ICAP Benefits and Requirements

ICAP Benefits

Industrial and Commercial projects subject to alteration, renovation or new construction may be eligible for the Industrial and Commercial Abatement Program (ICAP) property tax abatement of up to 25 years.

There are additional benefits for industrial construction projects that contribute an expenditure of 40% of the Taxable Assessed Value.

Inflation protection for commercial projects:

For Commercial Construction Work situated a Special Commercial Area: For years 2-13 of the abatement period, an increase in tax liability over the prior year that exceeds 5 percent, such excess shall be added to the abatement base. However, in any year 2-13, where the taxable AV is increased for a physical change resulting in an increase in taxes of more than 5%, then none of the increase is added to the abatement base. These rules apply to special area commercial projects regardless of whether the retail portion exceeds 10%.

ICAP Requirements

A Preliminary Application should be filed prior to receiving the first building permit issued by the DOB which allows construction to commence, or if no permit is required, prior to commencement of construction. Failure to file the preliminary application prior to the permits issued will disqualify this project from receiving any ICAP benefits.

A Final Application is to be filed within one year from the first building permit issuance date, or if no permit is required, within one year from commencement of construction. Construction does not need to be complete to submit a final application. If a final application is submitted after one year, the application will be automatically denied.

MRE (Minimum Required Expenditure) – The total Construction cost must be at least 30% of the property’s Assessed Value with a taxable status date prior to construction.

M/WBE (Minority & Women-owned Business Enterprise) firms should be offered the opportunity in participating in the construction/renovation project. Minority and Woman Owned Businesses can be researched online.

A Compliance Report should be submitted with the type of research done.

Construction must be completed no later than five years from the date of issuance of the first building permit, or if no permit is required, from the start of construction.

Preliminary ICAP applications will be accepted until March 1, 2022.

No more than 20% of the total rentable square footage can be dedicated to residential purposes. If so, apportionment is required.

Additional Requirements for projects exceeding $750,000

An applicant/ developer must solicit three bids for each trade through reaching out to M/WBE firms and offer the opportunity of participating in the project. Applicants must keep detailed records of the outreach activities accessible at their place of business.

Additional Requirements for projects exceeding $2,500,000

An applicant/ developer must solicit three bids for each trade through reaching out to M/WBE firms and offer the opportunity of participating in the project. Applicants must keep detailed records of the outreach activities accessible at their place of business.

If the project exceeds $2,500,000, an Employment report for the applicant should be submitted monthly and a Certificate of Approval must be obtained from DLS to confirm all requirements are met. Additionally, they should be notified fifteen days prior to commencement of construction. The DLS will thereafter setup a meeting with the Owner/Project Developer and review all the requirements to ensure compliance