2023 New York Laws › RPT - Real Property Tax › Article 4 - Exemptions › Title 2-F - Abatement of Tax Payments for Certain Industrial and Commercial Properties in a City of One Million or More Persons › 489-FFFFFF - Conversion of Property.

§ 489-ffffff. Conversion of property. 1. Conversion from commercial to
industrial   use.  Where  a  property  has  been  granted  benefits  for
commercial or renovation construction work, but such property is used as
industrial property before the benefits period  expires,  such  property
shall   continue  to  receive  benefits  for  commercial  or  renovation
construction work.
2. Conversion from industrial use to commercial use. Where a  property
has  been  granted benefits for industrial construction work, and where,
before the benefit period expires, less than seventy-five percent of the
total net square footage is used or held out for use  for  manufacturing
activities,  no  further benefits for industrial construction work shall
be provided except as provided in this subdivision. Taxes, together with
interest, shall become due and owing after such  date  of  the  use  for
purposes other than industrial, except as provided in this subdivision.
(a)  Any  applicant  whose  property  has been granted a tax abatement
under  this  title  for  industrial  construction  work  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  benefits  shall  continue  to  receive  an  abatement  for
industrial construction work.
(b) Any applicant whose property has been granted benefits under  this
title   for  industrial  construction  work  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 benefits shall, commencing with the date  of  conversion  to
commercial  property  and continuing until the expiration of the benefit
period for commercial construction work,  receive  any  abatement  which
such  applicant  would  have  received  in  the  corresponding  tax year
pursuant to the benefits granted for commercial construction work.
(c) Any applicant whose property has been granted benefits under  this
title  for industrial construction work in any area of the city on whose
property at least sixty-five percent of the net square footage continues
to be used or held  out  for  use  for  manufacturing  activities  after
conversion  to commercial property, shall not be required to pay the pro
rata share of tax for which an abatement was claimed during the tax year
in which such conversion occurred.
(d)  Where  the  property  is  receiving  the  additional   industrial
abatement pursuant to paragraph (e) of subdivision three of section four
hundred  eighty-nine-bbbbbb  of  this  title, such additional industrial
abatement  shall  cease  from  the  date  of  conversion  to  commercial
property.
3. Conversion to restricted use. Any applicant whose property has been
granted  benefits  for commercial, industrial or renovation construction
work, and who uses such property for any restricted  activity  prior  to
the  expiration  of  the  benefit period, shall cease to be eligible for
further abatement as of the date such property was first  used  for  any
restricted  activity.  Such  recipient of benefits that cease under this
subdivision shall pay with interest any taxes for which an abatement was
claimed after such date, including the pro rata share of tax  for  which
any  abatement  was  claimed  during  the  tax  year  in  which such use
occurred.
4. Conversion to residential use. (a) Any applicant whose property has
been  granted  benefits  for  commercial,   industrial   or   renovation
construction  work  and who, before the benefit period expires, uses the
property or a portion of the property  as  residential  property,  shall
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  twenty  percent or more of the rentable square footage of the
property is used as residential property, then the entire building shall
cease to be eligible for further abatement;
(ii) if less than twenty percent of the rentable square footage of the
property  is  used  as  residential  property, then that portion of such
property used as residential property shall cease  to  be  eligible  for
further abatement;
(iii)  notwithstanding subparagraph (ii) of this paragraph, where less
than five percent of a property's rentable square  footage  is  used  as
residential  property,  that  use will be considered de minimus and will
not be a basis for benefits to cease under this subdivision; and
(iv) such recipient of benefits  that  cease  under  this  subdivision
shall  pay,  with interest, any taxes for which an abatement was claimed
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 shall
continue for the commercial, industrial or renovation construction  work
for the portion of the property that continues to be used for commercial
purposes.
(b)  For  purposes  of  paragraph  (a) of this subdivision, "property"
means the real property contained by an individual tax lot.
(c)  Notwithstanding  paragraph  (b)  of  this  subdivision,  where  a
building  or  structure is owned in condominium form, and an application
for benefits under this title includes more than  one  property  in  the
same  condominium,  then  for  purposes  of  this  subdivision, the five
percent and twenty percent of  the  rentable  square  footage  shall  be
determined based on the aggregate usage of all such properties.
5.  Conversion  to  retail  use. (a) Where a property has been granted
benefits for industrial  or  commercial  construction  work  in  special
commercial  abatement areas on buildings where not more than ten percent
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 ten percent or more of the building  or  structure  is
used for retail purposes, the department shall recalculate the abatement
upon conversion as provided in subdivision six of this section.
(b)  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 five percent of the building or structure is used  for
retail  purposes,  the  department  shall recalculate the abatement upon
conversion as provided in subdivision six of this section.
5-a. Conversion of use by peaking units. Any applicant whose  property
has  been  granted benefits under this title for industrial construction
work as a peaking unit and who converts such property in any tax year to
a use that no longer qualifies it as a peaking unit, or  who  uses  such
property in a manner inconsistent with the definition of a peaking unit,
shall be ineligible for abatement benefits during any such tax year. Any
such  recipient  of  benefits shall pay with interest taxes for which an
abatement was claimed during any portion of such tax year.
6. 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  title  to  reflect  the  benefit  for which the current use is
eligible under this title and rules  that  may  be  promulgated  by  the
department.
7. The burden shall at all times be on the recipient to demonstrate by
clear  and  convincing  evidence that property subject to benefits under

this title is used as stated in the preliminary and  final  applications
for benefits filed by the recipient with the department.