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a. Commercial construction work outside of a special commercial abatement area. Commercial construction projects anywhere in New York City outside of a special commercial abatement area are eligible for abatement benefits except for such projects in the commercial exclusion area described in Subdivision b.
b. Commercial exclusion area. The commercial exclusion area is the area in Manhattan lying south of the centerline of 96th Street, except for (i) the areas in Manhattan designated for commercial renovation projects as commercial renovation areas that are described in Subdivision c, and (ii) the area designated for new construction as described in Subdivision d.
c. Commercial renovation areas. Commercial renovation projects in any area of New York City, except such projects south of the centerline of 96th Street in Manhattan, will be eligible for abatement benefits, except that abatement benefits will also be available for commercial renovation projects in the following designated areas, with the amount of such benefit dependent of the area in which the project is located, pursuant to 19 RCNY § 36-12(e) and (f):
(1) The area in Manhattan bounded by Murray Street on the north starting at the intersection of West Street and Murray Street, running easterly along the center line of Murray Street; connecting through City Hall Park with the center line of Frankfort Street and running easterly along the center line of Frankfort and Dover Streets to the intersection of Dover Street and South Street; running southerly along the center line of South Street to Peter Minuit Plaza; connection through Peter Minuit Plaza to the center line of State Street and running northwesterly along the center line of State Street to the intersection of State Street and Battery Place; running westerly along the center line of Battery Place to the intersection of Battery Place and West Street; and running northerly along the center line of West Street to the intersection of West Street and Murray Street.
(2) The area in Manhattan defined as the special garment center district by Chapter one of Article XII of the Zoning Resolution of the City, which is the area in Manhattan bounded by the centerline of West 40th Street on the north between 7th and 8th Avenue; running southerly along the centerline of 7th Avenue to the center line of West 38th Street; running easterly along the centerline of West 38th Street to the centerline of Broadway; running southerly along the centerline of Broadway to the centerline of West 35th street to 7th Avenue and running southerly along the centerline of 7th Avenue to the centerline of West 34th Street; running westerly to the centerline of 8th avenue, running northerly to the centerline of West 35th Street to 100 feet east of 9th Avenue, running northerly to the centerline of West 39th Street, running easterly to 8th Avenue and running northerly to the centerline of West 40th Street.
(3) The area in Manhattan south of the center line of 59th Street, other than the areas designated renovation areas by Paragraphs (1) and (2) of this subdivision.
d. New construction in New York City. New construction projects in any area of New York City, except such projects south of the centerline of 96th Street in Manhattan, will be eligible for abatement benefits, except that abatement benefits will also be available for new construction projects as described in Subdivision e of this section.
e. New construction in certain areas of lower Manhattan. The area in Manhattan bounded by Murray Street on the north starting at the intersection of West Street and Murray Street; running easterly along the center line of Murray Street; connecting through City Hall Park with the center line of Frankfort Street and running easterly along the center line of Frankfort and Dover Streets to the intersection of Dover Street and South Street; running southerly along the center line of South Street to Peter Minuit Plaza; connecting through Peter Minuit Plaza to the center line of State Street and running northwesterly along the center line of State Street to the intersection of State Street and Battery Place; running westerly along the center line of Battery Place to the intersection of Battery Place and West Street; and running northerly along the center line of West Street to the intersection of West Street and Murray Street, except that abatement benefits will not be available for projects in the area in the borough of Manhattan bounded by Church Street on the east starting at the intersection of Liberty Street and Church Street; running northerly along the center line of Church Street to the intersection of Church Street and Vesey Street; running westerly along the center line of Vesey Street to the intersection of Vesey Street and West Broadway; running northerly along the center line of West Broadway to the intersection of West Broadway and Barclay Street; running westerly along the center line of Barclay Street to the intersection of Barclay Street and Washington Street; running southerly along the center line of Washington Street to the intersection of Washington Street and Vesey Street; running westerly along the center line of Vesey Street to the intersection of Vesey Street and West Street; running southerly along the center line of West Street to the intersection of West Street and Liberty Street; and running easterly along the center line of Liberty Street to the intersection of Liberty Street and Church Street.
f. Special commercial abatement area.
