Senate Bill S8547A

                                
 
BILL NUMBER: S8547

SPONSOR: ADDABBO
 
TITLE OF BILL:

An act to amend part SS of chapter 56 of the laws of 2020 amending the
real property tax law and the administrative code of the city of New
York relating to abatement of tax payments for certain industrial and
commercial properties in a city of one million or more persons, in
relation to the effectiveness of certain provisions thereof

 
PURPOSE:

To grandfather projects that were purchased and financed in reliance of
the ICAP program. The cost to develop self-storage in New York City is,
like all development, extremely high and margins are slim. 21 current
projects would not have been pursued at the prices paid if ICAP was not
available.

 
SUMMARY OF PROVISIONS:

              

Section 1. Section 10 of part SS of chapter 56 of the laws of 2020
amending the real property tax law and the administrative code of the
city of New York relating to abatement of tax payments for certain
industrial and commercial properties in a city of one million or more.
Subsection 10 states that this act shall take effect immediately;
provided that section one of this act shall not apply to projects for
which  
THE FIRST BUILDING PERMIT IS ISSUED AFTER JULY 1, 2020 OR IF NO
PERMIT IS REQUIRED, FOR WHICH CONSTRUCTION COMMENCES AFTER A PRELIMINARY
APPLICATION HAS BEEN FILED ON OR BEFORE JULY 1, 2020.

SUBSECTION 2. EFFECTIVE DATE.

 
JUSTIFICATION:

THE RECENTLY PASSED NEW YORK STATE BUDGET INCLUDED LANGUAGE THAT
EXCLUDES NYC SELF-STORAGE DEVELOPMENTS FROM PARTICIPATION IN THE CITY'S
INDUSTRIAL AND COMMERCIAL ABATEMENT PROGRAM (ICAP).  ICAP AFFORDS ELIGI-
BLE BUSINESSES A TAX ABATEMENT AND BENEFITS PROVIDED CERTAIN CONDITIONS
AND DEADLINES ARE SATISFIED. THE RECENTLY PASSED NEW YORK STATE BUDGET
INCLUDED LANGUAGE THAT WOULD EFFECTIVELY DISQUALIFIED SELF- STORAGE
PROJECTS FROM ACCESSING SUCH BENEFITS BY IMPOSING AN UNACHIEVABLE
REQUIREMENT AND DEADLINE GIVEN ADMINISTRATIVE REALITIES WHICH ARE
EXACERBATED BY THE ONGOING COVID-19 PANDEMIC.

AS WRITTEN, THE LANGUAGE REQUIRES A DEVELOPER TO HAVE BEEN ISSUED A
BUILDING PERMIT BY JULY 1, 2020. DURING NORMAL TIMES,RECEIVING A BUILD-
ING PERMIT IS A 16 TO 24-MONTH PROCESS. WITH NON-ESSENTIAL CONSTRUCTION
HALTED BECAUSE OF THE PANDEMIC, NEW YORK CITY DEPARTMENT OF BUILDINGS IS
ONLY REVIEWING PERMITS FOR ESSENTIAL CONSTRUCTION AT THIS TIME. THIS
MALCES IT NEARLY IMPOSSIBLE FOR SELF-STORAGE TO ACHIEVE THIS REQUIRE-
MENT.

ELIMINATION OF ICAP FOR SELF-STORAGE AS OF JULY 1, 2020 WILL RENDER
TWENTY-ONE PROJECTS THAT ARE ALREADY IN THE PIPELINE UNFEASIBLE.  THIS
WILL HAVE A DIRECT NEGATIVE FISCAL IMPACT NEW YORK STATE AND NEW YORK
CITY.  WITHOUT THESE PROJECTS, THE STATE WILL LOSE AT LEAST S1.6M IN
REAL PROPERTY TRANSFER TAX AND $5M IN MORTGAGE RECORDING TAX, AND THE
CITY WILL LOSE AT LEAST S6.3M IN REAL PROPERTY TRANSFER TAX AND S8.6M IN
MORTGAGE RECORDING TAX.  IN ADDITION TO THE FISCAL IMPACT, APPROXIMATELY
2,700 CONSTRUCTION RELATED JOBS, 100 DIRECT NYC JOBS IN THE STORAGE
FACILITIES, AND WORK FOR SUPPORTING BUSINESSES (I.E. ELEVATOR COMPANIES,
HVAC, SECURITY SYSTEMS, FIRE INSPECTION COMPANIES ETC.) THAT WOULD HAVE
BEEN CREATED FROM THE CONSTRUCTION AND MANAGEMENT OF THESE FACILITIES
WOULD NO LONGER BE AVAILABLE.

THIS BILL WOULD AFFORD A TEMPORARY RELIEF FOR SELF-STORAGE BUSINESSES
WHO WERE RELYING UPON THE ICAP RULES PRIOR TO THE ENACTMENT OF THE BUDG-
ET PROVISION, WHILE CREATING JOBS AND REVENUE FOR THE STATE AND THE CITY
DURING A TIME WHEN THE STATE AND CITY ARE UNDER FISCAL STRESS, UNEMPLOY-
MENT NUMBERS ARE AT AN ALL-TIME HIGH AND MANY SMALL BUSINESSES HAVE BEEN
FORCED TO CLOSE THEIR DOORS.

 
LEGISLATIVE HISTORY:

NEW BILL.

 
FISCAL IMPLICATIONS:

TBD.

 
EFFECTIVE DATE:
THIS ACT SHALL TAKE EFFECT IMMEDIATELY; PROVIDED THAT IF THIS ACT SHALL
HAVE BECOME A LAW AFTER JULY 1, 2020, IT SHALL BE DEEMED TO HAVE BEEN IN
FULL FORCE AND EFFECT ON AND AFTER SUCH DATE.