§ 489-FFFFFF — Conversion of property

§ 489-ffffff. Conversion of property. 1. Conversion from commercial to\nindustrial use. Where a property has been granted benefits for\ncommercial or renovation construction work, but such property is used as\nindustrial property before the benefits period expires, such property\nshall continue to receive benefits for commercial or renovation\nconstruction work.\n 2. Conversion from industrial use to commercial use. Where a property\nhas been granted benefits for industrial construction work, and where,\nbefore the benefit period expires, less than seventy-five percent of the\ntotal net square footage is used or held out for use for manufacturing\nactivities, no further benefits for industrial construction work shall\nbe provided except as provided in this subdivision. Taxes, together with\ninterest, shall become due and owing after such date of the use for\npurposes other than industrial, except as provided in this subdivision.\n (a) Any applicant whose property has been granted a tax abatement\nunder this title for industrial construction work in a special\ncommercial abatement area who would have been eligible to receive\nbenefits for commercial construction work at the time such applicant\napplied for benefits shall continue to receive an abatement for\nindustrial construction work.\n (b) Any applicant whose property has been granted benefits under this\ntitle for industrial construction work other than in a special\ncommercial abatement area who would have been eligible to receive\nbenefits for commercial construction work at the time such applicant\napplied for benefits shall, commencing with the date of conversion to\ncommercial property and continuing until the expiration of the benefit\nperiod for commercial construction work, receive any abatement which\nsuch applicant would have received in the corresponding tax year\npursuant to the benefits granted for commercial construction work.\n (c) Any applicant whose property has been granted benefits under this\ntitle for industrial construction work in any area of the city on whose\nproperty at least sixty-five percent of the net square footage continues\nto be used or held out for use for manufacturing activities after\nconversion to commercial property, shall not be required to pay the pro\nrata share of tax for which an abatement was claimed during the tax year\nin which such conversion occurred.\n (d) Where the property is receiving the additional industrial\nabatement pursuant to paragraph (e) of subdivision three of section four\nhundred eighty-nine-bbbbbb of this title, such additional industrial\nabatement shall cease from the date of conversion to commercial\nproperty.\n 3. Conversion to restricted use. Any applicant whose property has been\ngranted benefits for commercial, industrial or renovation construction\nwork, and who uses such property for any restricted activity prior to\nthe expiration of the benefit period, shall cease to be eligible for\nfurther abatement as of the date such property was first used for any\nrestricted activity. Such recipient of benefits that cease under this\nsubdivision shall pay with interest any taxes for which an abatement was\nclaimed after such date, including the pro rata share of tax for which\nany abatement was claimed during the tax year in which such use\noccurred.\n 4. Conversion to residential use. (a) Any applicant whose property has\nbeen granted benefits for commercial, industrial or renovation\nconstruction work and who, before the benefit period expires, uses the\nproperty or a portion of the property as residential property, shall\ncease to be eligible for further abatement for commercial, industrial or\nrenovation construction work as of the date such property was first used\nas residential property, as follows:\n (i) if twenty percent or more of the rentable square footage of the\nproperty is used as residential property, then the entire building shall\ncease to be eligible for further abatement;\n (ii) if less than twenty percent of the rentable square footage of the\nproperty is used as residential property, then that portion of such\nproperty used as residential property shall cease to be eligible for\nfurther abatement;\n (iii) notwithstanding subparagraph (ii) of this paragraph, where less\nthan five percent of a property's rentable square footage is used as\nresidential property, that use will be considered de minimus and will\nnot be a basis for benefits to cease under this subdivision; and\n (iv) such recipient of benefits that cease under this subdivision\nshall pay, with interest, any taxes for which an abatement was claimed\nafter the conversion of the property as described in this subdivision,\nincluding the pro rata share of tax for which such abatement was claimed\nduring the tax year in which such use occurred. The abatement shall\ncontinue for the commercial, industrial or renovation construction work\nfor the portion of the property that continues to be used for commercial\npurposes.\n (b) For purposes of paragraph (a) of this subdivision, "property"\nmeans the real property contained by an individual tax lot.\n (c) Notwithstanding paragraph (b) of this subdivision, where a\nbuilding or structure is owned in condominium form, and an application\nfor benefits under this title includes more than one property in the\nsame condominium, then for purposes of this subdivision, the five\npercent and twenty percent of the rentable square footage shall be\ndetermined based on the aggregate usage of all such properties.\n 5. Conversion to retail use. (a) Where a property has been granted\nbenefits for industrial or commercial construction work in special\ncommercial abatement areas on buildings where not more than ten percent\nof the building or structure is used for retail purposes and where,\nbefore the benefit period expires, the property or a portion thereof is\nconverted so that ten percent or more of the building or structure is\nused for retail purposes, the department shall recalculate the abatement\nupon conversion as provided in subdivision six of this section.\n (b) Where a property has been granted benefits for renovation\nconstruction work in renovation areas and where, before the benefit\nperiod expires, the property or a portion of the property is converted\nso that more than five percent of the building or structure is used for\nretail purposes, the department shall recalculate the abatement upon\nconversion as provided in subdivision six of this section.\n 5-a. Conversion of use by peaking units. Any applicant whose property\nhas been granted benefits under this title for industrial construction\nwork as a peaking unit and who converts such property in any tax year to\na use that no longer qualifies it as a peaking unit, or who uses such\nproperty in a manner inconsistent with the definition of a peaking unit,\nshall be ineligible for abatement benefits during any such tax year. Any\nsuch recipient of benefits shall pay with interest taxes for which an\nabatement was claimed during any portion of such tax year.\n 6. Recalculation of abatement upon conversion. If, during the benefit\nperiod, a recipient converts square footage within any building or\nstructure, the department may recalculate the benefit granted pursuant\nto this title to reflect the benefit for which the current use is\neligible under this title and rules that may be promulgated by the\ndepartment.\n 7. The burden shall at all times be on the recipient to demonstrate by\nclear and convincing evidence that property subject to benefits under\nthis title is used as stated in the preliminary and final applications\nfor benefits filed by the recipient with the department.\n