N.Y. General Municipal Law § 695: Disposition of property

§ 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-seven, 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.