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Assessor's Manual, Volume 4, ExemptionAdministration

Exemption Administration Manual - Part 2
Industrial, Commercial, and Public Service

Section 4.06 - RPTL 489-bbbbb

 Mixed-Use Properties in New York City

Exemption Code(s): 47680

Year Originally Enacted: 1995

Related Statutes: RPTL Title 2; § §489-ddd; 489-bbbb

SUMMARY: Properties on which residential construction work or a combination of residential and commercial construction work is performed to create a building used for mixed residential and commercial purposes, which are located in a designated area of Manhattan, and which are certified by the NYC Department of Finance are partially exempt from taxation, but liable for special assessments. The amount and duration of the exemption depends on whether the project has been accorded landmark status. If the project is designated by local law as a landmark, 100% of the base amount is exempt during the first 9 years of the exemption, 80% is exempt in the 10th year, 60% is exempt in the 11th year, 40% is exempt in the 12th year and 20% is exempt in the 13th year. If the project is not so designated, 100% of the base amount is exempt during the first 8 years of the exemption, 80% is exempt in the 9th year, 60% is exempt in the 10th year, 40% is exempt in the 11th year and 20% is exempt in the 12th year. This exemption is not available for a new structure. Dwelling units in mixed-use buildings receiving benefits under this program are subject to rent stabilization during the benefit period. Application for a certificate of eligibility for this program must be made between July 1, 1995 and June 30, 1999, and all building permits must be issued by July 31, 1999. Benefits received under this program may not be combined with benefits received under other related statutes, as listed above, for the same tax lot.

  1. ELIGIBILITY REQUIREMENTS:
    1. Ownership Requirements: Facility must be owned or operated by a private or public individual or organization.
    2. Property Location Requirements: Property must be located in New York City within a mixed use construction exemption area" of Manhattan, as designated in RPTL §489-aaaaa (12). Any parcel which is partly located inside this designated area is considered to be entirely located inside this area.
    3. Property Use Requirements:
      1. Benefits under this exemption are reserved exclusively for: 1) residential construction work, other than dwelling units in a hotel, or 2) a combination of residential and commercial construction work which, after completion of the construction work, will qualify as mixed-use property. Projects that involve construction work exclusively for commercial purposes are not eligible for this exemption.
      2. Following completion of construction work on a mixed-use property, more than 25% of the aggregate floor area of the building or structure (sum of the gross areas of the floors of the building or structure) must be used or held out for use as commercial (including hotel services), community facility or accessory use space.
      3. No new buildings or structures are eligible for this exemption.
      4. The building or structure cannot be used in whole or in part for those entertainment activities that the NYC Department of Finance has determined not to be in the public interest.
      5. Construction work on any condominium unit is ineligible, unless such unit is in a building or structure which, if viewed as a whole and as if it were under single ownership, would qualify as a mixed-use property.
      6. If a local law exists providing for the stabilization of rents in multiple dwellings, the rents of the dwelling exempt under this program are subject to control under that local law for the entire period during which the eligible multiple dwelling receives benefits under this program, unless they are exempt from such control by reason of cooperative or condominium status. This period may be extended if rent-control provisions other than those contained in this program become applicable.
    4. Certification by State or Local Government: Project must be certified for eligibility by the NYC Department of Finance.
    5. Required Construction Start Date or Other Time Requirement: The minimum required expenditure is an amount equal to 20% of the "initial assessed value," defined as the lesser of (1) the taxable assessed value of the real property appearing on the assessment roll on the effective date of the recipient's certificate of eligibility or (2) the assessed value as reduced by the NYC Tax Commission or court order. The Department of Finance may establish by rule a higher percentage of initial assessed value, not to exceed 50% thereof, if it determines that a greater expenditure is required to encourage significant development of mixed-use property.

      The minimum required expenditure for any recipient of a certificate of eligibility for construction work on a condominium unit is equal to the minimum required expenditure which would apply if a certificate of eligibility were issued for construction work on the entire property where the unit is located. (NOTE: Owners of condominium units on the same property may form an association to be a recipient of this exemption.) A recipient with a certificate of eligibility with an effective date of July 1, 1995 or after must make ½ of the minimum required expenditure within 18 months of the certificate's effective date, and must make the total minimum required expenditure within 36 months of the effective date. Application for a certificate of eligibility under this program may be made between July 1, 1995 and June 30, 1999, but no benefits under this program may be granted for construction work performed under a building permit issued after July 31, 1999.

  2. LOCAL OPTION: No.
  3. LIMITATION ON EXEMPTION:
    General
    Municipal
    Taxes
    School
    District
    Taxes
    Special
    Ad Valorem
    Tax
    Special
    Assessments
    1. Amount Yes* Yes* NA No
    exemption
    allowed
    2. Duration Yes* Yes* NA No
    exemption
    allowed
    3. Taxing Jurisdiction
    a. City
    Ex NA NA Tax
    b. School District
    NA Ex NA NA
    Ex-Exempt  Tax-Taxable   NA-Not Applicable

    *Limitation on amount and duration vary by type of project -- see Calculation of Exemption below.

  4. PAYMENTS IN LIEU OF TAXES: None required.
  5. CALCULATION OF EXEMPTION:
    1. General Municipal and School District Taxes: The amount of exemption is calculated as a percentage of the exemption base," as indicated below:
      Year following Issuance of
      Certificate of Eligibility
      Exemption Base
      1 - 5 Assessed value of improvements made since the effective date of such certificate which are attributable exclusively to residential construction work or a combination of residential and commercial construction work described in approved plans
      All later years Assessed value of such improvements made before the 6th taxable status date following issuance of the certificate

      The percentage and duration of the exemption vary by type of project, as follows:

      1. Mixed-Use Construction Project (except designated landmarks):
        Year following Issuance of
        Certificate of Eligibility
        Percentage
        of Exemption
        1 - 8
        9
        10
        11
        12
        100
        80
        60
        40
        20
      2. Mixed Use Construction Project Designated as a Landmark:
        Year following Issuance of
        Certificate of Eligibility
        Percentage
        of Exemption
        1 - 9
        10
        11
        12
        13
        100
        80
        60
        40
        20

        Note: Building or structure must be designated as a landmark before the date the recipient is required to complete the minimum required expenditure.

    2. Special Ad Valorem Levies and Special Assessments: No exemption allowed.
  6. CODING OF EXEMPTION ON ASSESSMENT ROLL:
    Code Description of Alternative Codes Possible
    47680

    Assessment Roll Section(s): Taxable.

    NOTE: This code should not be used to identify property that is exempt. See the exemption profile for the statute that applies.

  7. FILING REQUIREMENTS (Owner or Occupant of Property): None.
  8. REPORTING REQUIREMENTS (Assessor): None.
  9. SIMILAR EXEMPTIONS: See Charts IA and IB under Multiple Dwellings
    Subject Statute
    Branch banks in banking development districts RPTL §485-f
    Business investment property RPTL §485-b
    Commercial properties in designated areas of
    Manhattan (New York City)
    RPTL §499-b
    Commercial properties in New York City
    except designated areas of Manhattan
    RPTL §499-bb
    Industrial and commercial properties in
    New York City (project certified by NYC Department
    of Finance)
    RPTL §489-bbbb
    Industrial and commercial properties in
    New York City (project certified by
    NYC Department of Finance after June 30, 2008)
    RPTL §489-bbbbbb
    Mixed-use Property in certain municipalities RPTL §485-a
    Municipal industrial development agencies RPTL §412-a & Gen Muny L §874
    NYS Urban Development Corporation
    (industrial project)
    McK U Con L §6272
    Property improvements in empire zones RPTL §485-e

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