A “combined-use facility” is a development that benefits a cultural institution by enabling it to develop under-utilized real estate assets partly for its own use and partly for the benefit of a private developer.
The private portion of the development is exempt from real estate taxes but subject to “tax equivalency payments” (“TEPs”) made by the owner(s) of the private portion, which are equal in amount to real estate taxes.
TEPs are paid to the Trust, which pays a portion of the TEPs to The City of New York and uses the remaining amount to pay debt service on bonds issued by the Trust to finance the portion of the combined-use facility used by the cultural institution.
There are a number of applicable statutory requirements relating to the development of a combined-use facility.