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a. Eligibility. An applicant is eligible for an additional industrial abatement in addition to the abatement for industrial construction work set forth in 19 RCNY § 36-02(b) and (c), if the applicant meets the eligibility requirements for the abatement of industrial construction work in this chapter and makes the minimum required expenditure of 40 percent of the property's taxable assessed value in the tax year with the taxable status date immediately preceding the issuance of the first building permit, or if no permit was required, the commencement of construction. Expenditures for residential construction work or construction work on portions of property to be used for restricted activities will not be included in the minimum required expenditure for the purposes of eligibility under this section.
b. Benefits granted. The additional industrial abatement benefits will only be granted for industrial construction work and only those portions of a building or structure used or held for use for industrial purposes will be eligible for such benefits.
c. The first year of additional industrial abatement benefits will be the tax year with a taxable status date following the earlier of (i) completion of construction, or (ii) four years from the date the first building permit was issued or, if no permit was required, from the start of construction.
d. Projects that do not meet the minimum required expenditure of 40 percent or do not perform eligible industrial construction work will not be eligible for additional industrial abatements.
e. The amount of the additional industrial abatement is set forth below:
Years 1 to 4 | 50% of the initial tax liability |
Year 5 | 40% of the initial tax liability |
Year 6 | 40% of the initial tax liability |
Year 7 | 30% of the initial tax liability |
Year 8 | 30% of the initial tax liability |
Year 9 | 20% of the initial tax liability |
Year 10 | 20% of the initial tax liability |
Year 11 | 10% of the initial tax liability |
Year 12 | 10% of the initial tax liability |
(Added City Record 2/10/2017, eff. 3/12/2017)
The abatement schedules below set forth the abatement amounts available pursuant to the ICAP program. While an applicant may meet the eligibility requirements for abatement benefits such abatement benefits will not be granted until the applicant complies with the notice of completion requirements set forth in 19 RCNY § 36-03(e).
a. Abatement for commercial construction work outside of a special commercial abatement or a renovation area. Upon approval by the department of a final application for benefits, an applicant who has performed commercial construction work outside of a special commercial abatement area as described in 19 RCNY § 36-02(a), or a commercial renovation area, as described in 19 RCNY § 36-02(c), shall be eligible for an abatement of real property taxes as set forth below.
Tax year during benefit period | Amount of abatement |
Years 1 to 11 | 100% of abatement base |
12 | 80% of abatement base |
13 | 60% of abatement base |
14 | 40% of abatement base |
15 | 20% of abatement base |
b. Abatement for industrial construction work or commercial construction work in special commercial abatement areas where not more than 10% of the building or structure is used for retail purposes. Upon approval by the department of a final application for benefits, an applicant who has performed industrial construction work as described in 19 RCNY § 36-02(f), or commercial construction work in a special commercial abatement area as described in 19 RCNY § 36-02(e), on buildings where not more than 10% of the building or structure is used for retail purposes, shall be eligible for an abatement of real property taxes as set forth below.
Tax year during benefit period | Amount of abatement |
Years 1 to 16 | 100% of abatement base |
17 | 90% |
18 | 80% |
19 | 70% |
20 | 60% |
21 | 50% |
22 | 40% |
23 | 30% |
24 | 20% |
25 | 10% |
c. Abatement for industrial construction work on a peaking unit. Upon approval by the department of a final application for benefits, an applicant who has performed industrial construction work on a peaking unit as described in 19 RCNY § 36-02(f) shall be eligible for an abatement of real property taxes as set forth below.
Tax year during benefit period | Amount of abatement |
Years 1 to 15 | 100% of abatement base |
d. Abatement for industrial construction work or commercial construction work in special commercial abatement areas, on buildings where more than 10% of the building or structure is used for retail purposes. Upon approval by the department of a final application for benefits, an applicant who has performed industrial construction work as described in 19 RCNY § 36-02(f) or commercial construction work in special commercial abatement areas as described in 19 RCNY § 36-02(e), shall be eligible for an abatement of real property taxes. Abatement benefits are available for the non-retail portion of such buildings or structures and 10% of the building or structure used for retail purposes in accordance with the 25 year schedule set forth in Subdivision b above. Any retail portion in excess of 10% of such building or structure is eligible for abatement benefits in accordance with the 15 year schedule set forth below.
Tax year during benefit period | Amount of abatement |
Years 1 to 11 | 100% of abatement base |
12 | 80% of abatement base |
13 | 60% of abatement base |
14 | 40% of abatement base |
15 | 20% of abatement base |
e. Abatement for renovation construction work in renovation areas.
