FOR IMMEDIATE RELEASE
February 5, 2004
MAYOR MICHAEL R. BLOOMBERG ANNOUNCES TAX BENEFITS FOR CO-OP CITY TO HELP FINANCE NECESSARY REPAIRS
$14 Million Property Tax Savings To Assist Bronx Development In Making Needed Repairs To Residential Buildings, Parking Garages And Heating Plant
Mayor Michael R. Bloomberg today announced that the City will make J-51 tax benefits available to Co-op City, a 15,372 unit State-sponsored Mitchell-Lama residential complex in the northern Bronx that was completed in the late 1960s. The complex has deteriorated and needs extensive renovation; substantial repair of the residential buildings has been completed but other structures including a collapsed parking garage, still need rehabilitation. An amendment to the rules governing the J-51 program will enable the housing complex to qualify for J-51 tax benefits by providing alternate means of documenting completion of rehabilitative work. The $14 million in estimated savings realized through property tax abatement over twenty years would fund other critical rehabilitative work to the complex including new windows and extensive structural repairs to the parking garages, residential buildings and its heating plant. Co-Op City, comprised of thirty-five high-rise buildings and 472 townhouses with three shopping centers, eight parking garages and schools, is home to an estimated 55,000 people. Housing Preservation & Development (HPD) Commissioner Jerilyn Perine, Assemblyman Stephen B. Kaufman, and Co-op City Shareholders' Association, RiverBay Corporation President Al Shapiro joined the Mayor for the announcement.
"Preserving the City's stock of middle income housing is crucial to making New York more livable for our hard working families and more attractive to new businesses, and today, our Administration takes another important step in preserving Mitchell-Lama housing by assisting in infrastructure improvements at Co-op City through the provision of J-51 tax abatements and tax exemptions," said Mayor Bloomberg. "This is also at the core of our Administration's housing plan, which will build or rehabilitate 65,000 units of affordable housing in our City over a five year period and includes $50 million in capital improvements to Mitchell-Lama developments that cannot afford conventional financing."
"This tax benefit will enable the preservation of Mitchell-Lama housing and facilitate additional repair work by the management company," said HPD Commissioner Jerilyn Perine. "This is a small investment that will yield a large return by providing additional funds to preserve affordable housing for the residents of Co-op City."
HPD has been working with Co-op City's management to prepare J-51 applications based on approximately $70 million of completed rehabilitative work; major repair of the plumbing, heating and electrical systems, asbestos removal, roof repairs and window guard installation are expected to generate over $14 million in tax abatement benefits. In addition, Co-op City is undertaking elevator modernization that will be receiving J-51 benefits as the work is completed on a building-by-building basis.
HPD published notice of the adoption of an amendment to the J-51 rules that will provide Mitchell-Lama developments with at least 15,000 dwelling units the flexibility to prove completion of construction by documentation other than required Buildings Department sign-off. The new rule recognizes the fact that rehabilitation work done on such an extensive scale at large Mitchell-Lama developments makes the filing of documentation necessary to complete a J-51 application lengthy and cumbersome. For the very same reasons, HPD amended its J-51 rules in 2000 to give such developments twelve additional months to complete their J-51 applications so that they might qualify for these much needed tax exemptions/abatements. The latest amendment took effect on January 23, 2004. The J-51 tax benefits were approved on that date. The tax benefits will take effect on April 1, 2004.
Separate from the J-51 tax benefits being provided to Co-op City, the Mayor's New Housing Marketplace plan includes $50 million in capital improvements to Mitchell-Lama developments that cannot afford conventional financing. In addition, in October of 2003, the Mayor proposed new protections for Mitchell-Lama residents who might otherwise be vulnerable to large rent increases and potential eviction if their landlords opt to buy out of the program. The State legislation being proposed by the Mayor would extend Rent Stabilization protections to 32,000 apartments in Mitchell Lama developments built after 1974, and provide all tenants with rent regulation protections regardless of the initial date of occupancy. In return, owners would be entitled to real estate tax relief for those apartments that would be newly regulated, and the proposed bill would provide financial incentives to owners to remain in the Mitchell-Lama program by allowing them to increase their return on equity while maintaining Mitchell-Lama guidelines on tenant income and occupancy. The Administration will work with its State legislators to introduce the bill in the 2004 session.
Ed Skyler / Jennifer Falk (212) 788-2958
Ginny Gliedman (HPD)