THE COUNCIL OF THE CITY OF NEW YORK

RESOLUTION NO. 530

Resolution approving a new tax exemption pursuant to Article XI of the Private Housing Finance Law and termination of the prior tax exemption for property located at Block 1823, Lots 58 and 61, Community District 10, Borough of Manhattan, (L.U. No. 187; Non-ULURP No. 20195016 HAM).

By Council Members Salamanca and Kallos

                       WHEREAS, the New York City Department of Housing Preservation and Development ("HPD") submitted to the Council on July 31, 2018 its request dated July 27, 2018 that the Council approve a new real property tax exemption pursuant to Section 577 of the Private Housing Finance Law (the "Tax Exemption Request") and termination of the prior exemption for  property located at Block 1823, Lots 58 and 61, Community District No. 10, Borough of Manhattan, Council District No. 9 (the "Exemption Area");

WHEREAS, upon due notice, the Council held a public hearing on the Tax Exemption Request on August 14, 2018;

                        WHEREAS, the Council has considered the land use and financial implications and other policy issues relating to the Tax Exemption Request;

RESOLVED:

Pursuant to Section 577 of the Private Housing Finance Law, the Council approves an exemption of the Exemption Area from real property taxes as follows:

1.                     Approve the exemption from real property taxation pursuant to Section 577 of the Private Housing Finance Law as follows:

a.                     For the purposes hereof, the following terms shall have the following meanings:

(1)                     “Community Facility Space” shall mean those portions of the Exemption Area which the Regulatory Agreement requires to be devoted solely to community facility uses.

(2)                     “Company” shall mean 1871 ACP Owner LLC or another entity that acquires the beneficial interest in the Exemption Area with the prior written consent of HPD.

(3)                     “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) exceed the total contract rents which were authorized as of the Effective Date.

(4)                     “Contract Rent Differential Tax” shall mean the sum of (i) $164,388, plus (ii) twenty-five percent (25%) of the Contract Rent Differential.

(5)                     “Current Owner” shall mean Deshler Apartments Associates Limited Partnership.

(6)                     “Effective Date” shall mean the later of (i) the date of conveyance of the Exemption Area to the HDFC, or (ii) the date that HPD and the New Owner enter into the Regulatory Agreement.

(7)                     “Exemption Area” shall mean the real property located in the Borough of Manhattan, City and State of New York, identified as Block 1823, Lots 58 and 61 on the Tax Map of the City of New York.

(8)                     “Expiration Date” shall mean the earlier to occur of (i) a date which is forty (40) years from the Effective Date, (ii) the date of the expiration or termination of the Regulatory Agreement, or (iii) the date upon which the Exemption Area ceases to be owned by either a housing development fund company or an entity wholly controlled by a housing development fund company.  

(9)                     “HDFC” shall mean Deshler Housing Development Fund Corporation or a housing development fund company that acquires the Exemption Area with the prior written consent of HPD.

(10)                     “HPD” shall mean the Department of Housing Preservation and Development of the City of New York.

(11)                     “New Exemption” shall mean the exemption from real property taxation    provided hereunder with respect to the Exemption Area.

(12)                     “New Owner” shall mean, collectively, the HDFC and the Company.

(13)                     “PHFL” shall mean the Private Housing Finance Law.

(14)                     “Prior Exemption” shall mean the exemption from real property taxation for the Exemption Area approved by the Board of Estimate on December 20, 1979 (Cal. No. 1).

(15)                     “Regulatory Agreement” shall mean the regulatory agreement between HPD and the New Owner establishing certain controls upon the operation of the Exemption Area during the term of the New Exemption.

b.                     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 or commercial use other than the Community Facility Space) 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.

c.                     Commencing upon the Effective Date, and during each year thereafter until the Expiration Date, the New Owner shall make real property tax payments in the sum of the Contract Rent Differential Tax. Notwithstanding the foregoing, the total annual real property tax payment by the New Owner shall not at any time exceed the lesser of either (a) 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, or (b) seventeen percent (17%) of the contract rents in the applicable tax year.

d.                     Notwithstanding any provision hereof to the contrary:

(1)                     The New 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 XI of the Private Housing Finance Law, (ii) the Exemption Area is not being operated in accordance with the requirements of the Regulatory 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 New Owner and all mortgagees of record, and, where there has been an unauthorized conveyance or transfer of any interest in the Exemption Area, to the new owner of such interest in the Exemption Area, 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 New Exemption shall prospectively terminate.

(2)                      The New Exemption shall apply to all land in the Exemption Area, but shall only apply to a building on the Exemption Area that exists on the Effective Date.

(3)                      Nothing herein shall entitle the HDFC, the New 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.

e.                     In consideration of the New Exemption, the owner of the Exemption Area, for so long as the New Exemption shall remain in effect, shall waive the benefits, if any, 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.

2.                     Approve, pursuant to Section 125 of the PHFL, the termination of the Prior Exemption, which termination shall become effective one day preceding the conveyance of the Exemption Area from the Current Owner to the New Owner.

3.                     Consent, pursuant to Section 123(4) of the PHFL, to the voluntary dissolution of the Current Owner.

4.                     If the conveyance of the Exemption Area from the Current Owner to the New Owner does not occur either (i) within one day following the termination of the Prior Exemption, or (ii) on the same day as the voluntary dissolution of the Current Owner, then all of the approvals and consents set forth above shall be null and void, the dissolution of the Current Owner shall be rescinded, and both the obligations of the Current Owner to remain an Article V redevelopment company and the Prior Exemption shall be reinstated as though they had never been terminated or interrupted.

Adopted.

                        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 September 12, 2018, on file in this office.

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                                                                                                                                                                                                       City Clerk, Clerk of The Council