(1) Upon approval by the department of a final application for benefits, an applicant who has performed renovation construction work in a renovation area, as described in 19 RCNY § 36-02(c)(1), shall be eligible for an abatement of real property taxes as set forth in the table below.
(2) Upon approval by the department of a final application for benefits, an applicant who has performed renovation construction work in a renovation area as described in 19 RCNY § 36-02(c)(2) shall be eligible for an abatement of real property taxes for the non-retail portion of such building or structure and up to 5% of such building or structure used for retail purposes as set forth in the table below. Any retail portion in excess of 5% of such building or structure is not eligible for abatement benefits.
Tax year during benefit period | Amount of abatement |
Years 1 to 8 | 100% of abatement base |
9 | 80% of abatement base |
10 | 60% of abatement base |
11 | 40% of abatement base |
12 | 20% of abatement base |
f. Abatement for renovation construction work in renovation areas. Upon approval by the department of a final application for benefits, an applicant who has performed renovation construction work in a renovation area, as described in 19 RCNY § 36-02(c)(3) shall be eligible for an abatement of real property taxes for the non-retail portion of such building or structure and up to 5% of the building or structure used for retail purposes. Any retail portion in excess of 5% of such building or structure is not eligible for abatement benefits.
Tax year during benefit period | Amount of abatement |
Years 1 to 5 | 100% of abatement base |
6 | 80% of abatement base |
7 | 60% of abatement base |
8 | 40% of abatement base |
9 | 20% of abatement base |
10 | 20% of abatement base |
g. Abatement for commercial construction work on new construction in certain areas of lower Manhattan. Upon approval by the department of a final application for benefits, an applicant who has performed new construction work in certain areas of lower Manhattan as described in 19 RCNY § 36-02(d) shall be eligible for an abatement of real property taxes
Tax year during benefit period | Amount of abatement |
Years 1 to 4 | 100% of the abatement base |
5 | 80% of the abatement base |
6 | 60% of the abatement base |
7 | 40% of the abatement base |
8 | 20% of the abatement base |
(Added City Record 2/10/2017, eff. 3/12/2017)
a. Certificate of continuing use.
(1) For the duration of the benefit period. ICAP benefit recipients must file with the department a certificate of continuing use on or before the taxable status date of January fifth every other year that states any changes in the structure or use of the property that have occurred since the previous submission for that property, except that ICAP benefit recipients receiving benefits for construction work on a peaking unit must file such statement on or before January fifth and July fifth of each year. For example, for recipients of benefits not for peaking units, the first certificate of continuing use must be filed after the first year benefits are received and the next certificate of continuing use must be filed after the third year benefits are received.
(2) The certificate of continuing use form must be filed electronically in the manner prescribed by the Commissioner. The Commissioner may, for good cause, waive the requirement that the statement of continuing use be filed electronically and permit the statement of continuing use to be filed by means of a paper form. A request for waiver of the electronic filing requirement must be made in writing no later than thirty days prior to the deadline for filing a statement of continuing use. Any filing permitted to be filed in a paper format must be filed with the Department, at the address designated by the department.
(3) ICAP benefit recipients who fail to file an ICAP certificate of continuing use by January fifth of a required filing year, or in the case of an ICAP benefit recipient receiving benefits for construction work on a peaking unit by January fifth or July fifth of each year, may have their ICAP benefits reduced or suspended. ICAP benefit recipients who fail to file an ICAP certificate of continuing use for two consecutive required filing years, may have their ICAP benefits terminated. The Commissioner may, after providing notice to the ICAP benefit recipient and an opportunity to be heard, reduce, suspend, terminate or revoke ICAP benefits. Such notice will inform the recipient of the reasons for the proposed action by the department and that the ICAP recipient has the right to present information as to why the ICAP recipient should not be penalized to the Commissioner or his or her designee, within 10 business days of delivery of the notice by hand or 15 business days of the posting of notice by mail.
(4) An ICAP certificate of continuing use delivered by an ICAP benefits recipient which contains a false or misleading statement as to a material fact or omits any material fact required to be reported under this subdivision may result in a determination that the recipient is ineligible for current and future tax abatements for the subject property or any other property. The Commissioner may, after providing notice to the ICAP benefit recipient and an opportunity to be heard, reduce, suspend, terminate or revoke ICAP benefits. Such notice will inform the recipient of the reasons for the proposed action by the department and that the ICAP recipient has the right to present information as to why the ICAP recipient should not be penalized to the Commissioner or his or her designee, within 10 business days of delivery of the notice by hand or 15 business days of the posting of notice by mail.
b. Continued use.
