Dorsey v. Stuyvesant Town Corporation Appendix to Brief of Respondents in Opposition to Petition for Writ of Certiorari

    (Unurt at %  llxixUb IHate
O ctober T erm , 1949

No. 402

JO S E P H  D O R SEY , M O NRO E DO W LING and 
C A LV IN  H A R PE R ,

Petitioners,
v.

ST U Y V E SA N T  TOW N CO RPO RATIO N  and 
M ETR O PO LITA N  L IF E  IN SU R A N C E  

COM PANY,
Respondents.

APPEN D IX

TO BRIEF OF RESPONDENTS IN OPPOSITION TO 
PETITION FOR WRIT OF CERTIORARI



THE HOUSING ARTICLE OF THE NEW YORK STATE 
CONSTITUTION (Article XVIII).

Section 1. [Housing for persons of low income; slum clear­
ance.]

Subject to the provisions of this article, the legislature 
may provide in such manner, by such means and upon such 
terms and conditions as it may prescribe for low rent 
housing for persons of low income as defined by law, or 
for the clearance, replanning, reconstruction and rehabili­
tation of substandard and insanitary areas, or for both 
such purposes, and for recreational and other facilities in­
cidental or appurtenant thereto.

§ 2. [Idem; powers of legislature in aid of.]

For and in aid of such purposes, notwithstanding any 
provision in any other article of this constitution, but 
subject to the limitations contained in this article, the legis­
lature may: make or contract to make or authorize to be 
made or contracted capital or periodic subsidies by the state 
to any city, town, village, or public corporation, payable 
only with moneys appropriated therefor from the general 
fund of the state; authorize any city, town or village to 
make or contract to make such subsidies to any public cor­
poration, payable only with moneys locally appropriated 
therefor from the general or other fund available for cur­
rent expenses of such municipality; authorize the contract­
ing of indebtedness for the purpose of providing moneys 
out of which it may make or contract to make or author­
ize to be made or contracted loans by the state to any city, 
town, village or public corporation; authorize any city, 
town or village to make or contract to make loans to any 
public corporation; authorize any city, town or village 
to guarantee the principal of and interest on, or only the 
interest on, indebtedness contracted by a public corporation; 
authorize and provide for loans by the state and authorize 
loans by any city, town or village to or in aid of corpora­



2

tions regulated by law as to rents, profits, dividends and 
disposition of their property or franchises and engaged in 
providing housing facilities; authorize any city, town or 
village to make loans to the owners of existing multiple 
dwellings for the rehabilitation and improvement thereof 
for occupancy by persons of low income as defined by law ; 
grant or authorize tax exemptions in whole or in part, 
except that no such exemption may be granted or author­
ized for a period of more than sixty years; authorize coop­
eration with and the acceptance of aid from the United 
States; grant the power of eminent domain to any city, 
town or village, to any public corporation and to any cor­
poration regulated by law as to rents, profits, dividends 
and disposition of its property or franchises and engaged 
in providing housing facilities.

As used in this article, the term “public corporation” 
shall mean any corporate governmental agency (except 
a county or municipal corporation) organized pursuant to 
law to accomplish any or all of the purposes specified in 
this article.

§ 3. [Article V II to apply to state debts under this article, 
with certain exceptions; capital and periodic sub­
sidies.]

The provisions of article VII, not inconsistent with 
this article, relating to debts of the state shall apply to all 
debts contracted by the state for the purpose of providing 
moneys out of which to make loans pursuant to this arti­
cle, except (a )  that any law or laws authorizing the con­
tracting of such debt, not exceeding in the aggregate three 
hundred million dollars, shall take effect without submis­
sion to the people, and the contracting of a greater amount 
of debt may not be authorized prior to January first, nine­
teen hundred forty-two; (b) that any such debt and each 
portion thereof shall be paid in equal annual installments, 
the first of which shall be payable not more than three 
years, and the last of which shall be payable not more than



3

fifty years, after such debt or portion thereof shall have 
been contracted; and (c) that any law authorizing the 
contracting of such debt may be submitted to the people 
at a general election, whether or not any other law or bill 
shall be submitted to be voted for or against at such election.

Any law authorizing the making of contracts for capi­
tal or periodic subsidies to be paid with moneys currently 
appropriated from the general fund of the state shall 
take effect without submission to the people, and the amount 
to be paid under such contracts shall not be included in 
ascertaining the amount of indebtedness which may be 
contracted by the state under this article; provided, how­
ever, (a )  that such periodic subsidies shall not be paid 
for a period longer than the life of the projects assisted 
thereby, but in any event for not more than sixty years; 
(b) that no contracts for periodic subsidies shall be en­
tered into in any one year requiring payments aggregating 
more than one million dollars in any one year; and (c) that 
there shall not be outstanding at any one time contracts 
for periodic subsidies requiring payments exceeding an 
aggregate of five million dollars in any one year, unless a 
law authorizing contracts in excess of such amounts shall 
have been submitted to and approved by the people at a 
general election.

§ 4. tPowers of cities, towns and villages to contract indebt­
edness in aid of low rent housing and slum clearance 
projects; restrictions thereon.]

To effectuate any of the purposes of this article, the 
legislature may authorize any city, town or village to 
contract indebtedness to an amount which shall not ex­
ceed two per centum of the average assessed valuation of 
the real estate of such city, town or village subject to taxa­
tion, as determined by the last completed assessment roll 
and the four preceding assessment rolls of such city, town 
or village, for city, town or village taxes prior to the con­
tracting of such indebtedness. In ascertaining the power



of a city to contract indebtedness pursuant to this article 
there may be excluded any such indebtedness if the project 
or projects aided by guarantees representing such indebt­
edness or by loans for which such indebtedness was con­
tracted shall have yielded during the preceding year net 
revenue to be determined annually by deducting from the 
gross revenues, including periodic subsidies therefor, re­
ceived from such project or projects, all costs of operation, 
maintenance, repairs and replacements, and the interest on 
such indebtedness and the amounts required in such year 
for the payment of such indebtedness; provided that in 
the case of guarantees such interest and such amounts shall 
have been paid, and in the case of loans an amount equal 
to such interest and such amounts shall have been paid 
to such city. The legislature shall prescribe the method 
by which the amount of any such indebtedness to be ex­
cluded shall be determined, and no such indebtedness shall 
be excluded except in accordance with such determination. 
The legislature may confer appropriate jurisdiction on the 
appellate division of the supreme court in the judicial de­
partments in which such cities are located for the purpose 
of determining the amount of any such indebtedness to 
be so excluded.

