N.Y. Arts and Cultural Affairs Law § 21.11: Special provisions relating to tax-equivalency payments

§ 21.11. Special provisions relating to tax-equivalency payments. 1.

The trust shall use and apply in the following order the tax-equivalency

payments it receives in respect of each combined-use facility:

(a) the trust shall first pay the costs of administration of the trust

allocable to such combined-use facility in accordance with generally

accepted accounting principles consistently applied, including without

limitation, the costs of collecting such tax-equivalency payments, and

establish or maintain such reserves for the payment of such costs as the

trust deems necessary;

(b) the trust shall then pay to the city, from and after the date on

which the trust acquires any real property described in subdivision two

of section 21.09 of this article or any other real property in or on

which all or any part of a combined use facility is or is designed to be

developed after January first, nineteen hundred ninety-seven, as nearly

as practicable in accordance with the applicable schedule for making

real property tax payments to the city with respect to such property,

annual amounts equal to the total assessed valuation, for the fiscal

year of such acquisition, of any such acquired real property with

respect to which real property taxes were paid to the city during the

fiscal year immediately preceding such acquisition, multiplied by the

real property tax rate applicable to such acquired property during each

fiscal year in which such amounts are required to be paid; provided that

the amount paid by the trust pursuant to this paragraph during any

fiscal year shall not be less than the amount paid by the trust pursuant

to this paragraph during the immediately preceding fiscal year;

(c) if, for any fiscal year of the city up to and including the fiscal

year ending ten years after the taxable status date next following the

completion of construction of the non-institutional portion of such

facility, the amount required to be paid by the trust pursuant to

paragraph (b) of this subdivision is less than ten per centum of the

aggregate amount of tax-equivalency payments received by the trust in

respect of such portion during the same fiscal year, then the trust

shall pay to the city, in lieu of the amount required to be paid by the

trust pursuant to paragraph (b) of this subdivision, an amount equal to

ten per centum of the aggregate amount of such tax-equivalency payments;

(d) the trust shall then pay to the city an amount equal to fifty per

centum of the increase in the amount of tax-equivalency payments

received by the trust in respect of the non-institutional portion of

such facility, during each fiscal year of the city following the fiscal

year beginning ten years after the taxable status date next following

the completion of construction of such portion, above the amount of the

tax-equivalency payments received by it during the fiscal year beginning

ten years after such taxable status date, such payments to be made by

the trust at the end of each fiscal year of the city for which they are

required to be made; to the extent that such increase has resulted from

a change in the assessed valuation or the real property tax rate applied

to such portion;

(e) with remaining amounts, to pay principal and interest on bonds,

notes and other obligations of the trust issued to finance development

of all or any part of the institutional portion of such combined-use

facility, and establish or maintain reserves to pay or secure such

bonds, notes or other obligations equal to no more than the sum required

to be paid to such reserves so that the moneys then held in such

reserves equal the aggregate amount of the then outstanding principal of

such bonds plus any redemption premium thereon and any interest to

accrue thereon to the earliest or subsequent date of payment or

redemption thereof;

(f) unless otherwise provided by a resolution of the board of estimate

of the city, or successor body, beginning with the fiscal year of the

trust in which the trust has paid, redeemed or otherwise retired or

provided a reserve to redeem or otherwise retire all bonds, notes and

obligations of the trust issued to finance development of all or any

part of the institutional portion of such combined-use facility, the

trust shall then pay from time to time the costs of operating and

maintaining the institutional portion, developed by or on behalf of the

trust, of such combined-use facility, including without limitation, the

costs of lighting, heating, cooling, security, maintenance, repairs and

necessary replacements; provided that at the end of each fiscal year of

the city after commencement of payment of such costs, the trust shall

have sufficient funds to make the payments then required under

paragraphs (b), (c) and (d) of this subdivision; and

(g) the trust shall then pay to the city the entire remaining balance

at the end of each fiscal year of the trust.

The provisions of paragraphs (b), (c) and (d) of this subdivision

shall be subject to any agreement under subdivision five of section

20.13 of article twenty of this chapter.

2. Solely for purposes of determining the amount of the

tax-equivalency payments required to be paid in respect of the real

property, consisting of the non-institutional portion, or any part

thereof, of a combined-use facility or in or on which all or any part of

such portion prior to completion is designed to be and upon completion

is developed for residential use, such real property shall be deemed to

be exempt from real property taxation as follows: during the period of

construction of such portion, such exemption shall consist of full

exemption, and for a period not to exceed ten years in the aggregate

after the taxable status date in the city next following the completion

of such construction, such exemption shall consist of two years of full

exemption, followed by two years of exemption from eighty percent of

such taxation, followed by two years of exemption from sixty percent of

such taxation, followed by two years of exemption from forty percent of

such taxation, followed by two years of exemption from twenty percent of

such taxation; provided that during such period of construction and such

ten-year period tax-equivalency payments shall be made with respect to

such real property at least equal to the amount computed by multiplying

(a) the amount which bears the same ratio to the assessed valuation, for

the fiscal year of the city prior to the commencement of such

construction, of the land comprising the zoning lot or lots, exclusive

of the real property described in subdivision two of section 21.09 of

this article on which all or any part of such combined-use facility is

or is designed to be developed as the floor area used or designed to be

used in the non-institutional portion of such facility for residential

use bears to the aggregate floor area permitted to be constructed on

such lot or lots under applicable zoning regulations in effect at the

time of commencement of such construction by (b) the real property tax

rate in the city for such fiscal year.

3. The exercise of the power granted to the trust by this article and

article twenty of this chapter to collect tax-equivalency payments from

owners is in all respects for the general welfare and benefit of the

people of the state, and with respect to such owners, has the same

effect as though such tax-equivalency payments were taxes as defined in

the real property tax law which had been duly levied and imposed upon

such owners by the city.

4. If any owner shall fail to make tax-equivalency payments as

required by this article and article twenty of this chapter, the trust

shall have a lien on the real property in respect of which such payments

were required to be made as if the tax-equivalency payments were real

property taxes and the trust were a tax district within the meaning of

the real property tax law. Such lien shall have all the priorities of a

lien for taxes of such real property in favor of the city and shall be

enforceable by the trust in the manner provided for the collection of

tax liens in title two of such article eleven; provided that in place of

any period of redemption provided by law no judgment of foreclosure

shall be entered until three years after the date on which such owner

first failed to make such payments; and provided further that from such

date interest shall accrue on such lien at the rate for late payment of

real property taxes in the city.