The clock is ticking for owners hoping to get the newly renewed J-51 tax break.
Last week, the City Council revived the program, which now provides property owners with an abatement equal to as much as 70 percent of the cost of major building renovations over the course of up to 20 years. The value of the annual break can not exceed 8.33 percent of renovation costs.
The improvements must be completed between June 29, 2022, and June 30, 2026. Building owners can only apply for the tax break once the work is done. For work that is already complete, property owners must apply within four months of the J-51 legislation becoming law. Others must do so within four months of finishing renovations.
“For some buildings it is going to be a scramble,” said Ben Williams, an attorney with Rosenberg & Estis who leads the firm’s property tax department.
Further complicating that timeline, owners do not yet know what kind of improvements or alterations will qualify for the abatement. The Department of Housing Preservation and Development will release a “certified reasonable cost schedule,” detailing such work and the maximum amount owners can spend if they want to be reimbursed for it.
The old program drew the ire of multifamily, condo and co-op owners, who said the prices were outdated and made the tax break unappealing. HPD officials acknowledge that the cost schedule must be updated more frequently than it was under the old J-51.
Williams said the revival of the tax break could be the deciding factor for owners on the fence about renovating. HPD did not return a request for information on when the schedule will be released.
The new program puts restrictions on who is eligible. Rental buildings must be at least 50 percent affordable, part of the state’s Mitchell-Lama program, or receive “substantial government assistance.” Condos and co-ops must have an assessed valuation of less than $45,000 per unit to qualify.
Daniel Bernstein, who heads Rosenberg & Estis’ tax incentive and affordable housing department, pointed out that the legislation reviving J-51 threatens penalties, including possible jail time, for violations of the program’s requirements.
“It seems like the benefit has been the afterthought,” he said, “and the restrictions and the enforcement has been the sum of what we’ve gotten so far.”
What we’re thinking about: Will someone challenge the City of Yes for Housing Opportunity in court? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: The Minnesota State Legislature gave the Judy Garland Museum $100,000 to bid on Dorothy’s ruby slippers worn by Judy Garland in “The Wizard of Oz,” the New York Times reports. The shoes ultimately sold to an anonymous bidder for $28 million. The slippers were once on display at the museum, but were stolen in 2005 by a man who thought the shoes featured real rubies.
Elsewhere in New York…
— After a federal judge dismissed a manslaughter charge against Daniel Penny, who was accused of choking Jordan Neely to death on an F train last year, the jury found Penny not guilty of criminally negligent homicide, Gothamist reports.
— Police arrested a “strong person of interest” in the fatal shooting of Brian Thompson, the chief executive of UnitedHealthcare, the New York Times reports. Luigi Mangione, 26, was hit with weapons charges after a McDonald’s employee spotted him eating in Altoona, Pennsylvania. Mangione, a tech worker, hails from a real estate family in Maryland.
— The state Board of Regents on Monday decided that all New York schools must teach phonics in pre-kindergarten through third grade, the Times Union reports. “We know and believe that a solid foundation in literacy by grade 3 is a critical marker in a child’s educational development and a strong predictor of future success,” said Deputy Commissioner Angelique Johnson-Dingle. “It is therefore especially imperative that students in K through grade 3 receive high-quality, explicit instruction in literacy.”
Closing Time
Residential: The priciest residential sale Monday was $14.3 million for a condo unit at 170 East End Avenue. The new, 5,000-square-foot apartment in the Peter Marino Building was listed by Douglas Elliman’s Barbara Russo and Danielle Englebardt.
Commercial: The largest commercial sale of the day was $46.4 million at 1364-1400 Blondell Avenue. Social services organization Care For the Homeless bought the Bronx property from Foremost Real Estate with plans for a 32,000-square-foot shelter and health clinic, Commercial Observer reported.New to the Market: The highest price for a residential property hitting the market was $19.5 million for a penthouse condo at 200 East 75th Street. The Lenox Hill unit is 5,000 square feet. Compass’ Alexa Lambert, Susan Wires and Marc Achilles have the listing.
— Joseph Jungermann