The liability of a city, town or village on account of any 
contract for capital or periodic subsidies to be paid subse­
quent to the then current year shall, for the purpose of 
ascertaining the power of such city, town or village to con­
tract indebtedness, be deemed indebtedness in the amount 
of the commuted value of the total of such capital or 
periodic subsidies remaining unpaid, calculated on the basis 
of an annual interest rate of four per centum. Such 
periodic subsidies shall not be contracted for a period longer 
than the life of the projects assisted thereby, and in no 
event for more than sixty years. Indebtedness contracted 
pursuant to this article shall be excluded in ascertaining 
the power of a city otherwise to create indebtedness under 
any other section of this constitution. Notwithstanding



5

the foregoing the legislature shall not authorize any city 
to contract indebtedness hereunder in excess of the limita­
tions prescribed by any other article of this constitution 
unless at the same time it shall by law require such city 
to levy annually a tax or taxes other than an ad valorem 
tax on real estate to an extent sufficient to provide for the 
payment of the principal of and interest on any such in­
debtedness. Nothing herein contained, however, shall be 
construed to prevent such city from pledging its faith and 
credit for the payment of such principal and interest nor 
shall any such law prevent recourse to an ad valorem tax 
on real estate to the extent that revenue derived from such 
other tax or taxes in any year, together with revenues from 
the project or projects aided by the proceeds of such indebt­
edness, shall become insufficient to provide fully for pay­
ment of such principal and interest in that year.

§ 5. [Liability for certain loans made by the state to certain 
public corporations.]

Any city, town or village shall be liable for the repay-, 
ment of any loans and interest thereon made by the state 
to any public corporation, acting as an instrumentality of 
such city, town or village. Such liability of a city shall be 
excluded in ascertaining the power of such city to become 
indebted pursuant to the provisions of this article, except 
that in the event of a default in payment under the terms 
of any such loan, the unpaid balance thereof shall be in­
cluded in ascertaining the power of such city to become so 
indebted. No subsidy, in addition to any capital or periodic 
subsidy originally contracted for in aid of any project or 
projects authorized under this article, shall be paid by the 
state to a city, town, village or public corporation, acting 
as an instrumentality thereof, for the purpose of enabling 
such city, town, village or corporation to remedy an actual 
default or avoid an impending default in the payment of 
principal or interest on a loan which has been theretofore 
made by the state to such city, town, village or corpora­
tion pursuant to this article.



6

§ 6. [Loans and subsidies; restrictions on and preference in 
occupancy of projects.]

No loan or subsidy shall be made by the state to aid 
any project unless such project is in conformity with a 
plan or undertaking for the clearance, replanning and re­
construction or rehabilitation of a substandard and insani­
tary area or areas and for recreational and other facilities 
incidental or appurtenant thereto. The legislature may pro­
vide additional conditions to the making of such loans or 
subsidies consistent with the purposes of this article. The 
occupancy of any such project shall be restricted to persons 
of low income as defined by law and preference shall be 
given to persons who live or shall have lived in such area 
or areas.

§ 7. [Liability arising from guarantees to be deemed indebt­
edness; method of computing.]

The liability arising from any guarantee of the prin­
cipal of and interest on indebtedness contracted by a public 
corporation shall be deemed indebtedness in the amount 
of the face value of the principal thereof remaining unpaid. 
The liability arising from any guarantee of only the inter­
est on indebtedness contracted by a public corporation shall 
be deemed indebtedness in the amount of the commuted 
value of the total interest guaranteed and remaining unpaid, 
calculated on the basis of an annual interest rate of four 
per centum.

§ 8. [Excess condemnation.]

Any agency of the state, or any city, town, village or 
public corporation, which is empowered by law to take pri­
vate property by eminent domain for any of the public 
purposes specified in section one of this article, may be 
empowered by the legislature to take property necessary 
for any such purpose but in excess of that required for 
public use after such purpose shall have been accomplished;



and to improve and utilize such excess, wholly or partly 
for any other public purpose, or to lease or sell such excess 
with restrictions to preserve and protect such improvement 
or improvements.

§ 9. [Acquisition of property for purposes of article.]

Subject to any limitation imposed by the legislature, 
the state, or any city, town, village or public corporation, 
may acquire by purchase, gift, eminent domain or other­
wise, such property as it may deem ultimately necessary 
or proper to effectuate the purposes of this article, or any 
of them, although temporarily not required for such pur­
poses.

§ 10. [Power of legislature; construction of article.]

The legislature is empowered to make all laws which 
it shall deem necessary and proper for carrying into execu­
tion the foregoing powers. This article shall be construed 
as extending powers which otherwise might be limited by 
other articles of this constitution and shall not be construed 
as imposing additional limitations; but nothing in this 
article contained shall be deemed to authorize or empower 
the state, or any city, town, village or public corporation, 
to engage in any private business or enterprise other than 
the building and operation of low rent dwelling houses for 
persons of low income as defined by law, or the loaning of 
money to owners of existing multiple dwellings as herein 
provided.



8

THE REDEVELOPMENT COMPANIES LAW 

(New York Laws 1943, Ch. 234, as amended)

§ 1. Short title

This act shall be known and may be cited and referred 
to as the “Redevelopment Companies Law.”

§ 2. Policy of state and purpose of act

It is hereby declared that in certain areas of munici­
palities located within this state there exist substandard 
conditions and insanitary housing conditions owing to ob­
solescence, deterioration and dilapidation of buildings, or 
excessive land coverage, lack of planning, of public facili­
ties, of sufficient light, air and space, and improper design 
and arrangement of living quarters; that there is not in 
such areas a sufficient supply of adequate, safe and sanitary 
dwelling accommodations properly planned and related to 
public facilities; that modern standards of urban life re­
quire that housing be related to adequate and convenient 
public facilities; that the aforesaid substandard and in­
sanitary conditions depress and destroy the economic value 
of large areas and by impairing the value of private invest­
ments threaten the sources of public revenues; that the 
public interest requires the clearance, replanning, recon­
struction and neighborhood rehabilitation of such substand­
ard and insanitary areas, together with adequate provision 
for recreational and other facilities incidental and appur­
tenant thereto according to the requirements of modern 
urban life and that such clearance, replanning, reconstruc­
tion and neighborhood rehabilitation are essential to the 
protection of the financial stability of such municipalities; 
that in order to protect the sources of public revenue it is 
necessary to modernize the physical plan and conditions of 
urban life ; that these conditions cannot be remedied by the 
ordinary operations of private enterprise; that provision 
must be made to encourage the investment of funds in cor­



