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New York Plans to Invest $1 Billion to Expand Chip Research

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The move is aimed at drawing $9 billion in corporate investment, as New York jockeys to host a new national semiconductor technology center.Gov. Kathy Hochul of New York announced on Monday a plan to invest $1 billion to expand chip research activities in Albany, N.Y., as the state aims to continue as a global semiconductor center.The plan is expected to create 700 new permanent jobs and retain thousands more, and includes the purchase of a new version of one of the world’s most expensive and sophisticated manufacturing machines, along with the construction of a new building to house it.At an event in Albany, Gov. Hochul positioned the investment as a national priority. “The Chinese are attempting to dominate this industry,” she said. “We have no intention of letting that happen. “The initiative should draw $9 billion in additional investments from chip-related companies, according to state officials. They expect it to boost New York’s chances to be selected to host a new National Semiconductor Technology Center, a planned centerpiece of the research portion of federal money that Congress allocated in 2022 as part of the CHIPS Act.“We’re hoping that this level of investment will attract more investment from the U.S. CHIPS Act to make it even bigger,” said Mukesh Khare, an IBM vice president who is general manager of its semiconductor operations.Besides IBM, which has long conducted chip research in Albany, companies participating in the project include Micron Technology, Applied Materials and Tokyo Electron.The focus of the effort is the Albany Nanotech Complex, a cluster of research buildings owned and operated by a state-affiliated nonprofit called NY CREATES. The state plans to spend about $500 million to build a new 50,000-square-foot clean room building.A different building is needed to accommodate the next major advance in a technology called lithography, which projects patterns of circuitry on silicon wafers to make chips. Advances in such equipment are needed to create smaller transistors and other circuitry to boost the power of computers and other devices.The most sophisticated chips are currently made using technology called extreme ultraviolet, or EUV, lithography. The Dutch company ASML is the dominant supplier of the machines, which officials in the United States and the Netherlands have prevented from being sold to China as part of an effort to limit that country’s progress in chip manufacturing.Albany Nanotech has owned prototype EUV tools and currently operates a commercial version. Under the new plan, New York will invest $500 million to purchase a next-generation EUV system — known by the phrase “High NA,” for numerical aperture — that will allow the center to develop much more advanced chips.Besides permanent research jobs, state officials estimated that the Albany project would generate 500 to 600 temporary construction jobs over roughly two years.Albany NanoTech won’t be the first to use the High NA tool. Intel has ordered the first system from ASML, which is expected to begin installing it in early 2024. The comparable machine is expected to arrive in Albany in late 2025, Mr. Khare said.The effort is unusual in several ways, including that the new machine will be owned by the state and operated as a public resource to help the broader U.S. semiconductor industry, he added.States in the Northeast United States seem destined to play a big role in the chip industry’s evolution. U.S. Commerce Department officials also said Monday that BAE Systems in New Hampshire will receive the first grant under the manufacturing portion of the CHIPS Act.Micron, a Boise, Idaho, company that is the only American maker of chips used to store data, has also said it will spend up to $100 billion over a decade or more to develop a new manufacturing site near Syracuse, N.Y. More

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    Biden Visits IBM to Promote Investments in U.S. Semiconductor Production

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    President Biden traveled to Poughkeepsie, N.Y., to connect a $20 billion investment by IBM to the bipartisan bill meant to spur production of critical microchips.During his visit to IBM’s Hudson Valley facility in New York, President Biden highlighted the CHIPS and Science Act that provides subsidies to companies that sign up to jump-start domestic production of semiconductor chips.Erin Schaff/The New York TimesPresident Biden visited the Hudson Valley of New York on Thursday to tour an IBM facility after the company announced it would invest $20 billion across the region to increase its production of semiconductors and develop advanced technologies, including artificial intelligence and quantum computing.Mr. Biden has ramped up his travel schedule to promote the bipartisan legislative achievements that his administration has guided as the November midterm elections approach. At the company’s campus in Poughkeepsie, N.Y., he highlighted an industrial bill he signed in August that provides subsidies to companies that sign up to jump-start domestic production of semiconductor chips.The White House has held up the law as a way to keep up with China and other countries — including South Korea, Japan, India and Germany — that offer subsidies for the production of semiconductors, which are critical components in everything from smartphones to military technology.