DEP letter to FEMA outlining fund priorities for WTC recovery,

NYC 9/11 Public Portal Document

Declining property taxes due to lost real estate. The attacks on the World Trade Center destroyed or damaged nearly 30 million square feet of office space, or almost 30% of the Class A space available downtown. Over $5 billion of real estate market value was lost as a direct result of the attack, including 13 million square feet of destroyed office space and 6 million damaged square feet still unavailable for occupancy (out of 17 million originally damaged). It will be several years before the 13 million square feet of destroyed space is replaced and reoccupied. In just fiscal years 2002 and 2003, the reduction in property taxes, commercial rent taxes, and reduced PILOTS (payments-in-lieu-of-taxes) from the lost or damaged buildings will be $220 million.

Closure of Lower Manhattan. For four working days after September 11*”, every business south of Canal Street was closed. Many never resumed full operations and it took months for many of the remainder to open their doors. While the entire country suffered job losses as a result of a slowing economy. New York’s loss since September 1has been over three times the national average. The Office of Management and Budget estimates that business shutdowns in Lower Manhattan between 9/11 and the end of the year cost the City almost $10 billion in economic output, with $9 billion of that loss in September 2001 alone. This is estimated to have cost the City $281 million in lost taxes for that period.

Declining hotel and sales taxes due to reduced tourism. Tourism is one of New York City’s five largest industries, and generated over $25 billion in annual economic impact from 37.4 million visitors in 2000. The estimated number of visitors in 2001 fell by 5.4 million, a decline over three times as severe as the national average. While the national (and global) recession explains some of this decline, September 11*’’ had a direct and clear effect: In the three weeks after September 11 hotel occupancy fell by almost one-third. For the remainder of the calendar year, hoteliers slashed room rates to stabilize occupancy with only partial success. As a result of the September 11-related decline, we estimate that hotel tax payments fell by $38 million in fiscal year 2002, and that sales tax on these hotel rooms and on other spending by visitors fell by $56 million (for a total loss in 2002 of $94 million). And for 2003, the reduced profitability of hotels has dramatically lowered their property values, resulting in a $55 million loss of property tax revenues.

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