§ 695 — Disposition of property

§ 695. Disposition of property. 1. In addition to employing any other\nlawful method of utilizing or disposing of an eligible area, a\nmunicipality may sell, lease for a term not exceeding ninety-nine years,\nor otherwise dispose of any such real property and appurtenances\nthereto, to any person, firm or corporation at the highest marketable\nprice or rental at public auction or by sealed bids pursuant to the\nprovisions of any general, special or local laws applicable to the sale\nor disposition of real property by such municipality.\n 2. Notwithstanding any provision to the contrary contained in this\narticle or any other law, general, special or local, applicable to the\nsale of real property by a municipality, such real property and\nappurtenances thereto may be sold, leased for a term not exceeding\nninety-nine years or otherwise disposed of for the effectuation of any\nof the purposes of this article to:\n (a) any person, firm or corporation designated by the agency and\napproved by the governing body or, in a city having a population of one\nmillion or more, by the mayor, as a qualified and eligible sponsor in\naccordance with established rules and procedures prescribed by the\nagency, provided that: (i) the agency has published, in at least one\nnewspaper of general circulation in the municipality at least ten days\nprior to such sale, lease or other disposition, a notice which shall\ninclude a project summary of the proposed urban development action area\nproject and such notice shall be in the form and manner prescribed by\nthe agency; (ii) such proposed sponsor agrees to pay the minimum price\nor rental fixed by the agency for such real property; (iii) such\nproposed sponsor matches any bid higher than such minimum price or\nrental; and (iv) such sale, lease or other disposition requires\neffectuation of the urban development action area project within a\ndefinite and reasonable period of time; or\n (b) any person, firm or corporation designated by the agency as a\nqualified and eligible sponsor in accordance with established rules and\nprocedures prescribed by the agency without public auction or sealed\nbids, provided that (i) the price or rental to be paid by such sponsor\nfor such property and all other essential terms and conditions of such\nsale, lease or other disposition shall be included in the notice\npublished by the agency pursuant to subparagraph (i) of paragraph (a) of\nthis subdivision, (ii) such sale, lease or other disposition requires\nthe effectuation of an urban development action area project with a\ndefinite and reasonable period of time, and (iii) that such sale, lease\nor other disposition be approved by the governing body or, in any city\nhaving a population of one million or more, by the mayor, after a public\nhearing held not less than ten days after the publication of such\nnotice.\n 3. A municipality may not transfer pursuant to this article any\ninterest in any eligible area to any person, firm or corporation\nconstituting (i) any former owner in fee of all or part of the real\nproperty in which such interest is sought to be transferred or of any\nother real property which was acquired by the municipality through real\nproperty tax or other lien enforcement proceedings; (ii) any spouse of\nsuch a former owner; (iii) any business entity substantially controlled\nby such a former owner; or (iv) any successor in interest to such a\nformer owner, except a purchaser from such successor in interest in good\nfaith and for value. The municipality shall require an affidavit from\neach person, firm or corporation to whom it proposes to sell or lease an\ninterest in any such eligible area certifying that the proposed sale or\nlease does not violate the provisions of this subdivision. Any deed,\nlease, or instrument which transfers an interest in any such eligible\narea in violation of this subdivision shall be voidable by the\nmunicipality, provided that a subsequent bona fide holder of an interest\nin the real property, whether as purchaser, lessee, or mortgagee shall\nnot be affected by this subdivision three.\n 4. Any lease of real property and appurtenances thereto for a period\nin excess of one year including any renewals or options to renew or for\na total rental may be made only upon a written appraisal of the market\nvalue thereof verified by an appraiser with at least five years\nexperience appraising real property, made within a period of sixty days\nprior to the authorization to enter into such lease given by the\ngoverning body or, in any city having a population of one million or\nmore, by the mayor, and filed in the office of that body or officer and\nmade available for public examination and copying at least thirty days\nbefore such authorization. Any sale of real property and appurtenances\nthereto shall be made only upon a written appraisal of the value thereof\nby an appraiser with at least five years experience appraising real\nproperty, made within six months prior to the authorization of such sale\nor other disposition by the governing body or, in any city having a\npopulation of one million or more, by the mayor, and filed in the office\nof that body or officer and made available for public examination and\ncopying at least thirty days before such authorization.