Stroock & Stroock & Lavan LLP, New York, N.Y. (Daniel A. Ross and David M. Cheifetz of counsel), for appellant.
Michael A. Cardozo, Corporation Counsel, New York, N.Y. (Frances J. Henn, Vincent D'Orazio, and Joshua M. Wolf of counsel), for respondents.
RANDALL T. ENG, P.J., PETER B. SKELOS, PLUMMER E. LOTT, JEFFREY A. COHEN, JJ.
DECISION & ORDER
Motion by the appellant to amend an opinion and order of this Court dated October 3, 2012, which determined an appeal from an order of the Supreme Court, Kings County, dated February 18, 2011. Cross motion by the respondents to amend the same opinion and order. Justice Lott has been substituted for former Justice Belen (see 22 NYCRR 670.1[c]).
Upon the papers filed in support of the motion and the cross motion and the papers filed in opposition thereto, it is
ORDERED that the motion and the cross motion are granted, and the opinion and order of this Court dated October 3, 2012 (Trump Vil. Section 3, Inc., v City of New York, 100 A.D.3d 170), is recalled and vacated, and the following opinion and order is substituted therefor:
APPEAL by the plaintiff, in an action, inter alia, for a judgment declaring that the real property transfer tax imposed by Tax Law § 1201(b) and Administrative Code of City of New York § 11-2102(a) was improperly imposed upon it, as limited by its brief, from so much of an order of the Supreme Court (Richard Velasquez, J.), dated February 18, 2011, and entered in Kings County, as denied that branch of its cross motion which was for summary judgment declaring that the real property transfer tax was improperly imposed upon it, and, upon searching the record, awarded summary judgment to the defendants declaring that the real property transfer tax was properly imposed upon it.
On this appeal, we are asked to determine whether a taxable transfer occurs under Tax Law § 1201(b) and Administrative Code of the City of New York § 11-2102(a) when a residential housing cooperative corporation amends its certificate of incorporation as a part of its voluntary dissolution, reconstitution, and termination of participation in the Mitchell-Lama [*2]housing program (see Private Housing Finance Law § 10 et seq.)fnref='1'>. We note that the issue of whether or not this voluntary dissolution, reconstitution, and termination of participation in the Mitchell-Lama housing program constituted a taxable transfer pursuant to Administrative Code of the City of New York § 11-2102(b) or (c) was not raised before the Supreme Court and, accordingly, is not properly before this Court (see CPLR 5501). Indeed, on its motion before the Supreme Court, the City of New York only argued that it was authorized to impose a tax pursuant Administrative Code of the City of New York § 11-2102(a). .
For the reasons set forth below, we hold that because there is no transfer or conveyance of any real property or an interest in real property under those circumstances, no taxable event occurs.
The plaintiff, Trump Village Section 3, Inc. (hereinafter Trump Village), owns a residential housing cooperative complex consisting of three 23-story buildings located in Brooklyn. Upon its incorporation in 1961, Trump Village took title to the underlying real property that it now owns pursuant to the Mitchell-Lama housing program.
The Mitchell-Lama housing program was established in 1955 as a New York State affordable housing program. The program took its name from its legislative sponsors, former Manhattan State Senator MacNeil Mitchell and former Brooklyn Assemblyman Alfred Lama. It was created to encourage and facilitate the construction and continued operation of affordable rental and cooperative housing in the State of New York for moderate- and middle-income families. Approximately 269 Mitchell-Lama developments, representing about 105, 000 apartments, were built in New York State under the program, and many consider it one of the most successful affordable housing programs of its kind.
As a Mitchell-Lama cooperative housing corporation, Trump Village enjoyed certain government benefits, including a low-interest government mortgage loan and substantial exemptions from municipal real property taxation. In return for these benefits, and as required by statute, various restrictions encumbered the cooperative corporation's tenant-shareholders, including restrictions on resale to third parties. Trump Village remained in the Mitchell-Lama program and, thus, continued to be governed by the Mitchell-Lama laws ...