§ 489-bbbbbb. Power to enact local law; industrial and commercial real
property tax abatement. 1. Authority to enact local law. Any city having
a population of one million or more, acting through its local
legislative body, is authorized and empowered to determine that
incentives in the form of abatement of real property taxes are necessary
to encourage industrial and commercial development in such city and to
enact a local law providing that such benefits shall be provided in the
manner set forth in this title.

2. Amount of abatement base. (a) Calculation of abatement base. Except
as provided in paragraph (e) of subdivision three of this section, the
abatement base used to determine the amount of the abatement provided
under this title shall be the amount by which the post-completion tax on
a building or structure exceeds one hundred fifteen percent of the
initial tax levied on a building or structure.

(b) Initial tax on building or structure. (i) Determination of initial
tax. The initial tax shall be determined by multiplying the final
taxable assessed value, without regard to any exemptions, shown on the
assessment roll with a taxable status date immediately preceding the
issuance of the first building permit by the initial tax rate. For
purposes of this subdivision, the initial tax rate shall be the final
tax rate applicable to the assessment roll with a taxable status date
immediately preceding the issuance of the first building permit. If no
permit was required, the initial tax and the initial tax rate shall be
determined based on the assessment roll with a taxable status date
immediately preceding the commencement of construction.

(ii) Effect of tax lot apportionment or merger. For a property as to
which an applicant has applied for benefits pursuant to this title, if
such property is apportioned or merged and such apportionment or merger
is not reflected in the assessment roll described in subparagraph (i) of
this paragraph, the initial tax for the newly created tax lot or lots
shall be based on the initial tax of the lot or lots from which they
have been created, which shall be apportioned among the newly created
tax lot or lots in the manner established by the department for purposes
of assessed valuation of real property.

(c) Post-completion tax on building or structure. For purposes of
calculating the abatement base only, the post-completion tax is
determined by multiplying the initial tax rate by the final taxable
assessed value, without regard to any exemptions, that would be shown on
the assessment roll but for the abatement, on the assessment roll with a
taxable status date immediately following the earlier of:

(i) completion of construction; or

(ii) four years from the date of issuance of the first building
permit, or if no permit was required, the commencement of construction.

(d) (i) If the taxable assessed value is later reduced by a court
order or application to the tax commission, then the initial tax or the
post-completion tax shall be the tax as reduced.

(ii) The taxable assessed value used for the calculations in this
subdivision shall be the lower of the actual and transitional value as
provided in subdivision three of section eighteen hundred five of this
chapter.

(e) Mixed-use property. For a mixed-use property, the initial tax and
post-completion tax shall be apportioned between the residential and
nonresidential portions. The department may promulgate rules to
determine the method of apportionment.

(f) Initial taxes not to be reduced by abatement. Except as provided
in paragraph (e) of subdivision three of this section, the abatement
provided under this title shall not be applicable in any year of the
benefit period to the initial tax or to the tax on the portion of the
assessment attributable to land. Additionally, the abatement shall not
result in any credit or refund of real property taxes.

3. Industrial and commercial abatements. (a) Abatement for commercial
construction work. Upon approval by the department of a final
application for benefits, an applicant who has performed commercial
construction work outside of a special commercial abatement area, as
designated pursuant to subdivision two of section four hundred
eighty-nine-gggggg of this title, or a renovation area, as defined by
subdivision three of section four hundred eighty-nine-gggggg of this
title, shall be eligible for an abatement of real property taxes, as
follows:

(i) Amount of abatement. The first year of the abatement shall be the
tax year with the first taxable status date that follows the sooner of
(A) completion of construction; or (B) four years from the date the
first building permit was issued, or if no permit was required, the
commencement of construction. For years one through eleven, the
abatement shall be the amount of the abatement base. For years twelve
through fifteen, the abatement shall decrease by twenty percent each
year. The following table illustrates the abatement computation:
Tax year during benefit period: Amount of abatement:

Years 1 through 11 100% of abatement base

12 80% of abatement base

13 60% of abatement base

14 40% of abatement base

15 20% of abatement base

(ii) Minimum required expenditure. For commercial construction work,
the minimum required expenditure is thirty percent of the property's
taxable assessed value in the tax year with a taxable status date
immediately preceding the issuance of the first building permit, or if
no permit was required, the commencement of construction. Expenditures
for residential construction work or construction work on portions of
property to be used for restricted activities shall not be included in
the minimum required expenditure.

