Skip universal navigation

New York State Universal header

Skip to main content

Volume 1 - Opinions of Counsel SBEA No. 28

Opinions of Counsel index

Urban renewal property (effect of short-term leasing on exempt status) - General Municipal Law, §§ 505, 555:

Short-term leasing arrangements for temporary use of urban renewal property between the time of acquisition and the time of demolition and construction is not the type of lease referred to in this section which terminates the exempt status of urban renewal property.

The General Municipal Law provides that property acquired for an urban renewal program by a municipality or by an urban renewal agency shall be exempt from taxation until sold, leased for a term not exceeding 99 years, or otherwise disposed of in accordance with the provisions of Article 15 and 15-A.

While these articles are fairly clear with respect to the disposition and undertakings to carry out the urban renewal project, they do not contain precise requirements or specifications with respect to the temporary use of property scheduled for slum clearance. Since the relocation of tenants and the demolition of buildings in clearing an urban renewal site necessarily involves a considerable amount of time, it would appear that temporary use of existing structures after the acquisition and prior to completion of the redevelopment project, which do not interfere with the project, would be a natural corollary to carry out a slum clearance program. In fact, upon approval of an urban renewal plan, the governing body of a municipality must find that there is a feasible method for the relocation of families and individuals displaced in the urban renewal area and that the urban renewal activities are being carried out in stages which are in the best public interest and which will not cause any additional or increased hardship to the residents in a designated area (General Municipal Law, section 505, subdivision 4).

Accordingly, we would conclude that the short-term leasing arrangements for temporary use of the property between the time of acquisition and the time of demolition and reconstruction is not the type of lease referred to in sections 506 and 555 of the General Municipal Law which terminates the exempt status of urban renewal property.

However, attention is called to the provisions set forth in both sections 506 and 555 of the General Municipal Law which provides a municipality or urban renewal agency with the authority to pay annual sums in lieu of taxes to any taxing jurisdiction providing services to the urban renewal area, in order that no such taxing jurisdiction will suffer an inequitable loss of revenue by virtue of such urban renewal program.

January 30, 1967

Updated: