Move is on to ax tax break
City loses millions, luxe bldgs. gain, say housing advocates
BY ELIZABETH HAYS
DAILY NEWS STAFF WRITER
The city is losing millions of dollars a year in tax breaks for
luxury condos in some of Brooklyn's choicest neighborhoods - and
housing advocates want it to stop.
A high-end building going up in DUMBO called Beacon Tower - where a
one-bedroom apartment is listed at more than $1 million - will cost
the city nearly $10 million in lost taxes over the next 15 years,
advocates estimate.
In nearby Brooklyn Heights, a 34-story luxury rental tower built in
2000 on sought-after Montague St. will benefit by more than $17
million during its 15-year deal, they said.
"It's not fair," said Lloyd Douglas, 60, outside 180 Montague St.,
where rents run from studios at $1,900 to three bedrooms at
$5,500. "The big guys get away with it; but what about the little
guys?"
The tax breaks, known as 421a, were started in the 1970s to
encourage development when many people were fleeing the city.
ACORN and other housing groups charge the tax breaks now subsidize
luxury development in hot areas that would be built in anyway.
"The city is forcing taxpayers to pay for the privilege of being
priced out of their own community by using their tax dollars to
subsidize the development of luxury housing," said ACORN executive
director Bertha Lewis.
ACORN and a citywide coalition of housing groups will launch a
campaign this week to push for reform.
They want developers who get the breaks to set aside a portion of
the apartments for low-income people - similar to reforms already
enacted in Manhattan.
Mayor Bloomberg has agreed the 30-year-old tax program needs to be
updated and convened a task force in February to study the issue.
"The program needs to be brought into the 21st century, to reflect
contemporary market conditions," said Housing Preservation and
Development Department spokesman Neill Coleman.
ACORN is also pressuring Magic Johnson to voluntarily include low-
income units at his luxury conversion of the Williamsburgh Savings
Bank - especially since his development group, Canyon-Johnson Urban
Funds, claims to foster development in "underserved" areas.
Another Johnson project at 145 Park Place off Flatbush Ave. will get
more than $400,000 a year in tax breaks, advocates estimated. Canyon-
Johnson officials did not return calls for comment.
Many of the buildings in hot areas would likely have been built
anyway, said Corcoran real estate senior managing director Steve
Rutter. But reforming the tax breaks now could undermine the market.
"While the market is still very strong, it is definitely a little
bit flatter than it was a few months ago," he said. "This could
disrupt the market at a time when it is a little more anxious."
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