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June 29, 2007
Grinding Sausage Late at Night: Albany Reforms 421a Program
The NY Observer
Real estate reporter Matthew Schuerman tries to sort through the mess that resulted in a 421-a reform bill that managed to piss off nearly everyone, except Atlantic Yards developer Bruce Ratner:
Finally, four days before the Assembly adjourned on June 22, [Vito Lopez, the head of the State Assembly’s Housing Committee] submitted a compromise bill. It had grown from two pages to 19, and outlined a dizzying array of mind-twisters.
Real-estate developers of the future will find it cheaper to build market-rate housing in Riverdale, for example, than in East New York. A middle-class village that the Mayor envisioned for Queens West will get no help from the taxman, while full-amenity condominiums in Tribeca will, as long as they get into the ground in the next 12 months.
...
One provision permits Atlantic Yards, a 22-acre development in central Brooklyn, to receive tax abatements on all of its residential buildings so long as the overall percentage of low-income apartments in the proposed 6,400-unit complex reaches 20 percent. Steve Spinola, the president of REBNY, said that he advocated in favor of the clause because it was similar to a recent rezoning in Greenpoint-Williamsburg which allowed developers to put the low-income units in a separate but adjacent building and still receive the tax break.
Vito Lopez, who has been ducking the press for days, finally speaks:
Mr. Lopez defended the carve-out because the Atlantic Yards complex devotes an unusually large proportion of its units—about 35 percent—to low- and middle-income apartments. But the City Council legislation would have forced the developer, Forest City Ratner, to pay full taxes on the condominium buildings that were entirely market-rate.
Brad Lander, the director of the Pratt Center for Community Development, calculates, based on conservative estimates, that Forest City will save more than $100 million as a result of the State Legislature’s actions.
Posted by lumi at June 29, 2007 11:34 AM