§ 460. Lease and other agreements. 1. Any agreement entered into
between the fund and the owner or developer of a proposed combined
occupancy structure pursuant to section four hundred fifty-four of this
chapter shall provide for (i) the construction, acquisition,
reconstruction, rehabilitation or improvement of one or more combined
occupancy structures, and the purchase or acquisition of the original
furnishings, equipment, machinery and apparatus to be used in the school
portion of a combined occupancy structure upon completion of the work,
(ii) the reconveyance, retransfer or leasing of all or any portion
thereof and of the real property or interest therein related thereto,
including real property originally acquired by the board of education in
the name of the city of New York, upon the completion of construction,
acquisition, reconstruction, rehabilitation or improvement upon such
terms and conditions as may be agreed upon in those instances where
there has been a prior conveyance, transfer or lease by the Fund to the
owner or developer, (iii) the leasing or subleasing of such combined
occupancy structures and property, or separately of the school and
non-school portions thereof, by the fund upon completion for a term not
exceeding ninety-nine years and upon such terms and conditions including
annual rental as may be agreed upon, and (iv) the conveyance to the
board of education in the name of the city of New York of title to the
school portion of any such combined occupancy structures at the
expiration of the term of the lease, or any renewal or extension
thereof, or upon earlier payment in full of the total amount specified
therein, without additional charge therefore. The board of education
shall approve any such agreement.

2. a. Any lease, sublease or other agreement entered into between the
fund and the owner or developer of a proposed combined occupancy
structure shall provide for payment to the fund of the fair market value
of such easements, space rights, air rights or other fee or leasehold
interests as are to be held or retained by such owner or developer or
his successor in interest under the terms of such agreement; provided
that where subsidized housing, as hereinafter defined, is intended to be
built in or on said easements, space rights, air rights or other fee or
leasehold interests, the appropriate document may provide, in the
discretion of the fund, for payment to the fund of less than the fair
market value of such easements, space rights, air rights, or other fee
or leasehold interests. As used in this paragraph, subsidized housing
shall mean dwelling units aided by one or more federal, state or
municipal programs designed to provide low or moderate income housing.

b. Whenever the easements, space rights, air rights or other fee or
leasehold interests held or retained by such owner or developer, if
other than the New York city housing authority, and/or the non-school
improvements constructed or erected therein or thereon, shall be exempt
from real property taxes pursuant to the provisions of section four
hundred sixty-eight of this article, such lease, sublease or other
agreement shall also provide for the payment to the fund of annual or
other periodic amounts equal to the amount of real property taxes that
would otherwise have been paid or payable with respect to such
easements, space rights, air rights or other fee or leasehold interests,
and with respect to the non-school improvements constructed or erected
therein or thereon, over the term of such lease, sublease or other
agreement. Where such lease, sublease, or other agreement provides for
the annual or other periodic payment of a fixed sum or sums as a tax
equivalency payment during the term of such a lease, sublease, or other
agreement, or any part thereof, the sum or sums to be paid may be either
greater or less than the actual amount of real property taxes that would
otherwise have been paid or payable with respect to the said property
rights affected, if said property rights were not exempt, provided the
city shall approve such provision. In the event provision is made for
the annual or other periodic payment of a fixed sum or sums as a tax
equivalency payment, such lease, sublease, or other agreement may
further provide, upon approval by the city of such provision, that (i)
such lessee, sublessee or vendee shall be required to pay such fixed sum
or sums to the fund during the term of such lease, sublease, or other
agreement regardless of whether the said property rights are exempt from
real property taxes, (ii) if for any year during such term an ad valorem
tax shall be levied and paid by such lessee, sublessee or vendee on the
said property rights, such lessee, sublessee or vendee shall receive a
credit against any taxes thereafter payable by it to the city the amount
of such ad valorem tax paid by it, and (iii) in the event during such
term a substitute tax, in place either in whole or in part of a real
property tax on said property rights, is levied and paid by such lessee,
sublessee or vendee, such lessee, sublessee, or vendee shall receive a
credit against any taxes thereafter payable by it to the city for the
amount of such substitute tax paid by it.

c. (1) Notwithstanding the provisions of section fifty-two of the
public housing law, whenever the New York city housing authority is such
owner or developer, such lease, sublease or other agreement shall also
provide for the payment by such authority to the fund or the city of
such amount, for any year or years, as payment in lieu of real property
taxes on the non-school portion constituting a project, as defined by
the public housing law, as may be agreed upon among the fund, the city
and the authority, and as may be approved by the commissioner of the
state division of housing and community renewal if such project is a
state project as defined in the public housing law, and by the federal
government if such project is a federal project as defined in the public
housing law.

(2) For any of the purposes of the public housing law, including,
specifically, section seventy-three thereof, and notwithstanding any
other provision in the public housing law for establishing the amount of
taxes paid or payable with respect to a project for such year and the
resulting amount of tax exemption, in computing the amount of tax
exemption granted to such non-school portion constituting a project, as
defined by the public housing law, the amount of such payment in lieu of
taxes paid or payable with respect thereto for any year shall be deemed
to be the amount of taxes paid or payable for such year.

3. Any lease, sublease or other agreement entered into between the
fund and the city of New York or the board of education pursuant to
section four hundred fifty-four of this chapter shall provide for (i)
the construction, acquisition, reconstruction, rehabilitation or
improvement of one or more combined occupancy structures and (ii) the
leasing or subleasing of the school portion of such structures to the
city or the board for a term not exceeding ninety-nine years, upon such
terms and conditions as may be agreed upon.

4. Every lease, sublease or other agreement executed pursuant to this
article shall be subject to the approval of the commissioner of general
services and the director of management and budget with respect to all
rentals or other payments to be made thereunder by the city of New York,
the board of education or by the owner or developer of a combined
occupancy structure and shall contain a clause that any agreement of the
city of New York thereunder shall be deemed executory to the extent of
the moneys available to the city therefor and no liability on account
thereof shall be incurred by the city beyond the moneys available for
the purpose thereof.