9

porations engaged in providing redevelopment facilities to 
be constructed according to the requirements of city plan­
ning and in effectuation of official city plans and regulated 
by law as to profits, dividends and disposition of their 
property or franchises; that provision must be made to 
enable insurance companies to provide such facilities, sub­
ject to regulation by law as to the return from such facili­
ties and the disposition of property acquired for such 
purpose; and that provision must also be made for the 
acquisition for such corporations and companies at fair 
prices of real property required for such purposes in sub­
standard areas and for public assistance of such corpora­
tions and companies by the granting of partial tax exemp­
tion; that the cooperation of the state and its subdivisions 
is necessary to accomplish such purposes; that the clearance, 
replanning and reconstruction, rehabilitation and modern­
ization of substandard and insanitary areas and the provi­
sion of adequate, safe, sanitary and properly planned hous­
ing accommodations in effectuation of official city plans by 
such corporations and companies in these areas are public 
uses and purposes for which private property may be ac­
quired for such corporations and companies and partial tax 
exemption granted; that these conditions require the crea­
tion of the agencies, instrumentalities and corporations 
hereinafter prescribed for the purpose of attaining the ends 
herein recited; and the necessity in the public interest for 
the provisions hereinafter enacted is hereby declared as a 
matter of legislative determination.

§ 3. Definitions

As used in this act the following terms shall mean and 
include:

1. “Area.” A section of a municipality wherein the 
planning commission finds that substandard conditions or 
insanitary housing conditions exist. An area may include 
land whether improved or unimproved, and buildings or



10

improvements not in themselves insanitary or substandard, 
the inclusion of which is deemed necessary by such commis­
sion for the effective clearance, replanning, reconstruction 
or rehabilitation of the area of which such land or property 
is a part.

2. “ Condemnation.” The acquisition of real property 
in the manner provided by any general, special or local law 
or city charter for the acquisition of real property by the 
municipality in which such property is to be taken.

3. “ Insurance company.” Any insurance company 
authorized to transact business in this state.

4. “ Municipality.”  A city, town or village.

5. “ Plan.” A  plan or undertaking for the clearance, 
replanning and reconstruction or rehabilitation of a sub­
standard or insanitary area or areas and for recreational 
and other facilities incidental or appurtenant thereto to 
effectuate the purposes of article eighteen of the constitu­
tion or any other provision of the constitution delegating 
any similar power.

6. “ Planning commission.” The planning commission 
means any agency of a municipality authorized to prepare, 
adopt or amend the map of the municipality or empowered 
to prepare and adopt and from time to time modify a com­
prehensive or master plan of the municipality, if there be 
one, or if there be none, the local legislative body of the 
municipality.

7. “Local legislative body.”  (a )  In a city, the board 
of aldermen, common council, council, commission or other 
board or body now or hereafter vested by its charter or 
other law with jurisdiction to enact ordinances or local 
laws, except that if there be a board of estimate, the term 
shall mean only such board of estimate; (b) in a town, the 
town board; (c) in a village, the board of trustees.



11

8. “ Project.” A specific work or improvement to ef­
fectuate all or any part of a plan including lands, buildings 
and improvements acquired, owned, constructed, managed 
or operated in an area by a redevelopment company 
or an insurance company providing dwelling accommoda­
tions pursuant to this act and such business, commercial, 
cultural or recreational facilities appurtenant thereto as 
may be approved pursuant to section fifteen of this act.

9. “ Real property.” Lands and improvements, lands 
under water, waterfront property, the water of any lake, 
pond or stream, and any and all easements, franchises and 
hereditaments, corporeal or incorporeal, and every estate, 
interest and right therein, legal and equitable, in lands or 
water, and the right, interest, privilege, easement and fran­
chise relating to the same, including terms for years and 
liens by way of judgment, mortgage, or otherwise.

10. “ Supervising agency.” The municipal comptroller 
in a municipality having a comptroller; in a municipality 
having no comptroller, the chief financial officer of such 
municipality. However, as to any insurance company pro­
viding dwelling accommodations pursuant to this act, or 
if any of the stock and income debenture certificates having 
voting power of a redevelopment company are or are to 
be issued to one or more insurance companies, the term shall 
mean only the superintendent of insurance.

§ 4. Redevelopment companies; how created

A redevelopment company may be created by three or 
more persons signing, acknowledging and filing a certificate 
which shall contain:

1. The name of the proposed redevelopment company.

2. The purposes for which it is to be formed which 
shall be as follows: To acquire one or more areas under 
a plan or plans, and to construct, own, maintain, operate,



12

sell and convey projects pursuant to the terms and provi­
sions of this act.

3. The amount of the capital stock, and if any be pre­
ferred stock, the preference thereof.

4. The number of shares of which the capital shall 
consist, all of which shall have a par value.

5. The city, village or town in which its principal busi­
ness office is to be located; if located in the city of New 
York, the borough thereof in which it is to be located.

6. Its duration, which shall not be less than twenty 
years.

7. The number of directors, which shall not be less 
than three and who need not be stockholders.

8. The names and post-office addresses of the directors 
for the first year.

9. The names and post-office addresses of the subscrib­
ers to the certificate and a statement of the number of shares 
of stock which each agrees to take in the redevelopment 
company.

10. The certificate may provide that in the event that 
income debenture certificates are issued by the redevelop­
ment company the owners thereof may be given the same 
right to vote as they would have if possessed of certificates 
of stock of the amount and par value of the income deben 
ture certificates held by them. If provision is made for the 
issuance of income debenture certificates, interest shall be 
paid by the redevelopment company on income debenture 
certificates only out of net earnings of the redevelopment 
company that would be applicable to payment of dividends 
if there were no income debentures.

11. A  provision that, so long as this act shall remain 
applicable to any project of the redevelopment company, the 
real property of the redevelopment company shall not be



13

sold, transferred or assigned except as permitted by the 
terms and provisions of this act.

12. A  declaration that all of the subscribers to the cer­
tificate are of full age ; that at least two-thirds of them are 
citizens of the United States and that at least one of them 
is a resident of the state of New York; that at least one of 
the persons named as a director is a citizen of the United 
States and a resident of the state of New York.

13. A  declaration that the redevelopment company has 
been organized to serve a public purpose and that it shall 
be and remain subject to the supervision and control of the 
supervising agency except as provided in this act, so long 
as this act remains applicable to any project of the redevel­
opment company; that all real and personal property ac­
quired by it and all structures erected by it, shall be deemed 
to be acquired or created for the promotion of the purposes 
of this act.

