The developer of a major housing project on the Williamsburg waterfront will score a lucrative tax break worth millions of dollars thanks to a measure tucked into the New York state budget on Wednesday.<\/p>\n
Gov. Kathy Hochul and state lawmakers agreed to include an extension of an expired tax break program to cover the sprawling River Ring housing complex in Brooklyn in the estimated $268 billion budget\u2019s housing bill, which the state Legislature is set to approve later in the day.<\/p>\n
The deal makes the project from influential Brooklyn developer Two Trees eligible for the tax break program known as 421a, which waives the bulk of a development\u2019s property tax bill in exchange for some affordable housing commitments.<\/p>\n
Two Trees will miss a 2031 deadline to complete its project and still qualify for the tax break. It needs the extension to make the project financially feasible, company spokesperson David Lombino said.<\/p>\n
\u201cWe\u2019re pleased that the River Ring project now has a clear path to completion,\u201d Lombino said in a statement.<\/p>\n
The 421a program requires the city finance department to tax properties based on their assessed value before development, leading to millions of dollars in savings for owners. For two nearby buildings at 420 Kent Ave.<\/a> and 1 North Fourth Place<\/a>, the differences in value are roughly $54 million each, city records show.<\/p>\n The City Council approved the River Ring project<\/a> in 2021. The site, located between North 1st and North 3rd Streets along River Street, will include a pair of high-rise apartment buildings reaching 710 and 560 feet that tower above a circular boardwalk, beach and waterfront park.<\/p>\n About 30% of the proposed 1,200 apartments will be priced for low- and middle-income renters, Lombino said.<\/p>\n The first tower will likely not be completed until 2033, he said.<\/p>\n The project will also feature a new YMCA and Two Trees has agreed to provide a $31 million grant to build senior housing elsewhere in northern Brooklyn.<\/p>\n Politico<\/a> first reported the budget carveout for Two Trees.<\/p>\n The Legislature and Hochul allowed the 421a program to expire in June 2022 amid criticism from left-leaning lawmakers and advocates<\/a> who saw it as a giveaway to developers that didn\u2019t meaningfully add affordable housing and caused New York City to forgo at least $1 billion in tax revenue a year. They replaced it with a new tax-break program in 2024<\/a>.<\/p>\n But they allowed projects that were already under construction to claim the prior, more lucrative 421a incentive so long as they\u2019re completed before 2031. The language in this year\u2019s budget removes that deadline for projects in a way that is narrowly tailored to apply to the River Ring development.<\/p>\n \u201cIn order for the project to go, they didn\u2019t think they could make it in the time, so they asked us for an extension,\u201d said Assembly Speaker Carl Heastie, a Bronx Democrat. \u201cAn agreement was worked out between the developer, the YMCA was involved and the local [assembly]member supported it.\u201d<\/p>\n Assemblymember Emily Gallagher, a Democrat whose district includes Williamsburg, said Two Trees asked her to support the program extension after delays ensured they would miss the initial deadline. Gallagher said she then went to labor unions for their view on the proposal and Two Trees agreed to pay the workers higher-than-average wages.<\/p>\n \u201cI decided to sign off on it because there was a lot of collaboration between labor and the developer,\u201d she said.<\/p>\n