Prime Development Site at 2197 3rd Avenue East Harlem

The proposed plans outline a 134,990-square-foot mixed-use development, comprising 127,515 square feet of residential space, 5,945 square feet for commercial use, and 1,530 square feet allocated for a community facility. The project includes 139 residential units, with 105 designated as market-rate and 34 as affordable housing. Current ownership also acquired additional air rights from a neighboring parcel.

The 421-a tax abatement program is a crucial incentive for developers in New York City, designed to encourage the construction of new residential buildings by offering significant property tax reductions. Under this program, developers who set aside a portion of units as affordable housing can receive substantial tax benefits for up to 35 years. To extend the completion date for 421-a benefits to 2031, developers were required to submit a Letter of Intent to the NYC Department of Housing Preservation & Development by September 12, 2024.

The property at 2197-2201 3rd Avenue is situated within a Certified Economic Opportunity Zone (EOZ), offering investors several tax incentives aimed at stimulating economic growth in underserved communities. By reinvesting capital gains into a Qualified Opportunity Fund (QOF) that invests in an EOZ, investors can defer paying capital gains taxes until 2026 or until the asset is sold. Additionally, if the investment is held for five years, 10% of the deferred gain is excluded from taxes, increasing to 15% after seven years. For investments held for at least 10 years, investors may avoid paying capital gains taxes on any appreciation from the new investment altogether.