14. A  declaration that, after providing for all expenses, 
taxes and assessments, there shall be paid annually out of 
the earnings of the redevelopment company for interest, 
amortization, depreciation and dividends, a sum equal to 
but not exceeding six per centum of the total actual final 
cost of the project as defined by subdivision two of section 
thirteen of this act; that the obligation in respect of such 
payments shall be cumulative, and any deficiency in inter­
est, amortization, depreciation and dividends in any year 
shall be paid either from any cash surplus derived from 
earnings remaining in the treasury of the redevelopment 
company in excess of the amount necessary to provide such 
cumulative annual sums or from the first available earnings 
in subsequent years; and that any cash surplus derived from 
earnings remaining in the treasury of the redevelopment 
company in excess of the amount necessary to provide such 
cumulative annual sums shall, upon dissolution of the com­
pany, be paid into the general fund of the municipality.



14

15. A  declaration that, upon the dissolution of the com­
pany pursuant to the provisions of subdivision one of section 
twenty-four, the property may be conveyed in fee as pro­
vided in said subdivision.

16. A  declaration that mortgage indebtedness, income 
debenture certificates and stock of the redevelopment com­
pany may be retired if, as and when there shall be funds 
available for amortization purposes in the treasury of the 
redevelopment company.

§ 5. Consent of supervising agency and local legislative body 
to incorporation of redevelopment companies

If any certificate of incorporation of a redevelopment 
company shall be presented to the secretary of state he shall 
not file such certificate unless a certificate of the consent 
of the supervising agency shall accompany the same. A 
certificate of amendment of a certificate of incorporation 
shall not be filed by the secretary of state unless a certificate 
of the consent of the supervising agency and a certificate of 
consent of the local legislative body of the municipality in 
which the project is located shall accompany the same.

§ 6. Application of other corporation laws

The provisions of the business corporations law, gen­
eral corporation law and stock corporation law as presently 
in effect and as hereafter from time to time amended, shall 
apply to redevelopment corporations, except where such 
provisions are in conflict with the provisions of this act. 
In the event that any action with respect to which the 
holders of income debentures shall have the right to vote 
is proposed to be taken, then notice of any meeting at which 
such action is proposed to be taken shall be given to such 
holders in the same manner and to the same extent as if 
they were stockholders entitled to notice of and to vote at 
such meeting, and any certificate filed pursuant to law in



15

the department of state with respect to any such action, 
whether taken with or without meeting, and any affidavit 
required by law to be annexed to such certificate, shall con­
tain the same statements or recitals and such certificate 
shall be subscribed and acknowledged, and such affidavit 
shall be made, in the same manner as if such holders were 
stockholders holding shares of an additional class of stock 
entitled to vote on such action, or with respect to the pro­
ceedings provided for in such certificate.

§ 7. Powers of redevelopment companies

Each redevelopment company shall have and may exer­
cise such of the powers conferred by the general corporation 
law as shall be necessary in conducting the business of a 
redevelopment company and consistent with the provisions 
of this act.

§ 8. Limited return on investment

Subject to the provisions of section twenty-four of this 
act, there shall be paid annually out of the earnings of the 
redevelopment company, after providing for all expenses, 
taxes and assessments, a sum for interest, amortization, 
depreciation and dividends, equal to but not exceeding six 
per centum of the total actual final cost of the project as 
defined by subdivision two of section thirteen of this act; 
the obligation in respect of such payments shall be cumu­
lative, and any deficiency in interest, amortization, depre­
ciation and dividends in any year shall be paid either from 
any cash surplus derived from earnings remaining in the 
treasury of the redevelopment company in excess of the 
amount necessary to provide such cumulative annual sums 
or from the first available earnings in subsequent years; 
and any cash surplus derived from earnings remaining in 
the treasury of the redevelopment company in excess of 
the amount necessary to provide such cumulative annual 
sums shall, upon dissolution of the company, be paid into 
the general fund of the municipality except as otherwise



16

contemplated by subdivision five of section twenty-four of 
this act.

§ 9. Consideration for issuance of stocks and bonds

No redevelopment company shall issue stock, bonds or 
income debenture certificates except for money or property 
actually received for the use and lawful purposes of the 
redevelopment company. No stock, bonds or income deben­
ture certificates shall be issued for property except upon a 
valuation approved by the supervising agency and such 
valuation shall be used in computing actual or estimated 
cost.

§ 10. Minimum amount of stock and debentures

Except as provided in this section the stock and income 
debenture certificates issued by the redevelopment company 
shall in no event be less than the total of twenty per centum 
of the actual cost of any project or projects undertaken 
pursuant to this act. The supervising agency may permit 
stock or income debenture certificates to be issued for work­
ing capital to be used in connection with such project to 
an amount not exceeding three per centum of the estimated 
cost, or three per centum of the total actual final cost, if 
that should exceed the estimated cost of a project.

The provisions of this section shall not be applicable to 
any redevelopment company if funds made available by the 
federal government or any instrumentality thereof, or any 
mortgage or mortgage bonds insured by the federal housing 
administrator or any other instrumentality of the federal 
government are used in financing the project in whole or 
in part.

§11.  Income debentures

With the approval of the supervising agency, the cer­
tificate of incorporation, or an amended certificate, may 
authorize the issuance of income debenture certificates bear­
ing no greater interest than six per centum per annum.



17

Such income debenture certificates and any instrument 
under which they are issued may contain such other provi­
sions, including provision for amortization by serial ma­
turities, through the operation of a sinking fund or other­
wise, as may be approved by the supervising agency.