“More is going to change in the next 10 years than it has in the last 40,” Mr. Biden said. “Where in God’s name is it written that we can’t be the manufacturing hub of the world? There’s a lot of reasons to be optimistic.”The legislation, called the CHIPS and Science Act, contains $52 billion in subsidies and tax credits for companies that manufacture chips in the United States, with more than half of the amount dedicated to helping companies build facilities for making, assembling and packaging some of the world’s more advanced chips.In a news release before Mr. Biden’s visit, IBM hailed the bill for its effort to “secure supply of next-generation chips for today’s computers and artificial intelligence platforms as well as fuel the future of quantum computing by accelerating research, expanding the quantum supply chain, and providing more opportunities for researchers to explore business and science applications of quantum systems.”IBM’s announcement came two days after Micron Technology, the Idaho-based computing company, announced that it planned to spend as much as $100 billion over the next two decades or more to build a computer chip factory complex in upstate New York.“There is no doubt that without the CHIPS Act, we would not be here today,” Sanjay Mehrotra, the chief executive of Micron, said on Tuesday.During his remarks, Mr. Biden emphasized that the law would bolster American competitiveness in research and technology at a time when other countries have pulled ahead.“We’re going to make sure that any company that uses federal research and development funding to invest in new technologies has to make the product in America,” Mr. Biden said to applause, adding later: “It matters. This is about economic security, folks. It’s about national security. It’s about good-paying jobs you can raise a family on.”.css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-ok2gjs{font-size:17px;font-weight:300;line-height:25px;}.css-ok2gjs a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.Administration officials hope that the bill’s bipartisan support, coupled with a windfall of pledged investment from large technology companies, is the sort of accomplishment that could appeal to voters ahead of the midterms. Seventeen Republicans voted for the bill in the Senate, while 24 Republicans supported it in the House.At one point, Mr. Biden, citing news reports, accused the Chinese government of lobbying in Congress against the law. “The Chinese Communist Party actively lobbied against the CHIPS and Science Act that I’d been pushing in the United States Congress,” Mr. Biden said. “Unfortunately, some of our friends on the other team bought it.”Representative Sean Patrick Maloney of New York, the chairman of House Democrats’ campaign arm, accompanied the president on his trip, as did Paul Tonko, and Pat Ryan, two Democratic congressmen from New York. Gov. Kathy Hochul, a Democrat, greeted Mr. Biden when he arrived in New York.Mr. Biden’s visit was also meant to bolster the fortunes of two Democrats facing tight races in next month’s elections. Mr. Maloney is facing a challenge from Assemblyman Michael Lawler in his district, which includes the Hudson Valley.Mr. Ryan, who won a special House election in August, is in a tight race against Assemblyman Colin Schmitt of New Windsor for the swing-district seat. The special election was seen as a potential test of the impact that June’s Supreme Court decision that ended the constitutional right to abortion might have on the midterm elections.After leaving Poughkeepsie, Mr. Biden traveled to Red Bank, N.J., to participate in a reception for the Democratic National Committee. On Thursday evening, he attended another reception for the Democratic Senatorial Campaign Committee. More

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    N.Y.C. Companies Are Opening Offices Where Their Workers Live: Brooklyn

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    Before the pandemic, Maz Karimian’s commute to Lower Manhattan was like that of many New Yorkers’: an often miserable 30-minute journey on two subway lines that were usually crammed or delayed.By comparison, when he returned to the office last week for the first time since the coronavirus began sweeping through the city, his commute felt serene: a leisurely bicycle ride from his home in Carroll Gardens to his company’s relocated office about 10 minutes away in Dumbo.“I love the subway and think it’s a terrific transit system but candidly, if I can be in fresh air versus shared, enclosed air, I’ll choose that 10 times out of 10,” said Mr. Karimian, the principal strategist at ustwo, a digital design studio.More than 26 months after the pandemic sparked a mass exodus from New York City office buildings, and after many firms announced and then shelved return-to-office plans, employees are finally starting to trickle back to their desks. But remote work has fundamentally reshaped the way people work and diminished the dominance of the corporate workplace.Companies have adapted. Conference rooms got a makeover. Personal desks became hot desks, open to anyone on a first-come basis. Managers embraced flexible work arrangements, letting employees decide when they want to work in person.And some are taking more drastic measures to make the return to work appealing: picking up their offices and relocating them closer to where their employees live. In New York City, the moves reflect an effort by organizations to reduce a major barrier to getting to work — the commute — just as they start to call their workers back.Before the pandemic, workers in New York City had the longest one-way commute on average in the country, nearly 38 minutes.About two-thirds of ustwo’s employees live in Brooklyn, so it made sense to move the office to Dumbo, on the Brooklyn waterfront, after a decade in the Financial District in Manhattan, said Gabriel Marquez, its managing director.The new space is about 11,500 square feet, slightly smaller than its former office, and was less expensive per square foot to lease than most offices in Manhattan. It is also better suited for when employees do come into the office, featuring an open-air rooftop with Wi-Fi for meetings, he said.