\n 5. Any deed, lease or instrument by which real property and\nappurtenances thereto, or air rights and concomitant easements or other\nrights of users necessary for the use and development of such air rights\nover streets, alleys, highways or other public rights of way, railway or\nsubway tracks, bridge or tunnel approaches or entrances, or other\nsimilar facilities, or air rights sites and necessary sitework, the\nfoundations and platforms constructed or to be constructed in connection\ntherewith, or any interest therein is conveyed or disposed of pursuant\nto this section shall contain provisions requiring the purchaser, lessee\nor grantee to replan, clear, rehabilitate, restore, renew, conserve,\nimprove, reconstruct or redevelop such property in accordance with the\nurban development action area project as approved by the governing body\nand within a definite and reasonable period of time subject to the terms\nof the contract or lease or deed relating thereto between the\nmunicipality and the sponsor, and shall contain provisions insuring the\nuse of such real property for purposes consistent with such urban\ndevelopment action area project.\n 6. (a) Leases authorized by this section may contain provisions\nsubordinating the fee interest of a municipality to a sponsor for\npurposes of pledging or assigning such fee interest to the primary\nleasehold mortgagee of such lease, provided that the amount to which the\nfee is subordinated shall not exceed the lessee's cost of completing its\nobligation to replan, clear, rehabilitate, restore, renew, conserve,\nimprove, reconstruct or redevelop such property in accordance with the\nlease provisions.\n (b) A municipality may execute such instruments as may be required to\nimplement the provisions of this subdivision.\n (c) Leases and such other instruments as may be required shall contain\nprovisions stating that: (i) the municipality shall assume no liability\nfor any debt underlying the pledge or assignment of the fee interest;\n(ii) the municipality, at its option, may satisfy any obligation for\nwhich the fee interest is assigned or pledged; and (iii) no foreclosure\naction shall be maintained against such subordinated fee interest until\nthe obligation of the sponsor to replan, clear, rehabilitate, restore,\nrenew, conserve, improve, reconstruct or redevelop such property has\nbeen completed in accordance with the lease provisions.\n (d) Notwithstanding any standards or procedures established for land\ndisposition by general, special or local law or charter, if an urban\ndevelopment action area project is to be developed on an eligible area\nand consists solely of the rehabilitation or conservation of existing\nprivate or multiple dwellings or the construction of one to four unit\ndwellings or, until June thirtieth, two thousand twenty-seven, for up to\nsix urban development action area projects in any calendar year, the\nconstruction of up to ninety dwelling units financed by the federal\ngovernment and restricted to occupancy by the elderly or by persons with\ndisabilities without any change in land use permitted by local zoning, a\nmunicipality may dispose of the real property constituting such urban\ndevelopment action project to any person, firm, or corporation qualified\npursuant to this subdivision by resolution of its governing body or, in\nany city having a population of one million or more, by action of the\nmayor, provided that such disposition is in accordance with the\nrequirements of this subdivision. Disposition of real property acquired\nby condemnation shall be in accordance with the requirements of section\nfour hundred six of the eminent domain procedure law, if applicable.\n 7. In a city having a population of one million or more, within one\nhundred fifty days following receipt of a written submission from the\nagency requesting waiver of designation of an urban development action\narea and approval of an urban development action area project, the\ngoverning body shall (i) approve or disapprove by resolution the\nrequested waiver of designation of an urban development action area\npursuant to section six hundred ninety-three of this article, and (ii)\napprove or disapprove by resolution the proposed urban development\naction area project pursuant to section six hundred ninety-four of this\narticle. If the governing body fails to take such action within one\nhundred fifty days following receipt of such written submission from the\nagency, then (i) the waiver of designation of an urban development\naction area requested by the agency shall be deemed approved pursuant to\nsection six hundred ninety-three of this article, and (ii) the urban\ndevelopment action area project proposed by the agency shall be deemed\napproved pursuant to section six hundred ninety-four of this article.\n