Well, 421-a is likely to lapse. But it may not be buried. That's a big question for Atlantic Yards/Pacific Park.

Why a Lucrative Tax Break for Developers Is Likely to Die in Albany is today's New York Times headline about the unwillingness of state legislators to renew the 421-a tax break--actually, to replace it with Gov. Kathy Hochul's proposed 485-w legislation, which would trade tax benefits for a percentage of affordable housing less costly than currently enabled.

However, as noted, it may not be dead:

The current tax break essentially freezes property taxes on new projects, including luxury developments, for up to 30 years, only requiring owners to pay the property taxes that were owed on the site before construction. Lawmakers have allowed the subsidy to expire in the past, only to revive it soon after.

While "there were no immediate signs that could happen this time," things could change after the 2022 elections.

Crucial to the project

The tax break, or some form thereof, is crucial to the development of future Atlantic Yards/Pacific Park towers. 

That's why developer Greenland Forest City Partners is expected to get a foundation in the ground for B5, 700 Atlantic Avenue, by June 15, the deadline to qualify for the current version of 421-a, which trades tax benefits for 30% income-targeted "affordable" units, for middle-income households earning up to 130% of Area Median Income. That means units that are fairly close to market-rate, depending on the neighborhood.

It's also why Greenland USA's Scott Solish was very interested in talking with state Sen. Jabari Brisport, an avowed opponent of 421-a, as indicated at a meeting earlier this month.

Solish called 421-a "a critical piece of developing mixed-income, multifamily affordable housing," so if the program lapses, is not renewed, or the replacement is radically different, the developers have to reevaluate.

In other words, plans for the rest of the project remain fuzzy until the finances are clear.

From Politico

Politico today published Inside the frenzied negotiations to salvage a controversial real estate tax break, finding fingers pointed at Mayor Eric Adams, Gov. Hochul, the less powerful than previous Real Estate Board of New York (REBNY), a lack of Senate leadership, and a legislature tilting ever more to the left, facing a re-election year..

Another problem: changing legislative cycles. To quote Politico:

Until 2015, the expiration of 421-a coincided with the sunsetting of rent regulations — a setup that offered bargaining chips to state lawmakers on both sides of the aisle and provided political cover to justify their votes.

This year, advocates tried to couple it with good cause eviction--extending rent protections to many more renters--which was a no-go for industry.

The long-term solution, in the absence of the tax break, is property tax reform. But that hasn't moved forward, either. So that suggests a future push to reinstate some kind of tax break.