Grant Checks Start Rolling Out To Residents, but IRS Moves In

Downtown residents are starting to receive their eagerly awaited grant money. Though moving more slowly than anticipated, the Lower Manhattan Development Corporation last month made progress with its $281 million residential grant program, sending checks to 3,600 people by month’s end, according to Amy Peterson, the program’s coordinator.

At the same time, the IRS announced that recipients of the federally funded grants, meant to attract and keep residents Downtown, must pay income tax on parts of their awards.

As of late last month, the LMDC had approved about 6,000 of the 25,000 grant applications it had received. The rest were being processed on a first-come, first-served basis. (There were only a few rejections, for people living outside the area of eligibility, Peterson said.)

Applications were taking up to 10 weeks to process, but Peterson anticipated that it would soon be down to eight. Residents are then sent either an approval letter or a request for additional information. Checks are sent out in the third week of each month to everyone approved through the end of the previous month.

The agency was still working out kinks in the program. Some residents reported being told that their applications were on hold because they were missing information that had in fact been submitted. Others were told that the LMDC was “overwhelmed” with applications.

Peterson said that anyone with questions about the status of their applications, after allowing time for processing, can speak to an “eligibility specialist” at the program’s offices at 68 Reade St. or 225 Park Row.

Residents who commit to living Downtown for at least two years are eligible for grants ranging from $2,000 to $12,000, depending on where they live and the amount of their rent or mortgage payments.

But amounts above the minimum awards will be taxed as income.

Additional one-time grants of $1,000 for people who lived Downtown on Sept. 11 and have remained here, and family grants of $750 or $1,500, will not be taxed.

Elected officials are pushing for legislation to make all grants tax-exempt, a policy the LMDC supports.

Residents can apply for the grants by calling 736-3969 or by visiting the program’s offices, open Monday, Tuesday, Wednesday and Friday from 9 a.m. to 5 p.m., Thursday from 8 a.m. to 8 p.m. and Saturday 9 a.m. to 1 p.m.