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NYC agencies are encouraging investments in Industrial Business Zones (IBZ). This is good news for real estate developers and building owners hoping to attract manufacturing and light industrial tenants through redevelopment of their properties. Financial assistance through the NYC Industrial Development Agency (NYCIDA) can make a sizeable contribution to most capital stacks.
In August, the NYCEDC announced the closing of a transaction to provide financial assistance to our clients The VOREA Group and Mega GroupDevelopment—or “VM 4401 LLC.” Approximately $3M in incentives will ensure the transformation of The Metropolitan Building, a vacant, 45,000-square foot, four-story historic building (c. 1930) in disrepair, located in the heart of a Long Island City, Queens, industrial neighborhood.
We secured about $3M in incentives, over 25 years, for our client. For a $14.2M renovation, this number represents approximately 25% of the total project costs.
VM 4401 LLC envisions a state-of-the-art mixed-use building for manufacturing and light industrial uses. Our client anticipates targeting small-scale production companies, tech incubators, fashion ateliers, and small studio users, including artists. The project is also projected to create 37 full-time construction jobs and ultimately employ 36 workers when the building is fully occupied.
The main goal behind offsetting project costs with incentives is to make the project financially viable, including the ability to offer attractive rents to small businesses. Incentives are a win-win for building owners and government agencies, because they typically align with a broader vision shared by both entities.
For example, Department of City Planning Director Dan Garodnick referenced Long Island City’s “Neighborhood Plan” and its stated objective of diversifying businesses and, therefore, ensuring more opportunities for more residents. The Metropolitan Building project is similarly focused on Long Island City’s future. Its incubator-type environment will bring small creative tenants and makers together under one roof, therefore, fostering a more resilient, modern manufacturing hub.
1. Government-sponsored, economic development assistance improves financial viability and public perception about The Metropolitan Building’s value.
2. Like many New York-based organizations, VM 4401 LLC relied on a mix of good financing options. Economic incentives were an important part of the equation.
3. Economic incentives maximize the performance of real estate portfolios. Consider all the factors in play, including (in our client’s case) the LIC neighborhood’s manufacturing future.
Redeveloping historic structures has additional benefits not as easily quantified but still critical to the long-term vitality of a neighborhood.
VM 4401 LLC shares the NYCIDA’s commitment to preserving The Metropolitan Building’s unique architectural features, such as the exposed brick and timber frame structure, four-grid pattern windows, and wood flooring. Our client is repurposing an under-utilized, historic building as much-needed manufacturing and creative spaces while preserving those elements that make it a standout with prospective tenants.
"By fostering a community of innovation and collaboration, we aim to support the creative class and continue enhancing the vibrant, dynamic character of Long Island City,” said Jared Lewis, Senior Development Manager at VOREA.
If you have questions about economic incentives and tax credit programs, please, feel free to contact me directly: sunil@thinkforwardfinancial.com. We can discuss where to start and how to navigate a constantly changing landscape of potential financing opportunities.
NYC agencies are encouraging investments in Industrial Business Zones (IBZ). This is good news for real estate developers and building owners hoping to attract manufacturing and light industrial tenants through redevelopment of their properties. Financial assistance through the NYC Industrial Development Agency (NYCIDA) can make a sizeable contribution to most capital stacks.
In August, the NYCEDC announced the closing of a transaction to provide financial assistance to our clients The VOREA Group and Mega GroupDevelopment—or “VM 4401 LLC.” Approximately $3M in incentives will ensure the transformation of The Metropolitan Building, a vacant, 45,000-square foot, four-story historic building (c. 1930) in disrepair, located in the heart of a Long Island City, Queens, industrial neighborhood.
We secured about $3M in incentives, over 25 years, for our client. For a $14.2M renovation, this number represents approximately 25% of the total project costs.
VM 4401 LLC envisions a state-of-the-art mixed-use building for manufacturing and light industrial uses. Our client anticipates targeting small-scale production companies, tech incubators, fashion ateliers, and small studio users, including artists. The project is also projected to create 37 full-time construction jobs and ultimately employ 36 workers when the building is fully occupied.
The main goal behind offsetting project costs with incentives is to make the project financially viable, including the ability to offer attractive rents to small businesses. Incentives are a win-win for building owners and government agencies, because they typically align with a broader vision shared by both entities.
For example, Department of City Planning Director Dan Garodnick referenced Long Island City’s “Neighborhood Plan” and its stated objective of diversifying businesses and, therefore, ensuring more opportunities for more residents. The Metropolitan Building project is similarly focused on Long Island City’s future. Its incubator-type environment will bring small creative tenants and makers together under one roof, therefore, fostering a more resilient, modern manufacturing hub.
1. Government-sponsored, economic development assistance improves financial viability and public perception about The Metropolitan Building’s value.
2. Like many New York-based organizations, VM 4401 LLC relied on a mix of good financing options. Economic incentives were an important part of the equation.
3. Economic incentives maximize the performance of real estate portfolios. Consider all the factors in play, including (in our client’s case) the LIC neighborhood’s manufacturing future.
Redeveloping historic structures has additional benefits not as easily quantified but still critical to the long-term vitality of a neighborhood.
VM 4401 LLC shares the NYCIDA’s commitment to preserving The Metropolitan Building’s unique architectural features, such as the exposed brick and timber frame structure, four-grid pattern windows, and wood flooring. Our client is repurposing an under-utilized, historic building as much-needed manufacturing and creative spaces while preserving those elements that make it a standout with prospective tenants.
"By fostering a community of innovation and collaboration, we aim to support the creative class and continue enhancing the vibrant, dynamic character of Long Island City,” said Jared Lewis, Senior Development Manager at VOREA.
If you have questions about economic incentives and tax credit programs, please, feel free to contact me directly: sunil@thinkforwardfinancial.com. We can discuss where to start and how to navigate a constantly changing landscape of potential financing opportunities.
For many organizations, delaying a project means delaying future success. Tax credits and economic incentives can help fund the next step forward in any mission-driven organization’s growth and evolution. Considering the life line that these programs can represent, let’s take a few moments to understand what incentives are and how to tap into the potential for your company.
The private, nonprofit agency Consortium for Worker Education (CWE) provides a wide array of workforce preparation, industry-specific training, and employment services for 70,000+ NYC workers every year. Union members, new Americans, and dislocated workers number among the populations served by this essential service provider.
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