(1) The boundaries of special commercial abatement areas as designated by the temporary commercial incentive area boundary commission will be described on the department's website.
(2) In accordance with Section 489-gggggg of the Real Property Tax Law and § 11-274 of the Administrative Code, the temporary commercial incentive area boundary commission may designate an area in the City of New York, other than in the area lying south of the centerline of 96th Street in Manhattan, to be a special commercial abatement area if it determines that market conditions in the area are such that the availability of a special abatement is required in order to encourage commercial construction in such area.
g. Industrial construction. Eligible projects may receive industrial construction benefits in any area of New York City.
h. Projects partially in an excluded area. Properties partially located in an excluded area will not be eligible for abatement benefits.
(Added City Record 2/10/2017, eff. 3/12/2017)
An applicant must receive approval for a series of milestones in order to receive ICAP tax abatement benefits.
a. Applicants.
(1) An entity is eligible to apply for ICAP benefits:
(i) if it is obligated to pay real property tax on the property, either by virtue of ownership or contract; or
(ii) if the property is exempt from real property taxation and the record owner or lessee of such property has entered into an agreement to sell or lease such property to another entity, provided that both parties to the agreement are co-applicants.
(2) Co-Application with public entity. A co-applicant with a public entity may be eligible for abatement benefits except benefits will not be available for any period for which the property is exempt from real property tax because it is owned or controlled by a public entity. Abatement benefits will only be available if the recipient meets the requirements of Subdivision g of § 11-270 of the Administrative Code.
(3) Multiple buildings. Where a completed project will result in creating two or more buildings, and separate building permits were obtained, a separate application must be filed for each permitted building.
b. Preliminary application.
(1) An applicant must submit a completed preliminary application before issuance of the first building permit, or if no permit is required, the start of construction. The preliminary application must be made on the form prescribed by the Commissioner. The completed preliminary application must be accompanied by a narrative describing the proposed project, including:
(i) the project site;
(ii) the proposed improvement(s);
(iii) the proposed uses of the building or structure upon completion of improvements; and
(iv) whether the improvements are building-wide or limited to specific building systems or renovations to particular areas (such as specific floors or lobby) of the building.
(2) Failure to file a preliminary application Certificate of Eligibility for ICAP benefits before receipt of the first building permit, or if no permit is required, the start of construction, will disqualify the project from receiving benefits under this program.
(3) The preliminary application deadline for ICAP benefits is March 1, 2019. Work performed pursuant to a building permit first issued after April 1, 2019, shall not be included in the project, except as otherwise provided by statute.
(4) Work excluded from the project shall not be considered for purposes of meeting the minimum required expenditure or determining the completion date.
c. M/WBE requirements.
(1) For projects with a total estimated cost of between $750,000 and $1,500,000 an ICAP applicant must certify that it accessed the directory of City certified M/WBE business enterprises ("directory"). The ICAP applicant must file the certification with the department in conjunction with the final application for benefits along with a report of whether or not efforts were made by the applicant to include Minority- and Women-Owned business enterprises in the construction work on property for which benefits are sought and describe those efforts.
(2) For projects with a total estimated cost of $1,500,000 or more ICAP applicants must comply with the following M/WBE requirements to obtain abatement benefits:
(i) After filing a preliminary application for benefits, the applicant must inform the division of contracting and subcontracting opportunities at construction sites where the applicant will be performing construction work subject to benefits pursuant to this part. The division shall make information on such contracting and subcontracting opportunities available to the general public by posting them on its website.
(ii) The ICAP applicant must review the directory to identify Minority- or Women-Owned business enterprises that may be qualified to perform contracting or subcontracting work on construction projects subject to benefits pursuant to this part.
