N.Y. Real Property Tax Law § 489-ffffff: Conversion of property

§ 489-ffffff. Conversion of property. 1. Conversion from commercial to

industrial use. Where a property has been granted benefits for

commercial or renovation construction work, but such property is used as

industrial property before the benefits period expires, such property

shall continue to receive benefits for commercial or renovation

construction work.

2. Conversion from industrial use to commercial use. Where a property

has been granted benefits for industrial construction work, and where,

before the benefit period expires, less than seventy-five percent of the

total net square footage is used or held out for use for manufacturing

activities, no further benefits for industrial construction work shall

be provided except as provided in this subdivision. Taxes, together with

interest, shall become due and owing after such date of the use for

purposes other than industrial, except as provided in this subdivision.

(a) Any applicant whose property has been granted a tax abatement

under this title for industrial construction work in a special

commercial abatement area who would have been eligible to receive

benefits for commercial construction work at the time such applicant

applied for benefits shall continue to receive an abatement for

industrial construction work.

(b) Any applicant whose property has been granted benefits under this

title for industrial construction work other than in a special

commercial abatement area who would have been eligible to receive

benefits for commercial construction work at the time such applicant

applied for benefits shall, commencing with the date of conversion to

commercial property and continuing until the expiration of the benefit

period for commercial construction work, receive any abatement which

such applicant would have received in the corresponding tax year

pursuant to the benefits granted for commercial construction work.

(c) Any applicant whose property has been granted benefits under this

title for industrial construction work in any area of the city on whose

property at least sixty-five percent of the net square footage continues

to be used or held out for use for manufacturing activities after

conversion to commercial property, shall not be required to pay the pro

rata share of tax for which an abatement was claimed during the tax year

in which such conversion occurred.

(d) Where the property is receiving the additional industrial

abatement pursuant to paragraph (e) of subdivision three of section four

hundred eighty-nine-bbbbbb of this title, such additional industrial

abatement shall cease from the date of conversion to commercial

property.

3. Conversion to restricted use. Any applicant whose property has been

granted benefits for commercial, industrial or renovation construction

work, and who uses such property for any restricted activity prior to

the expiration of the benefit period, shall cease to be eligible for

further abatement as of the date such property was first used for any

restricted activity. Such recipient of benefits that cease under this

subdivision shall pay with interest any taxes for which an abatement was

claimed after such date, including the pro rata share of tax for which

any abatement was claimed during the tax year in which such use

occurred.

4. Conversion to residential use. (a) Any applicant whose property has

been granted benefits for commercial, industrial or renovation

construction work and who, before the benefit period expires, uses the

property or a portion of the property as residential property, shall

cease to be eligible for further abatement for commercial, industrial or

renovation construction work as of the date such property was first used

as residential property, as follows:

(i) if twenty percent or more of the rentable square footage of the

property is used as residential property, then the entire building shall

cease to be eligible for further abatement;

(ii) if less than twenty percent of the rentable square footage of the

property is used as residential property, then that portion of such

property used as residential property shall cease to be eligible for

further abatement;

(iii) notwithstanding subparagraph (ii) of this paragraph, where less

than five percent of a property's rentable square footage is used as

residential property, that use will be considered de minimus and will

not be a basis for benefits to cease under this subdivision; and

(iv) such recipient of benefits that cease under this subdivision

shall pay, with interest, any taxes for which an abatement was claimed

after the conversion of the property as described in this subdivision,

including the pro rata share of tax for which such abatement was claimed

during the tax year in which such use occurred. The abatement shall

continue for the commercial, industrial or renovation construction work

for the portion of the property that continues to be used for commercial

purposes.

(b) For purposes of paragraph (a) of this subdivision, "property"

means the real property contained by an individual tax lot.

(c) Notwithstanding paragraph (b) of this subdivision, where a

building or structure is owned in condominium form, and an application

for benefits under this title includes more than one property in the

same condominium, then for purposes of this subdivision, the five

percent and twenty percent of the rentable square footage shall be

determined based on the aggregate usage of all such properties.

5. Conversion to retail use. (a) Where a property has been granted

benefits for industrial or commercial construction work in special

commercial abatement areas on buildings where not more than ten percent

of the building or structure is used for retail purposes and where,

before the benefit period expires, the property or a portion thereof is

converted so that ten percent or more of the building or structure is

used for retail purposes, the department shall recalculate the abatement

upon conversion as provided in subdivision six of this section.

(b) Where a property has been granted benefits for renovation

construction work in renovation areas and where, before the benefit

period expires, the property or a portion of the property is converted

so that more than five percent of the building or structure is used for

retail purposes, the department shall recalculate the abatement upon

conversion as provided in subdivision six of this section.

5-a. Conversion of use by peaking units. Any applicant whose property

has been granted benefits under this title for industrial construction

work as a peaking unit and who converts such property in any tax year to

a use that no longer qualifies it as a peaking unit, or who uses such

property in a manner inconsistent with the definition of a peaking unit,

shall be ineligible for abatement benefits during any such tax year. Any

such recipient of benefits shall pay with interest taxes for which an

abatement was claimed during any portion of such tax year.

6. Recalculation of abatement upon conversion. If, during the benefit

period, a recipient converts square footage within any building or

structure, the department may recalculate the benefit granted pursuant

to this title to reflect the benefit for which the current use is

eligible under this title and rules that may be promulgated by the

department.

7. The burden shall at all times be on the recipient to demonstrate by

clear and convincing evidence that property subject to benefits under

this title is used as stated in the preliminary and final applications

for benefits filed by the recipient with the department.