FOR IMMEDIATE RELEASE
June 2, 2010
MAYOR BLOOMBERG SIGNS LEGISLATION CLARIFYING LANGUAGE RELATED TO THE 421a TAX EXEMPTION PROGRAM
Remarks by Mayor Bloomberg at a Public Hearing on Local Laws
“The next bill before me today is Introductory Number 66, sponsored by Council Members Dilan, White, Greenfield, Ulrich and Jackson. Introductory Number 66 clarifies the definition of “commencement of construction” as it relates to the 421a tax exemption program.
“The 421a tax exemption program was created in 1971 to promote the construction of new multiple dwellings through a declining tax exemption on the increase in assessed valuation created by the improvement upon the “commencement date of construction”.
“Law 58 of 2006 required that architectural, structural, and plumbing plans had to be approved by Department of Buildings before the project could be deemed “commenced.” Although well intentioned, linking commencement of construction to the approval of three sets of plans has proven to be an inaccurate measure of when construction begins. The architectural and structural plans are approved before building permits are issued, but the plumbing plans are not approved until much later. As a result, although physical construction of the development has begun, the development, for the purpose of receiving 421a benefits, is not considered to have commenced construction until the plumbing plans are approved.
“Introductory Number 66 clarifies the language in Local Law 58 of 2006 and corrects a well intentioned, but factually inaccurate requirement. Lastly, it allows certain projects that were planned with the support of the 421a tax exemption to take advantage of the program.
“I would like to thank the Commissioner of the Department of Housing Preservation and Development, Rafael Cestero and his staff for their work on this bill. I would also like to thank the City Council for approving this legislation.”
Stu Loeser/Evelyn Erskine (212) 788-2958
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