Olshan real estate lawyers are vastly experienced in commercial condominium structuring arrangements and sophisticated condominium agreements, including ones for nonprofit entities that enable them to claim real estate tax exemptions.
How It Works
The condominium structure has the advantage of creating separate tax lots for the property. They provide easements and insurance regimes that permit the building to operate efficiently while enabling nonprofit unit owners to benefit from a real property tax exemption under Section 420-a of New York’s Real Property Tax Law (RPTL).
How We Help
Olshan lawyers have extensive experience creating, managing and enforcing rights under New York commercial condominiums of ground-leased parcels including condo within a condo structures. Our real estate lawyers regularly represent both owners and nonprofit clients in creating commercial fee and leasehold condominiums and navigating the challenges posed by mixed-use/mixed-ownership buildings. We structure purchases that enable nonprofit entities to acquire ownership interests without the heavy tax burdens associated with traditional commercial property purchases.
We review the condominium declarations, bylaws, records, terms and conditions of ownership, cost allocations, and the specifics of how the condo is governed. Then we ensure all are in order and make certain the commercial condo transaction will position our clients to achieve their intended goals.
Our firm has also been retained by both residential mixed-use condominium and cooperative buildings as general counsel or as special counsel to advise on and resolve unusual tax, condominium structure, sponsor defaults, and other issues in court and at the negotiating table.
Depth of Experience
We represented the ground lessor in the well-known 2009 “Cornell” Letter Ruling by New York City’s Department of Finance and have structured several commercial condominiums including the Tribeca Film Center, the Triangle Junction Retail Condominium, and the Urban Glass House Commercial Unit. Our lawyers also represented a New York college in the purchase of a new commercial unit constructed as part of a redevelopment project in the Bronx under the federal “New Markets” tax credit program.
- Represented an industry-leading cancer research institution in a long-term ground lease for a 7-story building to be constructed to suit the institution on a parcel located on the Upper East Side. We then created a leasehold condominium for the institution to permit them to obtain a tax exemption under Section 420-a of New York’s Real Property Tax Law. Our client then cooperated with the landlord to permit a $130 million mortgage on the fee estate.
- Negotiated the ground lease for the fee owner/ground lessor at 407 East 61 Street with Weill Cornell Medical Center including a provision permitting Cornell to convert its leasehold estate into a commercial condominium. Cornell entered into two subleases with itself and became the “declarant” under the declaration of condominium for the leasehold estate thereby qualifying the leasehold interest as equivalent to a fee interest under the City’s tax exemption applicable to not-for profits. This transaction was the transaction that led to the well-known “Cornell” letter ruling on which the real estate industry now relies for the Section 420-a tax exemption for not-for-
- Represented the purchaser of the iconic Mobil Building at 150 East 42nd Street, including securing a $700 million loan from Morgan Stanley Mortgage Capital Holdings to complete their acquisition of the leasehold position. The deal included a 99-year ground lease extension with the land owner, purchasing the existing leasehold from Hiro Real Estate, and creating a sub-leasehold condominium to permit Mt. Sinai Medical Center to obtain Section 420-a tax exemption benefits.
- Represented Metropolitan College of New York, a college founded in 1964 by educational pioneer Audrey Cohen, in the purchase of a commercial condominium to house its growing college programs within a $40 million development known as the Triangle Plaza Hub in the South Bronx. The construction and purchase of the condominium is being financed using New Markets Tax Credits.
- Represented a group of legacy owners in a decades-old resort cooperative where the sponsor was convicted of fraud and the unsold units were purchased by a new developer at auction including negotiation of a standstill agreement while additional units were sold. Then, upon loss of board control by the new sponsor, we were retained to represent the cooperative and embarked on substantial negotiated amendments to the governing documents which were out of date and noncompliant with current law.
- Often brought in as special counsel to represent boards regarding parking garage leases or management agreements including 130 East 18th Street, 420 East 55th Street, and 115 East 87th Street. Several of our lawyers have decades of experience in parking garage facilities.
- Brought in as new counsel to the sponsor of a troubled East Harlem condominium and, after diligently working issues out over many months, we were retained by the nonsponsored controlled board which had grown to trust us to be a fair problem solver.
- Represented a large group of unit owners in negotiating and signing a unique easement for light and air with the developer of a neighboring property who had not yet started to build. The easement involved significant compensation and protected sight lines and created terraces on setbacks in the new building that could be used by certain unit owners.
- Represented an individual board member at large midtown condominium with sponsor and construction issues.
- Won a significant voting rights summary judgment motion on behalf of unit owners where the incumbent board worked in cahoots with the building’s superintendent to cheat on annual meeting proxies.
- Serving as general counsel to numerous boards throughout the New York metropolitan area.
