With ICIP expired, owners feel headache.

When the New York State legislature adjourned without passing many real estate incentive measures, it left many owners with a sickening uncertainty.

According to Bill Thomas, deputy commissioner for tax policy at the Department of Finance, there are 1,400 preliminary applications pending under the Industrial and Commercial Incentive Program, commonly known as the ICIP. Of those, there are 57 in Manhattan below 96th Street.

"The problem is we don't know yet what determines what gets the benefits under the new program or the old program," he said.

A project's eligibility would be determined by the certificate of eligibility, and that date is keyed to the date of the building permit, which the DOF does not yet know. "If issued June 30 or earlier, you are under the old program," Thomas said. "We're waiting for the legislature to act and it is our hope that they act as soon as possible."

The new program would add renovation benefits in Manhattan below 96th Street for a window of time, while removing that area from new construction.

The number of building permits that would fall under the new program are unknown because there is no program. The legislature's bills would be keyed to apply retroactively to July 1, however, and that in itself could bring on litigation since the DOF is not accepting any new preliminary applications.

Jeffrey Golkin, a partner in Herzfeld & Rubin, said, "Where we stand right now is that ICIP is dead, but if they filed a preliminary application before June 30, then they are alive." Anything filed after June 30, Golkin noted, is being returned by DOF and not being accepted for filing.

Those applicants who have filed preliminary applications and have not yet "pulled" a permit from the Department of Buildings will be in a "grey area," Golkin believes. "My feeling is they should be grandfather in by the old ICIP, he said.

"Obviously if you have a new construction, you want to file under the old program," Golkin said. "But the new program might give you better benefits under the new renovation program. This business that people are preempted from pulling permits is a total oversight.

"No one can pull a permit to qualify under the program until it is law, so everybody has to put their plans on hold," Golkin added. He said obtaining a foundation permit, in his judgement, would constitute a fatal defect and would mean no ICIP benefits could be obtained. But Golkin believes a demolition permit could be obtained.

Michael Bailkin, a partner with Stadtmauer Bailkin Levine & Masyr, said "Generally, in the absence of benefits, there will be uncertainty in the market. Both the ICIP bill and the REAP bill are absolutely essential to the city's economic efforts. Even if somebody believes the bill will pass nobody will invest money unless there is certainty. I feel reasonably sure the legislature will ultimately pass them." he added.

The REAP measure provides employee tax credits and is used when moving into or building an ICIP eligible project.

Golkin said he has clients who are looking for bigger space or looking at the options of renovating or acquiring more space so they may expand their businesses.

"What the city is saying, is we don't care," he said. "The city is saying as far as your decision making is, there is no program."

Even if passed at a later date, and signed into law by the Governor, the entire program could be given a bumpy ride by City Council representatives who, ironically, sit on the Committee for Economic Development and believe the ICIP benefits have gone too far.

A spokesperson for Council Member Ronnie Eldridge said she and Council Member Stephen DiBrienza have prepared amendments to the measure. "They go to the heart of better legislative incentives," she said.

The Building Department does not track projects that have applied for building incentives separately, however, newly available figures show a sharp decline in any major construction in Manhattan over the last three years.

From January to June of 1992, there were 17 new building permits issued which was more than a 50 percent drop from the same period in 1991 in which 36 were issued. In 1990 there were 143 permits issued from January to June.

The breakdown for this year by month is as follows: Jan. -- 5, Feb. -- 5, March -- 2, April -- 0, May -- 4 and June -- 1.

"There didn't seem to be a rush to beat the deadline," said Building Department spokesperson Vahe Tiryakian, wryly.

There were considerably more permits issued for major alterations, some of which could be aided by the new ICIP bill. Those permits, however, also saw an extensive drop since 1990 in which 863 were issued.

In 1991 there were 422 issued and in 1992 there were 492.

Steven Spinola, president of the Real Estate Board of New York said, "We're hopeful that the legislature will come back into session. There are too many items open, there are bills the city wants through and some the Long Island contingent wasn't. I'm hopeful that within two to three weeks, the legislature will come back and deal with all of this."