Landlord Entitled to 421-a Tax Benefits

Facts: Landlord applied to HPD for partial tax exemption under Real Property Tax Law section 421-a. Under the 421-a program, landlord could receive tax benefits in exchange for charging rent-stabilized rents to tenants in a newly constructed building. To qualify, the building site had to be either vacant, under-utilized, or used already in violation of applicable zoning regulations. HPD denied landlord's application, claiming that landlord's building wasn't eligible for 421-a benefits. HPD found that the five-story commercial and retail building already on the site conformed with zoning for that area. Landlord appealed. Court: Landlord wins. HPD admitted that the prior commercial building had four parking spaces and a loading berth, which weren't routinely allowed in that zoning area. But HPD argued that this was an insignificant non-conforming use since it only took up a small area of the building. The court found that it didn't matter how much of the land had been improved with a non-conforming use. By law, since there had been a prior non-conforming use of the property, landlord could get 421-a benefits for new residential construction.

Lincoln West Partners v. HPD: NYLJ, p. 29, col. 6 (10/1/98) (Sup. Ct. NY; Tejada, J)