“We didn’t need the same relationship with the office and have everyone in five days a week,” said Mr. Marquez, who said that employees are mandated to be there twice a week, on Tuesdays and Wednesdays. “It felt like, culturally, it is a good fit and for a lot of companies like ours in our area.”Before the pandemic, the morning commute for Maz Karimian, who works at ustwo, took about 30 minutes on two separate subway lines into Manhattan. Now, his company’s new office in Brooklyn is within biking and walking distance from his home.Jose A. Alvarado Jr. for The New York TimesAs New York City tries to climb out from the depths of economic turmoil, there are recent signs that the city is rebounding despite concerns about crime on the subways and rising coronavirus cases. Tourists are visiting New York at a greater rate than last year, hotel occupancy has increased and earlier this month, daily subway ridership set a pandemic-era record of 3.53 million passengers.Despite those promising signals, a vital piece of the city’s economy remains battered: office buildings.Before the pandemic, office towers sustained an entire ecosystem of coffee shops, retailers and restaurants. Without that same rush of people, thousands of businesses have closed and for-lease signs still hang in many storefronts.Despite pleas for months from Mayor Eric Adams and Gov. Kathy Hochul for companies to require people return to the office, so far, many have heeded demands by their employees to maintain much of the job flexibility that they have come to enjoy during the pandemic.Just 8 percent of Manhattan office workers were in-person five days a week from the end of April to early May, according to a survey from the Partnership for New York City, a business group.About 78 percent of the 160 major employers surveyed said they have adopted hybrid remote and in-person arrangements, up from 6 percent before the pandemic. Most workers plan to come into the office just a few days a week, the group said.The seismic shift in office building usage has been one of the most challenging situations in decades for New York real estate, a bedrock industry for the city, and has upended the vast stock of offices in Manhattan, home to the two largest business districts in the country, the Financial District and Midtown.About 19 percent of office space in Manhattan is vacant, the equivalent of 30 Empire State Buildings. That rate is up from about 12 percent before the pandemic, according to Newmark, a real estate firm. Office buildings have been more stable in Brooklyn, where the vacancy rate is also about 19 percent but has not fluctuated much since before the pandemic, Newmark said.Daniel Ismail, the lead office analyst at Green Street, a commercial real estate research firm, predicted that the office market in Manhattan would worsen in the coming years as companies adjusted their work arrangements and as leases that were signed years ago started to expire. In general, companies that have kept offices have downsized, realizing they do not need as much space, while others have relocated to newer or renovated buildings with better amenities in transit-rich areas, he said.Even before the pandemic, it was not uncommon for companies to move offices throughout the city or to open separate locations outside of Manhattan. The city offers a tax incentive for businesses that relocate to an outer borough, with up to $3,000 in annual business-income tax credits per employee.Nearly 200 companies received it in 2018, for a total of $27 million in tax credits, the most recent data available, according to the city’s Department of Finance. But some office developers are betting on neighborhoods outside Manhattan becoming attractive in their own right, luring companies that specifically want to avoid the hustle-and-bustle of Midtown.More than 1.5 million square feet of office space is under construction in Brooklyn, including a 24-story commercial building in Downtown Brooklyn.Two Trees Management, the real estate development company that transformed Dumbo, is turning the former Domino Sugar Refinery in Williamsburg into a 460,000-square-foot office building. Jed Walentas, its chief executive, said he had so much confidence in the project that it was being renovated on speculation, without office tenants lined up beforehand.“You can’t ignore the talent base that has shifted to Brooklyn and Queens,” Mr. Walentas said. “The notion that they will all take the F train or the L train or whatever train into the middle of Manhattan, that’s faulty.”“We didn’t need the same relationship with the office and have everyone in five days a week,” said Gabriel Marquez, the managing director at ustwo, which moved to the Dumbo neighborhood in Brooklyn.Jose A. Alvarado Jr. for The New York TimesTo be sure, the latest outer-borough office trend is still nascent, and the unpredictable whims of the pandemic could change its course in the future.Brian R. Steinwurtzel, the co-chief executive at GFP Real Estate, whose firm largely owns properties in Manhattan, said that office markets in Queens and Brooklyn could attract certain niches of companies, such as biomedical and life science companies in Long Island City, Queens, where GFP has several sites.But overall, Mr. Steinwurtzel offered a curt assessment of the outer-borough markets: “It’s terrible.”Still, just being able to have panoramic views of Manhattan is enough for some companies.When the European advertising firm Social Chain opened an office in the United States before the pandemic, the group settled in the Flatiron area, an epicenter of the marketing world made famous decades ago by advertising giants on Madison Avenue.But after the pandemic struck and the firm decided to revisit its location, the prestige of being in Manhattan lacked the same magnetism — or necessity, said Stefani Stamatiou, the managing director of Social Chain USA.She toured office locations in Manhattan but none felt like the right fit. Then she traveled across the East River into Williamsburg and found 10 Grand Street, also a Two Trees property. It checked all the boxes — unobstructed views of Manhattan, a flexible floor plan and, most importantly, a shorter commute for a large number of Social Chain’s 42 employees.That includes Ms. Stamatiou, who now walks to work from her home in Greenpoint.“There is actual outside activities and restaurants down below us just like in Manhattan but there’s a sense of space,” Ms. Stamatiou said. “It made sense to be where the creative is, where the people are.” More

