Albany’s Final Week: Urgent Legislative Action Needed to Support NYC’s Economy.

New York City has reached a historic milestone, boasting the highest number of jobs in its 400-year history. The local economy is robust, further establishing the city as a prime destination for young talent and innovative businesses. Major corporations, including OpenAI, Chobani, and Citadel, are increasingly selecting New York City as their primary base for expansion.

However, amidst this economic growth, a significant challenge persists: the vast amount of vacant office space throughout the five boroughs. Currently, the city has approximately 109 million square feet of unused office space, a figure that exceeds the total available office space in Boston. This surplus of vacant offices presents an opportunity for startups and established businesses to occupy these spaces, thus creating well-paying jobs and bolstering the city’s tax revenue. Instead, many of these offices remain unoccupied.

In Albany, legislators are taking steps to confront this issue through proposed legislation that aims to enhance the city’s economic competitiveness. Central to this initiative are two tax incentive programs: the existing Relocation and Employment Assistance Program (REAP) and the newly introduced Relocation Assistance Credit per Employee (RACE).

REAP, which has been in place since 1987, provides tax credits to companies that establish new offices above 96th Street in Manhattan or in any of the outer boroughs. This program has successfully generated about 10,000 jobs in areas beyond Midtown, such as Long Island City and downtown Brooklyn, thereby revitalizing local economies and promoting job growth.

A notable example of this initiative’s impact is Queen One, a technology startup that recently secured a 10-year lease in Williamsburg, Brooklyn. With plans to create 600 tech jobs by 2030, Queen One represents the city’s emergence as a hub for applied artificial intelligence, fueled by a million state tax credit and potential further incentives through REAP.

While the retention of existing businesses is crucial, the city requires additional strategies to address the overall vacancy issue. The RACE program aims to attract new businesses to underperforming buildings across the city, particularly in Manhattan. This three-year pilot initiative is projected to create approximately 3,000 jobs and generate 5 million in tax revenue over its expected lifespan, demonstrating a significant return on investment.

These incentive programs form part of Mayor Adams’ “Race for Space” initiative, launched to tackle office vacancy and spur economic development. This initiative seeks to rejuvenate aging office spaces, making them more attractive to high-growth sectors, including life sciences, technology, and green industries.

Despite New York City’s proactive measures to address the office vacancy challenge, the support of the state legislature is essential for these programs to succeed. Recent advocacy efforts in Albany emphasize the urgency to pass these critical bills.

The iconic skyscrapers of New York City do more than punctuate the skyline; they drive local economies by fostering vibrant ecosystems that support small businesses and flourishing neighborhoods. The proposed REAP and RACE programs are vital tools needed to reoccupy vacant office spaces and sustain the impressive job growth experienced in recent years. Implementing these measures is essential for maintaining New York City’s status as a global leader in innovation and economic vitality.