Reminder – August 7, 2025 Deadline to Pull Permit and Vest Parking or Storage Warehouses under Recent ICAP Amendments

On May 9, 2025, Governor Hochul signed numerous provisions into law under the FY26 New York State Budget (the “Budget Law”), which included changes to the Industrial and Commercial Abatement Program (ICAP) through amendments to New York State Real Property Tax Law § 489 and the NYC Administrative Code. These changes include an exclusion of most parking and storage warehouses from eligibility for ICAP benefits. The amendments also memorialize these changes and the previously enacted ICAP self-storage prohibition in the applicable sections of the NYC Administrative Code. 

 

Most notably, the legislation provides a limited 90-day window from May 9, 2025 (the effective date of the Budget Law) to vest ICAP eligibility for most parking facilities and storage warehouses. Specifically, to preserve ICAP eligibility for a parking facility or storage warehouse, the first building permit for the project must be issued on or before August 7, 2025. After this date, ICAP benefits will not be available for a parking facility unless (i) the parking is on a separate tax lot, (ii) it is associated with residential construction, and (iii) the residential construction is receiving substantial governmental assistance (i.e., non–as-of-right subsidy subject to a regulatory agreement with HPD), and ICAP benefits will not be available for a storage warehouses, except warehouses in which goods are stored by or on behalf of a merchant for resale or other use in the course of the merchant’s business and operated in a manner that requires an applicable license for such use. The ICAP parking facility prohibition includes an additional limited carveout for any project located in a zoning district for which an action amending the designation of such district was filed with the mayor pursuant to Section 197–d of the New York City Charter on or before May 9, 2024.

 

In addition, the Budget Law designates Governor’s Island as an ICAP special commercial abatement area beginning on January 1, 2026, which allows for projects located thereon to obtain the longer 25-year ICAP benefit schedule. 

 

More recently, on July 10, 2025, the New York City Department of Finance (DOF), which administers ICAP, published proposed changes to the ICAP rules to implement the statutory changes discussed above and expand on the Preliminary Application requirements for projects that include parking facilities subject to the above-described exceptions. The comment period ends on August 20, 2025, and the proposed rule changes can be found here.

If you have any questions about the above information, please feel free to contact your trusted R&E attorney or Daniel M. Bernstein, R&E Member and Leader of the firm’s Tax Incentives & Affordable Housing Department and Nicholas DiLorenzo, R&E Member Member, Tax Incentives & Affordable Housing Department.