(iii) For each subcontract on the project, the ICAP applicant must solicit or arrange for the solicitation of bids from at least three Minority- or Women-Owned enterprises to perform contracting work.
(iv) The ICAP applicant must maintain records demonstrating its compliance with these M/WBE requirements.
(v) When filing a final application for benefits with the department, the ICAP applicant must certify that it has complied with and will continue to comply with the M/WBE provisions. The certification must also include: (A) the name and contact information of every minority or women-owned business enterprise that the applicant solicited bids from and (B) whether any such Minority- or Women-Owned firm was awarded a subcontract.
(vi) Work performed by an applicant's contractors or subcontractors is eligible construction work except when such work is not included in the project description, contained in the final application or an amendment thereto.
(vii) The division shall have authority to audit the records maintained by each applicant to ensure compliance with the requirements of such subdivision.
(viii) The applicant must maintain records demonstrating its compliance with the provisions of this subdivision.
(3) Each ICAP application must contain a statement that the ICAP applicant and its contractors and subcontractors agree to be equal opportunity employers and comply with all applicable requirements of Executive Order 50 of 1980, as amended by Executive Order 94 of 1986, Executive Order 108 of 1986, and Executive Order 159 of 2011 ("Executive Order 50"), and the rules of the division.
(4) ICAP applicants must file an employment report with the division for projects with a total estimated cost of $2,500,000 or more or if any subcontractor will perform construction work with a total estimated cost of $1,000,000 or more. If the ICAP applicant or any of its contractors or subcontractors will not perform work meeting these estimated dollar thresholds, the ICAP applicant must file a letter with the division that the applicant or subcontractor will not perform construction work having such an estimated cost.
(5) (i) The division will inform the Commissioner in writing when an applicant or its contractors or subcontractors, or any successor to such applicant, or its contractors or subcontractors, has failed to comply with any requirement of Executive Order 50 or the rules of the division, whereupon the division may issue a written recommendation to the Commissioner that any benefit provided under this Chapter be denied, suspended, revoked or terminated.
(ii) If the Commissioner has determines, in accordance with the procedures in 19 RCNY § 36-15, that an ICAP applicant, contractor, or subcontractor has made false or misleading statements or omissions in employment reports provided to the division, all benefits will be revoked from the date of the false statement or omission.
d. Final application.
(1) An applicant must submit to the department a completed final application no later than one year from the date of issuance of the first building permit for construction work on the project, or when construction work does not require a building permit, no later than one year from the date of commencement of construction on the project, for all projects including new projects as described in 19 RCNY § 36-05(a). Construction does not have to be completed prior to submitting the final application. Stop work orders issued by the department of buildings will not extend the deadline for filing the final application.
(2) Failure to file a final application no later than one year from the date of issuance of the first building permit for construction work on the project, or when construction work does not require a building permit, no later than one year from the date of commencement of construction on the project, will disqualify the project from receiving benefits under this chapter.
(3) The final application must be made on the form prescribed by the department. As part of the final application the applicant must provide a narrative description of the project which must include:
(i) A written description of the proposed project stating the specific work to be undertaken including the floor area (below grade and above grade floors and roof) and location within the property of space created or affected by the work;
(ii) List each permit number and the work associated with such permit, including elevator permits;
(iii) List any work that did not require a permit;
(iv) Date or anticipated date of start of construction;
(v) Estimated date of completion of project or actual date of first temporary certificate of occupancy or final certificate of occupancy, and include copies of any certificate of occupancy issued;
(vi) Contractors and subcontractors by trade, including addresses;
(vii) Cost of construction broken down by major categories of expenses;
(viii) Number and location of buildings on project property and where multiple buildings exist on a lot or project site, include a survey showing each building; and
(ix) (A) Statement of current or prior use by square foot; and
(B) Statement of proposed use by square feet, distinguishing between commercial and residential use.
