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Sullivan: NYC committed to real estate.

Allowing Olympia & York to delay repayment of its tax debt to New York City, said Barry Sullivan, deputy mayor for Finance and Economic Development, was one example of the city's commitment to its real estate sector. And while the recently passed Industrial and Commercial Incentive Program (ICIP) excludes new construction below 96th Street - "We don't need another new office building in Manhattan," Sullivan noted -, he said it holds promise for the beleaguered Downtown market by allowing tax exemptions below 23rd Street for the first time. And expanded tax incentives in the outerboroughs for new construction, Sullivan said, protect pioneer developers from inflation.

In one of his first appearances before a large gathering of real estate professionals, Sullivan last week addressed the Young Men's/Women's Real Estate Association. He spoke knowledgeably on many of the issues that are of concern to the industry, and, on others, he modestly admitted that he is still adjusting to the position he assumed in May.

Where's the Growth?

The Deputy Mayor identified international business and small- to mid-sized companies as the backbone of the city's economy and its potential sources for new tenants.

Remaining a leading international city, Sullivan said, is one of the city's "over-reaching" and "over-arching" goals. That is why, he said, the mayor, Sullivan and business leaders, made two multi-city trips to Europe this summer to meet with business leaders and economic development officials.

Sullivan said we are a world-wide center for commerce because we are the leader in financial services. Fifty-six percent of the loans made in New York are foreign and $1 million in financial transactions daily are made in the city daily, he quoted. Sullivan said New York also boasts strong public relations, advertising, law, etc.

"We're the leader in all those," he said. "And even though they've been hit hard. They are still a leading attraction."

The United Nations, which makes its home on Manhattan's East Side, is a growth sector in itself, Sullivan said.

Meanwhile, smaller, Fortune 100 companies, Sullivan said, comprise the majority of the city's enterprises and they enjoyed the greatest growth during the 80's boom. To facilitate these firms, Sullivan said, the mayor has launched local legislation to eliminate licensing for 12 categories of small business, and the city has increased its small-business loan programs.

"By creating opportunities for smaller business today," Sullivan said, the city is going to help medium and large businesses of tomorrow.

Major companies, Sullivan said, are recommitting to the city. Prudential Securities, one such firm, recently signed a deal that saves 5,000 city jobs, Sullivan noted. The deal, in one sense, Sullivan said, reflects "the drop" in real estate prices. Its completion, he said, was also due to the fact that his former employer, Chase Manhattan Bank, was able to give a good rent because Prudential is going to invest a significant amount in the renovation of the space.

In all, Sullivan said, he thought the city had "sufficient weapons to win in the bidding war with, ... in my time its always been, New Jersey."

While cost is one of companies' main priorities, the other primary concern is quality of life, specifically: Cleanliness, safety, infrastructure, and education. Companies, he said, want predictability for the future, which, he said, is hard to give. "But no other city knows either," he said.

About high property and business tax, Sullivan explained that public assistance accounts for the largest expense in running, the city. Other services, he said, are done at an average cost of other municipalities. The proposed absorption of Medicaid by the state, Sullivan said, could help with that.

One member of the audience suggested the city could be more proactive with companies threatening to leave the city. The real estate community, this person suggested, could assist the city's retention efforts by providing information and more intra-city alternatives to tenants contemplating another location.

Sullivan welcomed the idea. "If [information] is an important gap, let's close it together," he beamed.

The deputy mayor showed his awareness of the tax inequities in the city, by saying that co-op and condo owners are assessed four times the amount that single-family homeowners are. And while there are more apartment owners than single-family owners, he said, the latter is a more organized lobby.

"Until there is more of a political groundswell to change that ratio, it's going to be hard to do," he said.

By a number of his responses to audience questions, Sullivan showed that he is still in the learning process and that the scope of his position has limits. To a query about the controversial water meters, he asked the gentleman to brief him on the problem in-writing because he wants to be familiar with it when he takes up his post on the city's Water Board. To another woman who wanted to know what city agencies are doing about the desperate homeless problem, he flatly admitted "I don't know."

Sullivan stressed cooperation. When how the city can better clean up the Big Apple, Sullivan replied, if you believe the onus of better sanitation is entirely on the Department of Sanitation, he said, "We don't have the money to clean it up to your satisfaction." If she was envisioning a collaboration of public and private groups, he said "I think we can [achieve] a relatively clean city."
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Barry Sullivan, deputy mayor for Finance and Economic Development, New York, New York
Author:Fitzgerald, Therese
Publication:Real Estate Weekly
Date:Sep 23, 1992
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