REPORT: 421-a A PRODUCT OF DEVELOPER CASH

 


According to a report released today by the Met Council on Housing, the 421-a tax giveaway was the product of Albany’s dysfunctional culture, which allows virtually unlimited cash from wealthy real estate developers.

Information from the report was used in a New York Daily News article printed today. You can view the full report HERE.

Key Findings:

·        Combined, developers of four of the five luxury buildings gave at least $440,962 to PACs, state offices, and political par­ties in 2012 alone. (After an exhaustive search, we were not able to obtain data for the developer of the fifth building.)

·        Governor Cuomo, who had to sign the 421-a legislation, re­ceived $150,000 from the four developers in 2012. He was the biggest recipient of cash from these developers last year.

·        Contributions from Extell Development Company and its princi­pals, owners of One57, accounted for $229,262 of the 2012 total. Extell has given a whopping $771,436 to state committees and campaigns since 2005, spent $74,500 lobbying New York City on One57 alone and spent tens of thousands of dollars more lobbying the city and state to get new permits for its crane, among other issues.

·        Contributions to party committees, which benefit the most powerful legislators who control the movement of legislation, were also sizable: Republican Party committees received $53,000 and Democratic Party committees received $34,000 from the four developers in 2012.


·        Overall, these four companies gave more than $1.5 million ($1,531,531) to state elected officials, political parties and real-estate PACs between 2008 and 2012.


Here's the Daily News article:

DAILY NEWS: LUXURY DEVELOPERS GIVE TO POLS, GET MASSIVE TAX BREAKS

NY lawmakers mandate massive tax breaks for millionaires’ Manhattan apartments

Language quietly inserted into a bill that sailed through the state Legislature singled out five NYC developments to make them eligible for tax breaks that could cost the city tens of millions of dollars in property taxes, the Daily News has learned. Developers of four of the projects, their relatives and affiliated companies gave $1.5 million to various state campaign committees from 2008 to 2012.

BY DANIEL BEEKMAN NEW YORK DAILY NEWS

PUBLISHED: MONDAY, JUNE 17, 2013, 9:25 PM
UPDATED: TUESDAY, JUNE 18, 2013, 2:30 AM

 Swimming pool at One57

MARCHMADE

Besides the sparkling waters of this pool, millionaire tenants at One57 — near Central Park in New York — will get to swim in the massive tax savings they'll receive for buying the apartments, thanks to new state legislation.

The millionaires buying apartments in a soaring tower rising on 57th St. will get more than sweeping views of Central Park: They’ll also be eligible for massive city tax breaks.
So will the buyers of apartments in three other luxury Manhattan developments, and the builders of a fifth Manhattan high-rise, a rental.
Language quietly inserted into a bill that sailed through the state Legislature singled out the five developments to make them eligible for tax breaks — which could cost the city tens of millions of dollars in property taxes, the Daily News has learned.

The sponsor of the bill, Sen. Martin Golden (R-Brooklyn), defended the tax breaks, saying the projects would create jobs and boost the economy.
“These projects were ready to go,” he said.
But Golden could not say who selected the five projects for special treatment. “I’m not sure where they came from,” he said.
And the Assembly sponsor, Keith Wright (D-Manhattan), said he knew little about the tax breaks.
“These five properties — it was important that they benefit from the piece of legislation probably, and I don’t know why, because some of the folks in the Senate wanted them to be included.”
Funny how the awning of One57, a 75-story apartment tower in New York City being built by Extell Development Co., looks like a hand seeking a handout: thanks to a new bill passed by state lawmakers, Extell and similar developers will receive huge tax breaks. Critics argue the breaks are a stark example of why lawmakers should pass campaign finance reform.

MARCHMADE

Funny how the awning of One57, a 75-story apartment tower in New York City being built by Extell Development Co., looks like a hand seeking a handout: thanks to a new bill passed by state lawmakers, Extell and similar developers will receive huge tax breaks. Critics argue the breaks are a stark example of why lawmakers should pass campaign finance reform.

The developers of four of the projects, their relatives and affiliated companies gave $1.5 million to various state campaign committees during 2008-12 — including $440,962 last year, records show.
The contributions included $53,000 to the state Senate Republican campaign treasury, $34,000 to the war chest of Assembly Democrats and $150,000 to the campaign of Gov. Cuomo, who signed the bill Jan. 30.
Critics argue the breaks are a stark example of why lawmakers should pass campaign finance reform this week.
“That real estate developers were able to win such a huge giveaway is a reflection of . . . just how broken the current campaign finance system is,” said Jaron Benjamin, president of the Metropolitan Council on Housing.

“The reason Albany lawmakers agreed to spend millions subsidizing luxury housing for the wealthy is clear: Developers who contributed to their campaigns . . . expected to be rewarded.”
Steven Spinola, president of the Real Estate Board of New York, said the tax breaks were deserved.
“Whenever anybody doesn’t like something, they make an argument that some quid pro quo was made. I totally reject the suggestion,” he said.
This unit at One57, a luxury apartment tower in New York City, is bright and sunny. Less clear, however, is how language was included in a bill that singled out this development and four others for massive tax breaks. 'I’m not sure where they came from,' said Sen. Martin Golden (R-Brooklyn), who nonetheless defended the breaks.

MARCHMADE

This unit at One57, a luxury apartment tower in New York City, is bright and sunny. Less clear, however, is how language was included in a bill that singled out this development and four others for massive tax breaks. 'I’m not sure where they came from,' said Sen. Martin Golden (R-Brooklyn), who nonetheless defended the breaks.

The language benefiting the five developments was slipped into a catch-all housing bill pushed by the Bloomberg administration that included extending tax breaks to hundreds of thousands of low- and middle-income homeowners.
The language made the five projects eligible for a controversial abatement program called 421-a, which grants tax relief for 10 or 20 years to buildings that set aside 20% of all units for affordable housing, or in some cases sponsor such housing off-site.
Bloomberg administration officials said they did not request the special provision.
State Sen. Liz Krueger voted for the bill but slammed the “carve-out” breaks for the five buildings.
“This is a perfect example of what goes wrong with the wheeling and dealing in the backrooms ofAlbany,” Krueger (D-Manhattan) said.
The provision made the projects eligible for breaks by waiving a zoning rule blocking them from the abatement program.
Spinola said the City Council in the past routinely waived the rule for all developments — but has not done so recently. Several of the five developers broke ground years ago on the assumption the Council would continue granting such abatements, he said.
But Councilwoman Gale Brewer (D-Manhattan) called the provision an “end run” around the Council. “Why did they go to Albany, and why did Albany not ask for (a vote) from the City Council? I think the answer is that the powers that be wanted to bury it in an omnibus bill.”
The developers must file with the city to claim their abatements.
Extell Development Co., which is building the 75-story tower on W. 57th St., One57, did not return a request for comment.