New York City Council Header
File #: Res 1556-2017    Version: * Name: LU 670 - Planning, SIXTH AVENUE REHAB I, Brooklyn (20175424HAK)
Type: Resolution Status: Adopted
Committee: Committee on Land Use
On agenda: 6/6/2017
Enactment date: Law number:
Title: Resolution to approve a real property tax exemption pursuant to Section 577 of the Private Housing Finance Law (PHFL), termination of a prior exemption under the PHFL Section 125, and consent of the voluntary dissolution of the prior owner under the PHFL Section 123(4), related to Exemption Area located at Block 816, Lot 42 , Community District 7, Borough of Brooklyn (L.U. No. 670; 20175424 HAK).
Sponsors: David G. Greenfield, Rafael Salamanca, Jr.
Council Member Sponsors: 2
Attachments: 1. May 24, 2017 - Stated Meeting Agenda with Links to Files, 2. Land Use Calendar - Week of May 29, 2017 - June 2, 2017, 3. Land Use Calendar - June 5, 2017, 4. REVISED - Land Use Calendar - June 5, 2017, 5. June 6, 2017 - Stated Meeting Agenda with Links to Files, 6. Committee Report, 7. Hearing Transcript - Stated Meeting 6-6-17, 8. Minutes of the Stated Meeting - June 6, 2017

THE COUNCIL OF THE CITY OF NEW YORK

RESOLUTION NO. 1556

 

Resolution to approve a real property tax exemption pursuant to Section 577 of the Private Housing Finance Law (PHFL), termination of a prior exemption under the PHFL Section 125, and consent of the voluntary dissolution of the prior owner under the PHFL Section 123(4), related to Exemption Area located at Block 816, Lot 42 , Community District 7, Borough of Brooklyn (L.U. No. 670; 20175424 HAK).

 

By Council Members Greenfield and Salamanca

 

                       WHEREAS, the New York City Department of Housing Preservation and Development ("HPD") submitted to the Council on May 17, 2017 its request dated May 15, 2017 that the Council take the following actions regarding a tax exemption for real property located at Block 816, Lot 42, Community District 7, Borough of Brooklyn (the “Exemption Area”):

 

                     Approve an exemption of the Exemption Area from real property taxes pursuant Private Housing Finance Law (PHFL) Section 577 (the "New Exemption");

 

                     Terminate, pursuant to PHFL Section 125, a prior exemption for the Exemption Area; and

 

                     Consent to, pursuant to PHFL Section 123(4), the voluntary dissolution of the current owner;

 

                     WHEREAS, the original project was approved by the Board of Estimate on September 27, 1979 (Cal. No. 34), (the “Prior Exemption”);

 

WHEREAS, HPD submitted to the Council on May 17, 2017 its request dated May 15, 2017 relating to the tax exemption for the Exemption Area (“The HPD Request”);

 

                     WHEREAS, upon due notice, the Council held a public hearing on the New Exemption on May 30, 2017;

 

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

 

RESOLVED:

 

The Council approves the New Exemption pursuant to Section 577 of the Private Housing Finance as follows: 

 

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

 

(i)                     “Company” shall mean Sunset Park Owner III LLC.

 

(ii)                     “Current Owner” shall mean Sixth Avenue Rehabilitation Associates I, L.P.

 

(iii)                     “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.

 

(iv)                     “Exemption Area” shall mean the real property located in the Borough of Brooklyn, City and State of New York, identified as Block 816, Lot 42 on the Tax Map of the City of New York.

 

(v)                     “Expiration Date” shall mean the earlier to occur of (i) a date which is thirty (30) 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.

 

(vi)                     “Gross Rent” shall mean the gross potential rents from all residential units (both occupied and vacant) of the Exemption Area, including any federal subsidy (including, but not limited to, Section 8, rent supplements, and rental assistance).

 

(vii)                     “Gross Rent Tax” shall mean an amount equal to ten percent (10%) of the Gross Rent for the tax year 2018. 

 

(viii)                     “HDFC” shall mean HP Sunset Park III Housing Development Fund Company, Inc. or a housing development company that acquires the Exemption Area with the prior written consent of HPD.

 

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

 

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

 

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

 

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

 

(xiii)                     “Prior Exemption” shall mean the exemption from real property taxation for the Exemption Area pursuant to Section 125 of the PHFL approved by the Board of Estimate on September 27, 1979 (Cal No. 34).

 

(xiv)                     “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, 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.

 

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 (i)  the Gross Rent Tax, plus (ii) an additional amount equal to twenty-five percent (25%) of the amount by which the total contract rents applicable to the Exemption Area for that 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 are authorized as of the Effective Date. 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 Gross Rent.

 

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 PHFL, (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) except as otherwise provided in the Regulatory Agreement, 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, 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 buildings on the Exemption Area that exist on the Effective Date.

 

(3)                      Nothing herein shall entitle the HDFC, the New Owner or any past owner 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.                     The Council approves, 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.                     The Council consents, 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 June 6, 2017, on file in this office.

 

 

 

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                                                                                                                                          City Clerk, Clerk of The Council