§ 36-09 Benefit Period Commencement.

Upon approval by the department of a final application for benefits, the first year of the abatement shall be the tax year with the first taxable status date that follows the earlier of (a) completion of construction, or (b) four years from the date the first building permit was issued, or if no permit was required, the commencement of construction.

(Added City Record 2/10/2017, eff. 3/12/2017)

§ 36-10 Calculation of Abatement.

   a.   Abatement amount. The abatement amount is equal to the product of the abatement base times the percentage for the applicable year indicated in the applicable schedule set forth in 19 RCNY § 36-12.

   b.   Abatement base. The abatement base is the amount that the post completion tax liability exceeds 115% of the initial tax liability for each type of abatement except for the additional industrial abatement as defined in 19 RCNY § 36-11.

   c.   The calculation of initial and post completion tax liability is based on the lower of the actual or transitional assessed value of the building.

   d.   The initial tax liability is the liability for the building or structure on the tax roll with a taxable status date preceding the first building permit or commencement of construction if no permit is required.

   e.   Calculation of initial tax liability. The product of the taxable assessed value ("AV") for the building or structure (without regard to any tax exemption that may be applicable to the property) for the assessment roll with a taxable status date preceding the first building permit or commencement of construction if no permit is required is multiplied by the initial tax rate. The initial tax rate is the final tax rate applicable to the assessment roll with a taxable status date immediately preceding the issuance of the first building permit. If no building permit was required, the initial tax rate shall be determined based on the assessment roll with a status date immediately preceding the commencement of construction.

   f.   If the initial tax or the post-completion tax attributable to a mixed-use property must be apportioned to determine the tax attributable to a particular use for any purpose under these rules, the tax will be apportioned using the same method used by the department to value property for tax and assessment. This includes, but is not limited to, determining the abatement base or the minimum required expenditure, or if the tax must be apportioned among newly apportioned tax lots, Methods that may be considered, individually or in combination include:

      (1)   the land area of each portion;

      (2)   the square footage of the building or structure used or dedicated to each purpose;

      (3)   the market value of the building situated on each portion;

      (4)   the location of each portion on the lot;

      (5)   the topography of the lot;

      (6)   zoning and other land use restrictions applicable to the lot or portion thereof;

      (7)   analyses of income factors relating to each portion;

      (8)   analyses of cost factors; and

      (9)   other relevant factors.

If any tax lot included in a project that is the subject of a pending or approved final application for ICAP benefits is subdivided, the applicant must file an amendment to the final application designating the tax lots that constitute the property that is the subject of the application. The Department shall allocate the initial and, if applicable, the post construction assessed values based on the allocation of the historical assessments made pursuant to Subdivision 5 of Section 1805 of the real property tax law.

   g.   At no time during the abatement benefit period may the abatement reduce the amount of taxes imposed on the land portion of the assessment, nor may it reduce the initial tax liability imposed on the building or structure, except for the additional industrial abatement as described in 19 RCNY § 36-11.

Example: Commercial construction work outside of a special commercial abatement area. Preliminary application filed 7/1/2008; first building permit issued 8/1/2008. Project consists of commercial construction work to renovate and modernize the building.

In this case, the initial tax liability is based on the FY2008/09 tax liability (assessment roll with a taxable status date preceding the first building permit)

Section 1805 of the real property tax law requires that certain changes to assessed valuation ("AV") be phased in over a number of years rather than one year. This is transitional AV.

 

	Actual AV	Transitional AV
Total AV	$1,100,000	$900,000
Land AV	$400,000	$300,000
Building AV	$700,000*	$600,000*
Initial Tax Liability	$60,000**	$600,000 x 0.10

 

* The initial tax liability will be based on the lower of the building actual AV or building transitional AV.

** FY 2008/09 Tax Rate Assume an initial tax rate of 10% for 2008/09 for illustrative purposes

   h.   The post-completion tax liability is the tax liability for the building or structure on the tax roll with a taxable status date immediately following the earlier of completion of construction, or four years from the date of issuance of the first building permit or commencement of construction, if no building permit was required, multiplied by the initial tax rate.