(b) Abatement for industrial construction work or commercial
construction work in special commercial abatement areas on buildings
where not more than ten percent of the building or structure is used for
retail purposes. Upon approval by the department of a final application
for benefits, an applicant who has performed industrial construction
work in any area, where not more than ten percent of the building or
structure on which such work has been performed is used for retail
purposes, or commercial construction work in a special commercial
abatement area, as designated pursuant to subdivision two of section
four hundred eighty-nine-gggggg of this title, where not more than ten
percent of the building or structure on which such work has been
performed is used for retail purposes, shall be eligible for an
abatement of real property taxes, as follows:

(i) Amount of abatement. The first year of the abatement shall be the
tax year with the first taxable status date that follows the sooner of
(A) completion of construction; or (B) four years from the date the
first building permit was issued, or if no permit was required, the
commencement of construction. For years one through sixteen, the
abatement shall be the amount of the abatement base. The abatement shall
be adjusted for inflation protection as provided in subparagraph (ii) of
this paragraph. For years seventeen through twenty-five, the abatement
shall decrease by ten percent each year. The following table illustrates
the abatement computation:
Tax year during benefit period: Amount of abatement:

Years 1 through 16 100% of abatement base

17 90% of abatement base

18 80% of abatement base

19 70% of abatement base

20 60% of abatement base

21 50% of abatement base

22 40% of abatement base

23 30% of abatement base

24 20% of abatement base

25 10% of abatement base

(ii) Inflation protection. (A) Industrial construction work. (I)
Effect of assessed valuation increases. For years two through thirteen
of the benefit period, except as provided in item (II) of this clause,
if there is any increase in tax in that year that is based on an
increase of taxable assessed valuation since the immediately prior tax
year, such excess tax liability shall be added to the amount of the
abatement base. Such addition to the amount of the abatement base shall
be determined using the initial tax rate.

(II) Physical increases. Notwithstanding the provisions of item (I) of
this clause, if in any of years two through thirteen of the benefit
period, a physical change to the property results in an increase in the
taxable assessed value of the property of more than five percent for
that year, then any increase in taxes for that year shall not be added
to the amount of the abatement base in any year.

(III) If the taxable assessed value upon which an adjustment to the
abatement under this paragraph is based is later reduced by a court
order or application to the tax commission, then the appropriate
adjustment to the abatement base shall be made in accordance with the
reduced taxable assessed value.

(B) Commercial construction work in special commercial abatement areas
on buildings where not more than ten percent of the building or
structure is used for retail purposes. (I) Effect of assessed valuation
increases. For years two through thirteen of the benefit period, except
as provided in item (II) of this clause, if there is any increase in tax
in that year that is based on an increase of taxable assessed valuation
since the immediately prior tax year that exceeds five percent, such
excess tax liability shall be added to the amount of the abatement base.
Such addition to the amount of the abatement base shall be determined
using the initial tax rate.

(II) Physical increases. Notwithstanding the provisions of item (I) of
this clause, if in any of years two through thirteen of the benefit
period, a physical change to the property results in an increase in the
taxable assessed value of the property of more than five percent for
that year, then any increase in taxes for that year shall not be added
to the amount of the abatement base in any year.

(III) If the taxable assessed value upon which an adjustment to the
abatement under this paragraph is based is later reduced by a court
order or application to the tax commission, then the appropriate
adjustment to the abatement base shall be made in accordance with the
reduced taxable assessed value.

(C) Mixed-use property. For a property as to which benefits are given
for both industrial and commercial construction, the inflation
protection provided under this subparagraph shall be based on the
predominant use of the property as determined by the department.

(iii) Minimum required expenditure. For industrial construction work
or commercial construction work in a special commercial abatement area,
the minimum required expenditure is thirty percent of the property's
taxable assessed value in the tax year with a taxable status date
immediately preceding the issuance of the first building permit, or if
no permit was required, the commencement of construction. Expenditures
for residential construction work or construction work on portions of
property to be used for restricted activities shall not be included in
the minimum required expenditure.

