Assessor Manuals, Exemption Administration
Exemption Administration Manual—Part 2: Industrial, Commercial, and Public Service
Section 4.06 - McK U Con L Section 6272 (Industrial): New York State Urban Development Corporation (industrial project or property of undetermined use)
Year originally enacted:
Industrial projects, industrial effectiveness projects, and small and medium- sized business assistance projects owned or under the control of the NYS Urban Development Corporation (UDC) that are located and used as required (see Property Location and Property Use Requirements below) are wholly exempt from taxation and special ad valorem levies, but are liable for special assessments. Also eligible for this exemption is property owned or under the control of the UDC whose use has not yet been determined, i.e., no project finding has yet been made determining whether the property is to be used for a civic, housing, industrial, or urban renewal project. Payments in lieu of taxes are required for such projects and for industrial projects.
This exemption also applies to UDC subsidiaries, except those eligible for exemption under the following statutes: RPTL §422 (not-for-profit housing companies), PHFL §33(1)(c) (limited-profit (Mitchell-Lama) housing companies), PHFL §93(6) (limited-dividend housing companies), and PHFL §577(3) (housing development fund companies). For a description of the exemption allowed for each of these subsidiaries, see the Exemption Profile for the statute that applies.
Property must be owned by the UDC or one of its subsidiaries or under its control, possession, or supervision.
Property location requirements:
An industrial project, industrial effectiveness project, or small and medium-sized business assistance project must be located in an area that is substandard or insanitary, or in danger of becoming such an area, and in which there exists substantial and persistent unemployment or underemployment.
Property use requirements:
An industrial project must provide for the elimination, reduction, or prevention of unemployment or underemployment in the area and must include buildings suitable for manufacturing, warehousing, research, or other industrial, business, or commercial purposes.
An industrial effectiveness project must be designed to improve the productivity and competitiveness of an industrial firm or group of industrial firms through redesign of production facilities or other means. An industrial firm is defined as a manufacturing firm involved with extracting, smelting, or recovering, developing, preparing, compounding, converting, assembling, or producing raw materials. Along with facilities used for these purposes, eligible facilities include those used for storage, warehousing, or distribution, research and development, or refinement of known substances, processes, and products.
A small and medium-sized business assistance project must be either of the following:
- the rehabilitation or renovation of an industrial plant that is economically inefficient because of the need for changes in design, construction, technology, or production processes or
- the rehabilitation or renovation of existing facilities for reuse as an industrial facility. A small or medium-sized business is defined as one that employs 500 or fewer employees within the state on a full-time basis.
Certification by state or local government:
Required construction start date or other time requirement:
Limitation on exemption
|General municipal taxes||School district taxes||Special ad valorem tax||Special assessments|
|1. Amount||No limit||No limit||No limit||No exemption allowed|
|2. Duration||No limit||No limit||No limit||No exemption allowed|
|3. Taxing jurisdiction|
|a. County or county special districts||Ex||NA||Ex||Tax|
|c. Town or town special district||Ex||NA||Ex||Tax|
|e. School district||NA||Ex||NA||NA|
|Ex-Exempt Tax-Taxable NA-Not Applicable|
Payments in lieu of taxes
Yes. The UDC, subject to any agreement it has with any of its noteholders or bondholders, may enter into agreements with a municipality in which a project is located to make annual payments in lieu of taxes with respect to property that is owned by the UDC or one of its subsidiaries.
Payments in lieu of taxes are required on the real property constituting the project site for industrial projects as follows: 100% of the average annual real property taxes paid or due for the three-year period prior to UDC acquisition or, in the case of real property acquired from an urban renewal agency or from a municipality which acquired such property for urban renewal purposes, for the three-year period prior to its acquisition by such agency or municipality.
The chairman of the corporation must annually, on or before December 1, make and deliver to the Governor and to the Director of the Budget his certificate stating the sum(s), if any, required to be paid for industrial projects which have been granted exemption pursuant to this statute; such payments are paid by the state.
Real property of the UDC for which no project finding has been made in accordance with the provisions of McK U Con L §6260 are subject to such required payments described above so long as the chairman of the UDC certifies such sum(s) as being required.
Since they are not collected by the tax collector, payments in lieu of taxes should not be entered on the tax roll. Such payments are collected in the same manner as are other payments due the municipality under contract.
Calculation of exemption
General municipal and school district taxes:
100% of assessed value.
Special ad valorem levies and special assessments:
Special ad valorem levies:
100% of assessed value.
No exemption allowed.
Coding of exemption on assessment roll
|Code||Description of alternative codes possible|
Assessment roll section(s):
Exempt (RPS Section 8).
Note: This code should not be used to identify property that is exempt under any of the statutes listed under Similar Exemptions below. For coding of such property, see the Exemption Profile for the statute that applies.
Filing requirements (owner or occupant of property)
Reporting requirements (assessor)
|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|
|Housing development fund companies (UDC subsidiary)||PHFL §577(3)|
|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|
|Industrial development agencies, municipal||RPTL §412-a & Gen Muny L §874|
|Limited-dividend housing companies (UDC subsidiary)||PHFL §93(6)|
|Limited-profit housing companies (UDC subsidiary)||PHFL §33(1)(c)|
|Mixed-use properties in certain municipalities||RPTL §485-a|
|Mixed-use properties in New York City||RPTL §489-bbbbb|
|Nonprofit corporation providing industrial facilities and related research or guaranteeing loans to finance small business facilities and activities||CLS U Con L Ch. 270|
|Not-for-profit housing companies||RPTL §422|
|Public authorities||RPTL §412 & Pub Auth L|
|Property improvements in empire zones||RPTL §485-e|
|State of New York (generally)||RPTL §404(1)|
Please send general questions or comments to ORPTS.