§ 507. Disposition of property. 1. In addition to employing any other
lawful method of utilizing or disposing of any real property, and
appurtenances thereto or any interest therein owned by a municipality or
acquired by it pursuant to section five hundred six of this article, a
municipality may sell, lease for a term not exceeding ninety-nine years,
or otherwise dispose of any such real property and appurtenances
thereto, to any person, firm or corporation at the highest marketable
price or rental at public auction or by sealed bids pursuant to the
provisions of any general, special or local laws applicable to the sale
or disposition of real property by said municipality.

2. Notwithstanding anything to the contrary contained in this article
and notwithstanding the provisions of any general, special or local law
applicable to the sale of real property by a municipality, such real
property and appurtenances thereto may be sold, leased for a term not
exceeding ninety-nine years or otherwise disposed of for the
effectuation of any of the purposes of the urban renewal program in
accordance with the urban renewal plan:

(a) to any limited profit housing company organized pursuant to the
provisions of article two of the private housing finance law without
public auction or sealed bids;

(b) to any limited dividend housing company organized pursuant to
article four of the private housing finance law or redevolpment company
organized pursuant to article five of the private housing finance law,
without public auction or sealed bids provided that notice of such sale,
lease or other disposition is published and a public hearing is held
before the governing body not less than ten days after such publication;

(c) to any person, firm or corporation designated by the agency and
approved by the governing body as a qualified and eligible sponsor in
accordance with established rules and procedures prescribed by the
agency, provided that (1) the agency has published, in at least one
newspaper of general circulation in the municipality at least ten days
prior to such sale, lease or other disposition, a notice which shall
include a statement of the identity of the proposed sponsor and of his
proposed use or reuse of the urban renewal area or of the applicable
portion thereof; such notice shall be in such form and manner as may be
prescribed by the agency and, in the case of projects aided by a state
loan, periodic subsidy or capital grant or in which application has been
made for such loan, subsidy or grant, as approved by the commissioner;
(2) such proposed sponsor agrees to pay the minimum price or rental
fixed by the agency for such real property; (3) such proposed sponsor
matches any bid higher than the said minimum price or rental, and (4)
such sale, lease or other disposition shall require effectuation of the
purpose thereof within a definite and reasonable period of time. In the
event that such qualified and eligible sponsor does not agree to pay the
minimum price or rental fixed by the agency or fails to match any higher
bid than such minimum price or rental, a municipality may, in its sole
discretion and only if consistent with the urban renewal plan, sell or
lease for a term not exceeding ninety-nine years any such real property
and appurtenances thereto, to any person, firm or corporation, the
property acquired from such person, firm or corporation or substantially
equivalent property within the urban renewal area, provided that such
former owner (1) agrees to pay the said minimum price or rental and (2)
matches any higher bid than said minimum price or rental, and

(d) to any person, firm or corporation designated by the agency as a
qualified and eligible sponsor pursuant to the provisions of clause (1)
of subsection (c) of this subdivision without public auction or sealed
bids, provided that (1) the price or rental to be paid by such sponsor
for such property and all other essential terms and conditions of such
sale, lease or other disposition shall be included in the notice
published by the agency pursuant to the said clause (1) of subsection
(c) of this subdivision, (2) that such sale, lease or other disposition
be approved by the governing body after a public hearing held not less
than ten days after the publication of such notice, and (3) such sale,
lease or other disposition shall, in the case of projects aided by a
state loan, periodic subsidy or capital grant or in which application
has been made for such loan, subsidy or grant, be approved by the
commissioner.

(e) for the effectuation of any of the purposes of the urban renewal
program and in accordance with the urban renewal plan, a municipality
may grant, sell, convey or lease, without public hearing or public
letting, to a public utility subject to the jurisdiction of the public
service commission, for construction and maintenance of public utility
systems, and the conduct and operation thereof, for such length of time
as it may deem advisable, franchises, easements or rights of ways, in,
over, below, along or across any lands acquired by the municipality
pursuant to this article, upon such terms and conditions, for such
consideration and subject to such restrictions as in the judgment of its
governing body shall seem proper, provided, the governing body shall
first determine that the use and enjoyment for such purposes of such
lands is not inconsistent with the purposes and provisions of the urban
renewal plan.

3. Any deed, lease or instrument by which real property and
appurtenances thereto, or air rights and concomitant easements or other
rights of user necessary for the use and development of such air rights
over streets, alleys, highways or other public rights of way, railway or
subway tracks, bridge or tunnel approaches or entrances, or other
similar facilities, or air rights sites and necessary sitework, the
foundations and platforms constructed or to be constructed in connection
therewith, or any interest therein is conveyed or disposed of pursuant
to this section shall contain provisions requiring the purchaser, lessee
or grantee to replan, clear, rehabilitate, restore, renew, conserve,
improve, reconstruct or redevelop such property in accordance with the
urban renewal plan as approved by the governing body and within a
definite and reasonable period of time subject to the terms of the
contract relating thereto between the municipality and the sponsor, and
provisions insuring the use of such real property for purposes
consistent with such urban renewal plan.

4. (a) Leases authorized by this section may contain provisions
subordinating the fee interest of a municipality to a sponsor for
purposes of pledging or assigning such fee interest to the primary
leasehold mortgagee of said lease, provided that the amount to which the
fee is subordinated shall not exceed the lessee's cost of completing its
obligation to replan, clear, rehabilitate, restore, renew, conserve,
improve, reconstruct or redevelop such property in accordance with the
lease provisions.

(b) A municipality may execute such instruments as may be required to
implement the provisions of this subdivision.

(c) Leases and such other instruments as may be required shall contain
provisions stating that (1) the municipality shall assume no liability
for any debt underlying the pledge or assignment of the fee interest;
(2) the municipality, at its option, may satisfy any obligation for
which the fee interest is assigned or pledged; and (3) no foreclosure
action shall be maintained against such subordinated fee interest until
the obligation of the sponsor to replan, clear, rehabilitate, restore,
renew, conserve, improve, reconstruct or redevelop such property has
been completed in accordance with the lease provisions.

(d) A municipality shall not subordinate its fee interest, as
authorized by this subdivision, to any leasehold mortgagee if the
municipal fee interest is to be assigned or pledged to another
governmental agency, public authority or public benefit corporation
created and organized for the purpose of providing primary or secondary
financial assistance for commercial, industrial or business development.

5. In a city having a population of one million or more, the governing
body may, as part of its review of the land use impact and implications
of a disposition of property for residential use proposed to be made
pursuant to this section, incorporate into its approval any or all of
the following: (i) the number of residential units; (ii) whether such
units are home ownership units, rental units or condominium or
cooperative units; (iii) the estimated initial rents or selling prices
for such units; (iv) income restrictions, if any, on renters or
purchasers of such units; and (v) the basis on which the consideration
for the sale or lease of the property is to be determined; provided,
however, that this subdivision shall not apply to the extent an approved
urban renewal plan incorporates such items.