BILL NUMBER: S9919A
SPONSOR: SALAZAR
 
TITLE OF BILL:
An act to amend the real property tax law, in relation to enacting the
"New York city arts space act"
 
PURPOSE OR GENERAL IDEA OF BILL:
To provide tax incentives for the development of affordable arts space
in New York City in buildings being converted from commercial to resi-
dential space under the affordable housing from commercial conversions
tax incentive benefits program (the "AHCC Program").
 
SUMMARY OF PROVISIONS:
Section 1 states that the title of the act is the "New York city arts
space act".
Section 2 amends Section 467-m of the real property tax law, which
establishes am Affordable Housing from Commercial Conversions (AHC C)
program providing a real property tax incentive for such conversions, by
adding a new subdivision 4-a, which defines "affordable arts space" as
space rented or leased by an arts organization for use as studio,
rehearsal, performance space, or arts or cultural programming open to
the general public in a building participating in the AHCC Program at no
more than twenty dollars per square foot per year adjusted at no more
than three percent annually.
Eligible arts organizations are defined as nonprofit organizations
either incorporated in or registered to do business in New York State,
with a location in New York State and recognized as tax-exempt under the
IRC section as a 501(c)3. Arts organizations may sublease with organiza-
tions that don't have non-profit status but do business and are located
in New York State.
Property owners that meet the requirements for affordable arts space
will receive an enhanced property tax exemption above the AHCC Program
benefits on a sliding scale based on how much the rent is discounted. A
deeper tax exemption shall be provided for property owners that also
provide a tenant improvement allowance in addition to the discounted
rent.
The arts space shall meet the requirements for "affordable arts space"
for the period of the AHCC benefit.
Section 3 makes a technical amendment to section 5 of the real property
tax law.
Section 4 sets the effective date.
 
JUSTIFICATION:
New York City has long been recognized both nationally and interna-
tionally as a center for arts and culture. From renowned institutions
like Lincoln Center and the Metropolitan Museum to small local theatres
and art galleries, the diversity and vibrancy of its artistic life is
unparalleled.
New York's public and private investment in the arts is also the most
robust in the nation. New York's arts and culture sector is a key part
of the City's economy accounting for thousands of jobs and billions in
economic activity. For this sector to continue to thrive and New York to
maintain its premier position in the arts and culture world, the issue
of affordability must be addressed.
The City's 2019 Cultural Action Plan cites the need to support afforda-
ble living, working, and presentation spaces for artists and th e arts
as a top priority. Consistent with this, the City's 2019 "Small Theater
Study" found that the cost of real estate poses a major challenge for
small theaters. This legislation seeks to help address the issue of
affordability by leveraging the opportunity affor ded by the conversion
of commercial buildings to primarily residential use. The State's
Fiscal Year 2024-25 budget included provisions for an "Affordable Hous-
ing Commercial Conversion" program for New York City that would provide
property tax benefits to building owners/de velopers in exchange for
affordable housing. This bill builds on this policy initiative by
providing an option for property owners to obtain deeper tax benefits in
exchange for providing affordable arts space. Such space would fall
under the allowance the existing legislation has for nonresidential
space.
 
AMENDED BILL:
The "A" print of this bill clarifies the definition of "affordable arts
space."
 
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
 
FISCALPLICATIONS:
TBD
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S9919: 467-m real property tax law, 467-m(5) real property tax law
S9919A: 467-m real property tax law, 467-m(5) real property tax law