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Tag: Legislation

At Josh Lipton, we pride ourselves on being your trusted source of information and analysis on legislative matters. We diligently research and interpret the implications of these changes, distilling complex legal jargon into clear and concise insights that you can readily apply to your business.

Our in-depth analysis covers a wide range of legislative topics, including property rights, zoning ordinances, building codes, landlord-tenant regulations, tax incentives, financing laws, and environmental policies

Are NYC Properties Falling in Protected Tax Classes 2A/2B on The Chopping Block

Published on September 1, 2022
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Like many things, it starts with a whisper before morphing into a collective roar and this author fears that protected tax class 2A and 2B buildings in New York City may become Albany’s next target. The evidence of a legislative backlash involving the cancellation of protected tax classes is anecdotal at this point but the private equity behemoth, Carlyle Group’s, recent moves into this “mom and pop” space may have put the issue front and center for legislators. Over the past year, Carlyle has spent more than $500 million buying smaller apartment buildings in bite-sized $2 and $3 million checks.

Small potatoes for a group like Carlyle so what’s going on? Protected 2A/2B buildings enjoy the benefit of limited tax increases to no more than 8% annually and 30% over a five year period. And in a city with ever growing expenses, the 2A/2B  properties provide predictability to an owner’s net income and serve as an inflationary hedge against other operating expenses. The end game is to amass a portfolio of these properties and sell them at a premium. Take Highpoint Property Group, led by Drew Popkin, who caught on to the 2A/2B game early and recently put 20 such buildings on the market at an asking price of nearly $300 million. 

In 2018, Michael Shah of Delshah Capital purchased 28 2A/2B properties from Silvershore Properties that had done the heavy lifting of assembling the properties. To be clear, there isn’t anything illegal about this (nor should there be); in fact, it is quite savvy and, put simply, just an example of capitalism at work. But in current times, City Council members and NY senators are bound to start asking whether multi-million and multi-billion dollar owner/investors like the Carlyle Group should be benefitting from the 2A/2B tax class designations.  In a nation of laws, the rules that benefit the “little guy” should and must also benefit the larger players as well.    

Rebong, Kevin. “Carlyle Group Builds Empire of Small Brooklyn Apartment Buildings.” The Real Deal, 28 July 2022, therealdeal.com/new-york/2022/07/28/carlyle-goes-big-on-small-brooklyn-buildings/. Accessed 24 May 2023.
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New York State Takes an Unorthodox Path to the Opening of Marijuana Retail Stores: A Friend with Weed is a Friend of Albany

Published on July 19, 2022

Either the craziest idea ever conjured up over an evening of bong hits or the most brilliant proposal to come out of Albany in decades? Time will tell but NY’s Governor has proposed legislation that will give the state’s first licensed marijuana retailers to individuals or family members who have been convicted of a marijuana-related offense. Taxpayer money would be spent to find, secure and renovate storefronts for retailers. 

The first wave of applicants will likely include individuals like Baron Fajado, a real gem who was arrested for smoking marijuana at 16 which was followed by a half dozen other pot arrests as he moved from smoking to dealing. Perhaps there is some nobility in all of this as people with past drug charges have certainly “gone on to do great things,” according to Chris Alexander, the executive director of the state’s Office of Cannabis Management but handing out licenses to convicted felons without legitimate business experience on taxpayer’s dime seems a bit misguided.  

This author couldn’t be more in favor of the legalization of weed and like Hunter S. Thompson who viewed marijuana “as a basic staple of life, along with beer and ice and grapefruits,” I can concur with most of those things but I don’t think he should spearhead a multi-million dollar retail operation.

Mckinley, Jesse, and Grace Ashford. “New Yorkers with Marijuana Convictions Will Get First Retail Licenses.” The New York Times, 9 Mar. 2022, www.nytimes.com/2022/03/09/nyregion/marijuana-sellers-licenses-hochul.html.
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