§ 12. Mortgages and mortgage bonds

Any redevelopment company, subject to the approval of 
the supervising agency, may borrow funds and secure the 
repayment thereof by bond and mortgage or by an issue 
of bonds under a trust indenture. Each mortgage or issue 
of bonds of a redevelopment company shall relate only to a 
single specified project and to no other and such bonds shall 
be secured by mortgage upon all of the real property of 
which such project consists. First lien bonds of such re­
development company when secured by a mortgage not 
exceeding eighty per centum of the estimated cost prior to 
the completion of the project, or eighty per centum of the 
appraised value or actual cost, but in no event in excess of 
eighty per centum of the actual cost, after such completion, 
as certified by the supervising agency, are hereby declared 
securities in which all public officers and bodies of the state 
and of its municipal subdivisions, all insurance companies 
and associations, all savings banks and savings institutions, 
including savings and loan associations, executors, admin­
istrators, guardians, trustees and all other fiduciaries in 
the state may properly and legally invest the funds within 
their control. The bonds so issued and secured and the 
mortgage or trust indenture relating thereto, may create 
a first or senior lien and a second or junior lien upon the 
real property embraced in any project; provided, however, 
that the total mortgage liens shall not exceed eighty per 
centum of the estimated cost prior to the completion of the 
project, or eighty per centum of the appraised value or 
actual cost, but in no event in excess of eighty per centum of



18

the actual cost after such completion, as certified by the 
supervising agency. Where there are first and second mort­
gage liens upon the property embraced in a project, only 
the first or senior lien thereon shall be deemed a security 
in which such officers, bodies, corporations, associations 
and fiduciaries, may invest the funds within their control. 
Such bonds and mortgages may contain such other clauses 
and provisions as shall be approved by the supervising 
agency, including the right to assignment of rents and 
entry into possession in case of default; but the operation 
of the housing project in the event of such entry by mort­
gagee or receiver shall be subject to regulations promul­
gated by the supervising agency. Provisions for the 
amortization of the bonded indebtedness of companies 
formed under this act shall be subject to the approval of the 
supervising agency. So long as funds made available by 
the federal government or any instrumentality thereof or 
any mortgage or mortgage bonds, insured by the federal 
housing administrator or any other instrumentality of the 
federal government are used in financing, in whole or in 
part, any project under this act, the capital structure of a 
redevelopment company undertaking such project and the 
proportionate amount of the cost of the lands and improve­
ments to be represented by mortgages or bonds shall be en­
tirely in the discretion of the supervising agency; and all 
restrictions as to the amounts to be represented by mort­
gages, mortgage bonds, income debentures or stock shall be 
inapplicable to such projects or to redevelopment companies 
undertaking such projects, except that the bonds, mort­
gages, debentures and stock covering any project shall not 
exceed the total actual final cost of such project as defined in 
subdivision two of section thirteen of this act.

Interest rates on mortgage indebtedness shall not ex­
ceed five per centum per annum.



19

§13.  Limitations

111 addition to limitations prescribed by this act a re­
development company shall not have power to :

1. Acquire any real property or interest therein for a 
project or projects unless the supervising agency and the 
local legislative body determine as provided in this act that 
such acquisition is necessary or convenient for the public 
purpose defined in this act.

2. Issue its stock, debentures and bonds covering any 
project undertaken by it in an amount greater in the aggre­
gate than the total actual final cost of such project. The 
actual cost of such project shall include the cost of the lands 
and improvements constituting the project and charges for 
financing and supervision approved by the supervising 
agency, condemnation charges and interest and other carry­
ing charges during the period of acquisition and of con­
struction. The total actual final cost shall be deemed to be 
ah amount equal to such actual cost plus an allowance for 
working capital. Such allowance for working capital shall 
not exceed an amount equal to three per centum of the 
estimated cost or of the total actual final cost of the project 
if that shall be greater than the estimated cost.

3. Enter into contracts for the payment of salaries to 
officers or employees, or for the construction or for the sub­
stantial repair, improvement or operation of projects ex­
cept subject to the approval of the supervising agency.

§ 14. Use of projects
The project or projects of any redevelopment company 

shall be designed and used primarily for housing purposes, 
but portions of the project may be planned and used for 
business, commercial, cultural or recreational purposes ap­
purtenant thereto as approved in the project.



20

§ 15. Procedure for submission and approval of plan or project

Every plan or plan of a project proposed by a redevelop­
ment company shall contain a general description of the 
area to be redeveloped and a statement of the plan of re­
development with such detail of information with refer­
ence thereto as may be necessary to a general understanding 
thereof.

After preliminary approval thereof by the supervising 
agency as to conformity with the provisions and purposes 
of this act, every such plan or plan of a project shall be sub­
mitted to the planning commission for approval of the plan 
or plan of the project relating to :

1. Height and bulk of structures, density of popula­
tion and percentage of land coverage by structures as to 
their conformity with the purposes of this act and with the 
master plan, if any; and the relationship of the density of 
population contemplated by the plan or plan of the project 
to the distribution of the population of the municipality in 
other areas or parts thereof, and

2. Provision, if any, for business or commercial facil­
ities appurtenant to the plan or project, relationship to ex­
isting and planned public facilities, adequacy and planned 
rearrangement of street facilities and provisions for light, 
air, cultural and recreational facilities as to their con­
formity with the purposes of this act and their adequacy 
for accommodation of the density of population con­
templated by the plan or plan of the project.

The planning commission, after public hearing on a plan 
or plan of a project, m ay:

a. Issue an unqualified certificate of approval thereof, 
or

b. Issue a certificate of conditional or qualified ap­
proval thereof, with or without recommendations, or



21

c. Disapprove thereof.

After action thereon by the planning commission, such 
plan or plan of a project with a proposed form of contract 
between the municipality and the company or, when all 
stock, debentures and mortgage bonds of the company are 
owned or are to be owned by one or more insurance com­
panies, between the municipality, redevelopment company 
and such insurance company or companies shall be sub­
mitted by the redevelopment company, with a certificate of 
approval of the supervising agency and the certificate or a 
statement of action on the plan or project by the planning 
commission, to the local legislative body for its approval as 
to conformity with the provisions and purposes of this act, 
the extent of the tax exemption to be granted pursuant to 
section twenty-six, the amount and nature of the property 
to be condemned for the redevelopment company by the 
municipality and the terms and conditions of payment there­
for by the redevelopment company, the amount of publicly 
owned land or facilities to be sold to the redevelopment com­
pany or exchanged for redevelopment company-owned lands 
and the availability of other suitable dwelling accommoda­
tions for families living in the area or part thereof to be 
affected by the plan or plan of the project.

As part of an approved project the local legislative body 
may require a redevelopment company to dedicate to the 
municipality or any agency thereof in the manner provided 
by law specified portions of the land in a project for parks, 
streets, public recreational and other public purposes.

The contract shall regulate the rents to be charged for 
rooms in the project and may contain such other provi­
sions, not inconsistent with this act, as may be deemed 
necessary or desirable for the financing, construction, opera­
tion and supervision of the project.

In any case where the planning commission shall have 
issued a certificate of unqualified approval of a plan or plan



22

of a project approval thereof by the local legislative body 
may be by resolution adopted by a majority of the whole 
number of votes authorized to be cast by all of the members 
thereof. In any case where the planning commission shall 
not have issued a certificate of unqualified approval, the 
plan or plan of a project may nevertheless be approved by 
the local legislative body, after public hearings thereon, by 
resolution adopted by a three-fourths vote of the whole 
number of votes authorized to be cast by all of the mem­
bers thereof. The local legislative body is authorized to 
enter into the necessary contract or contracts on behalf of 
the municipality.

