Like almost everyone else, nonprofit organizations are taking hits from the real estate boom. Now, some of the market’s biggest profiteers may help win them at least a small leg up in the quest to save money on rent, while the realtors entice nonprofits to fill otherwise unoccupied office space.
The Real Estate Board of New York and the city have been discussing a proposal to give nonprofits grants in exchange for moving north of 96th Street or to the boroughs outside Manhattan. The measure would effectively provide nonprofits with the same incentive currently available only to tax-paying companies. “Nonprofits represent a significant portion of New York’s employment base,” said Warren Wechsler, spokesperson for REBNY which, he said, has talked with the city’s Economic Development Corporation about creating a refund program for such organizations. Based on New York’s Relocation and Employment Assistance Program, or REAP, and a similar program in New Jersey, the plan would give nonprofit organizations $3,000 per employee every year for five years.
Currently, for-profit businesses relocating to upper Manhattan or the boroughs receive tax breaks for between five and 12 years. Because nonprofits do not pay taxes, they were not included in the program.
David Stern, executive director of Jewish Association for Services for the Aged, is considering taking advantage of the deal: The lease for his headquarters on West 31st Street will jump by half a million dollars this fall. “Hundreds of thousands of dollars in rent increases could mean serious diminution in services,” said Stern. “This could be a win in terms of human services.”
But for the realtors, this is not purely about goodwill. No one collects vacancy info on office space in the outer boroughs, but that kind of real estate is a tougher sell there, acknowledges Arlene Wysong of Newmark and Co. Real Estate, an advisor to REBNY.
As for whether this will happen soon, David Lebenstein of Time Equities Inc. says, “We may need to wait for the next administration.” (EDC did not respond to calls from City Limits.)
Some nonprofits don’t have that long to wait. Of the 400 small theaters represented by the Alliance of Resident Theaters New York, about 100 face lease expirations over the next six months, said Executive Director Ginny Louloudes. “Rents are going to double and triple,” she said, adding that while she is in full support of expanding REAP benefits to nonprofits, the need for space in central Manhattan is critical, too.