(4) The applicant must also provide copies of all executed construction contracts or a statement from the engineer or architect detailing cost estimates.
(5) The department reserves the right to require that any documents submitted in support or as part of any application be certified.
(6) No ICAP benefits will be granted for any construction work unless the applicant files with the final application an affidavit setting forth the following information:
(i) statement that within the seven years immediately preceding the date of the final application for benefits, neither the applicant, nor any person owning a substantial interest in the property, nor any officer, director or general partner of the applicant or such person was finally adjudicated by a court of competent jurisdiction to have violated Section 235 of the real property law or any section of Article 150 of the penal law or any similar arson law of another state with respect to any building, or was an officer, director or general partner of a person at the time such person was finally adjudicated to have violated such law; and
(ii) a statement setting forth any pending charges alleging violation of Section 235 of the real property law or any section of Article 150 of the penal law or any similar arson law of another jurisdiction with respect to any building by the applicant or any person owning a substantial interest in the property or any officer, director or general partner of the applicant or such person.
(iii) "Substantial interest" as used in Subparagraphs (i) and (ii) of this paragraph will mean ownership and control of an interest of 10 percent or more in a property or any person owning a property.
(iv) If any person described in the statement required by Subparagraph (i) or (ii) of this paragraph is finally adjudicated by a court of competent jurisdiction to be guilty of any charge listed in such statement, the recipient will cease to be eligible for benefits pursuant to this part and must pay with interest any taxes for which an abatement was claimed pursuant to this part.
e. Notice of completion.
(1) The applicant must file the notice of completion with the department within 120 days of the taxable status date after completion of construction. Abatement benefits will not be granted until the applicant files the notice of completion. If the notice of completion is not filed within such 120 day period, abatement benefits will not be granted until such notice is filed, and the department may delay the granting of such benefits, at the departments discretion, to investigate the reason for the late filing. Except as allowed by Paragraph (2) of this subdivision, the notice of completion must be submitted electronically in the format required by the department on the department's website, and in accordance with the instructions for submission of such notices of completion described on the website.
(2) Request for waiver of electronic filing requirement. The Commissioner may, for good cause, waive the requirement that the notice of completion be filed electronically. A request for waiver of the electronic filing requirement must be made in writing no later than 30 days prior to the deadline for filing a notice of completion. Any filing in paper format must be filed with the Department, at such address as may be designated by the department.
(3) The notice of completion must contain certification by a New York State licensed engineer or architect, or general contractor that the narrative description provided in the final application for Certificate of Eligibility, as last amended, is an accurate and complete description of the completed project; and a final certificate of occupancy.
(4) The notice of completion must include a detailed itemized statement of the cost of construction. This statement must be certified by a certified public accountant, unless the project cost is less than $2,500,000 in which case the statement may be certified by the applicant.
(5) All applications must be submitted to the address set forth on the applicable forms.
f. Fees. The filings required by this section must be accompanied by the following fees:
(1) Preliminary application filing: $150
(2) Final application filing: $500
(3) Notice of Completion filing: $1,000
None of the filings listed above will be processed until the applicable fee is paid. All fees must be paid in a form acceptable to the Department.
(Added City Record 2/10/2017, eff. 3/12/2017)
a. First building permit. For purposes of these rules, the first building permit is the permit that would allow the construction work that is the subject of the ICAP application to proceed, even though:
(i) such permit was granted before submission of completed plans and specifications for the entire building; or
(ii) such permit shall have expired by limitation of time or otherwise become invalid; or
(iii) another permit is issued for the same project on the basis of same or similar plans, subject to the provisions of 19 RCNY § 36-05(a).
c. A demolition permit will not be considered to be a first building permit, except as set forth in 19 RCNY § 36-06(d).
