize businesses to make decisions consistent with not only their own expansion needs but also with the economic development goals of the City. These programs range from the Commercial Expansion Program (CEP) rent abatement to our Lower Manhattan Commercial Revitalization Program (CRP). Other incentives, such as the Greenpoint Relocation Program provide grants to offset moving costs for businesses relocating from areas of Brooklyn after rezoning.
Programs like the Energy Cost Savings Program (ECSP) , reward firms that stay in City or invest in their workspace when faced with the option of leaving the City. Moreover, ECSP also provides one of deepest “green” benefits by encouraging businesses to make their own electricity through installing “clean” cogeneration systems. ECSP has an emissions test to ensure only the most efficient and sustainable “cogen” units are installed. Businesses that can convert excess unused energy to usable electricity it helps relief the City’s electric grid and can further lower electric costs for the business.
The discussions will continue regarding the benefits of using incentives to lure businesses across state lines; however, in New York City incentives programs have been effectively used to encourage business to remain in the City, reduce costs, and grow operations in targeted areas that can benefit from renewed economic activity.
As Assistant Commissioner at the NYC Department of Small Business Services, Don Giampietro oversees such programs as the Energy Cost Savings Program (ECSP), Lower Manhattan Energy Program (LMEP), Printers Relocation Grant Program, and Industrial Relocation Grant Program. Don has over 15 years of experience working to help commercial and industrial firms relocate and expand within New York City.
