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Let's Take A $1.58 Billion Property Tax-Shirking Tour Of NYC

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One Bryant Park AKA the Bank of America Tower (left), which got an $80 million property tax break this year (Chris Goldberg / Flickr)

If the defining characteristic of modern-day New York is how damn expensive everything is, then the silver lining should be that the city would be rolling in more dough than it knows what to do with. New York City gets 40% of its revenue via property taxes, so an influx of people buying $10 million apartments should result in a windfall of cash to pay for incredible schools, pristine parks, and subways that actually go from point A to point B on a regular basis.

It doesn't quite work that way, however. Part of the problem is a cap on how fast property taxes can rise on any given property, even if it's a Brooklyn co-op whose actual sale price is going through the roof. But it also doesn't help that, according to the city's annual property tax report, more than 44,000 properties in the city pay no property tax at all, thanks to either being owned by tax-exempt institutions like government or charitable entities, or being specially exempted from property taxes. Total annual revenue forgone to the city treasury: $1.58 billion.

That's remarkable — and like everything else in New York, deserves its own walking tour. So use your meager savings after paying your rent (which unless you live in a tax-free building likely includes a passthrough of your landlord's property tax bill) to charge up your MetroCard and spend a day touring the city's most notable property tax deadbeats. (All current assessment and tax-break values per Property Shark.)

One Bryant Park (assessed value $767,370,378, forgone 2018 property taxes $80,681,322)

Better known as the Bank of America Tower, this $1 billion tower with its off-kilter angles was erected on 42nd and 6th in 2009 with tons of help from government taxpayers. For starters, its developers the Durst Organization were granted use of $650 million in Liberty Bonds, tax-exempt federal bonds issued after 9/11 to help in New York city's reconstruction. (No, 42nd Street isn't anywhere near Ground Zero. Yes, people noticed.)

Tax-free bonds just saved Durst money on interest payments, though. Equally important was a 20-year exemption from property taxes under the 42nd Street Development Land Use Project passed under Mario Cuomo way back in 1984, but still in place 25 years later when One Bryant Park was completed.

[UPDATE] Durst spokesperson Jordan Barowitz points out that One Bryant Park does make payments in lieu of taxes that cover part of the lost property-tax revenue: In 2017, he says, these amounted to $49.8 million. He also notes that the exemption is due to the land under the building being owned by the state of New York — though since the land was obtained by the state via eminent domain as one of the later consequences of the 42nd Street project, it’s fine if you want to go on blaming Mario Cuomo.

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The Chrysler Building (Andreas Komodromos / Flickr)


Chrysler Building (assessed value $212,322,600, forgone 2018 property taxes $22,323,598)

If there was a One Bryant Park of its day, it was the Chrysler Building, which was erected with the help of a get-out-of-property-taxes-free card that dates back nearly a century before the building was completed. When Cooper Union was founded in 1859, it received a full property tax exemption on any of its land — including the Chrysler site, which it purchased in 1902. The building itself, though managed by local real estate barons Tishman Speyer, is now owned by a group of Abu Dhabi investors, who starting next year will be paying Cooper Union $32.5 million a year in rent — more than two-thirds of which will be covered by its reduced city tax bill.

When the now-defunct City Project investigated properties that were tax-free thanks to being owned by educational institutions in 2006, it found that the combined tax breaks were costing the city $385 million a year — with the losses projected to hit $1.5 billion by 2018.

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Yankee Stadium (Jeff Reuben / Flickr)


Yankee Stadium (assessed value $911,138,760, forgone 2018 property taxes $95,797,129)

From the Chrysler Building, hop the 4 train uptown to visit the House That Ruth Built — or rather, the neo-grandiose structure that replaced the old Yankee Stadium across the street in 2009. Though George Steinbrenner made a big deal at the time of the new stadium being built with private money, they got plenty of help in the form of other subsidies, first and foremost being a complete exemption from property taxes, thanks to Yankee Stadium 2.0 being built on city parkland — and technically owned by the Parks Department, even though all revenues flow directly to the team.

