1. The Laws of New York
  2. Consolidated Laws
  3. Private Housing Finance
  4. Article 5: Redevelopment Companies


Section 103 Redevelopment companies; how created

Private Housing Finance (PVH)

1. A redevelopment company may be created as a corporation by three or more persons signing, acknowledging and filing a certificate which shall contain:

  (1) The name of the proposed redevelopment company.

  (2) The purposes for which it is to be formed which shall be as follows: To acquire one or more areas under a plan or plans, and to construct, own, maintain, operate, sell and convey projects pursuant to the terms and provisions of this article.

  (3) The amount of the capital shares, and if any be preferred shares, the preference thereof.

  (4) The number of shares of which the capital shall consist, all of which shall have a par value.

  (5) The city, village or town in which its principal business office is to be located; if located in the city of New York, the borough thereof in which it is to be located.

  (6) Its duration, which shall not be less than twenty years.

  (7) The number of directors, which shall not be less than three and who need not be shareholders. One additional director may be designated by the supervising agency, and, in the case of all mutual companies, such additional director shall be designated by the supervising agency at the creation of the company and shall serve from the time of such designation at least until a board of directors has been elected by the tenants entitled to occupancy in the project by reason of ownership of shares in such company. The directors appointed by the supervising agency need not meet any of the qualifications prescribed in the certificate of incorporation or the by-laws, and in the absence of fraud or bad faith shall not be personally liable for the debts, obligations or liabilities of the corporation.

  (8) The names and post-office addresses of the directors for the first year.

  (9) The names and post-office addresses of the subscribers to the certificate and a statement of the number of shares which each agrees to take in the redevelopment company.

  (10) A provision that, so long as this article shall remain applicable to any project of the redevelopment company, the real property of the redevelopment company shall not be sold, transferred or assigned except as permitted by the terms and provisions of this article.

  (11) A declaration that all of the subscribers to the certificate are of full age; that at least two-thirds of them are citizens of the United States and that at least one of them is a resident of the state of New York; that at least one of the persons named as a director is a citizen of the United States and a resident of the state of New York.

  (12) A declaration that the redevelopment company has been organized to serve a public purpose and that it shall be and remain subject to the supervision and control of the supervising agency except as provided in this article, so long as this article remains applicable to any project of the redevelopment company; that all real and personal property acquired by it and all structures erected by it, shall be deemed to be acquired or created for the promotion of the purposes of this article.

  (13) A declaration that, upon the dissolution of the company pursuant to the provisions of subdivision one of section one hundred twenty-three, the property may be conveyed in fee as provided in said subdivision.

  (14) A declaration that mortgage indebtedness, income debenture certificates and capital of the redevelopment company may be retired if, as and when there shall be funds available for amortization purposes in the treasury of the redevelopment company.

  (15) A declaration that in the event of a violation by a company of a provision of its certificate or of law or any rules and regulations promulgated pursuant to the provisions of this article, the supervising agency may, by written notice, as provided by this article, advise the directors, partners or trustees, as the case may be, of the company of its desire to remove any or all of the existing directors or to appoint a manager or managers of the partnership or trust who shall exclusively exercise all of the powers of such partners or trustees, as the case may be, for the duration of the appointment of such manager or managers. In the event that the company fails to comply with the requirements of the supervising agency within thirty days from date of mailing of said written notice, the supervising agency may, with the written approval of any mortgagee and without further notice to the company or to its directors, partners or trustees, as the case may be, remove such directors in the case of a redevelopment company which is a corporation or any of them from office and appoint such person or persons as the supervising agency, in its sole discretion, deems advisable, including officers or employees of the supervising agency, as new directors to serve in the places of those removed or appoint such manager or managers in the case of a redevelopment company which is a partnersnip or trust who shall exclusively exercise all of the powers of such partners or trustees, as the case may be. Directors or managers so appointed need not meet qualifications which may be prescribed by the certificate, by-laws, partnership or trust agreement, or other rules or regulations of the company. In the absence of fraud or bad faith, directors or managers so appointed shall not be personally liable for debts, obligations or liabilities of the company. Directors or managers so appointed shall serve only for a period coexistent with the duration of such violation or until the supervising agency is assured, in a manner satisfactory to it, against violations of a similar nature. Officers or employees of the supervising agency who are appointed as such directors or managers shall serve in such capacity without compensation.

  (16) A designation of the secretary of state as agent of the corporation upon whom process against it may be served and the post office address within or without this state to which the secretary of state shall mail a copy of any process against it served upon him.

