Long Island City waterfront. Photo via Getty Images.
March 27, 2025 By Ethan Marshall
As Governor Kathy Hochul considers extending a tax incentive program meant to support the growth of businesses and create more jobs in New York City, Queens businesses and economic development agencies, especially the Long Island City Partnership in Long Island City, are pushing for it to continue beyond its scheduled expiration of June 30, 2025.
The Relocation and Employment Assistance Program (REAP) provides income tax credits for businesses that are relocating jobs from outside New York City or below 96th Street in Manhattan to any of the other New York City boroughs or above 96th Street in Manhattan.
It was initially proposed in the 1990s as a way to help grow businesses in New York City outside of Manhattan. It has helped bring more jobs to the other boroughs. Businesses taking advantage of the benefit program are not limited to Manhattan, as some have come from elsewhere in New York State, as well as from New Jersey and Connecticut.
REAP benefits include a $3,000 annual credit for 12 years per eligible employee for relocating to any of the designated locations within revitalization areas zoned as C4, C5, C6, M1, M2 or M3 by the City and an annual non-refundable $1,000 credit per share for relocating to parts of an eligible area that are not considered revitalization areas.
The $3,000 credits are refundable during a five-year period, starting from the year of the relocation. The annual $1,000 credit can be taken against the New York City General Corporation Tax (GCT), the Banking Corporation Tax (BCT), the Business Corporation Tax, the Unincorporated Business Tax (UBT) and/or the utility tax. Credits that were not used in subsequent years can be carried over for up to five years.
Long Island City Partnership President Laura Rothrock said the organization has put a lot of time and effort into making sure the neighborhood benefits from the REAP program.
“We at the Long Island City Partnership have a business assistance team that works with businesses that are looking to locate in Long Island City,” Rothrock said. “We help them identify space, and we help them get permits and approvals to open. REAP is something that a lot of businesses take advantage of. They say it helps move the needle when they’re making their decisions about where to locate.”
Long Island City Partnership has been trying to make sure businesses know about the REAP program, as it can incentivize them to move to Queens. This helps to benefit both the business and the borough, bringing more jobs there. In Long Island City alone, at least 12 companies have used the REAP program to bring approximately 2,600 jobs to the neighborhood, according to Rothrock.
The benefit for employers has remained the same since the REAP program was implemented. Governor Hochul has included the renewal of the program at the same level in her budget proposal.
While LIC Partnership would not mind seeing the benefit be increased, the main priority is to make sure the REAP program gets extended before its June 30 deadline.
LICP President Laura Rothrock at a LICP event in October. Via @LongIslandCityPartnership on Facebook
“We’re happy with the current program,” Rothrock said. “We want to see what’s in the governor’s budget now. We would love to see it be approved. Of course, we would always argue for a deeper benefit, but I think it’s important to maintain what we have at the base level. It’s a tool that businesses can use to make sure that they’re being incentivized to move here. It is very important when you talk about economic development, making sure New York City is a diverse economy and maintains a strong economy. At a baseline, what’s in the governor’s budget, we’re very supportive of that and we’re hoping that it does get extended.”
Rothrock noted that the COVID-19 pandemic showed how people not working in offices within communities negatively impacted local businesses, as there was less foot traffic and, thus, fewer people around to go to these businesses. Now, with more and more people returning to work in the office, there has been a spike in foot traffic, greatly benefitting local retailers.
“We want to make sure that we don’t have a lot of office vacancies,” Rothrock said. “We want to make sure that we have a lot of economic activity in the office and the industrial space. Not only does it help those businesses locally, but also those employees are spending money within the community. They’re going to lunch here, going to the bodega, the coffee shop and the local drug store. That also helps with the local economy, when we have not just residents here, but workers.”
When it comes to Long Island City, Rothrock also noted the neighborhood’s mix of residential, office, manufacturing, and retail buildings has helped it remain resilient during and beyond the pandemic. The manufacturing sector and mix of office towers are much higher in this neighborhood compared to many others in Queens, leading to many businesses being attracted to taking advantage of the REAP program in Long Island City. This allows for more workers at these businesses, which is noteworthy due to the fact that the benefit encourages a high number of employees.
Some of the more common businesses to take advantage of the REAP program in Long Island City include those in construction, manufacturing and technology. There are a number of office tenants in the neighborhood who are within the tech sector or are back offices of larger operations. Many of the manufacturing businesses relate to fields of transportation, food processing and garment manufacturing. The high number of film and television studios in the neighborhood have made it a popular industry there as well.
The REAP program is extended in five-year increments. If it is extended again, it would run through 2029.
In order to be eligible for REAP benefits, businesses must have operated largely outside of New York City or below 96th Street for at least the last 24 months before relocation. While most retail activities and hotel services do not qualify for the program, businesses that make internet sales and sales by mail or telephone can qualify.
The premises in which the business relocates cannot be residential and must have been improved upon through either construction or renovation. The property for the premises must be eligible for the Industrial and Commercial Incentive Program (ICIP) and be leased by New York City, the New York City Industrial Development Agency (NYCIDA) and the Port Authority or New York State Urban Development Corporation. At least 50% of the assessed value of the property at the start of improvements must be made towards improving the property.
If any premises do not meet all these criteria, they can still qualify if they are leased and the lease term extends at least three years beyond the commencement of the lease or the date of the relocation.
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