NY State Lawmakers Approve Massive Tax Breaks for Luxury Apartments

NY lawmakers mandate massive tax breaks for millionaires’ Manhattan apartments

Daniel Beekman

New York Daily News

June 17, 2013

Language quietly inserted into a bill that sailed through the state Legislature singled out five NYC developments to make them eligible for tax breaks that could cost the city tens of millions of dollars in property taxes, the Daily News has learned. Developers of four of the projects, their relatives and affiliated companies gave $1.5 million to various state campaign committees from 2008 to 2012.

The millionaires buying apartments in a soaring tower rising on 57th St. will get more than sweeping views of Central Park: They’ll also be eligible for massive city tax breaks.

So will the homeowners and builders of four other luxury Manhattan condo and rental developments.

Language quietly inserted into a bill that sailed through the state Legislature singled out the five developments to make them eligible for tax breaks — which could cost the city tens of millions of dollars in property taxes, the Daily News has learned.

The sponsor of the bill, Sen. Martin Golden (R-Brooklyn), defended the tax breaks, saying the projects would create jobs and boost the economy.

“These projects were ready to go,” he said.

But Golden could not say who selected the five projects for special treatment. “I’m not sure where they came from,” he said.

And the Assembly sponsor, Keith Wright (D-Manhattan), said he knew little about the tax breaks.

“These five properties — it was important that they benefit from the piece of legislation probably, and I don’t know why, because some of the folks in the Senate wanted them to be included.”

The developers of four of the projects, their relatives and affiliated companies gave $1.5 million to various state campaign committees during 2008-12 — including $440,962 last year, records show.

The contributions included $53,000 to the state Senate Republican campaign treasury, $34,000 to the war chest of Assembly Democrats and $150,000 to the campaign of Gov. Cuomo, who signed the bill Jan. 30.

Critics argue the breaks are a stark example of why lawmakers should pass campaign finance reform this week.

“That real estate developers were able to win such a huge giveaway is a reflection of . . . just how broken the current campaign finance system is,” said Jaron Benjamin, president of the Metropolitan Council on Housing.

“The reason Albany lawmakers agreed to spend millions subsidizing luxury housing for the wealthy is clear: Developers who contributed to their campaigns . . . expected to be rewarded.”

Steven Spinola, president of the Real Estate Board of New York, said the tax breaks were deserved.

“Whenever anybody doesn’t like something, they make an argument that some quid pro quo was made. I totally reject the suggestion,” he said.

The language benefiting the five developments was slipped into a catch-all housing bill pushed by the Bloomberg administration that included extending tax breaks to hundreds of thousands of low- and middle-income homeowners.

The language made the five projects eligible for a controversial abatement program called 421-a, which grants tax relief for 10 or 20 years to buildings that set aside 20% of all units for affordable housing, or in some cases sponsor such housing off-site.

Bloomberg administration officials said they did not request the special provision.

State Sen. Liz Krueger voted for the bill but slammed the “carve-out” breaks for the five buildings.

“This is a perfect example of what goes wrong with the wheeling and dealing in the backrooms of Albany,” Krueger (D-Manhattan) said.

The provision made the projects eligible for breaks by waiving a zoning rule blocking them from the abatement program.

Spinola said the City Council in the past routinely waived the rule for all developments — but has not done so recently. Several of the five developers broke ground years ago on the assumption the Council would continue granting such abatements, he said, noting that the projects will generate new affordable housing and contribute significantly to the city’s tax coffers when their abatements run out.

But Councilwoman Gale Brewer (D-Manhattan) called the provision an “end run” around the Council. “Why did they go to Albany, and why did Albany not ask for (a vote) from the City Council? I think the answer is that the powers that be wanted to bury it in an omnibus bill.”

The developers must file with the city to claim their abatements.

Extell Development Co., which is building the 75-story tower on W. 57th St., One57, did not return a request for comment.

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