New York CIty Council Member Ben Kallos

New York City Seeking “Right of First Refusal” on Large Real Estate Transfers to Build Schools, Firehouses, and Vital Municipal Infrastructure Under Legislation by Council Member Kallos

New York, NY – Legislation introduced today (Int 2363) by Council Member Kallos would ask real estate developers to inform the city when they are transferring property on lots over 20,000 square feet. City agencies would then be required to respond within a month with notice to the public so they can get their services built.
Even with the pandemic, New York City’s population is still growing as essential city services struggle to keep up due to difficulty finding a place to build in a city that’s largely already built.
Vital infrastructure is necessary to support a growing city where schools are overcrowded and firehouses struggle to cover more and more residents.
In 2018, Council Member Ben Kallos secured $92 million to build 824 new school seats by 2024 with no location secured as of 2021 with dozens of new luxury towers keep going up without them.
“New York City is already built so there isn’t really vacant land where you can just build a new school.  Right now, the city has to buy existing buildings to build what residents need, which can be tough in the most competitive real estate market in the world. By the time I read about a big real estate deal in the paper and call the developer to beg for a school, it’s already too late, and my community is desperate for school seats,” said Council Member Ben Kallos. “Elected officials ask agencies to build new schools and facilities all the time, but we never know what’s going or even what’s in play till it is too late. This legislation would put the city in the loop on big real estate transactions, force city agencies to share whether they see a need as well as whether they even tried to make a deal, and lets residents know what happened. In Manhattan, the city won’t actually need to buy all of the land, it will just need to be a part of the transaction to build a public-private partnership with municipal facilities in the base and the housing we need above.”
Kallos has already proven this public-private partnership model can work on East 95th Street at the Kent, where the city built a new pre-kindergarten center in the base of a new building.
With a limit of spaces able to accommodate critically needed community resources such as schools and health care facilities, the legislation will enable communities to know when space will be available before it’s too late.  It will only apply to the sale of vacant real property with a lot size of 20,000 square feet or more, enabling community and government stakeholders to be able to work quickly and collaboratively to advocate for specific facilities seeking a site. 
The bill asks real property owners and real estate professionals working on their behalf to notify the city via a web app 30 days before properties will be listed for sale. The notice would include information about the owners, the property, and the price. Within 30 days of the notice, city agencies would have to respond either expressing interest or disclaiming interest. Where the city agencies disclaimed interest they would have share specifics publicly such as a lack of funding, insufficient space, or not having need in that location. Where an agency has expressed interest through an offer, reporting would be made on progress or why the offer was refused. Where an offer is refused, the city would be required to share why the city chose not to use eminent domain and uniform land use review procedure to acquire the land.