I f  the contract parties are a municipality, a redevelop­
ment company and one or more insurance companies which 
own or will own all of the stock, debentures, bonds and mort­
gage indebtedness of such redevelopment company, or if the 
project is undertaken by an insurance company, then the 
certificate of the supervising agency approving such con­
tract shall terminate the functions of the supervising agency 
pursuant to this act, and after the execution of such contract 
all references herein to the approval or other action by the 
supervising agency shall be inapplicable to the project pro­
vided for in such contract and to such redevelopment com­
pany or the insurance company undertaking such project.

§ 16. Limitation on changes

It shall be unlawful during the period of tax exemption, 
granted pursuant to section twenty-six of this act, for any 
redevelopment company dr any successor in interest to its 
title to a project or any part thereof to change or modify 
any feature of a project for which approval of the planning 
commission is required by this act, without the approval 
of such commission, except by a three-quarters vote of the 
local legislative body.



23

§ 17. Transfer of real property to redevelopment company

Notwithstanding any requirement of law to the contrary 
or the absence of direct provision therefor in the instrument 
under which a fiduciary is acting, every executor, admin­
istrator, trustee, guardian or other person, holding trust 
funds or acting in a fiduciary capacity, unless the instru­
ment under which such fiduciary is acting expressly for­
bids, the state, its subdivisions, municipalities, all other 
public bodies, all public officers, persons, partnerships and 
corporations organized under or subject to the provisions 
of the insurance law, the superintendent of insurance as 
conservator, liquidator or rehabilitator of any such person, 
partnership or corporation, owning or holding any real 
property within an area, may grant, sell, lease or otherwise 
transfer any such real property to a redevelopment company 
and receive and hold any cash, stock, income debentures, 
bonds, mortgages, or other securities or obligations, secured 
or unsecured, exchanged therefor by such redevelopment 
company and may execute such instruments and do such 
acts as may be deemed necessary or desirable by them or it 
and by the redevelopment company in connection with a 
project or projects. An insurance company which has un­
dertaken a project through direct ownership and/or lease 
may transfer to the project any real property which it owns 
or holds within an area and the actual cost of such property 
to the insurance company shall be included in the total actual 
final cost of such project.

§ 18. Rules and regulations

The planning commission and the supervising agency, 
respectively, shall have power to make rules and regulations 
to carry out their powers and duties pursuant to this act and 
to effectuate the purposes thereof.

§ 19. Fees

The supervising agency, the local legislative body and 
the planning commission, if any, may each adopt a reason­



24

able schedule of fees to be paid upon the filing with each of 
them of a plan, plans for a project or projects, amendments 
thereto and other instruments in connection therewith.

§ 20. Condemnation

A municipality may take property by condemnation for 
a redevelopment company, provided the contract or con­
tracts executed pursuant to section fifteen contain a re­
quirement that the company shall pay to the municipality all 
sums expended or required to be expended by the munici­
pality in the acquisition of such real property, provision as 
to the time of payment and manner of securing payment 
thereof, and provisions requiring that the municipality re­
ceive, before proceeding with the acquisition of such real 
property, such assurances as to payment or reimburse­
ment by the redevelopment company, or otherwise, as the 
local legislative body may deem advisable. Upon the execu­
tion of such contract or contracts the company shall cause 
to be made three copies of surveys or maps of the real prop­
erty described in the contract, one of which shall be filed in 
the office of the redevelopment company, one in the office 
of the corporation counsel or chief law officer of the 
municipality, and one in the office in which instruments a f­
fecting real property in the county are recorded. The filing 
of such copies of surveys or maps in accordance with the 
provisions of this section shall be in lieu and in complete 
satisfaction of any other requirement for the filing of sur­
veys or maps imposed upon either the municipality or the 
redevelopment company by any general, special or local law. 
Upon compliance by the redevelopment company with the 
applicable terms and conditions of such contract or con­
tracts the municipality shall proceed to acquire title to the 
real property and when title to the real property shall have 
vested in the municipality, it shall convey the same to the 
redevelopment company upon final compliance by the rede­
velopment company with such terms and conditions. As



25

soon as title shall have vested in the municipality, the re­
development company may, upon the authorization of the 
mayor, enter upon the real property taken, take over and 
dispose of existing improvements, and carry out the terms 
of the project with respect thereto.

Real property in an area, needed or convenient for the 
project, which is to be acquired by condemnation pursuant 
to this section, may be acquired by the municipality for the 
project, including any property devoted to a public use, 
whether or not held in trust, notwithstanding that such 
property may have been previously acquired by condemna­
tion or is owned by a public utility corporation, it being 
hereby expressly determined that the public use in con­
formity with the provisions of this act shall be deemed a 
superior public use. The local legislative body may consent 
to the condemnation of property owned by the municipality, 
whether or not such property be held in trust, or may sell or 
lease any such property necessary or convenient for a 
project of a redevelopment company without public bidding, 
provided notice of such sale or lease is published and a public 
hearing is held before the local legislative body. The term 
of any such lease shall not be limited by any provision of 
any general, special or local law or city charter limiting the 
period of time during which a lease or any renewal thereof 
may run. Real property belonging to a public utility cor­
poration may not be acquired without the approval of the 
commission or other officer or tribunal having regulatory 
power over such corporation.

An award of compensation shall not be increased by 
reason of any increase in the value of the real property 
caused by the assembly, clearance or reconstruction, or pro­
posed assembly, clearance or reconstruction for the pur­
poses of this act of the real property in an area.

A local legislative body, upon payment therefor or upon 
exchange for other lands, may convey to any redevelopment 
company land in any street or public place which is duly 
closed or discontinued pursuant to the plan of a project.



26

Nothing in this section shall be deemed to forbid or 
prevent the acquisition of any real or personal property by a 
redevelopment company by gift, devise, bequest, grant, or 
subject to the provisions of this act, by purchase at public or 
private sale.

§ 21. Regulation of redevelopment companies

The supervising agency shall:

Examine each redevelopment company and keep in­
formed as to its general condition, its capitalization and the 
manner in which its property is constructed, leased, oper­
ated or managed with respect to its compliance with all 
provisions of law and orders of the supervising agency.

