Word: leasebacks
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Dates: during 1949-1949
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...sell & leaseback" deal was doubly advantageous. Yale would get a fairly sure tax-exempt income of 5.3% on its investment. Macy's would get its $4,500,000 out of dead brick & mortar into lively working capital, still have the use of the building. Since the rent is taxexempt, it is probably lower than Macy's would have to pay to a taxpaying owner...
Unhappy Treasury. But the U.S. Treasury was not quite so happy about the deal. It has been concerned about the problem of "sell & leaseback" since 1945, when Union College of Schenectady bought, for $16,150,000, the buildings of Allied Stores Inc., and leased them back to the company. Soon other colleges were buying not only real estate but commercial businesses as well. So many U.S. stores and other enterprises have sold their property to tax-exempt institutions* that the Treasury is now losing an estimated $1 billion a year in income taxes. A survey by the American Council...