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    States Turn to Tax Cuts as Inflation Stays Hot

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    WASHINGTON — In Kansas, the Democratic governor has been pushing to slash the state’s grocery sales tax. Last month, New Mexico lawmakers provided $1,000 tax rebates to households hobbled by high gas prices. Legislatures in Iowa, Indiana and Idaho have all cut state income taxes this year.A combination of flush state budget coffers and rapid inflation has lawmakers across the country looking for ways to ease the pain of rising prices, with nearly three dozen states enacting or considering some form of tax relief, according to the Tax Foundation, a right-leaning think tank.The efforts are blurring typical party lines when it comes to tax policy. In many cases, Democrats are joining Republicans in supporting permanently lower taxes or temporary cuts, including for high earners.But while the policies are aimed at helping Americans weather the fastest pace of inflation in 40 years, economists warn that, paradoxically, cutting taxes could exacerbate the very problem lawmakers are trying to address. By putting more money in people’s pockets, policymakers risk further stimulating already rampant consumer demand, pushing prices higher nationally.Jason Furman, an economist at Harvard University who was an economic adviser under the Obama administration, said that the United States economy was producing at full capacity right now and that any additional spending power would only drive up demand and prices. But when it comes to cutting taxes, he acknowledged, the incentives for states do not always appear to be aligned with what is best for the national economy.“I think all these tax cuts in states are adding to inflation,” Mr. Furman said. “The problem is, from any governor’s perspective, a lot of the inflation it is adding is nationwide and a lot of the benefits of the tax cuts are to the states.”States are awash in cash after a faster-than-expected economic rebound in 2021 and a $350 billion infusion of stimulus funds that Congress allocated to states and cities last year. While the Biden administration has restricted states from using relief money to directly subsidize tax cuts, many governments have been able to find budgetary workarounds to do just that without violating the rules.Last week, Gov. Ron DeSantis of Florida signed a $1.2 billion tax cut that was made possible by budget surpluses. The state’s coffers were bolstered by $8.8 billion in federal pandemic relief money. Mr. DeSantis, a Republican, hailed the tax cuts as the largest in the state’s history.“Florida’s economy has consistently outpaced the nation, but we are still fighting against inflationary policies imposed on us by the Biden administration,” he said.Adding to the urgency is the political calendar: Many governors and state legislators face elections in November, and voters have made clear they are concerned about rising prices for gas, food and rent.“It’s very difficult for policymakers to see the inflationary pressures that taxpayers are burdened by right now while sitting on significant cash reserves without some desire to return that,” said Jared Walczak, vice president of state projects with the Center for State Tax Policy at the Tax Foundation. “The challenge for policymakers is that simply cutting checks to taxpayers can feed the inflationary environment rather than offsetting it.”The tax cuts are coming in a variety of forms and sizes. According to the Tax Foundation, which has been tracking proposals this year, some would be phased in, some would be permanent and others would be temporary “holidays.”Next month, New York will suspend some of its state gas taxes through the end of the year, a move that Gov. Kathy Hochul, a Democrat, said would save families and businesses an estimated $585 million.In Pennsylvania, Gov. Tom Wolf, a Democrat, has called for gradually lowering the state’s corporate tax rate to 5 percent from 10 percent — taking a decidedly different stance from many of his political peers in Congress, who have called for raising corporate taxes. Mr. Wolf said in April that the proposal was intended to make Pennsylvania more business friendly.States are acting on a fresh appetite for tax cuts as inflation is running at a 40-year high.OK McCausland for The New York TimesMr. Furman pointed to the budget surpluses as evidence that the $1.9 trillion pandemic relief package handed too much money to local governments. “The problem was there was just too much money for states and localities.”A new report from the Tax Policy Center, a left-leaning think tank, said total state revenues rose by about 17.6 percent last year. State rainy day funds — money that is set aside to cover unexpected costs — have reached “new record levels,” according to the National Association of State Budget Officers.Yet those rosy budget balances may not last if the economy slows, as expected. The Federal Reserve has begun raising interest rates in an attempt to cool economic growth, and there are growing concerns about the potential for another recession. Stocks fell for another session on Monday, with the S&P 500 down 3.2 percent, as investors fretted about a slowdown in global growth, high inflation and other economic woes.Cutting taxes too deeply now could put states on weaker financial footing.The Tax Policy Center said its state tax revenue forecasts for the rest of this year and next year were “alarmingly weak” as states enacted tax cuts and spending plans. Fitch, the credit rating agency, said recently that immediate and permanent tax cuts could be risky in light of evolving economic conditions.