The New York City Industrial Development Agency approved $195 million in tax breaks for Related Cos. and Oxford Properties Group for their planned $4 billion office tower at 50 Hudson Yards on Manhattan's West Side.
At its Jan. 10 meeting, the IDA permitted Related and Oxford to send payments in lieu of city real property taxes, city and state mortgage recording taxes, and city and state sales and use taxes.
According to Related vice president of development Andrew Cantor, 50 Hudson Yards will be the city's fourth-largest commercial tower.
Hudson Yards is a transit-oriented development project. In September 2015, the Metropolitan Transportation Authority opened the No. 7 subway line extension 1.5 miles from Times Square to the new 34th Street-Hudson Yards station.
In the mid-2000s, then-Mayor Michael Bloomberg's administration devised a so-called value capture financing plan through the issuance of $2 billion in special-purpose bonds, to be repaid from revenue streams generated by the development and other sources, including payments in lieu of taxes.
Goldman Sachs in September priced the MTA's $1.06 billion of Hudson Rail Yards trust obligation bonds.
City-issued tax breaks totaled $7.7 billion in fiscal 2016, according to a report the City Council issued in September. If accounted as regular expenses, they would have represented 13% of city-fund expenses that year.
On Jan. 18, the council is scheduled to debate a bill calling for the watchdog Independent Budget Office to evaluate tax-development expenditures.
