Preconsidered Res. No. 897
Resolution approving an additional period of exemption from real property taxes for property located at Block 2111, Lot 1; Block 2123, Lots 30 and 38, Manhattan, pursuant to Section 125(1)(a-3) of the Private Housing Finance Law (Preconsidered L.U. No. 289).
By Council Member Brannan
WHEREAS, The New York City Department of Housing Preservation and Development (“HPD”) submitted to the Council its request dated May 2, 2025, that the Council take the following action regarding a housing project located at Block 2111, Lot 1, and Block 2123, Lots 30 and 38, Manhattan (“Exemption Area”):
Approve an additional period of tax exemption from real property taxes pursuant to Section 125(1)(a-3) of the Private Housing Finance Law (the “Tax Exemption”);
WHEREAS, The project description that HPD provided to the Council states that the owner of the Project (the “Owner”) for the subject period of the requested exemption was a duly organized housing redevelopment company formed pursuant to Article V of the Private Housing Finance Law;
WHEREAS, the Council has considered the financial implications relating to the Tax Exemption; now, therefore, be it
RESOLVED:
1. For the purposes hereof, the following terms shall have the following meanings:
a. “Contract Rent Deadline” shall mean three hundred and sixty-five (365) days from the date of the HPD letter requesting the information that HPD needs to calculate the Contract Rent Differential Tax for the applicable tax year.
b. “Contract Rent Differential” shall mean the amount by which the total contract rents applicable to the Exemption Area for such tax year (as adjusted and established pursuant to Section 8 of the United States Housing Act of 1937, as amended) exceeded the total contract rents which are authorized as of the date of the Regulatory Agreement.
c. “Contract Rent Differential Tax” shall mean the sum of (i) $287,058, plus (ii) twenty-five percent (25%) of the Contract Rent Differential; provided, however, that the total annual real property tax payment by the Current Owner shall not at any time exceed the lesser of (A) seventeen percent (17%) of the contract rents in the applicable tax year, or (B) the amount of real property taxes that would otherwise be due in the absence of any form of exemption from, or abatement of, real property taxation provided by an existing or future local, state, or federal law, rule, or regulation. Notwithstanding the foregoing, if the Current Owner fails to provide the contract rents on or before the Contract Rent Deadline, Contract Rent Differential Tax shall mean an amount equal to real property taxes that would otherwise be due in such tax year in the absence of any form of exemption from or abatement of real property taxation.
d. “Current Owner” shall mean McKenna Square Associates, L.P.
e. “Effective Date” shall mean October 24, 2023.
f. “Exemption” shall mean the exemption from real property taxation provided hereunder.
g. “Exemption Area” shall mean the real property located in the Borough of Manhattan, City and State of New York, identified as Block: 2111, Lot 1 and Block 2123, Lots 30 and 38, on the Tax Map of the City of New York.
h. “Expiration Date” shall mean the earlier to occur of (i) the date of conveyance of the fee interest in the Exemption Area to the HDFC, (ii) the date that HPD, the Current Owner and the HDFC enter into the Regulatory Agreement, or (iii) a date which is three (3) years from the Effective Date.
i. “HDFC” shall mean McKenna Square Preservation Housing Development Fund Corporation or a housing development fund company that acquires the Exemption Area with the prior written consent of HPD.
j. “HPD” shall mean the Department of Housing Preservation and Development of the City of New York.
k. “New Owner” shall mean McKenna Square Preservation, L.P., a New York limited partnership that acquires the beneficial interest in the Exemption Area with the prior written consent of HPD.
l. “Redevelopment Agreement” shall mean the Land Disposition Agreement dated September 16, 1982, between the City of New York and the Current Owner, establishing certain controls upon the operation of the Exemption Area in accordance with Private Housing Finance Law Section 114, and recorded on reel 558, page 173, in the Office of the City Register of the City of New York.
m. “Regulatory Agreement” shall mean the regulatory agreement between HPD, the HDFC, and the Current Owner establishing certain controls upon the operation of the Exemption Area on and after the date such regulatory agreement is executed.
2. All of the value of the property in the Exemption Area, including both the land and any improvements (excluding those portions, if any, devoted to business, commercial, or community facility use), shall be exempt from real property taxation, other than assessments for local improvements, for a period commencing upon the Effective Date and terminating upon the Expiration Date.
3. Commencing upon the Effective Date and during each year thereafter until the Expiration Date, the Current Owner shall make real property tax payments as follows: (i) in the sum of $155,560 for the period beginning on the Effective Date and ending on June 30, 2024, (ii) in the sum of $227,118 for the period beginning on July 1, 2024, and ending on June 30, 2025, and (iii) in the sum of the Contract Rent Differential Tax for each year thereafter until the Expiration Date.
4. Notwithstanding any provision hereof to the contrary:
a. The Exemption shall terminate if HPD determines at any time that (i) the Exemption Area is not being operated in accordance with the requirements of Article V of the Private Housing Finance Law, (ii) the Exemption Area is not being operated in accordance with the requirements of the Redevelopment Agreement, (iii) the Exemption Area is not being operated in accordance with the requirements of any other agreement with, or for the benefit of, the City of New York, (iv) any interest in the Exemption Area is conveyed or transferred to a new owner without the prior written approval of HPD, or (v) the construction or demolition of any private or multiple dwelling on the Exemption Area has commenced without the prior written consent of HPD. HPD shall deliver written notice of any such determination to the Current Owner and all mortgagees of record, which notice shall provide for an opportunity to cure of not less than sixty (60) days. If the noncompliance specified in such notice is not cured within the time period specified therein, the Exemption shall prospectively terminate.
b. The Exemption shall apply to all land in the Exemption Area, but shall only apply to buildings on the Exemption Area that exist on the Effective Date.
c. Nothing herein shall entitle the Current Owner or any other person or entity to a refund of any real property taxes which accrued and were paid with respect to the Exemption Area prior to the Effective Date.
5. In consideration of the Exemption, the owner of the Exemption Area shall, for so long as the Exemption shall remain in effect, waive the benefits of any additional or concurrent exemption from or abatement of real property taxation which may be authorized under any existing or future local, state, or federal law, rule, or regulation. Notwithstanding the foregoing, nothing herein shall prohibit the granting of any real property tax abatement pursuant to Sections 467-b or 467-c of the Real Property Tax Law to real property occupied by senior citizens or persons with disabilities.
Office of the City Clerk, }
The City of New York } ss.:
I hereby certify that the foregoing is a true copy of a Resolution passed by The Council of the City of New York on May 28, 2025, on file in this office.
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City Clerk, Clerk of Council