New Year's help offered to big tenants.

A number of big and small tenants and lease deals that have been question marks appear to be jelling thanks to some bottom-line savings that are being offered by the City and State of New York.

Various incentives are being offered to these large employers through the Industrial Development Agency (IDA) as an inducement to remain in New York. Those ready to be approved include packages for financial services tenants Merrill Lynch and Paine Webber; entertainment powerhouses CBS, which has now decided to update its current broadcast facilities, Viacom and Home Box Office; as well as fashion designer Liz Claiborne.

A number of smaller businesses are also hoping to attain boosts from the IDA board, which will meet January 11th to vote on the packages. The smaller employers include a jeweler, a material recycling firm, an importer, a food service provider and a business that makes those can't-do-without sticky rat traps.

The proposed inducement offers will be announced during the public hearing before the IDA board. At that time, those familiar with the provision of incentives said, these IDA offers would be explained and probably approved.

Additionally, the verbal briefing would include other benefits that the tenant or employer might be receiving, such as those coming directly from the Empire State Development Corp., a State agency with the power to provide its own job retention packages.

Typically, the IDA can act as a conduit to issue triple tax-free revenue bonds toward the construction of manufacturing facilities, while other deep pocketed tenants might simply obtain the right to spend money on fixtures and furnishings without paying city or state taxes.

The multi-million dollar packages as identified in the calendars are misleading, an expert explained, and are not the actual bottom line benefit to the tenant, which would be much less.

For instance, Paine Webber's approximately $224 million IDA revenue bond transaction is an old one that allows the firm and affiliates to spend these dollars on the acquisition and leasing and installation of machinery, equipment, furniture, fixtures and other tangible personal property to be used at 51 West 52nd Street without paying city, and state and use taxes on the items.

Without changing the inducement package and going before the IDA board for approval once again, the benefits could not be used, say for equipment to be used at another of its leased sites at 1251 Avenue of the Americas, or its headquarters at 1285 Avenue of the Americas.

"An inducement gives then the parameters," said the incentive expert, who declined to be identified by name "They can't execute a lease until the inducement resolution is in. But if they want to subtract [a site], they can."

While the IDA typically provides an inducement package that is supposed to be approved before a lease is signed - it's the inducement to sign, get it? - Paine Webber already has an all encompassing incentive package, so the execution of its 15-year lease for 69,000 square feet in July for the November 1998 start is an action that is merely being approved under its current package, explained its broker at Cushman Realty.

Speaking in general, a spokesperson for the city's Economic Development Corp. said sometimes, the inducement is made earlier, as it was with Paine Webber, and these hearings can simply be following up on earlier deals.

Paine Webber's competitor, Merrill Lynch, appears to have completed a deal for a New Jersey parcel, but still needs space in New York. The sales and use tax exemptions listed by the IDA would be directed towards spaces at 202 Canal Street, 65 East 55th Street, 450 Lexington Avenue, and 3736 Riverdale Avenue in The Bronx. The IDA calendar also lists locations at 444 Madison Avenue, 4 World Trade Center a/k/a the Commodities Exchange, and One North End Avenue a/k/a the Mercantile Exchange Building, that may be new. Calls to the representatives of those buildings, and to Merrill's broker, Peter Riguardi at Colliars ABR, were not returned before deadline.

Since the incentive packages are also supposed to be directed towards specific sites that are listed in the IDA calendar, DoubleClick is back on the agenda after adding 245 Fifth Avenue to sites that in the December calendar only included 41 Madison and 50,000 square feet at 450 West 33rd Street.

From the IDA calendar, it also appeared that Home Box Office was ready to settle on an expansion to 775,000 square feet at its current locations.

But HBO spokesperson Henry Gomez put a grinch-like spin to the company's IDA dealings, insisting "We've made no commitment either to our current leaseholders or to other properties, and we are still exploring our options." The cable company has been trying to decide what to do about its space needs for more than a year, and is working with Joseph Simone at Tishman Realty, who through a spokesperson declined comment.

Gomez, however, insisted they are negotiating a "portable" package that could be used at any city building, and said they are doing the same with New Jersey.

But unlike the "portable" benefits claimed by NASDAQ, the HBO benefits described in the IDA calendar for January 11, 1999 are aimed specifically towards space at the named properties.

Even so, approval by the IDA board doesn't mean its a done deal, said the benefits expert. "This is a term sheet, and is not binding until the deal is signed. But the [IDA approval] action enables [the employer] to go forward, and you have induced them [to remain in New York]."

HBO has so far lined up a New York IDA inducement package for its current sites at the Home Box Office Building at 1100 Avenue of the Americas, on the northeast corner of 42nd Street across from Bryant Park; the adjacent block-through Grace Building at 1114 Avenue of the Americas just to the east; and its studios in Midtown South at 123 East 23rd Street.