The supervising agency m ay:

1. Either itself or through its inspectors or employees 
duly authorized by it, enter in or upon and inspect the 
property, equipment, buildings, plants, offices, apparatus 
and devices of any redevelopment company; examine all 
books, contracts, records, documents and papers of any re­
development company and by subpoena duces tecum compel 
the production thereof.

2. In its discretion, prescribe uniform methods and 
forms of keeping accounts, records and books to be observed 
by redevelopment companies, and after a hearing to pre­
scribe by order accounts in which particular outlays and 
receipts shall be entered, charged or credited.

3. Require specific answers to questions upon which it 
may desire information and require the filing of periodic 
reports in the form, covering the period, and at the time 
prescribed by it.

§ 22. Sinking fund
Unless other provision be made therefor in the contract 

with the municipality, the supervising agency, if he shall 
deem it feasible at any time, subject to the limitation con­



27

tained in section eight of this act, may require a redevelop­
ment company to provide for earnings, after provision for 
dividends and interest, a sinking fund in an amount to be 
fixed by such supervising agency for the gradual retire­
ment of the stock and income debenture certificates of such 
company. Such sinking fund may be used either for the 
purchase, from time to time, of stock or income debenture 
certificates at a price approved by the supervising agency 
not exceeding par value thereof with accrued and unpaid 
dividends or interest, or if it be not practicable to purchase 
such stock or such income debenture certificates at a price 
so approved, the moneys in such sinking fund may be added 
to the surplus of such company. Any stock or income deben­
ture certificates purchased out of such sinking fund shall be 
cancelled and shall not be reissued.

§ 23. Transfer of title or foreclosure of project

1. Until the termination of the tax exemption, whether 
by expiration or by any other cause, a redevelopment com­
pany, heretofore or hereafter organized, shall not have 
power to sell any project without the consent of the local 
legislative body.

2. I f  an action be brought to foreclose a mortgage or 
tax lien upon a redevelopment project, heretofore or here­
after authorized pursuant to this act, and the property con­
stituting the project shall be acquired at the foreclosure sale, 
or by a conveyance in lieu of such sale, by a redevelopment 
company organized pursuant to this act, or by the federal 
government or an instrumentality thereof, or by a corpora­
tion which is, or by agreement has become subject to the 
supervision of the superintendent of banks or the superin­
tendent of insurance, such successor in interest shall acquire 
such project subject to all provisions of the contract regula­
ting such project and shall be entitled to all of the benefits 
contained in such contract. In all other cases of sale at fore­
closure or forced sale, the project shall be sold free of all



28

restrictions, except such covenants running with the land 
as may be contained in the contract regulating the project, 
and the tax exemption, if any, theretofore granted to such 
project shall immediately terminate.

§ 24. Dissolution

1. After termination of any tax exemption granted 
pursuant to section twenty-six of this act, whether by ex­
piration or by any other cause, or in the event that prior 
thereto the redevelopment company elects to pay to the 
municipality the total of all accrued taxes for which such 
exemption was granted and received, together with interest 
at the rate of five per centum per annum, the redevelopment 
company may voluntarily dissolve, and title to the project 
may be conveyed in fee to the owner or owners of its capital 
stock or to any corporation designated by it or them for the 
purpose, or the redevelopment company may be dissolved 
and reconstituted pursuant to appropriate laws relating to 
the formation and conduct of corporations, after providing, 
in any case, for the payment of all current operating ex­
penses, taxes, indebtedness and all accrued interest thereon, 
and the par value of and accrued dividends on the outstand­
ing stock of the redevelopment company. If, after making 
such provision and after the conveyance of the project, a 
cash surplus remains in the treasury of the redevelopment 
company, such cash surplus shall, upon dissolution, be paid 
into the general fund of the municipality. After such dis­
solution and conveyance or such reconstitution, the provi­
sions of this act shall become and be inapplicable to any such 
project and its owner or owners, and any tax exemption 
granted to such redevelopment company pursuant to section 
twenty-six of this act shall cease and terminate.

2. I f prior to the termination of any tax exemption the 
project is sold for any reason, the redevelopment company



29

shall dissolve, and any tax exemption granted to such re­
development company pursuant to section twenty-six of 
this act shall cease and terminate, except as otherwise pro­
vided in section twenty-three of this act. In such case the 
stockholders and income debenture certificate holders shall 
in no event receive more than the par value of their stock 
and the face value of their income debenture certificates 
with accrued and unpaid dividends or interest upon such 
stock and income debenture certificates, and any remaining 
surplus shall be paid into the general fund of the 
municipality.

3. In no event shall a redevelopment company be volun­
tarily dissolved unless provision is made for the payment in 
full of the remaining balance of principal and interest due 
or unpaid upon any mortgage on its property or any part 
thereof, but any project may, with the consent of the local 
legislative body of the municipality, be conveyed and trans­
ferred to the municipality subject to such mortgage and 
accrued interest.

4. Unless the local legislative body of the municipality 
shall consent to the voluntary dissolution of a redevelop­
ment company, such a company shall not dissolve except in 
accordance with subdivisions one and two of this section 
or upon the expiration of the period of corporate existence 
as fixed by its certificate of incorporation.

5. With the consent of the local legislative body and 
the superintendent of insurance, a redevelopment company 
heretofore or hereafter organized may voluntarily dissolve 
prior to the termination of any tax exemption granted pur­
suant to section twenty-six of this act and title to the 
project may be conveyed, and all other assets of such re­
development company may be transferred, to an insurance 
company, whether or not such project shall have been there­
tofore completed. After such dissolution and conveyance 
such tax exemption shall continue for the period of years



30

originally provided for in the contract, or for the unexpired 
portion thereof if such period shall have theretofore com­
menced, subject to prior termination pursuant to section 
twenty-five or section twenty-six of this act, and the pro­
visions of this act shall thereafter be applicable to such 
project and to such insurance company to the same extent 
and with the same force and effect as though such project 
had been initially undertaken by such insurance company 
pursuant to section twenty-five of this ac t; provided, how­
ever, that nothing herein contained shall be deemed to re­
quire the resubmission of the plan of the project and the 
contract relating thereto for approval pursuant to section 
fifteen of this act.

6. The contract with the municipality may contain 
such other provisions for the dissolution of the redevelop­
ment company as may be deemed advisable, not inconsistent 
with the provisions of this section. In case of a dissolution 
and conveyance in accordance with subdivision five of this 
section, the contract may be modified consistently with the 
provisions of said subdivision five and section twenty-five 
of this act, any such modifications to be approved by the 
superintendent of insurance and the local legislative body.