(Added City Record 2/10/2017, eff. 3/12/2017)
a. A project will be deemed a new project if one of the following conditions applies:
(1) a building permit was previously issued for the project and an applicant has shown that there is a change in the project for which a new building permit is issued which meets at least one of the following criteria:
(i) change in the total estimated cost of the project of at least 10 percent as certified by the applicant; or
(ii) change in the total floor area of the project of at least 10 percent; or
(iii) change in use.
For purposes of the requirements of filing a preliminary application pursuant to 19 RCNY § 36-03(b), the previously issued building permit will be deemed to be the first building permit for a project that meets the requirements specified in this paragraph but does not meet the requirements specified in Paragraph (2) of this subdivision.
(2) a building permit was previously issued for the project and an applicant has shown that there is a change in the project which meets at least one of the following criteria:
(i) the current project will require an estimated expenditure at least twice as great as the project for which a building permit was previously issued, where the estimated expenditures of the project for which a building permit was previously issued and of the current project are each measured as if construction commenced on the date of each such project's preliminary application as certified by the applicant; or
(ii) the current project will enclose floor area to be used for industrial or commercial purposes that is at least twice as great as the floor are of the project for which the prior permit was issued.
For purposes of the requirements of filing a preliminary application pursuant to 19 RCNY § 36-03(b), a new building permit will be deemed to be the first building permit for a project that meets the requirements specified in this paragraph.
(3) the application for the project is made either:
(i) more than four years after issuance of the building permit for the prior completed project; or
(ii) for a new project in a discrete, separate part of the building than the project that was the subject of the prior building permit.
(4) the project consists of alteration work that is not specified in a previously issued building permit or associated plan and for which a preliminary application was not previously filed.
b. A project will be deemed abandoned where the applicant establishes that either (i) construction work was commenced by an applicant and has ceased for at least two continuous years at the time a preliminary application is filed for the new project or (ii) that construction work was not commenced pursuant to the previously issued building permit and at least two years have passed between the issuance of such previously issued building permit and the time a preliminary application is filed for the project.
For purposes of the requirements of filing a preliminary application pursuant to 19 RCNY § 36-03(b), a subsequent building permit will be deemed to be the first building permit for a project that meets the requirements specified in this paragraph.
(Added City Record 2/10/2017, eff. 3/12/2017)
a. For purposes of determining the minimum required expenditure, the abatement base and all other purposes, construction work will be eligible for tax abatement benefits under this program if the work is:
(1) A permanent capital improvement to real property with a useful life of at least three years;
(2) Described or integrally related to work described in the approved plans or narrative description submitted as part of the application;
(3) Performed during the construction period which is five years after issuance of the first building permit, or if no permit was required, after the commencement of construction; and
(4) Not rendered ineligible by any provision of law or these rules, or by any agreement made as part of the application.
b. Renovations. Renovations that are eligible construction work for abatement benefits include, but are not limited to, the following, provided that such renovations are deemed to enhance the value of the property:
(1) Renovations that increase the square footage or cubic content of an existing building; or
(2) Modernization of core facilities including:
(i) Upgrading of electrical and plumbing systems;
(ii) Installation of new elevators and elevator banks;
(iii) Renovation or new installation of the exterior of a structure;
(iv) Major upgrading of lobby space;
(v) Reconfiguration of multi-tenant floor space to single tenant space;
(vi) Installation of central HVAC systems;
(vii) Major abatement of asbestos contamination;
(viii) Conversion of obsolete office space into functional space; or
(ix) Major conversion of a building's use involving structural changes.
c. Work not deemed to be eligible construction work. Construction work that is not eligible for tax abatement benefits pursuant to this section includes:
(1) Ordinary repairs, replacements or redecoration;
(2) Placement of personal property that remains personal property;
(3) Extension of streets, sewers, water or utility systems to a site not provided with such services; or
(4) Installation of satellite dishes, billboards, or cellular and microwave antennae.