“Substantial tax policy changes can negatively affect revenues and lead to long-term structural budget challenges, especially when enacted all at once in an uncertain economic environment,” Fitch said.The state tax cuts are taking place as the Biden administration struggles to respond to rising prices. So far, the White House has resisted calls for a gas tax holiday, though Jen Psaki, the White House press secretary, said in April that President Biden was open to the idea. The administration has responded by primarily trying to ease supply chain logjams that have created shortages of goods and cracking down on price gouging, but taming inflation falls largely to the Fed.The White House declined to assess the merits of states’ cutting taxes but pointed to the administration’s measures to expand fuel supplies and proposals for strengthening supply chains and lowering health and child care costs as evidence that Mr. Biden was taking inflation seriously.“President Biden is taking aggressive action to lower costs for American families and address inflation,” Emilie Simons, a White House spokeswoman, said.The degree to which state tax relief fuels inflation depends in large part on how quickly the moves go into effect.Gov. Laura Kelly backed a bill last month that would phase out the 6.5 percent grocery sales tax in Kansas, lowering it next January and bringing it to zero by 2025. Republicans in the state pushed for the gradual reduction despite calls from Democrats to cut the tax to zero by July.Understand the 2022 Midterm ElectionsCard 1 of 6Why are these midterms so important? More

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    Taxpayers May Foot Bill for Penn Station Revitalization, Report Says

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    New York State wants to rebuild the transit hub in Midtown Manhattan and pay for the improvements through a larger real estate development.To restore the ailing Pennsylvania Station, both Gov. Kathy Hochul and her predecessor endorsed an extraordinary reimagining of Midtown Manhattan with 10 super-tall skyscrapers — among the largest real estate projects in American history.The ambitious undertaking would be complex but necessary, they said, as the development of new towers would help pay for much-needed improvements at Penn Station, which was, before the pandemic, the busiest train station in the Western Hemisphere and, perhaps, the most universally disliked.But just as New York State is set to approve the project as soon as next month, a new analysis by New York City’s Independent Budget Office has raised serious questions about the financial viability of the development, the state’s role in it and the possibility that taxpayers would have to foot the bill if the revenue its boosters are expecting fails to materialize.Most strikingly, the report concludes, New York State has provided so few financial details about the 18.3-million-square foot project, that it is all but impossible to analyze the plan on the merits. The state’s cost projections have run the gamut from an original estimate of between $30 billion to $40 billion, to an estimate closer to $20 billion, now that the state is no longer bundling the Hudson Tunnel into the same project estimate, it said.The reconstruction of Penn Station would be complete in 2032, before construction would start on half of the towers, largely consisting of office space, demand for which has declined markedly because of the pandemic-induced shift to working from home. The last building would be finished in 2044.During that 12-year gap, the city agency said, revenue from the new buildings’ office leases, hotel rooms, retail and residences may not be enough to pay for the completed transit improvements, which would force taxpayers to cover the bill.“Without this information, it doesn’t seem reasonable to actually be moving on to approving this program,” George Sweeting, the acting director of the Independent Budget Office, the nonpartisan agency that monitors the city budget, said in an interview.A spokesman at the Empire State Development Corporation, the state agency leading the redevelopment, said that the project would not be brought to its board for approval until the financial questions have been resolved. Agency officials said that the city would be protected from financial risk because any shortfalls would be covered by the state.“In addition to cooperating with the I.B.O. on its report, E.S.D. will continue to work with the community, the city, stakeholders and elected officials to ensure their priorities, including a fair financial structure, are in place prior to securing public approval,” the spokesman, Matthew Gorton, said.“We will finally transform the area’s neglected business district, create much-needed affordable housing and social services, vastly enhance the commuter experience and provide a foundation for sustainable growth for the city and the broader region,” he added.Ms. Hochul revised the proposed development plan, which was first introduced by her predecessor, in response to concerns over the size of the project.Cindy Schultz for The New York TimesDespite the report’s findings, a spokesman for Mayor Eric Adams said that his administration was still committed to the state’s redevelopment plan.“We are working constructively with our state partners to advance a project that transforms Penn Station and the surrounding area into the world-class transit hub New Yorkers deserve, in a fiscally responsible way,” the spokesman, Charles Lutvak, said.The report amplifies many of the criticisms that were first raised by elected officials and community leaders when former Gov. Andrew M. Cuomo revealed the full scope of the project a year ago, just months before he resigned amid sexual-assault allegations.It also echoes similar questions about the project’s finances posed by the New York City Planning Commission in a letter in January to Empire State Development.