(b-1) Abatement for industrial construction work on a peaking unit.
Upon approval by the department of a final application for benefits, an
applicant who has performed industrial construction work in any area on
a peaking unit, shall be eligible for an abatement of real property
taxes, as follows:

(i) Amount of abatement. The first year of the abatement shall be the
tax year with the first taxable status date that follows the sooner of
(A) completion of construction; or (B) four years from the date the
first building permit was issued, or if no permit was required, the
commencement of construction. For years one through fifteen, the
abatement shall be the amount of the abatement base. The abatement shall
be adjusted for inflation protection as provided in subparagraph (ii) of
this paragraph. The following table illustrates the abatement
computation:
Tax year during benefit period: Amount of abatement:
Years 1 through 15 100% of abatement base

(ii) Inflation protection. (A) Industrial construction work, effect of
assessed valuation increases. For years two through thirteen of the
benefit period, except as provided in clause (B) of this subparagraph,
if there is any increase in tax in that year that is based on an
increase of taxable assessed valuation since the immediately prior tax
year, such excess tax liability shall be added to the amount of the
abatement base. Such addition to the amount of the abatement base shall
be determined using the initial tax rate.

(B) Physical increases. Notwithstanding the provisions of clause (A)
of this subparagraph, if in any of years two through thirteen of the
benefit period, a physical change to the property results in an increase
in the taxable assessed value of the property of more than five percent
for that year, then any increase in taxes for that year shall not be
added to the amount of the abatement base in any year.

(C) If the taxable assessed value upon which an adjustment to the
abatement under this paragraph is based is later reduced by a court
order or application to the tax commission, then the appropriate
adjustment to the abatement base shall be made in accordance with the
reduced taxable assessed value.

(iii) Minimum required expenditure. For industrial construction work
on a peaking unit, the minimum required expenditure is thirty percent of
the property's taxable assessed value in the tax year with a taxable
status date immediately preceding the issuance of the first building
permit, or if no permit was required, the commencement of construction.
Expenditures for residential construction work or construction work on
portions of property to be used for restricted activities shall not be
included in the minimum required expenditure.

(c) Abatement for industrial construction work or commercial
construction work in special commercial abatement areas on buildings
where more than ten percent of the building or structure is used for
retail purposes. Upon approval by the department of a final application
for benefits, an applicant who has performed industrial construction
work in any area, where more than ten percent of the building or
structure on which such work has been performed is used for retail
purposes, or commercial construction work in a special commercial
abatement area, as designated pursuant to subdivision two of section
four hundred eighty-nine-gggggg of this title, where more than ten
percent of the building or structure on which such work has been
performed is used for retail purposes, shall be eligible for an
abatement of real property taxes on the non-retail portion of such
building or structure and up to ten percent of such building or
structure used for retail purposes, in accordance with paragraph (b) of
this subdivision, and shall be eligible for an abatement of real
property taxes on the remaining retail portion of such building or
structure, as follows:

(i) Amount of abatement. The first year of the abatement shall be the
tax year with the first taxable status date that follows the sooner of
(A) completion of construction; or (B) four years from the date the
first building permit was issued, or if no permit was required, the
commencement of construction. For years one through eleven, the
abatement shall be the amount of the abatement base. For years twelve
through fifteen, the abatement shall decrease by twenty percent each
year. The abatement shall be adjusted for inflation protection as
provided in subparagraph (ii) of this paragraph. The following table
illustrates the abatement computation:
Tax year during benefit period: Amount of abatement:

Years 1 through 11 100% of abatement base

12 80% of abatement base

13 60% of abatement base

14 40% of abatement base

15 20% of abatement base

(ii) Inflation protection. (A) Industrial construction work. (I)
Effect of assessed valuation increases. For years two through thirteen
of the benefit period, except as provided in item (II) of this clause,
if there is any increase in tax in that year that is based on an
increase of taxable assessed valuation since the immediately prior tax
year, such excess tax liability shall be added to the amount of the
abatement base. Such addition to the amount of the abatement shall be
determined using the initial tax rate.

(II) Physical increases. Notwithstanding the provisions of item (I) of
this clause, if in any of years two through thirteen of the benefit
period, a physical change to the property results in an increase in the
taxable assessed value of the property of more than five percent for
that year, then any increase in taxes for that year shall not be added
to the amount of the abatement base in any year.

