N.Y. Public Housing Law § 58: Sale or lease of municipal projects by authorities

§ 58. Sale or lease of municipal projects by authorities. 1. An

authority, subject to the approval of the local legislative body of the

municipality in which such authority has territorial jurisdiction, may

sell or lease any municipal project of such authority to any corporation

created pursuant to article two of the private housing finance law on a

co-operative basis, and an authority may enter into a contract for the

sale of or sell or lease a municipal project to such a corporation

either prior to, at the date of, or subsequent to the physical

completion of such project and, in the event of a sale or lease of any

such project prior to the physical completion thereof, the authority may

agree to complete and may complete construction and development of such

project. No such corporation to which such a municipal project is sold

or leased as provided in this section shall pay a dividend on any of its

stock or pay interest on any of its income debentures.

2. Any sale or lease of a municipal project by an authority pursuant

to subdivision one of this section may be made without public bidding,

public sale or public offering pursuant to such negotiated contract,

agreement or lease, containing such provisions, limitations,

requirements, terms and conditions, as the authority selling or leasing

such project, in its discretion, may determine to be necessary or

desirable; provided, that, in the event of a sale of a municipal

project, the purchase price to be paid to the authority on or prior to

date of transfer of title to such project by the authority, or upon the

physical completion of such project, shall not be less than the amount

required by the authority to pay and retire, or to make provision for

the payment and retirement of, all bonds, notes and other obligations

issued by the authority to finance the project cost, and to pay or make

provision for the payment of all obligations incurred or to be incurred

by the authority as part of the project cost.

3. Notwithstanding the provisions of section thirty-three of article

two of the private housing finance law, the real property in a municipal

project sold or leased as provided in subdivision one of this section,

when the transfer thereunder becomes effective, shall be exempt from

local and municipal taxes, other than assessments for local

improvements, to such extent as may be granted by the local legislative

body of any municipality in which such project is located; provided,

however, that any corporation to which such project is so sold or leased

shall pay to each municipality in which a project is located, with

respect to each such project, local and municipal taxes in amounts not

less than the sum or sums contracted to be paid by the authority as a

payment in lieu of taxes with respect to such project and which the

authority would be obligated to pay to the municipality had it not sold

or leased the project to such a corporation. The tax exemption shall

operate and continue so long as capital loans of the corporation to

which such project shall have been sold or leased are outstanding, but

in no event shall such exemption for a municipal project located outside

a city of one million or more persons continue for a period of more than

thirty years, commencing in each instance from the date on which the

benefits of such exemption became available to and effective for such

corporation.

Notes, bonds, mortgages and other obligations of such a corporation

are declared to be issued for a public purpose and to be public

instrumentalities and, together with interest thereon, shall be exempt

from tax.

4. The provisions of section thirteen of article two of the private

housing finance law requiring the approval by the commissioner of

housing of the persons incorporating a limited-profit housing company

and the provisions of section fourteen of article two of the private

housing finance law requiring the consent of the commissioner of housing

to the filing of the certificate of incorporation of such a company in

the office of the secretary of state and the amendment thereof shall not

apply to a corporation created pursuant to article two of the private

housing finance law on a cooperative basis for the purchase or lease of

a municipal project pursuant to this section; nor shall any of the

provisions of article two of the private housing finance law conferring

upon the commissioner of housing any powers in respect of limited-profit

housing companies apply to such a corporation. The application of this

subdivision shall be limited to corporations undertaking a project with

the aid of a municipal loan under article two of the private housing

finance law.

5. Any project that received a tax exemption under this section may,

upon the expiration of the tax exemption period, be granted an

additional tax exemption period of up to fifty years, or until such time

as the project is no longer operated under the restrictions and for the

purposes set forth in this article, whichever is sooner.