(1) Continuing eligibility for ICAP benefits is contingent upon continued use of buildings and property for the purpose specified in the application as last amended in the most recent certificate of continuing use.
(2) ICAP benefits will be suspended for code violations pursuant to § 11-277 of the Administrative Code.
(3) When the eligibility of a property to receive ICAP benefits is affected by a conversion as described in Subdivision c of this section, the recipient must establish by clear and convincing evidence the last date that the property was eligible for the benefits previously granted, which will be deemed the date of the conversion. If no certificate of continuing use has been submitted, a building permit indicating a change in use will be treated as a presumption of conversion.
(4) A recipient must file an amendment to the latest filed statement of continuing use prior to conversion of industrial use as set forth in Subdivisions e and f of this section. For all other conversions an applicant must file an amendment to the latest filed statement of continuing use within 60 days of the conversion.
c. Conversion.
(1) A conversion of property, a building or a building site is any intentional change in the nature of the improvements for which benefits were granted, or in the use of such improvements by any person, including by the benefit recipient, a tenant or an occupant.
(2) A demolition, in full or part, or any other structural change which necessarily causes a change in use is a conversion.
(3) A discontinuance of use may be deemed a conversion if the dilapidated condition of the property and prolonged period of nonuse evidences intent to abandon the property and permanently discontinue use. Temporary nonuse due to inability to secure tenants or funding for completion of construction shall not constitute a change in use.
d. Permitted changes. The following types of changes are not conversions:
(1) A change in ownership or control of property, provided that the department is notified of such change in ownership or control, or
(2) A change in the identity of a tenant or occupant.
e. Conversion from industrial to commercial use.
(1) If a property receives industrial abatement benefits, but then at any time prior to the end of the abatement period, less than 65 percent of the total net square footage is used as an industrial property, no further abatement benefits for industrial work will be granted except as set forth in this subdivision. Except as otherwise provided in this section, any taxes owed from a converted use will be due, and interest assessed, as of the date of such conversion.
(2) Notwithstanding Paragraph (1) of this subdivision, any applicant whose property was receiving industrial abatement benefits in a special commercial abatement area that would have been eligible to receive benefits for commercial construction work at the time such applicant applied for abatement benefits will continue to receive the abatement for industrial construction work until the expiration of such benefit period.
(3) Notwithstanding Paragraph (1) of this subdivision any applicant whose property was receiving industrial abatement benefits other than in a special commercial abatement area who would have been eligible to receive benefits for commercial construction work at the time such applicant applied for abatement benefits will receive any abatement which such applicant would have received in the corresponding tax year pursuant to the benefits granted for commercial construction work. Such benefits will commence with the date of conversion to commercial property and continue until the expiration of the benefit period for commercial construction work.
(4) If a property that converts from industrial to commercial use was receiving benefits for industrial construction work in any area of the city and at least 65 percent of the net square footage continues to be used for manufacturing activity after such conversion to commercial use, the recipient will not be required to pay the pro-rata share of tax for the abatement claimed during the tax year for which an abatement was claimed during the tax year in which such conversion occurred.
(5) Any industrial property that was receiving the additional industrial abatement pursuant to 19 RCNY § 36-11 will cease to be eligible for such additional benefits from the date of conversion to commercial property.
f. Conversion to residential use.
(1) Any applicant whose property has been granted benefits for commercial, industrial or renovation construction work and who, before the benefit period expires, uses or allows the use of the property or a portion of the property as residential property, will cease to be eligible for further abatement for commercial, industrial or renovation construction work as of the date such property was first used as residential property, as follows:
(i) If 20 percent or more of the rentable square footage of the property is used as residential property, then the entire property will cease to be eligible for further abatement.
(ii) If less than 20 percent of the rentable square footage of the property is used as residential property, then that portion of such property used as residential property will cease to be eligible for further abatement.
(iii) Notwithstanding Subparagraph (ii) of this paragraph, where less than 5 percent of a property's rentable square footage is used as residential property, that use will be considered negligible and will not be a basis for benefits to cease under this subdivision.
(iv) Where benefits cease or are reduced pursuant to this subdivision, the recipient of such ceased or reduced benefits must pay, with interest, any taxes for which an abatement was received after the conversion of the property as described in this subdivision, including the pro rata share of tax for which such abatement was claimed during the tax year in which such use occurred. The abatement will continue for the commercial, industrial or renovation construction work for the portion of the property that continues to be used for commercial purposes as long as the property is still eligible for such abatement benefits.
