Commercial Expansion Program (CEP)

The 2017/18 Renewal Period has started. All submissions will be accepted until July 1, 2017.

The Commercial Expansion Program (CEP) program is designed to increase tenant occupancy in commercial offices and industrial/manufacturing spaces. CEP provides property tax benefits for qualified new, renewal, and expansion leases in commercial offices and industrial/manufacturing spaces built before January 1, 1999. The properties must be located in a designated abatement zone. Applicants are also required to make certain minimum physical improvements to the eligible premises and the common areas.

Benefit

Three or Four-Year Leases
In the initial year, the tax abatement is equal to the actual property tax liability per square foot or $2.50 per square foot, whichever is less. It is equal to two-thirds the initial amount in year two and one-third in year three.

Leases of Five or More Years
The abatement lasts for five years. In years one, two and three it is equal to the actual property tax liability per square foot, or $2.50 per square foot, whichever is less.

The abatement is equal to two-thirds the initial amount in year four and one-third in year five.

Leases of up to Ten Years (Manufacturing Only)
The abatement lasts for up to ten years depending on the lease.  There is no phase out. The same expenditure requirements (see above) as commercial CEP apply and must include a description of the beginning raw materials and final product(s) manufactured.

Benefit
Lease Term Abatement Period Year 1 Year 2 Year 3 Year 4 Year 5
3 - 4 Years 3 Years Property tax liability or $2.50 per sq. ft. whichever is less  2/3 of initial abatement  1/3 of initial abatement  Abatement Expires Abatement Expires
5 Years
(Commercial)
5 Years Property tax liability or $2.50 per sq. ft. whichever is less  Property tax liability or $2.50 per sq. ft. whichever is less  Property tax liability or $2.50 per sq. ft. whichever is less  2/3 of initial abatement  1/3 of initial abatement
5 Years or more (Manufacturing) 5 Years or more Property tax liability or $2.50 per sq. ft. whichever is less  Property tax liability or $2.50 per sq. ft. whichever is less  Property tax liability or $2.50 per sq. ft. whichever is less  Property tax liability or $2.50 per sq. ft. whichever is less  Property tax liability or $2.50 per sq. ft. whichever is less 

Eligibility

Location
Manhattan (north of 96th Street zoned C4, C5, C6, M1, M2, or M3) and all areas in the Bronx, Brooklyn, Queens and Staten Island. CEP Manufacturing within the Garment District: West 34th & 9th to West 39th & 9th and West 34th & Broadway to 40th & Broadway.

Lease Term
If companies have fewer than 125 employees, the lease term must be for at least 3 years; if there are more than 125 employees, the lease term must be for at least 10 years. All leases must begin before June 30, 2018 in order to be eligible for the program.

Eligible Properties
The property must be classified as a non-residential or mixed-use building built before January 1, 1999.

Properties occupied by or used for retail, hotel, or residential purposes are not eligible.

Required Physical Improvements
Improvements to common areas and the eligible premises are required. Please see below for the required minimum spending on improvements.

Minimum Cost of Improvements
Lease Type Less than 125 employees More than 125 employees
New $2.50 per sq. ft. of net leasable space $25.00 per sq. ft. of net leasable space
Renewal $2.50 per sq. ft. of net leasable space if previously occupied $5.00 per sq. ft. for all applicable net leasable space if previously occupied
Expansion $2.50 per sq. ft. of net leasable space $25.00 per sq. ft. of net leasable space

Spending on improvements under a lease renewal must occur within the three year period prior to the start of the Renewal lease and up to 14 months after the tenant's rent commencement date. Spending on improvements under New and Expansion leases must occur within the three year period prior to the start of the lease and up to 60 days after the tenant's rent commencement date.  Benefits cannot begin until one month after the rent commencement date.

Initial Application Requirements
A completed Commercial Expansion Program Application must be submitted within 180 days of the lease start date. CEP benefits will be denied if an application is received after the 180th day. Please refer to the Commercial Expansion Program (CEP) Application for instructions, information about other requirements and filing deadlines.

Once a property is approved for CEP, the applicant/representative will receive a Notification of Eligibility which includes your application number. You should keep the application number for future reference. Please notify us right away if you have any questions or see any errors on the notice.

New and Expansion Leases
Must provide:

  • proof of the number of employees (within 60 days of the first required rent commencement date); and
  • proof of expenditures  -  a copy of the invoices of your expenditures and cancelled checks must be mailed along with this form (within 60 days of the first required rent commencement date).
Renewal Leases
Must provide:
  • proof of the number of employees  (within 60 days of the first required rent commencement date); and
  • proof of expenditures  -  a copy of the invoices of your expenditures and cancelled checks must be mailed along with this form (within fourteen months of the first required rent commencement date).

Forms & Reports
Forms


Renewing your Exemption
To keep this benefit, you were required to submit an annual CERP Renewal form, formerly known as the Certificate of Continuing Eligibility.

The 2017/18 Renewal Period has ended. All submissions were due on July 1, 2017.


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