The economic benefits of 432 Park Avenue, New York, the much-hyped Manhattan Mega-Tower in the Midtown Cultural District are enormous: Units have just started to close. Too many have vilified the buyers of these uber-expensive apartments marginalizing their contribution to the City. The economic impact of this building is massive and here is a breakdown of what this building has and will do for all those NOT living in the building. The almost 1,400ft tall tower houses about 125 apartments, and more may be added if they split up some full floor units which is possible as the building is roughly 70% sold out at this stage. So for whomever looks up at this tower with disdain, here are some points to consider every time a $20 million apartment sells:
- 1.825% in transfer taxes = $365,000.00 for the City and State
- 1% Mansion taxes = $ 200,000.00
- Taxes on broker commissions: around $150,000.00
- Capital gains taxes for the developer.
- A $20 million apartment generates roughly $90,000.00 per year in real estate taxes….every year….forever….and this figure always seems to rise. (thats 30x more per year what Mayor De Blasio pays in real estate taxes for his $1.5m+ townhouse in Park Slope, yet this apartment is roughly 13X more expensive)
- Chances are these sales prices will boost the value of surrounding buildings…..which in turn will raise their assessed values…..which in turn will raise the real estate taxes collected from neighboring buildings.
- Sales taxes derived from the hundreds of millions that will be spent on decorating and furnishing these apartments, not to mention the art collections that will be on these walls.
- Taxes collected on the staff for the building.
- Taxes collected on all the utilities and services for the building.
- Taxes collected on all the jobs related to the construction, marketing, engineering, advertising, etc of this building
- Job creation: around 20 full time employees for the general building (at least) plus most of these apartments will have staffing.
- Sales Taxes collected when these owners are in town spending at retail on Fifth Avenue, Madison Avenue, restaurants, theaters, car services, cabs, etc.
- With many of these apartments owned as pied-a-terre’s, the majority of these owners will not be using too much of Manhattan’s infrastructure so proportionally they will be paying much more in taxes for their share of infrastructure usage.
- Many of these owners come to Manhattan to do big business…..another driver of economic activity in New York.
- Chances are many buyers will flip their apartments…..leading to another wave of transactional taxes.
SO…add up all on this list and the financial an economic benefits to New York City and State are simply ENORMOUS. 432 Park Avenue is good for all New Yorkers who probably can see this building from every corner of the State its so tall!