New York City lost more than $100 million in property taxes last year because of privately negotiated deals with some of the world's richest companies.
The companies - including behemoths like JPMorgan Chase, Pfizer and NBC - have paid a fraction of their normal property tax bill for years through these little-known deals, commonly called PILOTs (Payments in Lieu of Taxes).
An internal Bloomberg administration report obtained by the Daily News shows:
The giant American International Group paid nothing in PILOTs for fiscal 2007, saving $4.1 million on its annual property tax bill.
The American Stock Exchange, that symbol of the free market, paid a mere $1,070 in PILOTs - far less than a South Bronx homeowner would pay in taxes. The exchange's tax break from City Hall saved it nearly $1.5 million.
JPMorgan Chase paid just $1.9million in PILOTs, 20% of the $9.6 million in property taxes it normally would be assessed.
Most New Yorkers are aware of the outrageous $10 million property tax exemption Madison Square Garden has enjoyed for decades, courtesy of the state Legislature.
So why haven't we heard much about these other tax giveaways in, say, the liberal New York Times? Maybe because the newspaper of record is feeding at the same trough.
The Times paid $219,000 in PILOTs last year for its new printing plant in College Point, Queens, the report said. That's a paltry 13% of the $1.7 million assessed tax on the Times plant.
The undisputed king of PILOTs is real estate developer Bruce Ratner. His Forest City/Ratner firm paid the city $9.7 million last year for half a dozen commercial buildings the company owns in downtown Brooklyn. That sounds like a lot of money - until you realize it's only one-third of the company's actual $26.3 million property tax bill.
That doesn't even count PILOTs that have yet to kick in for Forest City's Atlantic Yards mega-project.
Forest City spokesman Loren Riegelhaupt defended the company's success at landing PILOT subsidies.
"A lot of those buildings in MetroTech were constructed when downtown Brooklyn was not what it was today," Riegelhaupt said. "Many businesses were fleeing to New Jersey in the 1990s, and we were willing to invest in that area when others wouldn't."
City Hall has routinely doled out these PILOT deals for decades, usually as part of a larger incentive package to get companies to stay in town or expand their business.
Government watchdog groups say the absence of uniform standards makes the whole PILOT program open to abuse, because each company gets to negotiate its own private deal. In addition, companies that fail to meet their original job creation promises rarely get penalized.
Until recently, no one knew exactly how much the tax breaks were costing the city. Then in 2005, after city Controller William Thompson released an audit blasting the city's poor monitoring of PILOTs, the City Council passed a law requiring the mayor's office to supply the Council speaker with a report of all PILOT revenues and expenditures.
The News recently obtained copies of those reports, which are sent quarterly from the city Office of Management and Budget to City Council Speaker Christine Quinn.
They reveal that some 300 companies and nonprofit groups enjoy long-term PILOT deals. A few of those deals date back to the Koch and Dinkins eras, but most were arranged under Mayors Rudy Giuliani and Bloomberg.
Last year, discounted PILOTs amounted to $107 million in lost revenue to the city, with abatements averaging a whopping 60% per company.
It should come as no surprise that some of the city's powerhouse companies landed the juiciest deals. Just 15 companies enjoyed more than two-thirds of the total tax savings in fiscal 2007, the report shows.
Besides Forest City, AIG, Chase and The Times, top beneficiaries include Morgan Stanley, Bear Stearns, NBC, Pfizer, McGraw-Hill and the Hearst Corp. In NBC's case, the company has received three separate PILOT deals over the past 20 years from Koch, Giuliani and Bloomberg.
jgonzalez@nydailynews.com
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