Gateway Center at Bronx Terminal Market
On Tuesday, August 8, the Industrial
Development Agency approved a Mortgage Recording Tax exemption for the
Gateway Center project valued at $7 million. The IDA provided estimates
of other public subsidies being provided, mostly through Related Companies'
ground lease arrangement with the city:
Cost to the City--NYC taxes to be exempted
| IDA Benefits | Value of Subsidy |
| Mortgage Recording Tax exemption | $7 million |
| Benefits provided through lease | |
| Property Tax Abatement | $109.63 million |
| Sales Tax Exemption | $6.09 million |
| Capital Contribution for Demolition | $7.1 million |
| Relocation Payments | $4.1 million |
| Total Cost to NYC Net of Financing Fee | $133.93 million |
The IDA also indicated that Related Companies may apply for tax-exempt bond financing under the federal Empowerment Zone program.
Background
Since the 1920s the Bronx Terminal Market, located along the Major Deegan Expressway between East 149 Street and Macombs Dam Bridge, has been known as an immigrant food service hub: historically serving the culinary needs of Italians, Puerto Ricans, and today catering to the West Indian community and other immigrant groups. The market has historically thrived due to its proximity to transportation infrastructure (bridges, highways, and transit access); the clustering of related businesses; and its specialized products that are sought by ethnic food outlets throughout the region.
For years, the market was not adequately maintained by its leaseholder, although many merchants have kept their businesses alive--meeting the needs of restaurants and bodega's around the city while employing about 700 people. Last year, the Related Companies inked a no-bid deal with the city to replace the East Coast's largest ethnic food market with big-box stores, and initiated eviction proceedings against the businesses unwilling to accept the city's relocation package.
Related Companies plans to develop an approximately 957,000 square-foot mall and a 2,610 space, multi-level parking facility to be known as Gateway Center at Bronx Terminal Market. Aside from the transfer of city-owned property without issuance of a "Request for Proposal," the Gateway Center developer Related Companies is receiving significant subsidies through the ground lease with the city, and is pursuing other benefits from the city's Industrial Development Agency.