Int. No. 2363
By Council Member Kallos
To amend the New York city charter and the administrative code of the city of New York, in relation to departmental statements of needs and notice to the city required when real property is available for purchase
Be it enacted by the Council as follows:
1 Section 1. Subdivision e of section 204 of the New York city charter is amended to read as  2 follows:
3 e. Preparation of the statement of needs.
4 (1) Annually on such date as the mayor shall direct, each agency shall submit to the mayor  5 and the council a statement containing all the information required to be included in the statement  6 of needs for the ensuing two fiscal years pursuant to subdivisions a, b and c of this section that  7 relates to the plans, jurisdiction and responsibility of such agency. Such statements shall be known 8 as the departmental statements of need for city facilities. In preparing such departmental statements 9 of needs, each agency shall review and consider the district needs statements submitted by 
10 community boards pursuant to paragraph ten of subdivision d of section twenty eight hundred and  11 the statements of budget priorities submitted by the community boards pursuant to section two  12 hundred thirty.
13 § 2. Title 4 of the administrative code of the city of New York is amended by adding a new  14 chapter 3 to read as follows:
1 § 4-301 Definitions. For the purposes of this section, the following terms have the  2 following meanings:
3 Bona fide offer to purchase. The term “bona fide offer to purchase” means an offer to  4 purchase real property, which offer is made in writing, in good faith and without fraud. 5 Commissioner. The term “commissioner” means the commissioner of citywide  6 administrative services or the head of a successor agency charged with administration of this  7 chapter.
8 Department. The term “department” means the department of citywide administrative  9 services or a successor agency charged with administration of this chapter. 10 Owner. The term “owner” means any person, agent, firm, partnership, corporation or other  11 legal entity having a legal or equitable interest in, or control of, real property that is offered for or  12 subject to sale.
13 Real property professional. The term “real property professional” means any realtor,  
14 broker, listing agent or service who is acting on behalf of an owner and who is charged with listing  
15 real property available for purchase or facilitating the purchase of real property.
16 § 4-302 Properties for sale; notice required.
 a. An owner or real property professional shall  
17 provide notice to the department before taking any action that will result in the sale of vacant real  
18 property with a lot size of 20,000 square feet or more. For vacant real property with a lot size less 
19 than 20,000 square feet, such notice may be required as determined by rule of the department.
20 b. The owner or real property professional shall provide such notice of sale no less than 30 21 days before taking such action. The notice may be provided fewer than 30 days before the owner  
22 takes such action where the owner or real property professional shows good cause for delay,
1 including but not limited to the owner’s death or financial hardship, or if the sale is in response to  2 a previously unsolicited offer. 
3 c. A notice of sale shall include the following information:
4 1. The name and address of each owner of the real property;
5 2. All addresses and names of the real property;
6 3. The action that will result in a sale, including receipt of any bona fide offer to purchase  7 a previously unlisted property;
8 4. The date on which such action is anticipated to take place;
9 5. The provision of law, rule or regulation pursuant to which such action is authorized, if  10 any;
11 6. The total size and type of real property subject to a sale;
12 7. The amount of any outstanding mortgage as of the date of the notice; 13 8. The asking price for the real property; and
14 9. Such other information as the department may require.
15 d. An owner or real property professional may withdraw a notice of sale, subject to the  16 terms of any accepted offer to purchase or executed purchase and sale agreement, and to applicable  17 statutory and common law remedies. To withdraw a notice of sale, the owner or real property  18 professional shall give notice of withdrawal to the department in a manner specified by the  19 department. Nothing in this subdivision shall be construed as exempting an owner or real property  20 professional who has withdrawn a notice of sale from complying with subdivisions a, b and c of  21 this section and with all other applicable requirements of this chapter before taking any action that  22 will result in the sale of real property.
23 e. Notwithstanding any provision of this section to the contrary:
1 1. A person shall be deemed to have complied with the requirement to provide notice of  2 sale or notice of withdrawal under this section if such person has complied with a substantially  3 similar notice requirement imposed pursuant to a superseding statute or program; and 4 2. If the notice of sale or notice of withdrawal is required by this section to include more  5 information than is required by any applicable superseding city, state or federal statute or program,  6 the additional information required by this section shall be provided within the time period  7 established by the superseding statute or program.
8 § 4-303 Agency response required. Within 30 days of the posting of a notice of sale of real  9 property pursuant to this chapter, each agency shall respond to each such notice by either (i) 10 expressing an interest in purchasing such real property or (ii) by disclaiming any such interest. An  11 expression of interest includes, but is not limited to, outreach to the owner or real property  12 professional to make inquiries about the available real property or submitting an offer for such  13 property.
14 § 4-304 Prior notification. Notwithstanding any other provision of this chapter, where an  15 owner or real property professional listed real property for sale before the effective date of this  16 chapter and such listing was properly posted under any other applicable provision of law, such  17 owner or real property professional shall notify the city as required by section 4-302. Such notice  18 is not required if the owner has entered into a contract for the sale of such property or the sale  19 period has closed before the effective date of this chapter.
20 § 4-305 Manner of notice, generally. a. Wherever this chapter requires provision of notice,  21 such notice shall be made by posting on a website designated by the commissioner.  22 b. The commissioner shall designate a website through which an owner or real property  23 professional shall provide notice to the city under this chapter. The commissioner shall update the
1 website at least daily and shall include disclaimers to the effect that (i) where a notice is provided  2 on the website, such notice usually will not be provided in any other manner and (ii) it is the  3 responsibility of any person interested in receiving any notice under this chapter to monitor the  4 website for such notices.
5 c. Where applicable, the department shall include with a notice posted on such website the  6 following information:
7 1. An affirmative statement that a copy of such notice was sent to every agency  8 automatically when it was posted to such website;
9 2. The response of each agency to such notice;
10 3. Whether any agency is in the process of acquiring the real property listed and, if so,  11 which agency;
12 4. Whether an agency disclaimed any interest in purchasing the real property and the reason  13 for such lack of interest, including budget constraints, space limitations or location; 14 5. The reason the owner refused an agreement with an agency that expressed interest, if  15 any;
16 6. Whether eminent domain was used to acquire the real property; and 17 7. Whether the real property was acquired through successful completion of the uniform  18 land use review procedure.
19 d. The department shall post an update of an agency’s expression of interest upon referral  20 of an application that was submitted pursuant to the uniform land use review procedure for  21 community board review. Any notice posted upon the website shall remain on such website until  22 six months after sale of the real property has concluded or been canceled, or six months after an  23 eminent domain action has concluded or been canceled. Such website shall provide every agency
1 with alerts for every notice that is posted on the website. Such website shall allow public users to  2 sign up for alerts for available properties filtered by zip code, council district and community  3 district.
4 e. Provision of notice as required by this chapter shall be deemed complete upon posting  5 to the website designated by the commissioner pursuant to subdivision b of this section. 6 § 4-306 Penalties. a. An owner shall be liable for a civil penalty of $30,000 where: 7 1. Such owner willfully violates any provision of this chapter; or 
8 2. Such owner directs a real property professional to take or refrain from taking any action  9 that results in a violation of any provision of this chapter.
10 b. A real property professional who willfully violates any provision of this chapter shall be  11 liable for a civil penalty of $30,000, except when such violation is a result of action or inaction at  12 the express direction of the owner.
13 § 4-307 Exclusions; construction. a. The provisions of this chapter do not apply: 14 1. To any agreement regarding the transfer of real property that was in effect on the  15 effective date of this chapter, except that any renewal, modification or amendment of such  16 agreement occurring on or after the effective date of this chapter is subject to the provisions of this  17 chapter;
18 2. To any refinancing arrangement where an owner or purchaser refinances real property  19 in order to maintain ownership of such property;
20 3. To any transfer of property initiated by (i) a government entity implementing its powers  21 of eminent domain, (ii) a judicial proceeding, including a judicially supervised sale, (iii) a  22 bankruptcy proceeding, or (iv) other operation of law; or
1 4. To any proposed sale for which (i) a listing, as described in section 4-305, was properly  2 posted in accordance with any other applicable provision of law that requires provision of a notice  3 of sale to the department, and (ii) 45 or fewer days remain before the expiration of the notice of  4 sale period under such other applicable provision of law.
5 b. Nothing in this chapter shall be construed as requiring an owner to give preference to  6 any particular offer to purchase real property, or to accept any such offer. 7 § 4-308 Power of acquisition by ULURP or eminent domain preserved. Nothing in this  8 chapter shall be construed as curtailing the city’s authority to acquire real property in accordance  9 with the uniform land use review procedure or by exercise of the power of eminent domain, subject  10 to all applicable laws governing the exercise of such power.
11 § 3. This local law takes effect 120 days after it becomes law.

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