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October 23, 2008
When AY GPP was "released" in July 2006, was that preliminary approval?
Atlantic Yards Report
Last we checked, words do matter. So what are we supposed to make of Norman Oder's latest discovery?
THE RULE
To grandfather in a project [for eligibility for triple tax exempt bonds], the [IRS] rule requires a governmental entity to have taken "official action evidencing its preliminary approval of the project before October 19, 2006."
"APPROVED" VS. "ADOPTED"
While the Modified General Project Plan for Atlantic Yards was formally approved in December 2006 by the Empire State Development Corporation (ESDC), a slightly different version, the General Project Plan (GPP), had been "adopted" (according to an agency press release) by the ESDC on July 18, 2006.
"PRELIMINARY APPROVAL"
Though that ESDC board action in July was likely cursory, the IRS rule still seems tailored to comments filed by the city and state regarding the definition of "preliminary approval." Thus I (and most others) concluded that the ESDC's "adoption" of the GPP qualifies as "preliminary approval" under the regulation.
"RELEASED"
Developer Forest City Ratner's Atlantic Yards web site does not use the term "approval" to describe the action at that July ESDC board meeting.
It does not use the term "adopted."
It uses the term "released," adding that the ESDC's action "formally started the public review process."
...
The New York Times's coverage that day used "release":The report’s release sets into motion a public comment period. The project faces a final vote by the development corporation’s board this fall, and if it is approved, it will face a vote by the state Public Authorities Control Board.
The IRS may well consider that "preliminary approval." But the public sure didn't know it.
NoLandGrab: Bruce Ratner and his political backers are having it both ways.
To satisfy legal requirements for NY State land-use review, the plan had to be "released", "approved" and "adopted," according to a timetable set by the State Environmental Quality Review Act (SEQRA).
On the other hand, to satisfy the recent federal ruling that grandfathered the project under old IRS rules for Payments in Lieu of Taxes (PILOTs), the project needed "preliminary approval" at some point before the IRS closed the loophole in October, 2006.
Swap "release" for "preliminary approval" and you've got a loophole in a loophole.
Posted by lumi at October 23, 2008 7:14 AM