  (17) If the corporation is to have a registered agent, his name and address within this state and a statement that the registered agent is to be the agent of the corporation upon whom process against it may be served.

  2. (1) A redevelopment company may be created as a general partnership by the partners signing, acknowledging and filing as hereinafter provided a certificate which shall contain:

  (a) The matters set out in paragraphs one, two, five, six, ten, twelve, thirteen, fourteen and fifteen of subdivision one of this section.

  (b) The names and post-office addresses of the partners.

  (c) A statement of the capital of the partnership.

  (d) As to all the partners who are individuals, a declaration that (i) all such partners are of full age; (ii) all of them if there be no more than two and at least two-thirds of them if there be more than two are citizens of the United States; and (iii) at least one of them is a resident of the state of New York; and as to all partners which are corporations, a declaration that each such corporation is either incorporated under the laws of the state of New York or is a foreign corporation duly authorized to do business in the state of New York.

  (2) A redevelopment company may be created as a limited partnership by the partners filing as provided herein a copy of the certificate filed with the county clerk pursuant to article eight of the partnership law. The partners shall at the same time sign, acknowledge and file a further certificate which shall contain the matters set out in paragraphs one, two, five, six, ten, twelve, thirteen, fourteen and fifteen of subdivision one of this section and a declaration as to all of the general partners which shall comply with the requirements of subparagraph (d) of paragraph one of this subdivision.

  2-a. A redevelopment company may be created as a limited liability company by the members signing, acknowledging and filing as hereinafter provided a certificate which shall contain:

  (1) The matters set out in paragraphs one, two, five, six, ten, twelve, thirteen, fourteen and fifteen of subdivision one of this section.

  (2) The names and post-office addresses of the members.

  (3) A statement of the capital of the limited liability company.

  (4) As to all the members who are individuals, a declaration that (a) all such members are of full age; (b) all of them if there be no more than two and at least two-thirds of them if there be more than two are citizens of the United States; and (c) at least one of them is a resident of the state of New York; and as to all members which are corporations, a declaration that each such corporation is either incorporated under the laws of the state of New York or is a foreign corporation duly authorized to do business in the state of New York.

  3. A redevelopment company may be created as a trust by the settlor signing, acknowledging and filing as hereinafter provided a certificate which shall contain:

  (1) The matters set out in paragraphs one, two, five, six, ten, twelve, thirteen, fourteen and fifteen of subdivision one of this section.

  (2) A statement of the capital of the trust.

  (3) The name and post-office address of the trustee or trustees.

  (4) The name and post-office address of any person having a beneficial interest, whether vested or contingent, under the trust.

  (5) As to all the trustees who are individuals, a declaration that (i) all such trustees are of full age; (ii) that all of them if there be no more than two and at least two-thirds of them if there be more than two are citizens of the United States; and (iii) that at least one of them is a resident of the state of New York; and as to all trustees which are corporations, a declaration that each such corporation is either incorporated under the laws of the state of New York or is a foreign corporation duly authorized to do business in the state of New York.

  4. A certificate made pursuant to this section shall further contain a declaration that after providing for all expenses, taxes and assessments, there shall be paid annually out of the earnings of the redevelopment company, a sum for interest on and amortization of any mortgage indebtedness and depreciation charges if, when and to the extent deemed necessary by the supervising agency, plus interest not exceeding six per centum on outstanding income debentures and a distribution to the shareholders, to the partners or to the beneficiaries of the trust having interests vested in possession, as the case may be, not exceeding six per centum of the total of the capital; that the obligation in respect of such payments shall be cumulative, and any deficiency in interest, amortization, depreciation and distribution in any year shall be paid either from any cash surplus derived from earnings remaining in the treasury of the redevelopment company in excess of the amount necessary to provide such cumulative annual sums or from the first available earnings in subsequent years; and that any cash surplus derived from earnings remaining in the treasury of the redevelopment company in excess of the amount necessary to provide such cumulative annual sums shall upon the dissolution of, or in the case of a redevelopment company which is a trust the termination of, the company be paid into the general fund of the municipality.

  5. A certificate made pursuant to the provisions of this section may provide that in the event that income debenture certificates are issued by the redevelopment company, the owners thereof may be given the same right to vote as they would have if possessed of shares of equivalent par value in the case of a corporation or if they had contributed capital in the case of a partnership, or had a beneficial interest under the trust vested in the case of a trust, of an amount equal to the amount of the income debenture certificates held by them.

  If provision is made for the issue of income debenture certificates, interest shall be paid by the redevelopment company on income debenture certificates only out of net earnings of the redevelopment company that would be applicable to payment of distributions if there were no income debentures.