The Yankees owners, in fact, ended up involved in a bizarre dispute where they insisted that their new building be assessed at a higher value, since they weren't going to be paying any taxes anyway but needed to count more of their bond payments as "in lieu of" property taxes to meet an IRS requirement for tax-exempt bonds. This meant that Steinbrenner ripped off taxpayers twice — first city taxpayers by paying no property taxes, and federal taxpayers again by getting to use discounted federally subsidized bonds where they normally wouldn't have — even before evading a half-billion in taxes by dying at just the right time.

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The Diller Scofidio + Renfro designed building at Columbia University Medical Center (Keith Michael / Flickr)


New York-Presbyterian / Columbia University Medical Center (assessed value $323,413,648, forgone 2018 property taxes $34,003,711)

Walk across the scenic High Bridge to 168th Street and Broadway, the former home of Hilltop Park, where the Yankees, then known as the Highlanders, played from 1903 to 1912. In 1928, Presbyterian Hospital built its new campus on the site in collaboration with Columbia University — but thanks to city property tax law exempting private hospitals as well as private universities, the $5.6 billion a year health company has paid not a dime in property taxes in the 90 years since.

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10 Hudson Yards (Jim.henderson / Wikicommons)


10 Hudson Yards (assessed value $355,000,000, forgone 2018 property taxes $37,324,700)

Hop the A train down to 34th Street — or, if you want to make Dan Doctoroff happy, switch to the 7 and take it one stop to the shiny new station the former deputy mayor helped usher into existence with the help of $2 billion in city money — and take in the breathtaking spectacle that is Hudson Yards, plaything of our alien god masters. We already covered the district's phenomenal tax breaks here a few weeks ago, so suffice to say that every time you look up at the new midtown skyline, keep in mind that it's not paying a dime in property taxes to the city treasury. (Though it does make "payments in lieu of property taxes" that helped fund that new train station, if that's the kind of thing that floats your boat.) Ten Hudson Yards is the only building that's completed and already on the tax rolls; total city property tax losses are anticipated to add up to $785 million over the life of the complex's tax break.



Madison Square Garden (assessed value $387,934,529, forgone 2018 property taxes $40,787,436)

Head back over to 8th Avenue, where the site of the former beaux-arts Penn Station is now occupied by a mammoth air filter that has assumed the name of the World's Most Famous Arena. While the architectural crime has been covered elsewhere, the building's tax break is of more recent vintage: After 20 years of paying property taxes on the land it had secured from the Penn Central railroad, then-owner Gulf & Western used the threat of moving the Knicks and Rangers to New Jersey to extract a full exemption from property taxes in 1982 — one that has continued indefinitely thanks to somebody in the state legislature neglecting to indicate an end date (and subsequent state legislatures refusing to correct the error).

If you're looking to take in more tax-free sights, you can eyeball Lincoln Center (assessed value $320,193,000, forgone 2018 property taxes $33,665,092), visit Citi Field (same public-parkland deal as Yankee Stadium, assessed value $702,896,041, forgone 2018 property taxes $73,902,489) or walk around the east side of Manhattan glaring at various foreign embassies, which are likewise tax-exempt (none are costing the city more than a few hundred thousand a year apiece, but all those nations add up). Or you can bend the rules slightly and admire some of the nearly 500,000 buildings that get partial property-tax breaks (total annual cost to the city: a mere $378 million), which include One57, the city's tallest building and only one modeled after a trash can, which was granted $65.6 million in affordable-housing tax breaks over ten years — in exchange for funding just 66 affordable units in the Bronx, which came out to more than five times the city's usual per-unit cost.

Of course, not all of the nearly $2 billion a year that the city gives up in property taxes could ever be recouped — the two biggest-ticket items are Kennedy Airport and Central Park, neither of which is likely to be paying a tax bill anytime soon. But much of it could — which, depending on your perspective, either leaves the city short of funds it could otherwise be spending on public needs, or leaves other property owners paying more than their share of the city budget. (Property taxes are the one tax rate that the city council can set without having to ask the state legislature for permission, but they haven't been changed since 2003.)

Either way, knowing which major edifices are skimping on their tax bills gives us new reasons to shake our fists at the city skyline, and isn't that what being a New Yorker is all about?