N.Y. Education Law § 460: Lease and other agreements

§ 460. Lease and other agreements. 1. Any agreement entered into

between the fund and the owner or developer of a proposed combined

occupancy structure pursuant to section four hundred fifty-four of this

chapter shall provide for (i) the construction, acquisition,

reconstruction, rehabilitation or improvement of one or more combined

occupancy structures, and the purchase or acquisition of the original

furnishings, equipment, machinery and apparatus to be used in the school

portion of a combined occupancy structure upon completion of the work,

(ii) the reconveyance, retransfer or leasing of all or any portion

thereof and of the real property or interest therein related thereto,

including real property originally acquired by the board of education in

the name of the city of New York, upon the completion of construction,

acquisition, reconstruction, rehabilitation or improvement upon such

terms and conditions as may be agreed upon in those instances where

there has been a prior conveyance, transfer or lease by the Fund to the

owner or developer, (iii) the leasing or subleasing of such combined

occupancy structures and property, or separately of the school and

non-school portions thereof, by the fund upon completion for a term not

exceeding ninety-nine years and upon such terms and conditions including

annual rental as may be agreed upon, and (iv) the conveyance to the

board of education in the name of the city of New York of title to the

school portion of any such combined occupancy structures at the

expiration of the term of the lease, or any renewal or extension

thereof, or upon earlier payment in full of the total amount specified

therein, without additional charge therefore. The board of education

shall approve any such agreement.

2. a. Any lease, sublease or other agreement entered into between the

fund and the owner or developer of a proposed combined occupancy

structure shall provide for payment to the fund of the fair market value

of such easements, space rights, air rights or other fee or leasehold

interests as are to be held or retained by such owner or developer or

his successor in interest under the terms of such agreement; provided

that where subsidized housing, as hereinafter defined, is intended to be

built in or on said easements, space rights, air rights or other fee or

leasehold interests, the appropriate document may provide, in the

discretion of the fund, for payment to the fund of less than the fair

market value of such easements, space rights, air rights, or other fee

or leasehold interests. As used in this paragraph, subsidized housing

shall mean dwelling units aided by one or more federal, state or

municipal programs designed to provide low or moderate income housing.

b. Whenever the easements, space rights, air rights or other fee or

leasehold interests held or retained by such owner or developer, if

other than the New York city housing authority, and/or the non-school

improvements constructed or erected therein or thereon, shall be exempt

from real property taxes pursuant to the provisions of section four

hundred sixty-eight of this article, such lease, sublease or other

agreement shall also provide for the payment to the fund of annual or

other periodic amounts equal to the amount of real property taxes that

would otherwise have been paid or payable with respect to such

easements, space rights, air rights or other fee or leasehold interests,

and with respect to the non-school improvements constructed or erected

therein or thereon, over the term of such lease, sublease or other

agreement. Where such lease, sublease, or other agreement provides for

the annual or other periodic payment of a fixed sum or sums as a tax

equivalency payment during the term of such a lease, sublease, or other

agreement, or any part thereof, the sum or sums to be paid may be either

greater or less than the actual amount of real property taxes that would

otherwise have been paid or payable with respect to the said property

rights affected, if said property rights were not exempt, provided the

city shall approve such provision. In the event provision is made for

the annual or other periodic payment of a fixed sum or sums as a tax

equivalency payment, such lease, sublease, or other agreement may

further provide, upon approval by the city of such provision, that (i)

such lessee, sublessee or vendee shall be required to pay such fixed sum

or sums to the fund during the term of such lease, sublease, or other

agreement regardless of whether the said property rights are exempt from

real property taxes, (ii) if for any year during such term an ad valorem

tax shall be levied and paid by such lessee, sublessee or vendee on the

said property rights, such lessee, sublessee or vendee shall receive a

credit against any taxes thereafter payable by it to the city the amount

of such ad valorem tax paid by it, and (iii) in the event during such

term a substitute tax, in place either in whole or in part of a real

property tax on said property rights, is levied and paid by such lessee,

sublessee or vendee, such lessee, sublessee, or vendee shall receive a

credit against any taxes thereafter payable by it to the city for the

amount of such substitute tax paid by it.

c. (1) Notwithstanding the provisions of section fifty-two of the

public housing law, whenever the New York city housing authority is such

owner or developer, such lease, sublease or other agreement shall also

provide for the payment by such authority to the fund or the city of

such amount, for any year or years, as payment in lieu of real property

taxes on the non-school portion constituting a project, as defined by

the public housing law, as may be agreed upon among the fund, the city

and the authority, and as may be approved by the commissioner of the

state division of housing and community renewal if such project is a

state project as defined in the public housing law, and by the federal

government if such project is a federal project as defined in the public

housing law.

(2) For any of the purposes of the public housing law, including,

specifically, section seventy-three thereof, and notwithstanding any

other provision in the public housing law for establishing the amount of

taxes paid or payable with respect to a project for such year and the

resulting amount of tax exemption, in computing the amount of tax

exemption granted to such non-school portion constituting a project, as

defined by the public housing law, the amount of such payment in lieu of

taxes paid or payable with respect thereto for any year shall be deemed

to be the amount of taxes paid or payable for such year.

3. Any lease, sublease or other agreement entered into between the

fund and the city of New York or the board of education pursuant to

section four hundred fifty-four of this chapter shall provide for (i)

the construction, acquisition, reconstruction, rehabilitation or

improvement of one or more combined occupancy structures and (ii) the

leasing or subleasing of the school portion of such structures to the

city or the board for a term not exceeding ninety-nine years, upon such

terms and conditions as may be agreed upon.

4. Every lease, sublease or other agreement executed pursuant to this

article shall be subject to the approval of the commissioner of general

services and the director of management and budget with respect to all

rentals or other payments to be made thereunder by the city of New York,

the board of education or by the owner or developer of a combined

occupancy structure and shall contain a clause that any agreement of the

city of New York thereunder shall be deemed executory to the extent of

the moneys available to the city therefor and no liability on account

thereof shall be incurred by the city beyond the moneys available for

the purpose thereof.