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NYC Takes 15 Spots in the Top 20 Tax Exempt Properties in the US

A recent nationwide study carried out by CommercialCafé, and based on PropertyShark data, revealed the top 20 tax-exempt properties in the U.S.

NYC stole the show, with a total of 15 tax-exempt properties featured in the top 20. Given the fact that many historic buildings located in Manhattan are tax exempt, we weren’t really surprised when we saw that landmark staples such as the Chrysler Building and Madison Square Garden had made the list.

CommercialCafé compiled a list of the top 20 properties in the U.S. that save the most on taxes. To come up with a “true” list of tax-exempt properties, the study includes only privately owned properties.

Among the 20 properties that made the list, eight are major hospitals. Half of them are located within NYC, while the other four are in Maryland and Ohio. The hospitals from the list are all non-profit. U.S. News & World Report recently ranked the Cleveland Clinic and Johns Hopkins Hospital—two contenders on the list of exempt properties—as the second- and third-best hospitals in the country.

#1 One Bryant Park – $74,098,132 in exemptions

Bank of America Tower
Bank of America Tower (via PropertyShark)

Home to Bank of America, the office tower at 1111 Avenue of the Americas in Manhattan boasts the highest tax exemption of all privately-owned buildings in the U.S.

The owner of One Bryant Park, The Durst Organization, was granted $650 million in triple tax-exempt Liberty Bonds to build its Midtown Manhattan building. Congress approved the Liberty Bond program in 2002 – a program that was deemed necessary in the wake of 9/11 to boost the local economy and entice development.

Yardi Matrix data shows that financing for the project was issued in four components, by the New York Liberty Development Corp., Second Priority Liberty Revenue Refunding Bonds, Series 2010, with Bank of New York Mellon acting as trustee.

#2 Barclay’s Center – $57,175,298 in exemptions

Located at 620 Atlantic Ave. in Brooklyn, and home to the Brooklyn Nets, the famed multi-purpose arena boasts $57 million in yearly tax exemptions. The project was started in 2004 by Bruce Ratner of Forest City Ratner Cos., who bought the Nets for $300 million and decided to build a new home for the team. After facing various delays and a major financial crisis, the arena opened its doors in 2012.

The Barclay’s Center might not have been standing today, if not for the favorable ruling of the IRS in 2008. The IRS granted New York sports teams use of tax-free bonds to build stadiums or arenas. A total of $511 million in tax-exempt PILOT Revenue Bonds, Series 2009, were granted to the Barclay’s Center. The bonds were issued by the not-for-profit Brooklyn Arena Local Development Corp.

#3 Madison Square Garden – $41,020,197 in exemptions

Madison Square Garden
Madison Square Garden (via PropertyShark)

The iconic Madison Square Garden also saves a hefty amount on taxes. Section 429 of the real property tax law of 1982 grants the arena a tax-exempt status. Owned by Madison Square Garden Co., the property remains tax free under one condition: that all Knicks and Rangers home games are to be held at the arena.

City lawyers made The Garden permanently tax-exempt unintentionally, but so far, no initiatives have managed to change that. In 2014, The New York Times took a look at how much the property saved on taxes over the course of 32 years. Per the publication, Madison Square Garden Co. saved $350 million in property taxes through 2014.

#12 The Chrysler Building – $21,876,702 in exemptions

The Chrysler Building
The Chrysler Building (via PropertyShark)

Currently owned by the Abu Dhabi Investment Authority, and maybe one of the oldest tax-exempt properties in the U.S., is the iconic Chrysler Building. The tower’s tax-exempt status goes back to Cooper Union’s charter of 1859. The college is the owner of the land beneath the landmark Manhattan tower.

The charter grants the property owner a tax break, if “the above-mentioned and described premises, together with the appurtenances, and the rents, issues, income, and profits thereof, shall be forever devoted to the instruction and improvement of the inhabitants of the United States in practical science and art,” as described in the charter.

Check out the full list below:

Methodology:

Data sources: PropertyShark and proprietary research.

Tax exemption values were established once a list of the most expensive market values was extracted. Tax values were verified against Assessor and Tax Treasurer official public websites.

The search was based on individual parcels and results which could not be publicly checked were not included. Only non-governmental entities were included in the ownership section. Tax exemption amounts represent the 2017 fiscal year values.

Roxana Poenar

Roxana Poenar

With a taste for learning, Roxana joined PropertyShark in order to expand her knowledge of all things real estate. Passionate about reading and travelling, if she's not at her desk or engrossed in one of her books, then she's probably packing her backpack for a new adventure.

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