(III) If the taxable assessed value upon which an adjustment to the
abatement under this paragraph is based is later reduced by a court
order or application to the tax commission, then the appropriate
adjustment to the abatement base shall be made in accordance with the
reduced taxable assessed value.

(B) Commercial construction work in special commercial abatement areas
on buildings where more than ten percent of the building or structure is
used for retail purposes. (I) Effect of assessed valuation increases.
For years two through thirteen of the benefit period, except as provided
in item (II) of this clause, if there is any increase in tax in that
year that is based on an increase of taxable assessed valuation since
the immediately prior tax year that exceeds five percent, such excess
tax liability shall be added to the amount of the abatement base. Such
addition to the amount of the abatement base shall be determined using
the initial tax rate.

(II) Physical increases. Notwithstanding the provisions of item (I) of
this clause, if in any of years two through thirteen of the benefit
period, a physical change to the property results in an increase in the
taxable assessed value of the property of more than five percent for
that year, then any increase in taxes for that year shall not be added
to the amount of the abatement base in any year.

(III) If the taxable assessed value upon which an adjustment to the
abatement under this paragraph is based is later reduced by a court
order or application to the tax commission, then the appropriate
adjustment to the abatement base shall be made in accordance with the
reduced taxable assessed value.

(C) Mixed-use property. For a property as to which benefits are given
for both industrial and commercial construction, the inflation
protection provided under this subparagraph shall be based on the
predominant use of the property as determined by the department.

(iii) Minimum required expenditure. For industrial construction work
or commercial construction work in a special commercial abatement area,
the minimum required expenditure is thirty percent of the property's
taxable assessed value in the tax year with a taxable status date
immediately preceding the issuance of the first building permit, or if
no permit was required, the commencement of construction. Expenditures
for residential construction work or construction work on portions of
property to be used for restricted activities shall not be included in
the minimum required expenditure.

(d) Abatement for renovation construction work in renovation areas.
Subject to the provisions of subparagraph (iii) of this paragraph, upon
approval by the department of a final application for benefits, an
applicant who has performed renovation construction work in a renovation
area, as defined by subdivision three of section four hundred
eighty-nine-gggggg of this title, shall be eligible for an abatement of
real property taxes, as follows:

(i) Amount of abatement. For the renovation areas defined in
paragraphs (a) and (b) of subdivision three of section four hundred
eighty-nine-gggggg of this title, the first year of the abatement shall
be the tax year with the first taxable status date that follows the
sooner of (A) completion of construction; or (B) four years from the
date the first building permit was issued, or if no permit was required,
the commencement of construction. For years one through eight, the
abatement shall be the amount of the abatement base. For years nine
through twelve, the abatement shall decrease by twenty percent each
year. The following table illustrates the abatement computation:
Tax year during benefit period: Amount of abatement:

Years 1 through 8 100% of abatement base

9 80% of abatement base

10 60% of abatement base

11 40% of abatement base

12 20% of abatement base

(ii) Amount of abatement. For the renovation area defined in paragraph
(c) of subdivision three of section four hundred eighty-nine-gggggg of
this title, the first year of the abatement shall be the tax year with
the first taxable status date that follows the sooner of (A) completion
of construction; or (B) four years from the date the first building
permit was issued, or if no permit was required, the commencement of
construction. For years one through five, the abatement shall be the
amount of the abatement base. For years six through nine, the abatement
shall decrease by twenty percent each year. In year ten, the abatement
shall be twenty percent of the abatement base. The following table
illustrates the abatement computation:
Tax year during benefit period: Amount of abatement:

Years 1 through 5 100% of abatement base

6 80% of abatement base

7 60% of abatement base

8 40% of abatement base

9 20% of abatement base

10 20% of abatement base

(iii) If more than five percent of any building or structure upon
which renovation construction work is performed is used for retail
purposes, no abatement shall be granted for the retail portions of such
building or structure in excess of five percent, but five percent of
such building or structure used for retail purposes shall be eligible
for an abatement of real property taxes in accordance with subparagraph
(i) or subparagraph (ii) of this paragraph, as applicable; provided,
however, that notwithstanding any other provision of this title, any
building or structure located in the renovation area defined in
paragraph (a) of subdivision three of section four hundred
eighty-nine-gggggg of this title shall be eligible for an abatement in
accordance with subparagraph (i) of this paragraph regardless of the
amount of the building or structure used for retail purposes.

