Netflix Expanding to NYC With Amazon-Type Tax Benefits
Streaming media giant Netflix plans to spend $100 million to expand its footprint in New York City, Governor Andrew Cuomo announced today.
Netflix signed a lease with Normandy Real Estate Partners for 100,000 square feet at 888 Broadway between East 18th and East 19th Streets to house a 127-person corporate office, Variety first reported. The company also inked a deal with Steel Equities for the entire 161,000-square-foot warehouse at 333 Johnson Avenue in Bushwick, Brooklyn, to build six sound stages, according to Cuomo.
“Netflix is innovative, creative and bold—just like New Yorkers—and the expansion of this cutting-edge company in New York once again demonstrates the Empire State is open for business,” Cuomo said in a statement. “We’re proud Netflix chose New York to grow its business, and we look forward to the jobs, economic activity and world-class productions this project will bring.”
As part of the deal, Cuomo offered Netflix up to $4 million in tax credits through the Excelsior Jobs program if the company creates the 127 new jobs by 2024 and retains them along with its current 32-person New York City workforce for another five years, according to the governor’s office. This is the same initiative the state offered Amazon (AMZN) to build a campus in Long Island City, Queens.
In Amazon’s case it was $1.2 billion in subsidies, which comprised the majority of a highly criticized $2.5 billion in tax breaks the city and state offered the tech behemoth. Amazon eventually backed out of its deal in February.
While lawmakers during the Amazon fight vowed to curb offering corporate tax cuts in future deals, the state budget passed earlier this month approved $840 million in refundable credits for television and movie producers, Bloomberg reported.
Spokespeople for Normandy, Netflix and Steel Equities did not immediately respond to a request for comment about the deals. But The Real Deal previously reported that the company was in talks last September to sign a 12-year lease with Normandy at 888 Broadway for 36,000 square feet. Asking rents in the six-story building were reportedly in the low $130s per square foot at the time. CBRE (CBRE)’s Neil King and Paul Amrich were representing Normandy in that deal while colleagues Timothy Hay, Robert Hill, Jared Isaacson and Sacha Zarba were handling it for Netflix, TRD reported. A spokeswoman for CBRE declined to comment.
Netflix has filmed several shows around the city in recent years—including Orange is the New Black, Unbreakable Kimmy Schmidt and Russian Doll—and Cuomo said its new Brooklyn soundstage will house thousands of production jobs within five years.
“New York has created a film-friendly environment that’s home to some of the best creative and executive talent in the world, and we’re excited to provide a place for them at Netflix with our production hub,” Jason Hariton, Netflix’s director of studio operations and real estate, said in a statement.
Steel Equities bought 333 Johnson Avenue from Normandy, Princeton Holdings and Royalton Capital in December 2018 for $53 million and the property has been vacant since the United States Postal Service vacated the property early that year, according to TRD.