Subsidy Sheet: Real estate hopes to revive Grim REAPer

June 6, 2025

A rare case of NY ending an irrational subsidy! We’re glad – but real estate is disappointed – that the state budget didn’t extend the long-obsolete Relocation and Employment Assistance Program (REAP) tax break that incentivizes companies to leave lower Manhattan (Crain’s). 

State Senator Brad Hoylman-Sigal nailed it: “Why should we be paying businesses to leave the borough when we want them to stay? It’s a perverse incentive, especially with commercial vacancies and empty storefronts.” 

Reminder: These tax breaks only affect business location decisions 2 to 25% of the time, according to a metaanalysis by Tim Bartik at the Upjohn Institute for Employment research.

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More NY corporate giveaway news from this week:

  • OZs: The Senate passed the Gianaris/Dinowitz bill that would end the Trump handout to the wealthy for a fourth straight year. All eyes on the Assembly.
  • The latest example of no consequences for failure to meet mega-subsidy targets: Local leaders in Brooklyn are threatening legal action over Empire State Development delaying penalties for a developer that still has not built thousands of affordable housing units near Atlantic Yards (Gothamist). The broader takeaway here is that the businesses getting mega-subsidies for mega-projects rarely (if ever) end up reimbursing the taxpayer after missing contractual targets. 
  • Excelsior: The state is giving $6 million in Excelsior tax breaks to Queen One, an e-commerce company, for establishing its headquarters in Williamsburg, Brooklyn (Crain’s). Alstom, a “car body shell manufacturing company,” will receive up to $7 million for expanding into Hornell, NY – a town about a 112-mile drive southwest from Syracuse, located at 42°19′N 77°40′W.
  • Buffalo Billion: Over a decade after the scandal, and years after the convictions for contract bid-rigging of top Cuomo allies overturned by the Supreme Court, the Department of Justice continues to push for a new trial (Syracuse [dot] com).
  • Micron: The ground-breaking for the company’s Clay, NY chip fab – which could receive up to $5.5 billion in state subsidies – has been pushed back to the end of this year (WRVO).

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