Relates to the definition of qualified leasehold condominiums

Title of bill

An act to amend the real property law, in relation to the definition of qualified leasehold condominiums

Purpose or general idea of bill

To include the New York City educational construction fund ("Fund") as an additional holder of the landlord's interest in such leasehold interest under the definition of "Qualified Leasehold Condominium." The bill will permit the Fund to create commercial, industrial, residential condominium interests or mixed-use condominium interests in leaseholds of real property controlled by the Fund.

Summary of specific provisions

Section 1 of the bill amends subdivision 12 of section 339-e of the condominium act, which is article 9-B of the Real Property Law (the "Act"). Section 339-e includes a list of definitions of terms used in the Act. Subdivision 12 is the definition of "qualified leasehold condominium". The bill amends this definition to include commercial, industrial or mixed-use including residential condominiums built on leasehold interests in real property controlled by the Fund. This legislation is specific to one location in the borough of Manhattan.

Section 2 of the bill provides that it shall take effect immediately.

Effects of present law which this bill would alter

Adds new paragraph (iv) to subdivision 12 of section 339-e to the Real Property Law.

Justification

Pursuant to the New York City Educational Construction Fund ("Fund"), a public benefit corporation created by the State legislature in 1966, the City of New York conveyed land to the Fund at no cost for the development of twelve schools. The land for ten schools is being used for combined schools and housing units and the land for two schools is being used for combined schools and commercial buildings. The operating revenues consist of rental revenues and tax equivalency payments.

Currently, the non-school residential portions of the Fund projects consist of leasehold co-ops. The Fund is not able to market these nonschool portions as residential leasehold condominiums. The perception of condominiums amongst the development community is that buyers of residential units are more likely to purchase condominium units, and are also more willing to pay higher prices for these condominium units, as opposed to co-ops.

Allowing the Fund to market the non-school portions of its projects as residential leasehold condominiums would broaden the appeal of its sites and afford greater flexibility to meet changing market conditions. This will create a more viable residential program thus ensuring a successful continuation of the Educational Construction Fund Program.

Prior legislative history

2008: A.11548/S.8559 Referred to Assembly Housing Committee. Passed Senate.

Fiscal implications for state and local governments

None.

Effective date

Immediately.