According to CoStar, HBO currently has 315,000 square feet at its eponymous building, 289,500 square feet in the adjacent TrizeHahn-owned Grace Building, and 75,000 square feet at the 23rd Street studios, which are near Madison square, the trendy Flatiron District and Gramercy Park.

"We would absolutely like to keep them. We are absolutely talking to them," said TrizecHahn's Northeast Vice President of Leasing, Steven F. Grant. To date, however, no renewal has been signed at the Grace Building, he said.

Since the IDA notice would provide benefits for approximately 700,000 square feet at the two office sites, that allows for an additional 95,000 square feet or so of possible expansion space.

That much is available through the sublease of offices at the Grace Building, and there is also the directly offered 64,000 square feet of underground concourse and street level retail that will be vacant this summer after CUNY moves its library and consolidates other offices at its new condo at the former B. Altman's site, which is still under construction.

An attractive re-use of the grimy and underutilized plaza area at 43rd Street and Sixth Avenue as a better public amenity to be used in conjunction with the concourse space is something TrizecHahn has been exploring with architects, City Planning and HBO. So an HBO studio, store or theme "something" as part of that urban space is always a possibility.

Remember, this city attracts tourists with a huge appetite for interactive displays before street cameras, and the newest ABC, MTV and CNN studio designs will place the talking heads before plate-glassfuls of wavers.

HBO could just as easily cut a deal with Douglas Durst for the site NASDAQ has been eyeing across Sixth Avenue, and even use the 2 FAR inclusionary theater bonus to build a playhouse they could control, program and film within the structure. Of course, they would have to add that site to another IDA calendar if they did so.

While there is usually a wink when discussions come to crossing the river, those familiar with HBO say that they, more than most companies, are seriously considering the bottom line express to New Jersey. In this case, they suggest, the IDA package is more of a bargaining tool towards getting a better Jersey deal.

CBS, which at one time was negotiating to build on the Trump commercial land at Trump Place and talking to New Jersey land owners, is now preparing to make the technological changes at its current spaces by requesting exemptions from sales and use taxes for 507-530 West 57th Street, 513 West 56th Street, 1697 Broadway, and 851-3 and 855-9 Tenth Avenue through a $50 million IDA revenue bond action.

The deal is not signed, sealed and delivered, but "As a result of this [IDA action], we are committed, pending the approval of the benefits," said Kenneth Cooper, vice president of facilities and administration for the television programmer.

Viacom already has a $10 million incentive package for its Times square offices. They are now on the IDA calendar so they can skip paying city and state sales and use taxes for equipment to be used at 1443 Park Avenue at 107th Street, in the Harlem Empowerment Zone, in a $292 million revenue bond transaction.

The smaller manufacturers and those that buy properties can obtain other benefits.

Apicella Jewelers, for instance, intends to purchase the building at 225 West 29th Street and use its 23,242 square feet to manufacture gold jewelry. They will make payments in lieu of city real property taxes, and obtain an exemption from the mortgage recording tax, and sales and use taxes.

Similar benefits will be obtained by the Double Seven Realty Group on behalf of Yellowstone Imports to buy the 55,000 square-foot building at 11 West 32nd Street. That owner's rep did not return a call before deadline.

The Small Industry Incentive Program will help companies such as Front Row Sweets afford to buy and equip the 15,000 square-foot building in Brooklyn at 32 India Street; commercial boiler and oil tank manufacturer A&L Eastmond & Sons to buy and renovate a building at 531 or 537 Casanova Street in The Bronx; and breakfast preparers Juno Chefs to renovate land and buildings on 249th Street in Brooklyn.

The Industrial Incentive Program will allow Inner City Fish Supply to purchase and equip a 27,780 square-foot building at 21-32 Borden Avenue in Queens.

The IDA does not usually provide financing, which has to be obtained privately or through other programs, but will usually take a position in the property or leasehold through the creation of a condominium.

Normally there is a $10 million cap on what can be financed through the revenue bonds by state law, but recycling facilities can get more.

Approximately $13 million in triple taxexempt revenue bonds will help the recycling company Interstate Material Corp. to acquire with triple tax exempt financing and construct, renovate and equip a 23-acre facility at 211 Johnson Avenue in Staten Island and four acres on Halleck Street in Brooklyn.

Similarly, Atlantic Paste & Glue will have $7 million in triple-tax exempt bonds issued so they can obtain triple-tax exempt financing to purchase, renovate and equip a 160,000 square foot building at 170 53rd Street in Brooklyn where they will make sticky glue traps to capture rodents attracted by all the candy, food and garbage created by the other firms [and everyone else].

Of course, if you represent a tenant that finds they can't get specific help from the city, they can always buy their furnishings over the internet, avoiding some of these sales taxes just like the big boys.