§ 695. Disposition of property. 1. In addition to employing any other
lawful method of utilizing or disposing of an eligible area, 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 such municipality.

2. Notwithstanding any provision to the contrary contained in this
article or any other law, general, special or local, 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 this article to:

(a) any person, firm or corporation designated by the agency and
approved by the governing body or, in a city having a population of one
million or more, by the mayor, as a qualified and eligible sponsor in
accordance with established rules and procedures prescribed by the
agency, provided that: (i) 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 project summary of the proposed urban development action area
project and such notice shall be in the form and manner prescribed by
the agency; (ii) such proposed sponsor agrees to pay the minimum price
or rental fixed by the agency for such real property; (iii) such
proposed sponsor matches any bid higher than such minimum price or
rental; and (iv) such sale, lease or other disposition requires
effectuation of the urban development action area project within a
definite and reasonable period of time; or

(b) any person, firm or corporation designated by the agency as a
qualified and eligible sponsor in accordance with established rules and
procedures prescribed by the agency without public auction or sealed
bids, provided that (i) 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 subparagraph (i) of paragraph (a) of
this subdivision, (ii) such sale, lease or other disposition requires
the effectuation of an urban development action area project with a
definite and reasonable period of time, and (iii) that such sale, lease
or other disposition be approved by the governing body or, in any city
having a population of one million or more, by the mayor, after a public
hearing held not less than ten days after the publication of such
notice.

3. A municipality may not transfer pursuant to this article any
interest in any eligible area to any person, firm or corporation
constituting (i) any former owner in fee of all or part of the real
property in which such interest is sought to be transferred or of any
other real property which was acquired by the municipality through real
property tax or other lien enforcement proceedings; (ii) any spouse of
such a former owner; (iii) any business entity substantially controlled
by such a former owner; or (iv) any successor in interest to such a
former owner, except a purchaser from such successor in interest in good
faith and for value. The municipality shall require an affidavit from
each person, firm or corporation to whom it proposes to sell or lease an
interest in any such eligible area certifying that the proposed sale or
lease does not violate the provisions of this subdivision. Any deed,
lease, or instrument which transfers an interest in any such eligible
area in violation of this subdivision shall be voidable by the
municipality, provided that a subsequent bona fide holder of an interest
in the real property, whether as purchaser, lessee, or mortgagee shall
not be affected by this subdivision three.

4. Any lease of real property and appurtenances thereto for a period
in excess of one year including any renewals or options to renew or for
a total rental may be made only upon a written appraisal of the market
value thereof verified by an appraiser with at least five years
experience appraising real property, made within a period of sixty days
prior to the authorization to enter into such lease given by the
governing body or, in any city having a population of one million or
more, by the mayor, and filed in the office of that body or officer and
made available for public examination and copying at least thirty days
before such authorization. Any sale of real property and appurtenances
thereto shall be made only upon a written appraisal of the value thereof
by an appraiser with at least five years experience appraising real
property, made within six months prior to the authorization of such sale
or other disposition by the governing body or, in any city having a
population of one million or more, by the mayor, and filed in the office
of that body or officer and made available for public examination and
copying at least thirty days before such authorization.

5. Any deed, lease or instrument by which real property and
appurtenances thereto, or air rights and concomitant easements or other
rights of users 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 development action area project as approved by the governing body
and within a definite and reasonable period of time subject to the terms
of the contract or lease or deed relating thereto between the
municipality and the sponsor, and shall contain provisions insuring the
use of such real property for purposes consistent with such urban
development action area project.

6. (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 such 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: (i) the municipality shall assume no liability
for any debt underlying the pledge or assignment of the fee interest;
(ii) the municipality, at its option, may satisfy any obligation for
which the fee interest is assigned or pledged; and (iii) 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) Notwithstanding any standards or procedures established for land
disposition by general, special or local law or charter, if an urban
development action area project is to be developed on an eligible area
and consists solely of the rehabilitation or conservation of existing
private or multiple dwellings or the construction of one to four unit
dwellings or, until June thirtieth, two thousand twenty-four, for up to
six urban development action area projects in any calendar year, the
construction of up to ninety dwelling units financed by the federal
government and restricted to occupancy by the elderly or by persons with
disabilities without any change in land use permitted by local zoning, a
municipality may dispose of the real property constituting such urban
development action project to any person, firm, or corporation qualified
pursuant to this subdivision by resolution of its governing body or, in
any city having a population of one million or more, by action of the
mayor, provided that such disposition is in accordance with the
requirements of this subdivision. Disposition of real property acquired
by condemnation shall be in accordance with the requirements of section
four hundred six of the eminent domain procedure law, if applicable.

7. In a city having a population of one million or more, within one
hundred fifty days following receipt of a written submission from the
agency requesting waiver of designation of an urban development action
area and approval of an urban development action area project, the
governing body shall (i) approve or disapprove by resolution the
requested waiver of designation of an urban development action area
pursuant to section six hundred ninety-three of this article, and (ii)
approve or disapprove by resolution the proposed urban development
action area project pursuant to section six hundred ninety-four of this
article. If the governing body fails to take such action within one
hundred fifty days following receipt of such written submission from the
agency, then (i) the waiver of designation of an urban development
action area requested by the agency shall be deemed approved pursuant to
section six hundred ninety-three of this article, and (ii) the urban
development action area project proposed by the agency shall be deemed
approved pursuant to section six hundred ninety-four of this article.