“The project needs to be retired,” said Layla Law-Gisiko, a community board member in Midtown Manhattan who is running to represent the area in the State Assembly. “The rationale for this project to go forward is to generate the revenue. And this particular project is going to be costing money and not producing revenue.”In many ways, the project mirrored Mr. Cuomo’s other efforts to put his imprint on the city, including the renovation of the Moynihan Train Hall across the street from Penn Station and his reconstruction of the city’s major airports in Queens.In this case, the funds from the development would pay for cosmetic improvements at Penn Station, as well as a potential expansion of the station a block south of its current location. New tracks and platforms would add rail capacity along the economically vital corridor connecting commuters in New Jersey to jobs in New York, after a second tunnel is built under the Hudson River.The state would wield its authority to overrule local zoning and planning laws so that developers could build bigger buildings at the site than otherwise allowed. When Ms. Hochul succeeded Mr. Cuomo, she continued the state’s support for the project while making modest changes to appease critics, such as expanding pedestrian pathways and slightly reducing the project’s proposed scale.The report also highlights a key concern from critics: It would largely benefit a single company, Vornado Realty Trust, one of the city’s largest office developers. Vornado owns four sites in the development zone and part of a fifth, and its chief executive, Steven Roth, last year donated the maximum, $69,700, to Ms. Hochul’s campaign.Mr. Roth, along with his family members, also gave Mr. Cuomo about $400,000 in campaign donations before he resigned. State officials and a Vornado spokesman have said the donations did not influence Vornado’s role in the venture. Mr. Roth has called the redevelopment of the Penn Station area Vornado’s “Promised Land.”In an earnings call this week, Mr. Roth reiterated the company’s commitment to the state’s project. “Obviously, we support it,” he said.A Vornado spokesman declined to comment on the record on the report.Despite the state’s multiyear work on the project and its imminent approval, the Independent Budget Office found that the plan lacked a robust analysis of the numerous risks, including the consequences of the shift to remote work and whether the new Penn Station towers could negatively impact Hudson Yards, the enormous development on the far West Side of Manhattan. Hudson Yards opened in 2019 and has a similarly structured tax deal as the proposed Penn Station site.“It’s a flashing yellow light that the Penn Station redevelopment plan at this stage has more questions than answers,” said Brad Hoylman, the State Senator whose district encompasses most of the proposed development. “There are significant risks that the state has not yet addressed.”Officials have not reviewed whether a simple rezoning of the area to spur redevelopment could produce greater economic benefits and property-tax collections than the state’s project, the agency said. Yet, without the state’s proposal, the area is unlikely to entice developers, the agency said, noting the lack of construction in the Penn Station area. And while the mayor is pro-development, such a rezoning would be unlikely to proceed through the current City Council.The state’s proposed financial scheme would suspend additional property taxes on the new towers but require Vornado and other developers to contribute an undetermined share of their revenues to pay down the construction costs at Penn Station.But without financial specifics, the report said, it is not possible to determine whether the developers would pay less to the city and state in this deal than if the new buildings were subject to standard property taxes. And, while the state would still be collecting payments from developers, the city would lose out on extra property-tax revenue that it would have earned under a standard rezoning.While the Penn Station area has not had seen large redevelopment in decades, Vornado executives have explored such projects in the area for years, which the city agency noted “may signal that little additional incentive is needed, if at all, for those sites.”John Kaehny, the executive director of Reinvent Albany, a government watchdog group, said that the Independent Budget Office’s report makes clear that “the project does not stand up under scrutiny.”“It’s an issue of putting a lot of taxpayers at risk for no reason other than helping Vornado,” Mr. Kaehny said. “It just doesn’t make sense from a public-financing and public-policy perspective.” More

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    As Broadway Struggles, Governor Hochul Proposes Expanded Tax Credit

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    With Omicron complicating Broadway’s return, Gov. Kathy Hochul proposed more assistance for commercial theater, which her budget director called “critical for the economy.”As Broadway continues to reel from the economic effects of the coronavirus pandemic, Gov. Kathy Hochul is proposing to expand and extend a pandemic tax credit intended to help the commercial theater industry rebound.Ms. Hochul on Tuesday proposed budgeting $200 million for the New York City Musical and Theatrical Production Tax Credit, which provides up to $3 million per show to help defray production costs.“They were starting to recover before Omicron, and then, as you have all seen, a lot of these performance venues had to shut down again, and those venues are critical for the economy,” the state budget director, Robert Mujica, told reporters.The tax credit program, which began last year under Gov. Andrew Cuomo, was initially capped at $100 million. Early indications are that interest is high: Nearly three dozen productions have told the state they expect to apply, said Matthew Gorton, a spokesman for Empire State Development, the state’s economic development agency.The Hochul administration decided to seek to expand the tax credit program — and to extend the initial application deadline, from Dec. 31, 2022 to June 30, 2023 — as it became clear that Broadway’s recovery from its lengthy pandemic shutdown would be bumpier than expected.Shows began resuming performances last summer, and many were drawing good audiences — Ms. Hochul visited “Chicago” and “Six” in October, while Mr. Gorton saw “The Lehman Trilogy” and “To Kill a Mockingbird.”But the industry is now struggling after a spike in coronavirus cases prompted multiple cancellations over the ordinarily lucrative holiday season, and then attendance plunged. Last week, 66 percent of Broadway seats were occupied, according to the Broadway League; that’s up from 62 percent the previous week, but down from 95 percent during the comparable week before the pandemic.