The developers of the Victoria Tower in Harlem have filed a lawsuit against New York City, alleging that delays by the Department of Finance (DOF) resulted in the loss of nearly $17 million in tax benefits. The legal action was reported by Crain’s.
Danforth Development and its partners — Exact Capital, the Lam Group, and Falconwood Corporation — claim that their application for a full Industrial and Commercial Abatement Program (ICAP) benefit was improperly denied. The ICAP program is designed to encourage investment outside the city’s main business districts by offering property tax relief.
Victoria Tower, an $80 million project completed in 2023, features 191 residential units, a Renaissance hotel with 210 rooms, and a 25,000-square-foot cultural center at its base. According to the developers’ lawsuit filed in Manhattan Supreme Court, they were eligible for about $33 million in property tax breaks over 25 years through ICAP. However, DOF limited their benefit to $16.5 million due to what it described as outdated filing rules.
The central issue concerns when the project officially began. Danforth first applied for ICAP benefits in 2014 but submitted renewed permits three years later. The developers argue that pandemic-related delays increased costs significantly beyond original projections. They requested that the project’s start date be shifted from 2015 to 2017 so that tax calculations would align with its completion date in 2023. According to the suit, DOF refused this request on grounds that it depended on ICAP regulations not yet established when Danforth initially applied.
The lawsuit asserts that DOF took almost ten years after state and city lawmakers created ICAP in 2008 to finalize regulations implementing the program. This delay allegedly violated separation-of-powers principles and undermined ICAP’s intent.
A spokesperson for DOF responded: “the agency administers programs ‘within the parameters established by state and local law.’”
Steven Williams, founder of Danforth Development, declined to comment.