(2) For purposes of this subdivision, "property" means the real property contained within an individual tax lot.
(3) Notwithstanding Subparagraph (iv) above, where a building or structure is owned in condominium form, and an application for benefits includes more than one unit in the same condominium, then for purposes of this subdivision, the 5 percent and 20 percent of the rentable square footage determination will be based on the total square footage of all condominium units applying for ICAP benefits.
g. Conversion to retail use.
(1) Where a property has been granted benefits for industrial or commercial construction work in special commercial abatement areas on buildings where not more than 10 percent of the rentable square footage of the building or structure is used for retail purposes, and where, before the benefit period expires, the property or a portion thereof is converted so that 10 percent or more of the rentable square footage of the building or structure is used for retail purposes, the department will recalculate the abatement upon conversion in accordance with subdivision e of this section.
(2) Where a property has been granted benefits for renovation construction work in renovation areas and where, before the benefit period expires, the property or a portion of the property is converted so that more than 5 percent of the rentable square footage of the building or structure is used for retail purposes, the department will recalculate the abatement upon conversion to reflect the benefit for which the current use is eligible.
h. Conversion of use by peaking units. Any applicant whose property has been granted benefits under this chapter for industrial construction work as a peaking unit and who converts such property in any tax year to a use that no longer qualifies as a peaking unit, or who uses such property in a manner inconsistent with the definition of a peaking unit, will be ineligible for abatement benefits during any such tax year. Any such recipient of benefits must pay with interest taxes for which an abatement was claimed during any portion of such tax year.
i. Recalculation of abatement upon conversion. If, during the benefit period, a recipient converts square footage within any building or structure, the department may recalculate the benefit granted pursuant to this chapter to reflect the benefit for which the current use is eligible.
j. The burden shall at all times be on the recipient to demonstrate by clear and convincing evidence that property subject to benefits under this part is used as stated in the applications for benefits filed by the recipient with the department.
(Added City Record 2/10/2017, eff. 3/12/2017)
An applicant may not file a preliminary application for new ICAP benefits for an additional construction project on any portion of a property that is already receiving any ICAP benefit for four years after the start of the first tax year for which such property is receiving such ICAP benefits. For any ICAP benefit granted for a property that has previously been granted any other ICAP benefit, the initial tax to determine the new abatement will not include the ICAP abatement previously received.
(Added City Record 2/10/2017, eff. 3/12/2017)
a. The department may submit written requests to any ICAP benefit applicant or ICAP benefit recipient for additional information which may include, but is not limited to, the production of books, records and documents relating to any application made for ICAP benefits or submission of a certificate of continuing use. Such written requests will contain a 90 day deadline. The Commissioner may, after providing notice and an opportunity to be heard to the ICAP benefit applicant or ICAP benefit recipient deny, reduce, suspend, terminate or revoke ICAP benefits if an applicant or ICAP benefit recipient fails to timely comply with such a request. Such notice will inform the recipient of the reasons for the proposed action by the department and that the ICAP applicant or ICAP recipient has the right to present information as to why they should not be penalized. This information must be submitted to the Commissioner or his or her designee, within 10 business days of delivery of the notice by hand or 15 business days of the posting of notice by mail.
b. The department may, consistent with the law, upon reasonable notice enter and inspect property during normal business hours to determine a property's use and whether a property is eligible for the abatement benefits that the property has applied for or is receiving.
c. The Commissioner may, after providing notice to the ICAP benefit applicant or ICAP benefit recipient an opportunity to be heard deny, reduce, suspend, terminate or revoke any abatement benefits granted under this chapter where:
(1) A recipient fails to comply with any requirement provided for by Title 2-f of Article 4 of the real property tax law, Chapter 5 of Title 11 of the Administrative Code, or this chapter; or
(2) An application, certificate, report or other document delivered by an applicant or benefit recipient contains a false or misleading statement as to a material fact or omits any material fact, and may declare any applicant or recipient who makes such false or misleading statement or omits such material fact, ineligible for future tax abatements for the subject property or any other property.
Such notice will inform the recipient of the reasons for the proposed action by the department and that the ICAP applicant or ICAP recipient has the right to present information as to why the ICAP recipient should not be penalized to the Commissioner or his or her designee, within 10 business days of delivery of the notice by hand or 15 business days of the posting of notice by mail.
d. This chapter shall apply only to projects for which the preliminary application is filed after the effective date of this rule.
(Added City Record 2/10/2017, eff. 3/12/2017)