NEIGHBORHOOD GROCERY STORE INCENTIVE PROGRAMProgram Description:

A Department of City Planning study shows that many low-income neighborhoods across the city are underserved by neighborhood grocery stores. The resulting lack of nutritious, affordable fresh food in these neighborhoods has been linked to higher rates of diet-related diseases, including heart disease, diabetes and obesity.Through the Neighborhood Grocery Store Incentive Program, the New York City Industrial Development Agency(NYCIDA) seeks to incentivize the establishment of neighborhood grocery stores in low-income and underservedcommunities. The program provides eligible full-line grocery store operators and developers with real estate taxreductions, mortgage recording tax waivers and sales tax exemptions on purchases of materials used to construct,renovate or equip grocery stores in underserved neighborhoods.

Eligible Companies:

1• Full-line grocery store operators renovating existing retail space in low-income and underserved communities2• Developers seeking to construct or renovate retail space located in low-income and underserved communitiesthat will be leased by full-line grocery stores

Program Benefits:

Real Estate Tax Reductions

•

Land taxes

An amount of $500 multiplied by each full-time employee or part-time equivalent at time of application may be abated for 25 years.

Full value may be abated for project sites located within Empire and Empowerment Zones.

A phase-out of the benefit begins in year 21 and continues through year 25 at 20 percent each year. In year 26, land taxes increase to full amount.

•

Building taxes

May be stabilized at the pre-improvement assessed value for 25 years.

A phase-out of the benefit begins in year 21 and continues through year 25 at 20 percent each year. In year 26, building taxes increase to full amount.Sales Tax Exemption1• The 8.375 percent sales tax on materials used to construct, renovate or equip facilities may be waived.Mortgage Recording Tax Waiver 1• Mortgage recording tax relating to the project's financing, equal to 2.05 percent of the mortgage amount for mortgages of $500,000 or less, and 2.80 percent for mortgages greater than $500,000, may be waived.

Energy Programs:

In addition to these benefits, full-line grocery store operators and developers can independently access energyefficiency benefits through programs offered by the New York State Energy Research and Development Authority(NYSERDA). Such programs include:

• Existing Facilities Program: a variety of energy-efficiency retrofitting projects and equipment purchasesincluding Pre-Qualified Measures and Performance-Based Incentives.

• New Construction Program: a combination of assistance and incentives to incorporate energy-efficiencymeasures into design, including a peak-load reduction program.

• Energy Audit Program: For businesses with electric utility bills less than $75,000 annually, a low-cost walk through energy audit to help make informed electric energy decisions and implement energy strategies.

• FlexTech/Technical Assistance Program: For larger businesses with electric utility bills greater than $75,000annually, a fifty-fifty cost-sharing with NYSERDA for a detailed energy study.Confidential Draft: February 12, 2009

Examples:

Existing Retail SpaceGrocery Store 123 enters into a 25-year “triple net” lease for 20,000 square feet of existing retail space in the SouthBronx. Existing annual real estate taxes for the space are estimated to be $200,000. Grocery Store 123 incurs fit-out