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Economic climate gives birth to ideas.

Economic climate gives birth to ideas

Property taxes and economic development were the themes of a number of private-sector proposals made last week.

While Mayor David N. Dinkins claims he will be able to keep property taxes from rising too much when the presents his four-year plan next month, the New York City Partnership and the New York Chamber of Commerce joined the Real Estate Board of New York's call for a freeze on those taxes, as well as other business and individual taxes.

The business groups also called for a reduction of 30,000 municipal employees through the four years of the plan. They are also pushing for the expansion of the ICIP program to include areas south of 96th Street in Manhattan for the renovation of commercial buildings and are urging the creation of tax credits for job creation. In addition, New Jersey, Connecticut and New York signed a "non-aggression" pact last week in which they agreed to refrain from soliciting each other's corporations and to concentrate on wooing outsiders to the region.

Guy H. Leibler, president of the Schulman Realty Group, which owns 27 buildings in Westchester, said "The policy in Westchester is not to hurt the City of New York, just to get them before they go anywhere else. Once they leave the state they are lost."

Leibler said Westchester supports the City of New York, and its health is very important. "Our only goal is that we would like them to move here and not Dallas Texas. We are not stirring the pot or ringing anybody's doorbell," he added. "This is the policy set forth by the county executive."

The pact was signed at the state level, said Jeanne P. Nathan, deputy mayor of Economic Development, and counties did not sign. Nathan said campaigns which are to attract business without disparaging other tri-state areas are considered to be okay. "We're not trying to stop that," she said. "The focus is to encourage joint marketing of the area."

Steven Spinola, president of the Real Estate Board of New York (REBNY), said the tri-state pact is important to bring people together to maximize the strengths of this region. "I don't think we should pretend it will stop corporate raiding," he added, noting that there is already a campaign by New Jersey utilities to lure people.

"People would not believe that it's not necessary to be aggressive just because we have this pact," he said. "We have to be as aggressive as possible and not make negative comments, but we also have to make the business environment here as hospitable as possible."

What is needed, Spinola said, is an aggressive, bold program for economic development which includes expanded ICIP's and incentives to sign leases and create jobs. The ICIP, he said, is not going to solve the problem alone but should be expanded and continued. "It will be a shame if even the benefits this modest program provides are allowed to expire," he said.

Ronald K. Shelp, chairman and CEO of the New York City Partnership and the Chamber of Commerce, said the mayor outlined in broad terms the five principals he will pursue, including downsizing and restructuring of the government. "In general we would applaud him, except that he said he will keep taxes rising as low as he can," he said. "We don't believe in any tax rise over the four years. There has been four billion dollars in new city and state taxes and citizens simply cannot bear this."

Shelp said they testified in favor of the ICIP hearings and advocated modifications, including the extension of certain benefits and added benefits for those locating outside the central business districts. "If you freeze property taxes you have come a long way towards creating incentives," Shelp noted. "The freeze is linked to our belief in creating more incentives. If you don't freeze (taxes), we would advocate additional ICIP incentives."

The non-aggression pact is something, Shelp said, he first advocated four years ago in some comments on a Washington television show. "Everybody laughed," he said, "But it's great idea, which I understand was promoted by (Deputy Mayor) Sally Hernandez-Pinero, and I commend the city for doing it. Everybody will benefit from this."

Ruben Klein, president of the Bronx Realty Advisory Board, said, "Every single area has trouble and by consolidating, things will not change. AT&T can say |Come back,' but once these tenants leave and go out of the city no one will say, |come back.' It's not realistic. There is no question that the region should not have conferenced and agreed to get along but the point at which you will have programs is a long way off."

Spinola said they have been urging the mayor to announce a tax freeze since May. "This is an indication that he has finally recognized a need for the holding down of taxes." Spinola said nothing shorter than a freeze for a number of years is needed to give the message to businesses, property owners and homeowners, "that they city will not tax you out of it." Spinola said the City Council has called for no tax increases and REBNY hopes the mayor will do the dame. "The message from the mayor is so very important in terms of where the city is going," he said.

Spinola said they applaud the Partnership and Chamber of Commerce's position and calls it a sign that the business community is concerned about where the city is going. "It was a strong statement and the timing was important as well as who said it," he said.

The city has not considered REBNY's own aggressive, bold economic development plan outlined 18 months ago an Spinola blames that on the administration becoming sidetracked with other issues.

John J. Gilbert III, president of the Rent Stabilization Association, said the taxes are the most important issue. "It is essential that the Mayor and City Council freeze property taxes for at least the next five years in order to build a firm foundation for economic recovery. A healthy New York and a healthy metropolitan region is in the interest of all property owners and the thing that can enhance that health is lower taxes and less regulation. Whether you talk to the Long Island folks or the Westchester folks you hear the appeals to keep taxes lower and for the deregulation of high rent units."

Klein said, "I have very little confidence in the Mayor doing what he said. I have heard that the Major has turned down any kind of tax hold." Klein noted that owners need some kind of cap or they will have to give the buildings away. "They Mayor has a responsibility where the cost factors have escalated and owners are having difficult times. The mayor should say we need to save the space and see that it will not get worse. I don't hear that."

The recommendations to raise salaries for high level employees, including the mayor, Klein said, shows and insensitivity to the situation. "The winter is coming, oil is at $22 a barrel, water is high, it is going to cost everybody a lot of money and I don't know where the money is coming from."

Klein said the city is facing the highest amount of defaults on property taxes since 1976. "This an indication that people can't exist and pay their taxes and one should begin to look at the tax structure. We wouldn't have this many defaults unless there is a problem brewing."
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Title Annotation:outcry to freeze taxes
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Oct 16, 1991
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