(iv) Minimum required expenditure. For renovation construction work in
renovation areas, the minimum required expenditure is thirty percent of
the property's taxable assessed value in the tax year with a taxable
status date immediately preceding the issuance of the first building
permit, or if no permit was required, the commencement of construction.
Expenditures for construction work on portions of the property to be
used for retail purposes that exceed five percent of the building or
structure in renovation areas defined in paragraphs (b) and (c) of
subdivision three of section four hundred eighty-nine-gggggg of this
title, for residential construction work, or for construction work on
portions of the property to be used for restricted activities, shall not
be included in the minimum required expenditure.

(e) Additional industrial abatement. In addition to the abatement for
industrial construction work provided in paragraph (b) of this
subdivision, an applicant who performs industrial construction work that
meets the eligibility requirements set forth in this title shall be
eligible for an additional abatement, calculated as a percentage of the
initial tax, as follows:

(i) Amount of abatement. The first year of the abatement shall be the
tax year with the first taxable status date that follows the sooner of
(A) completion of construction; or (B) four years from the date the
first building permit was issued, or if no permit was required, the
commencement of construction. The amount of the additional industrial
abatement shall be as follows:
Tax year during benefit period: Amount of additional abatement:

1 through 4 50% of the initial tax amount

5 40% of the initial tax amount

6 40% of the initial tax amount

7 30% of the initial tax amount

8 30% of the initial tax amount

9 20% of the initial tax amount

10 20% of the initial tax amount

11 10% of the initial tax amount

12 10% of the initial tax amount

(ii) Minimum required expenditure. For the additional industrial
abatement, the minimum required expenditure is forty percent of the
property's taxable assessed value in the tax year with a taxable status
date immediately preceding the issuance of the first building permit, or
if no permit was required, the commencement of construction.
Expenditures for residential construction work or construction work on
portions of property to be used for restricted activities shall not be
included in the minimum required expenditure.

(f) Abatement for commercial construction work on new construction in
certain areas of the borough of Manhattan. Notwithstanding any other
provision of law, upon approval by the department of a final application
for benefits, an applicant who has performed commercial construction
work on a new building or structure, in the geographical area as
specified in subparagraph (iv) of this paragraph, shall be eligible for
an abatement of real property taxes, as follows:

(i) Amount of abatement. The first year of the abatement shall be the
tax year with the first taxable status date that follows the sooner of
(A) completion of construction; or (B) four years from the date the
first building permit was issued, or if no permit was required, the
commencement of construction. For years one through four, the abatement
shall be the amount of the abatement base. For years five through eight,
the abatement shall decrease by twenty percent each year. The following
table illustrates the abatement computation:
Tax year during benefit period: Amount of abatement:

Years 1 through 4 100% of abatement base

5 80% of abatement base

6 60% of abatement base

7 40% of abatement base

8 20% of abatement base

(ii) Minimum required expenditure. The minimum required expenditure is
thirty percent of the property's taxable assessed value in the tax year
with a taxable status date immediately preceding the issuance of the
first building permit, or if no permit was required, the commencement of
construction. Expenditures for residential construction work or
construction work on portions of property to be used for restricted
activities shall not be included in the minimum required expenditure.

(iii) Special eligibility requirements. Notwithstanding any other
provision of this title, no benefits shall be granted pursuant to this
paragraph unless the building or structure meets the requirements of
clauses (A) and (B) of this subparagraph, and further meets at least two
of the requirements set forth in clauses (C) through (G) of this
subparagraph:

(A) The height of at least forty percent of the floors in such
building or structure shall be not less than twelve feet, nine inches
measured from the top of the slab comprising the floor to the bottom of
the slab comprising the ceiling;

(B) Such building or structure shall be served by fiber-optic
telecommunications wiring and shall contain vertical penetrations for
the distribution of fiber optic cabling to individual tenants on each
floor;

(C) The total square footage of such building or structure is not less
than five hundred thousand gross square feet;

(D) A minimum of two hundred thousand gross square feet or twenty-five
per centum of such building or structure is comprised of floors of not
less than forty thousand gross square feet;

(E) At least ten per centum of the gross square footage of such
building or structure is comprised of floors that contain no more than
eight structural columns, excluding any columns within the core or on
the periphery of such building or structure;

(F) The electrical capacity of such building or structure is not less
than six watts per net square foot;

(G) Emergency backup power sufficient to accommodate a need of six
watts per net square foot is available in at least two hundred thousand
gross square feet or twenty-five per centum of such building or
structure.

