96 Wythe Street in Brooklyn, Image Credit: CityLand.

Court found that application was not filed within the statutory time period of one year. On January 27, 2016, the New York State Supreme Court denied a Brooklyn developer’s petition to reverse a Department of Finance decision to not grant a tax abatement. The Developer, 96 Wythe Acquisitions, filed the petition after the Department of Finance denied the application for the tax abatement because it was not filed within the mandatory one-year requirement. 96 Wythe Acquisition LLC filed plans with the NYC Department of Buildings back in April 2013 to construct a hotel in the Williamsburg section of Brooklyn.

After receiving permit approvals from the Department of Buildings, the Developer filed a preliminary application with the Department of Finance for a tax abatement on April 25, 2013. According to the NYC Department of Finance, these “exemptions lower the amount of tax you owe by reducing your property’s assessed value. Abatements reduce your taxes by applying credits to the amount of taxes you owe.” These tax abatements are intended to support new development, non-profits, religious institutions, public works, and environmental programs such as solar energy.

On April 29, 2013 Finance acknowledged the application in a letter containing a clause stating “The Final Application must be filed within one (1) year after the building permit is received….This Is a hard one (1) year deadline with no exceptions”.

The Developer filed its Final Application on July 24, 2014, claiming the first permit was issued on November 29, 2013; however, Finance denied the application asserting the application was filed past the one (1) year window. The initial building permit issued was dated May 30, 2013.

The Developer claimed the one (1) year window was unconstitutionally unclear in reference to what actually constitutes the “first building permit for construction work” that would begin the one (1) year clock.

Judge Kathy J. King denied the Developers petition against the Department of Finance citing it is “well-settled law that tax benefits and exemptions, such as an abatement, are narrowly construed in favor of the taxing authority”. Judge King further ruled the Developer failed to reach its burden to show the interpretation of the stature is unreasonable.

Despite not receiving the abatement, the developer has continued to move forward on the project, and it is anticipated to be completed later this year.

Matter of 96 Wythe Acquisition LLC v Jiha, 2016 NY Slip Op 26030 Decided on January 27, 2016 Supreme Court, Kings County King

By: Stephen Caracappa (Stephen is a student at New York Law School, Class of 2018).