The Real Deal New York

Buyers at Extell’s One57 set to receive a 94% tax break

State law granted developer special use of 421a tax abatement

July 12, 2013 12:30PM

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From left: Extell President Gary Barnett and One57

From left: Extell President Gary Barnett and One57

At Extell Development’s white-glove One57 condominium development — where asking prices have reached an astronomical $10,500 per square foot — buyers are set to receive a 94 percent discount on annual real estate taxes, the New York Times reported, citing a review of the offering plans of some of the city’s priciest new projects.

At the Alexico Group’s 56 Leonard Street, for example, the tax break is 76 percent. Because the developer laid the foundation before a 2008 deadline, they were eligible to apply for a 10-year tax abatement under the 421a program. This means that the buyer of a penthouse that recently went into contract for $47 million will pay just $33,000 per year for the first two years in taxes, which will progressively increase through the remaining eight years.

In the case of One57, however, its location on West 57th Street would normally make it ineligible for the abatement. But in January, the state legislature passed a housing bill that included an exemption for the project, as well as other high-end residential projects such as Larry Silverstein’s 30 Park Place and Joseph Sitt’s 516 Fifth Avenue.

If the city gives a nod to the abatement, the buyer of One57’s top penthouse – which is under contract for north of $90 million – will pay an annual tax bill of under $18,000, a sum more typical for the buyer of a $3 million apartment. [NYT]  – Hiten Samtani

  • yobaby

    Got to love the Bloomberg administration. He then makes it up by raising the taxes on everyone else. Hood Robin.

    • BULLSHIT

      unbelievable!!!! how is this possible?!?!?! wtf?!?!?!

  • http://www.ErikRussellHomes.com/ Erik

    Must be nice to be rich…

  • JohnACritic

    In a few words, disgusting, insulting, tragic, ridiculous. What is going on here when these kind of tax abatements are given. Someone should oppose this in court.

  • Common Sense

    I am a real estate owner and developer. I am also a free market capitalist. Let’s be clear here – these abatements are disgusting. They are cronyism at it’s worst. They give our entire industry a black eye. Shame on REBNY. Shame on us. We look like buffoons. These give aways are indefensible.

  • Confidence

    And why, then, are the taxes on my 1052 square foot condo, built in 1986, approximately $15,000 a year?

  • Carolyn Joy

    Unfair and criminal….This city of ours could use the revenue that the 421a is removing from the books! The new real estate owners who live in luxury apartments subsidized by tax abatements don’t necessarily need good public schools and safe and efficient mass transit. This type of adjustment runs counter to the evolution and fair development of NYC as a place that all families and visitors can take advantage of.

  • Proper

    i wonder if the special risk section of the condo plan indicated that the developer used extensive lobbying and political connections to obtain the abatement and thus it is possible that there will be a reversal of the 421a benefit for this project. what were the other 5 projects that got this carve out 421a? who was the politician in charge, is he getting any blow back for pushing this bill?

  • timrei

    isn’t this typical though? not just here in nyc, or in real estate, but in everything. the poor, working, and middle class always gets the worst of it…

  • concerned citizen

    It’s interesting that everyone is complaining about Extell’s benefits on One57. But where are the complaint’s about the benefits Extell got or will get with regard to its commercial condo on 47th Street, the IGT. No other commercial developer ever got as many inside deals as Extell does. Smells fishy at best.

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