“Clearly, we’re not out of the woods yet,” said Jeff Daniel, who is the chairman of the Broadway League’s Government Relations Committee, as well as co-chief executive of Broadway Across America, which presents touring shows in regional markets. Mr. Daniel, still recovering from his own recent bout of Covid, welcomed the governor’s proposal, and said the League would work to urge the Legislature to approve it.“Every show we can open drives jobs and economic impact,” said Mr. Daniel, who noted the close economic relationship between Broadway and other businesses, including hotels and restaurants. “If we can maximize Broadway, we maximize tourism.”Under the program, shows can receive tax credits to cover up to 25 percent of many production expenditures, including labor. As a condition of the credit, shows must have a state-approved diversity and arts job training program, and take steps to make their productions accessible to low-income New Yorkers. More

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    800,000 New Yorkers Just Lost Federal Unemployment Benefits

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    Many pandemic-era federal programs expired on Sunday, leaving jobless New Yorkers with more modest state unemployment benefits, or no aid at all.From the beginning of the coronavirus pandemic, New York City has been pummeled economically unlike any other large American city, as a sustained recovery has failed to take root and hundreds of thousands of workers have yet to find full-time jobs.On Sunday, the city, like other communities nationwide, was hit with another blow: The package of pandemic-related federal unemployment benefits, which has kept families afloat for 17 months, expired.In short order, roughly $463 million in weekly unemployment assistance for New York City residents is ending, threatening to upend the city’s fledgling economic rebound and slashing the only source of income for some to pay rent and buy groceries in a city rife with inequality. About 10 percent of the city’s population, or about 800,000 people, will have federal aid eliminated, though many will continue receiving state benefits.The benefits were the sole income for the many self-employed workers and contract employees whose jobs are central to the city’s economy and vibrancy — taxi drivers, artists and hairdressers, among many others — and who do not qualify for regular unemployment benefits. “To just cut people off, it’s ridiculous and it’s unethical and it’s evil,” said Travis Curry, 34, a freelance photographer who will lose all his assistance, about $482 a week. “If we can’t buy food or go to local businesses because we don’t have money to live in New York, how will New York come back?”Federal officials say that more Americans are ready to return to work, and Republican lawmakers and small business owners have blamed the benefits for discouraging people from working at a time when there are a record number of job openings.In recent weeks, President Biden has said that states like New York with high unemployment rates could turn to leftover federal pandemic aid to extend benefits after his administration decided not to ask Congress to authorize an extension. In New York, Gov. Kathy Hochul, a Democrat who last week signed a new moratorium on evictions after the Supreme Court ended federal protections, said the state could not afford to extend the benefits on its own and would need the federal government to provide additional money. A spokesman for Mayor Bill de Blasio did not respond to requests for comment.Gov. Kathy Hochul said the state could not afford to keep financing unemployment assistance without additional federal aid.Stephanie Keith for The New York TimesThe expiring of unemployment benefits ends a period of extraordinary federal intervention to prop up the economy over the past year and a half as the virus has ravaged the country, claiming the lives of 649,000 people and leaving millions of laid-off workers struggling to secure new jobs. .css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}The federal programs supplemented standard and far more modest state unemployment benefits. New York City was the first major city in the United States to be hit hard by the pandemic, decimating industries almost overnight that underpinned the city’s economy, from tourism to hospitality to office buildings. Economists have projected that New York City may not fully regain all its pandemic job losses until 2024.The federal assistance provided new streams of financial aid beyond regular unemployment payments, which are distributed by states. Jobless Americans received a $600 per week supplement, which was later reduced under Mr. Biden to $300 per week. Unemployment benefits were also offered to contract workers and the self-employed, who under normal circumstances do not qualify for assistance. Payments were extended beyond the 26 weeks offered by most states.The end of the $300 federal supplement means those who still qualify for regular benefits through New York State will lose about half of their weekly assistance.Since the jobless programs rolled out in April 2020, New York City residents have collected about $53.5 billion in unemployment aid, primarily among lower-paid workers in the service, hospitality and arts industries, according to a recent report by the economist James Parrott of the New School’s Center for New York City Affairs. The recipients also tended to be people of color, who have borne the brunt of the pandemic’s economic and health toll. That includes Ericka Tircio, who lost her job cleaning a 40-story office building in Manhattan’s Financial District in March 2020 and contracted the disease around the same time. She has collected assistance since then, but it will be reduced by about $300 per week. Ms. Tircio, an immigrant from Ecuador who has a 6-year-old son, said her company told her recently that she might be asked to return to work in the coming months.