d. Earthwork or partial demolition. Earthwork or partial demolition will be included in the construction work on a project if the following two conditions are met:
(1) the earthwork or partial demolition is integrally related to the other construction work on the project and is commenced not more than one year after the date that a preliminary application was filed; and
(2) the applicant requests inclusion of the earthwork or partial demolition in the preliminary application or a subsequent notice filed at least 15 business days before the commencement of the earthwork or partial demolition and before a permit for the earthwork or partial demolition is issued.
e. In the case of an abandoned project, only construction work that is the subject of a newly issued or renewal permit will be eligible for abatement benefits. Eligible construction for an abandoned project will qualify for benefits only if it is the subject of a preliminary application filed prior to the date on which the new or renewal permit was issued.
f. Construction work that is part of a project which is the subject of an approved application may not be considered eligible construction work for a future application for tax abatement benefits for the same property, building or structure under this chapter.
g. (1) No ICAP benefits will be granted for residential construction work, or for work on a structure or building where 20 percent or more of the rentable square footage of such property is or will be dedicated to residential purposes, provided however that where less than 5 percent of a property's rentable square footage is or will be dedicated to residential purposes, that use will be considered negligible and will not be considered in determining ICAP benefits.
(2) Notwithstanding Paragraph (1) of this subdivision, where a building or structure is owned in condominium form, and an application for benefits under this chapter includes more than one property in the same condominium, then for purposes of this paragraph, the 5 percent and 20 percent of the rentable square footage shall be determined based upon the aggregate usage of all such properties.
h. Notwithstanding the foregoing, for purposes of determining whether a project is completed within the time required to secure the inflation protection benefits described in 19 RCNY § 36-10(l), eligible construction work may include construction work done more than four years, but not more than five years, from the date of the issuance of the first building permit or from the start of construction if no permit was required.
(Added City Record 2/10/2017, eff. 3/12/2017)
a. The minimum required expenditure is based on a percentage of the property's final taxable assessed value, without regard to any exemptions, for the tax year with a taxable status date immediately preceding the issuance of the first building permit, or if no permit was required, the commencement of construction. For commercial construction work the minimum required expenditure is 30 percent. 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 additional industrial construction abatement set forth in 19 RCNY § 36-11, the minimum required expenditure is 40 percent.
b. Eligible expenditures. Expenditures include but are not limited to those made for:
(1) construction contracts;
(2) materials, labor, equipment rental, insurance, permit fees and other direct expenses of construction;
(3) installation of partitions and other tenant work by or for the tenant or occupant of new or substantially renovated space;
(4) architectural, engineering, construction management, legal, accounting and other professional services rendered in connection with the construction work to the extent that the total of all such fees do not exceed 10 percent of the expenses incurred for direct construction costs;
(5) site preparation, such as the erection of partitions, fences, barricades, scaffolding, temporary walkways, removal of debris or any similar work allocable to the project; and
(6) fees for connection to existing sewer, water or utility lines.
c. Ineligible expenditures. The following are ineligible expenditures:
(1) the costs of selecting or acquiring the site;
(2) the costs of determining the feasibility of the project;
(3) the costs of moving or installing machinery or equipment, except the cost of installing equipment that is real property and installed as part of the project;
(4) charges to any reserve, contingency or sinking fund;
(5) the costs of earthwork or demolition except as provided in 19 RCNY § 36-06(d);
(6) the costs or payments for the extension of streets, sewers, water lines or other public utilities to a site not provided with these services; and
(7) the cost or payments associated with vacating the site or existing buildings such as terminating existing leases or tenancies.
d. Expenditures for construction work for mixed use properties related to the common areas and systems of such property will be allocated, if applicable, between the residential, nonresidential and retail portions of the property based on a pro rata square footage basis.
e. No later than 60 days after the minimum required expenditure must be made – four years from the date of the first building permit, or from the start of construction if no permit was required – the applicant must submit to the department a certified statement that the applicant has made the minimum required expenditure as required by this chapter.
(Added City Record 2/10/2017, eff. 3/12/2017)
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