Example: In this case, the construction was completed by November 2011; therefore, the post completion tax is based on the 2012/13 AV roll (taxable status date January 5, 2012). The AV for the building on that assessment roll was:

 

	Actual AV	Transitional AV
Building AV	$1,100,000	$1,000,000
FY 2008/09 Tax Rate of 10%	.10	.10
Post Completion Tax	$110,000*	$100,000*

 

* Post completion tax is based on the lower of the actual AV or transitional AV.

The abatement base is equal to the post-completion tax liability less 115% of the initial tax liability.

 

Post Completion Tax Liability	$100,000
Initial Tax Liability	$60,000
115% of Initial Tax Liability	$69,000
Abatement Base	$31,000

 

   i.   Abatement benefits will not in any year exceed the property taxes imposed on such property.

   j.   If a tax lot has multiple structures with both eligible and non-eligible uses, the initial tax will be apportioned and only the eligible portion will receive the abatement.

   k.   (1)   The availability of ICAP benefits for retail use is limited in the following cases:

         (i)   No more than 10 percent of gross square footage in industrial and commercial buildings in special commercial abatement areas used for retail purposes is eligible to receive a 25 year abatement benefit. If more than 10 percent of the property is used for retail purposes, the portion exceeding the 10 percent retail use will be eligible for a 15 year abatement benefit.

         (ii)   For renovation areas in Manhattan, any retail use in excess of 5 percent of the building(s) gross square footage will be ineligible for ICAP benefits, except in the Lower Manhattan renovation area, as set forth in 19 RCNY § 36-02(c)(1), where there will be no limit on portion of gross square footage dedicated to retail use.

      (2)   The determination of the percent of gross square footage used for retail purposes shall be based on the gross square footage of the entire building in all cases, including those where the ICAP application relates to one or more condominium units in the building.

      (3)   In a building in which at least 10% of the gross square footage is dedicated exclusively to industrial or commercial purposes other than retail purposes, the gross square footage of retail space shall not include space used for common building mechanical equipment, maintenance or circulation.

   l.   Inflation Protection.

      (1)   Inflation protection for industrial construction projects. Inflation protection is available during years 2 through 13 of the abatement period if in such year there is an increase in the tax over the immediately preceding year resulting from an increase in the property's total taxable assessed value. The new increase in tax liability, based upon the increase in taxable assessed value, will be added to the abatement base using the initial tax rate.

For industrial construction projects the inflation protection is the full amount of the increase in taxes based upon the initial tax rate, unless there is a physical change from the immediately preceding year and the increase in taxable assessed value due to such physical change is more than 5 percent of the taxable assessed value for the immediately preceding year. Under such circumstances, none of the increase in tax liability, whether the increase in taxable assessed value is solely the result of a physical change or a combination of physical change and non-physical change, may be added to the abatement base. For industrial projects the percentage of retail use does not have any impact on eligibility for inflation protection.

      (2)   Inflation protection for commercial projects in special commercial abatement areas. Inflation protection is available during years 2 through 13 of the abatement period if in any such year there is an increase in taxable assessed value of more than 5 percent of the initial tax rate. The increase in tax liability based upon the increase in taxable assessed value that is more than 5 percent calculated using the initial tax rate will be added to the abatement base.

However, no inflation protection will be provided for commercial projects in special commercial abatement areas where there is a physical change from the immediately preceding year and the increase in taxable assessed value due to such physical change is more than 5 percent of the taxable assessed value for the immediately preceding year. Under such circumstances, none of the increase in tax liability, whether the increase in taxable assessed value is solely the result of a physical improvement or a combination of physical improvement and equalization, may be added to the abatement base. For commercial projects in special commercial areas the percentage of retail use does not have any impact on eligibility for inflation protection. If the building is currently receiving inflation protection for one ICAP project and any additional ICAP projects are approved that qualify for inflation protection, the inflation protection for the current ICAP project will be terminated and inflation protection benefits for the most recently approved ICAP project will commence upon such termination.

Hotels located in special commercial abatement areas are eligible for the inflation protection set forth in this paragraph.

Examples: In the examples below, inflation protection is provided on the calculation of total abatement base for commercial construction projects in a special commercial abatement area when the retail portion of the square footage of the project is not more than 10% (Example 1), as well as when the retail portion is more than 10% of the square footage of the project (Example 2).

Example 1: Commercial construction in special commercial abatement area – retail not more than 10% of square footage (equalization increases in taxable assessed value).