(iv) Geographical area. Abatements will only be granted for new
construction work pursuant to this paragraph in the following
geographical area: the area in the borough of Manhattan bounded by
Murray Street on the north starting at the intersection of West Street
and Murray Street; running easterly along the center line of Murray
Street; connecting through City Hall Park with the center line of
Frankfort Street and running easterly along the center line of Frankfort
and Dover Streets to the intersection of Dover Street and South Street;
running southerly along the center line of South Street to Peter Minuit
Plaza; connecting through Peter Minuit Plaza to the center line of State
Street and running northwesterly along the center line of State Street
to the intersection of State Street and Battery Place; running westerly
along the center line of Battery Place to the intersection of Battery
Place and West Street; and running northerly along the center line of
West Street to the intersection of West Street and Murray Street, except
the area in the borough of Manhattan bounded by Church Street on the
east starting at the intersection of Liberty Street and Church Street;
running northerly along the center line of Church Street to the
intersection of Church Street and Vesey Street; running westerly along
the center line of Vesey Street to the intersection of Vesey Street and
West Broadway; running northerly along the center line of West Broadway
to the intersection of West Broadway and Barclay Street; running
westerly along the center line of Barclay Street to the intersection of
Barclay Street and Washington Street; running southerly along the center
line of Washington Street to the intersection of Washington Street and
Vesey Street; running westerly along the center line of Vesey Street to
the intersection of Vesey Street and West Street; running southerly
along the center line of West Street to the intersection of West Street
and Liberty Street; and running easterly along the center line of
Liberty Street to the intersection of Liberty Street and Church Street.

4. Limitations on abatement. (a) Subsequent abatement. With respect to
any property that has received or is receiving abatement benefits under
this title, an applicant shall not file a preliminary application for
new abatement benefits under this title for an additional construction
project on the same portion of the property for which construction work
is the subject of abatement benefits under this title until at least
four years have elapsed since the first day of the first tax year of
such abatement benefits under the prior abatement, and, in the event
that such new benefits are granted, then notwithstanding any other
provision of this title or any other law, the initial tax for any such
new abatement will be determined without regard to the prior abatement
and any other abatement or exemption granted to the property.

(b) Abatement benefits granted under this title shall not in any year
exceed the real property taxes imposed on such property.

(c) Once an abatement is granted, no additional benefits pursuant to
this title shall be granted for construction work that is substantively
a part of eligible construction work for which benefits have been
approved or granted.

(d) No benefits shall be granted for residential construction work.

(e) Any parcel partly located in an excluded area shall be deemed to
be entirely located in such area.

(f) Where a tax lot contains multiple structures or buildings with
eligible and non-eligible uses, the initial tax shall be apportioned
under rules promulgated by the commissioner and only the tax
attributable to the eligible portion of the property shall be abated.

(g) (i) No benefits under this title may be received by a property
that is concurrently receiving exemption or abatement of real property
taxes under any other law, except for an exemption under (A) section
four hundred twenty-a, four hundred twenty-b or four hundred
fifty-nine-b of this chapter; or (B) any section of this chapter as to
which a city that has enacted a local law pursuant to this title has
also enacted a local law to implement such exemption and as to which
exemption is granted only if the property is the primary or legal
residence of one or more of the owners of the property, including such
sections in which exemption may be granted if an owner is absent from
the residence while receiving medical benefits; or (C) title two-D of
this article for a separate project involving separate parts of the
building or structure that was completed prior to the application for
benefits.

(ii) For purposes of this paragraph, "property" means the real
property contained by an individual tax lot.

(iii) Notwithstanding subparagraph (ii) of this paragraph, where a
property is owned in condominium form, and an application for benefits
under this title includes more than one tax lot in the same condominium,
then for purposes of this paragraph, "property" shall include any or all
such tax lots that are included in the application.