The New York City Council Subcommittee on Landmarks, Public Siting and Dispositions held a public hearing on a request from the Department of Housing Preservation and Development to grant a 40-year Article 11 property tax exemption, retroactive to April 1, 2018, for three co-op buildings at 2149–2153 Pacific Street in the Ocean Hill neighborhood of Brooklyn. The exemption is proposed to facilitate a rehabilitation funded in part by a roughly $2,000,000 HPD loan, panelists said.

The request, described by HPD during the hearing as an Article 11 application under the Private Housing Finance Law (Section 577), would replace an existing partial tax exemption set to expire in 2032 and support repairs to a three‑building HDFC co‑op with about 24 units. Jacob Kotler, HPD project manager, told the subcommittee that the buildings have suffered deferred maintenance and operating shortfalls and that HPD is proposing a regulatory agreement, reserve requirements and resale restrictions to preserve affordability.

Why it matters: The application would make the exemption retroactive and extend tax relief for decades, a move some council members said could set a precedent for long-term tax abatements for privately owned affordable housing. Councilmember Mili (representing the district where the buildings are located) said the length of the exemption is a central concern. "This city has taken people's homes for one year’s taxes, and now we're going to give someone 40 years," Mili said during the hearing. She urged consideration of a shorter term, saying "25 years would be good" and that she would not support 40 years unless shortened.

HPD presentation and building needs: Kotler said the city took title to the property in 1988 through a foreclosure action and that the buildings were conveyed to an HDFC in 1992. He reported there are 24 units total: 20 occupied by shareholders, three currently leased to rental tenants, and one vacant unit. HPD staff said the buildings last saw a moderate rehabilitation in 1993 and that arrears began accruing around 2018; arrears were reported at roughly $322,000. Identified capital needs include roof and window replacement, boiler upgrades, plumbing and storm-line repairs, and replacement of electrical breakers/panels.

Kotler described the project's financial model and said the co-op has operated at a loss, with income below expenses. HPD presented a plan that assumes maintenance (monthly) increases phased over three years to yield a roughly 63% total increase (described at the hearing as approximately 25% in year one, 18% in year two and 11% in year three) to bring year‑one post‑rehab cash flow into a positive position. Kotler said the building’s current rents are unusually low relative to market — HPD gave representative averages during the presentation as $595 for a one‑bedroom, $581 for a two‑bedroom and $600 for a three‑bedroom — and estimated those rents correspond to about 20% AMI for current occupants relative to a neighborhood median near 90% AMI. HPD said regulatory terms would cap future sale prices and income limits (HPD cited a 120% AMI maximum for income restrictions and noted sale price calculations tied to 100% AMI in the regulatory formula). Kotler also said HPD’s estimates place post‑increase household incomes around 32% AMI for current shareholders.

Resident and manager testimony: Wayne Finley, president of Bluefin Development and the property manager/rehab consultant for the co-op, said his firm has worked with the shareholders to prepare a rehabilitation plan and financing and that an Article 11 exemption is the final piece needed to close on the loan. "The shareholders of these buildings have achieved the dream of homeownership and do their very best to keep the property affordable and well maintained," Finley said. Two residents who identified themselves as a board member and acting board president described longstanding community efforts to preserve affordability and asked the council to approve the exemption so repairs can proceed.

Council questions and concerns: Members pressed HPD on selection criteria for programs and why this property was chosen for the Article 11 pathway. Councilmember Mili repeatedly questioned why a 40‑year exemption was being requested and whether the city was treating this applicant differently than small homeowners who cannot recover unpaid taxes. HPD responded that the agency operates an open multifamily rehabilitation program, accepts applications from many co‑ops, and that the agency has approximately 70 co‑op projects in its pipeline. HPD staff said notices about the project and any closing would be sent to residents in advance and that tenant protection plans and DOB requirements would be followed during construction; HPD also said no involuntary relocation is expected for the scope of repairs presented.

Outcome and next steps: The subcommittee closed the public hearing and laid the item over for a later decision. HPD staff agreed to follow up with council offices to confirm the status of the reported vacant unit and to send notices to residents prior to closing. No formal vote on the Article 11 exemption occurred at the hearing.

Votes at a glance: No votes were taken; the item was laid over for future consideration.