7. Upon dissolution as provided in this section, this 
act shall become and be inapplicable to the project and its 
owner or owners except as otherwise contemplated by sub­
division five of this section.

§ 25. Participation by certain corporations

One or more insurance companies shall have the power 
to organize, or cause to be organized, a redevelopment com­
pany formed pursuant to the provisions of this act, and to 
purchase for cash or to receive and hold in exchange for 
property, and to own and control, the stock or the income 
debenture certificates or both of any redevelopment com­
pany and shall also have power to invest, singly or jointly, 
in a bond and first mortgage or in an issue of bonds secured



31

by mortgage or trust indenture constituting a first lien upon 
any project as provided in this act. An insurance company, 
however, which owns stock or income debenture certificates 
of a redevelopment company and also owns bonds or a bond 
and mortgage or an interest in a bond and mortgage of the 
same redevelopment company shall not, without the consent 
of the supervising agency, sell all or any part of such bonds 
or such bond and mortgage or of its interest in such bond 
and mortgage unless it shall simultaneously sell such stock 
and such income debenture certificates owned by it.

Notwithstanding any other provision of law, an insur­
ance company or companies operating a redevelopment 
project or owning all of the stock of a redevelopment com­
pany are hereby expressly authorized to enter into contracts 
contemplated by this act and to agree by contract with the 
municipality not to sell, assign, or otherwise transfer such 
project or the stock, income debentures or mortgage bonds 
of such redevelopment company during the period of tax 
exemption provided for by the contract pursuant to this act 
without the consent of the local legislative body of the 
municipality. An insurance company or companies owning 
all of the stock of a redevelopment company are hereby ex­
pressly authorized to make such capital contributions to any 
such redevelopment company, in cash or by cancellation of 
securities or otherwise, as may be necessary to enable such 
redevelopment company to comply with all conditions pre­
cedent to its dissolution and conveyance of its property in 
accordance with section twenty-four of this act, and upon 
dissolution of such a redevelopment company, to acquire the 
project, complete the same if not theretofore completed, and 
own and operate the same as a permanent investment for 
such period as it or they may deem desirable either directly 
or through acquisition and ownership of the capital stock of 
any corporation which may acquire title to the project pur­
suant to subdivision one of section twenty-four.

An insurance company, instead of investing its funds 
in the stock and debentures or other obligations of a rede-



32

velopment company, may through direct ownership and/or 
lease acquire, own, construct, manage or operate as an in­
vestment for such period as it may deem desirable, one or 
more projects, in which event the provisions of sections 
seven, fourteen, fifteen, sixteen, seventeen, twenty, twenty- 
three, and twenty-six and subsection one of section thir­
teen of this act applicable to redevelopment companies shall 
be applicable to such insurance company in its operations 
with respect to any such project but not otherwise. Said 
provisions and the ensuing provision of this section shall 
cease to be applicable to any such project and to such insur­
ance company in its operations with respect to such project 
after termination of any tax exemption granted pursuant to 
section twenty-six of this act with respect to such project, 
whether such termination shall be by expiration or by any 
other cause, or in the event that prior thereto the insurance 
company elects to pay the municipality the total of all ac­
crued taxes for which such exemption was granted and re­
ceived, together with interest at the rate of five per centum 
per annum. I f  any such project shall be sold by an insur­
ance company, the tax exemption with respect to such 
project shall thereupon cease and terminate unless the local 
legislative body shall otherwise provide.

Until the termination of any tax exemption granted pur­
suant to section twenty-six of this act or until the provi­
sions of this act shall otherwise cease to be applicable:

1. An insurance company shall be entitled to earn and 
retain annually on a cumulative basis in respect of each 
project operated by it hereunder, before depreciation but 
after providing for all expenses, taxes and assessments at­
tributable to such project or to the income therefrom, a sum 
equal to but not exceeding six per centum of the total actual 
final cost of the project as defined by subdivision two of sec­
tion thirteen of this act.

2. Separate accounts shall be kept for each project 
operated by an insurance company.



33

3. I f  the income from any such project for any year, 
after all expenses, taxes and assessments attributable 
thereto or to the income therefrom, shall be in excess of six 
per centum of the total actual final cost of such project as 
defined by subdivision two of section thirteen of this act, 
such excess shall be credited to a special reserve account.

4. I f the income from any such project for any year, 
after all expenses, taxes and assessments attributable 
thereto or to the income therefrom shall be less than six 
per centum of such total actual final cost, such deficiency 
shall be charged against such special reserve account.

The amount of any accrued taxes and interest thereon 
paid by an insurance company pursuant to the second para­
graph of section twenty-six of this act may be charged 
against such special reserve account. An amount equal to 
any balance remaining to the credit of such special reserve 
account on the termination of the period of tax exemption 
shall be paid into the general fund of the municipality. If 
any project shall be conveyed to an insurance company in 
accordance with subdivision five of section twenty-four 
of this act, an amount equal to all accrued and unpaid in­
terest, amortization and dividends on the stock and evi­
dences of indebtedness of the redevelopment company there­
tofore accumulated in accordance with section eight of this 
act shall be charged against the special reserve account ex­
cept to the extent included in total actual final cost, and any 
remaining cash surplus derived from earnings remaining in 
the treasury of the redevelopment company shall be trans­
ferred to such insurance company and shall be,credited by 
it to the special reserve account provided for in this section 
applicable to such project.

Except as specifically provided herein this act shall not 
be deemed to limit or restrict any power or authority granted 
to insurance companies or to any other corporation or to 
any fiduciary by any other provision of law heretofore or 
hereafter enacted.



34

§ 26. Tax exemptions

The local legislative body of any municipality in which 
a project of such company is or is to be located may by con­
tract agree with any redevelopment company to exempt 
from local and municipal taxes, other than assessments for 
local improvements, all or part of the value of the property 
included in such project which represents an increase over 
the assessed valuation of the real property, both land and 
improvements, acquired for the project at the time of its 
acquisition by the redevelopment company which originally 
undertook the project and for such definite period of years 
as such contract may provide. The tax exemption shall not 
operate for a period of more than twenty-five years, com­
mencing in each instance from the date on which the bene­
fits of such exemption first become available and effective.

A  redevelopment company which has been granted and 
has received tax exemption pursuant to this section may at 
any time elect to pay to the municipality the total of all ac­
crued taxes for which exemption was granted and received, 
together with interest at the rate of five per centum per 
annum. Upon such payment the tax exemption of the 
project shall thereupon cease and terminate.