Percent Increase in Taxable Assessed Value	Benefit Period	Post Completion Tax Liability	Initial Tax Rate	Addition to Abatement Base Due to Inflation Protection	Total Abatement Base	Yearly Abatement Percentage
	YR 1	100,000	10%		31,000	100%
3%	YR 2	103,000	10%		31,000	100%
6%	YR 3	109,180	10%	1,030	32,030	100%
6%	YR 4	115,731	10%	1,092	33,122	100%
4%	YR 5	120,360	10%		33,122	100%
3%	YR 6	123,971	10%		33,122	100%
2%	YR 7	126,450	10%		33,122	100%
6%	YR 8	134,037	10%	1,265	34,387	100%
3%	YR 9	138,058	10%		34,387	100%
1%	YR 10	139,439	10%		34,387	100%
1%	YR 11	140,833	10%		34,387	100%
2%	YR 12	143,650	10%		34,387	100%
3%	YR 13	147,960	10%		34,387	100%
4%	YR 14	153,878	10%		34,387	100%
2%	YR 15	156,956	10%		34,387	100%
4%	YR 16	163,234	10%		34,387	100%
3%	YR 17	168,131	10%		34,387	90%
2%	YR 18	171,494	10%		34,387	80%
4%	YR 19	178,354	10%		34,387	70%
5%	YR 20	187,272	10%		34,387	60%
6%	YR 21	198,508	10%		34,387	50%
3%	YR 22	204,463	10%		34,387	40%
2%	YR 23	208,552	10%		34,387	30%
1%	YR 24	210,638	10%		34,387	20%
2%	YR 25	214,851	10%		34,387	10%

 

Example 2: Commercial construction in special commercial abatement area – retail more than 10% of square footage (equalization increases in taxable assessed value). The retail space is 25% of square footage.

Percent Increase in Taxable Assessed Value	Benefit Period	Post Completion Tax Liability	Initial Tax Rate	Addition to Abatement Base Due to Inflation Protection	Total Abatement Base	Abatement Base for Commercial Plus 10% Retail	Yearly Abatement Percentage	Abatement Base for Retail over 10%	Yearly Abatement Percentage
	YR 1	100,00 0	10%		31,000	26,350	100%	4,650	100%
3%	YR 2	103,00 0	10%		31,000	26,350	100%	4,650	100%
6%	YR 3	109,18 0	10%	1,030	32,030	27,226	100%	4,804	100%
6%	YR 4	115,73 1	10%	1,092	33,122	28,154	100%	4,968	100%
4%	YR 5	120,36 0	10%		33,122	28,154	100%	4,968	100%
3%	YR 6	123,97 1	10%		33,122	28,154	100%	4,968	100%
2%	YR 7	126,45 0	10%		33,122	28,154	100%	4,968	100%
6%	YR 8	134,03 7	10%	1,265	34,387	29,229	100%	5,158	100%
3%	YR 9	138,05 8	10%		34,387	29,229	100%	5,158	100%
1%	YR 10	139,43 9	10%		34,387	29,229	100%	5,158	100%
1%	YR 11	140,83 3	10%		34,387	29,229	100%	5,158	100%
2%	YR 12	143,65 0	10%		34,387	29,229	80%	5,158	80%
3%	YR 13	147,96 0	10%		34,387	29,229	60%	5,158	60%
4%	YR 14	153,87 8	10%		34,387	29,229	40%	5,158	40%
2%	YR 15	156,95 6	10%		34,387	29,229	20%	5,158	20%

 

      (3)   Industrial construction work on a peaking unit will have the same inflation protection as other industrial construction projects.

      (4)   A property receiving abatement benefits for both industrial and commercial construction is eligible for the inflation protection provided under this section based upon the predominant use of the property as determined by the department.

      (5)   Time limit for completion of construction. Construction of buildings or structures must be completed no later than five years from the date of issuance of the first building permit, or if no permit was required, the commencement of construction. Failure to meet this requirement will result in the termination of any inflation protection provided under this subdivision for any tax year that begins following the date by which completion of construction is required.

(Added City Record 2/10/2017, eff. 3/12/2017)

§ 36-11 Additional Industrial Abatement.

   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)

§ 36-12 ICAP Abatement Schedules.

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)

§ 36-13 Continuing Use.

   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)

§ 36-14 Subsequent Abatements.

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)