It finally happened: The governor announced a stopgap 421-a measure. The catch? It only applies in Gowanus.
Real Estate partner, Brett Gottlieb, was quoted in The Real Deal - The Daily Dirt discussing New York Governor Kathy Hochul's recent (July 18, 2023) announcement to implement a measure for new multi-family construction projects in Gowanus, Brooklyn as an alternative to the expiring Affordable New York Program (421-a) tax benefits.
The piece highlighted that Gowanus developments who do not believe they will meet the June 15, 2026, construction completion deadline to utilize 421-a, will now have the option to apply for a similar property tax benefit. The new program Governor Hocul proposed entails the state taking control of the developer's site and leasing it back through a long-term deal similar in length to 421-a. This program would allow the state to accept payments in lieu of taxes (PILOTs), which would be "calibrated to mirror the exemption provided by 421-a." Additionally, the developer gets the property back at the end of the benefit period.
Brett noted, "This should make lenders more comfortable providing financing for these projects, given that beating the 2026 deadline is not the only path available to developers. This may make selling those sites easier, depending on the timeline laid out by the state."