Opportunity Zone Boosts Bids for Hot Bronx Property
(THE CITY) Rachel Rippetoe, October 14, 2019
A worn-down factory building on Bruckner Boulevard in the South Bronx may not look like much — but its owners are banking on a government-backed gold rush.
The Benedetto family, giants in the recycling industry, put a 99-year lease on the property up for bid this summer, with the pot sweetened by a federal program known as Opportunity Zones.
The winner of that contest, to be announced by the end of the month, will get the opportunity to construct a much larger building at the site — including apartments, if they choose. They also will reap a lucrative tax credit worth potentially hundreds of thousands of dollars.
With its Port Morris neighborhood already booming with new apartment developments, the Benedettos were going to lease out the 250,000-square-foot plot anyway, said the property’s broker, Randy Modell.
Four businesses operate in the building, and their leases are ending soon.
The Opportunity Zone credit means the Benedettos will likely make much more money on the deal at 40 Bruckner Blvd. than they would have just three years ago.
“It’s just a happy coincidence,” said Modell, who wouldn’t reveal how much bidders have offered.
Bad for Businesses
While the owners and investors reap a pumped-up financial reward, a pet store, print shop, plumbing contractor and tire dealer all will have to find new homes.
Lenny Ford, founder of Little L’s Pet Boutique, didn’t know about the planned deal until he read about it in the New York Post.
The pet shop owner, who uses his space as both a storefront and to make custom dog treats, knows it’s likely he won’t be welcomed back after his lease expires next year.
“I knew what I was getting into — business is a risk,” Ford said. “But none of us really know what’s going to happen. We’re all in limbo.”
Joanna Santos, vice president of 48Print Corp., said the company pays $3,000 a month for a 3,100-square-foot printing office it has occupied for eight years. Finding a similar space for that price is unlikely, she noted.
“Once we get wiped out of here and all the new buildings come in, rent is going to skyrocket,” Santos said.
Accelerating Change
Opportunity Zones emerged as part of the sweeping 2017 tax bill passed by Congress, incorporating a measure co-sponsored by Sen. Cory Booker (D-N.J.), who’s now running for president, and Sen. Tim Scott (R-S.C.).
Under the program, a governor may designate up to one-quarter of their state’s high-poverty Census tracts as eligible for a generous tax credit. Gov. Andrew Cuomo chose 514 tracts — just over 300 in New York City and 75 of them in The Bronx.