“I’m praying to God that they call me back,” Ms. Tircio, who speaks Spanish, said through a translator. “There are moments when I’ve waited so long that I feel myself falling into a depression.”Ms. Tircio is a member of 32BJ SEIU, a local chapter of the Service Employees International Union, whose president, Kyle Bragg, said thousands of its members had been laid off during the pandemic.“Workers should not be left behind to fend for themselves during the worst crisis in a century,” Mr. Bragg said.In recent months, about half the states elected to end their pandemic-related benefits long before the expiration this weekend, a deadline set by the federal government when a vigorous recovery appeared to be on the horizon. In states led by Republican governors, elected officials said that the assistance stymied economic growth and resulted in labor shortages; however, the job growth in those states has not been substantially different than in states that kept the programs.In New York, business leaders have advocated for the state to end the pandemic unemployment benefits, arguing that they hurt small businesses struggling to hire workers. Thomas Grech, president of the Queens Chamber of Commerce, said several job fairs he hosted over the summer were poorly attended.“People were disincentivized to go to work,” Mr. Grech said. “They’re making more money sitting at home. It’s a classic case of good intentions gone bad.”Mr. Grech said that raising wages as a way to lure workers, as some labor economists and advocates have recommended, was unrealistic for some restaurants “unless you want to spend $30 or $40 for a burger.”Elected officials in New York have argued that unemployment benefits helped pump money directly into the economy.“People who receive emergency unemployment assistance are going to turn around and spend that money, and that money is helpful to other people who are also struggling to get things back to normal,” said State Senator Brian Kavanagh, a Democrat who represents Lower Manhattan.The expiration of the benefits was supposed to coincide with a grand reopening of sorts for New York, as many companies announced during an early summer dip in virus cases that workers would be called back to the office in September. But the Delta variant has fueled a resurgence of the virus, postponing any hope that Manhattan’s office buildings would soon refill. Months of moderate job gains stalled over the summer and the city’s unemployment rate, 10.2 percent, increased slightly in July and is nearly double the national average.Bill Wilkins, who oversees economic development for the Local Development Corporation of East New York in Brooklyn, said unemployment and other benefits helped sustain his neighborhood, which has long suffered from high joblessness. But as the pandemic recedes from its peak, he said it was also “incumbent for individuals to be more self-reliant.”The pandemic exposed the significant skills gap in New York City, he said, resulting in large numbers of unemployed workers who do not qualify for job openings that require a college degree, such as high-paying jobs in the tech sector.“If you want a job right now, you have a job,” Mr. Wilkins said, referring to lower-paying openings at many mom-and-pop shops. “The problem is, is that job a sustainable wage? You want the higher-paying jobs, but you have to have the requisite skills that demand that type of salary.”Alex Weisman, an actor, registered for unemployment benefits for the first time after the pandemic shut down Broadway, where he had been in the ensemble for “Harry Potter and the Cursed Child.” The checks, which ranged from about $800 to $1,100 a week, allowed him to keep paying rent for his apartment in the Hamilton Heights neighborhood of Manhattan.When the pandemic shut down Broadway, including “Harry Potter and the Cursed Child,” it left Alex Weisman, an actor in the show’s ensemble, jobless and reliant on supplemental federal unemployment assistance.Erin Schaff/The New York TimesMr. Weisman, 34, submits audition videos every week, hoping for steady work. Earlier this year, he booked a television job for five weeks, which allowed him to briefly go off unemployment benefits.As his benefits run out, he is considering connecting with a temp agency to find work. The last time he had a job outside acting was as a barista in 2013.“I’m going to have to get an entry-level position somewhere,” Mr. Weisman said. “Because I succeeded in the thing that I trained in and wanted to do, I have absolutely nothing to offer any other industry. It’s scary.”Mohammad Kashem, who worked for nearly two decades as a taxi driver, had similar difficulties switching industries. Before the pandemic, a bank had seized his taxi medallion after he struggled to repay his loans amid a sharp drop in yellow cab ridership. Mr. Kashem, an immigrant from Bangladesh who lives in Brooklyn, worked as a postal carrier during the pandemic but quit after one month, saying he was unaccustomed to delivering mail through rain and snow. His family has been relying on $700 a week in unemployment benefits. He and his wife could not maintain jobs during the pandemic because of health issues, he said, noting that they both contracted the coronavirus and have high blood pressure and diabetes.When the unemployment benefits expire, his wife may try finding a job as a babysitter. Mr. Kashem, 50, has been wracked with anxiety about how he will pay for rent and school supplies for his three children.“I was driving taxi many, many years,” Mr. Kashem said. “I’m not used to another job.” More