Coliseum tax breaks unlikely.

Any new project at the Coliseum site would have a tough time getting tax breaks, lawyers and real estate executives say, although it might be possible.

While the city normally likes to encourage development through incentives, for this parcel, opposition has already ensured that certain tax breaks will be nearly impossible to achieve.

Smart building legislation, a form of the Industrial Commercial Incentive Program (ICIP) that can apply to buildings in Manhattan, was drafted in part to help spur what was believed to be the imminent development at 383 Madison. But because of other factors, it was not used to create a single project, and without legislative intervention, will expire at the end of the year.

Real Estate Board of New York President Steven Spinola doesn't know if any extender, retroactive or otherwise, will be taken up by the State legislature. "Nobody took advantage of it," he agreed.

Another source explained that while technically, the smart building legislation does expire, an application can be made before the end of this year. But that would require the current owners, i.e. the MTA, to be a co-applicant. Then, the developer would have a year to complete the foundation - not an easy task.

"If I were the MTA I would certainly think about pre-qualifying the property," said one land use attorney. "But if I were the community, I would scream bloody murder."

Since Mayor Rudolph Giuliani has been inclined to jump start construction with incentives - like his successful Downtown incentive plan - the city itself might seek to extend the law and include the parcel.

Even if the MTA were to agree to become co-applicant with any or all potential developers - and this would have to be decided long before the short list is chosen in February of 1997, the final choice wouldn't be made for another 45 days, and closing is not scheduled until July of 1997.

So the final developer would have to work quickly or lobby the city and state legislature to extend the smart building program and counteract those incentive foes like Senator Franz Leichter, who will try to specifically exclude the Coliseum site.

Leichter has already sent a letter to the MTA Chairman E. Virgil Conway, dated Aug. 13, 1996, urging that "language be included in the contract of sale that waives the right of the developer to any current or future tax incentives."

The MTA, Conway replied on Sept. 20, 1996, "is committed that no sale will be contingent of receipt by the developer of a tax abatement or other economic incentive."

The regular ICIP benefits also exclude parcels if any part lies above the center line of 59th Street. That is something the city's land use lawyers have been debating quietly with their clients.

Some of their advice may include trying to create a separate tax parcel for the portion below 59th Street and keeping any development there as a separate tower.

That building could include a commercial portion to meet the ICIP qualifications and then have a residential portion to meet the income stream needs of the developer.

"There is certainly is room in the ICIP for a building to qualify," said one attorney representing Coliseum aspirants, who declined to be identified. "You could design and build a building to qualify under that legislation."

But, said another, the ICIP can only be used with new construction, and that would lead you back to the smart building issue.

As for 421a, which give tax abatements and deferrals to residential property, its allowability in a 15 FAR zone expired in October. One attorney said the issue becomes whether the city will extend the right to get it to a 15 FAR zone. "The city has not agreed to do that yet," said the counselor.

The entity buying the property also has to be taxable. Anyone chosen on the short list would probably have time to make an application to correct the tentative assessment, normally due March 1st - but in 1997 on Monday, March 3 - to maintain rights to a Tax Commission hearing for the tax year beginning July 1, 1997.

As the Nov. 2nd deadline for the Coliseum looms closer, participants are still refining their plans and lining up partners.