Section 58. Sale or lease of municipal projects by authorities

1. An
  authority, subject to the approval of the local legislative body of  the
  municipality  in  which such authority has territorial jurisdiction, may
  sell or lease any municipal project of such authority to any corporation
  created pursuant to article two of the private housing finance law on  a
  co-operative  basis,  and an authority may enter into a contract for the
  sale of or sell or lease a  municipal  project  to  such  a  corporation
  either  prior  to,  at  the  date  of,  or  subsequent  to  the physical
  completion of such project and, in the event of a sale or lease  of  any
  such project prior to the physical completion thereof, the authority may
  agree  to complete and may complete construction and development of such
  project. No such corporation to which such a municipal project  is  sold
  or leased as provided in this section shall pay a dividend on any of its
  stock or pay interest on any of its income debentures.
    2.  Any  sale or lease of a municipal project by an authority pursuant
  to subdivision one of this section may be made without  public  bidding,
  public  sale  or  public  offering pursuant to such negotiated contract,
  agreement   or   lease,   containing   such   provisions,   limitations,
  requirements,  terms and conditions, as the authority selling or leasing
  such project, in its  discretion,  may  determine  to  be  necessary  or
  desirable;  provided,  that,  in  the  event  of  a  sale of a municipal
  project, the purchase price to be paid to the authority on or  prior  to
  date  of transfer of title to such project by the authority, or upon the
  physical completion of such project, shall not be less than  the  amount
  required  by  the  authority to pay and retire, or to make provision for
  the payment and retirement of, all bonds, notes  and  other  obligations
  issued  by the authority to finance the project cost, and to pay or make
  provision for the payment of all obligations incurred or to be  incurred
  by the authority as part of the project cost.
    3. Notwithstanding  the  provisions of section thirty-three of article
  two of the private housing finance law, the real property in a municipal
  project sold or leased as provided in subdivision one of  this  section,
  when  the  transfer  thereunder  becomes effective, shall be exempt from
  local  and  municipal  taxes,   other   than   assessments   for   local
  improvements,  to such extent as may be granted by the local legislative
  body of any municipality in which such  project  is  located;  provided,
  however, that any corporation to which such project is so sold or leased
  shall  pay  to  each  municipality  in  which a project is located, with
  respect to each such project, local and municipal taxes in  amounts  not
  less  than  the  sum or sums contracted to be paid by the authority as a
  payment in lieu of taxes with respect to  such  project  and  which  the
  authority  would be obligated to pay to the municipality had it not sold
  or leased the project to such a corporation.  The  tax  exemption  shall
  operate  and  continue  so  long  as capital loans of the corporation to
  which such project shall have been sold or leased are  outstanding,  but
  in no event shall such exemption for a municipal project located outside
  a city of one million or more persons continue for a period of more than
  thirty  years,  commencing  in  each instance from the date on which the
  benefits of such exemption became available to and  effective  for  such
  corporation.
    Notes,  bonds,  mortgages  and other obligations of such a corporation
  are declared to be  issued  for  a  public  purpose  and  to  be  public
  instrumentalities  and,  together with interest thereon, shall be exempt
  from tax.
    4. The provisions of section thirteen of article two  of  the  private
  housing  finance  law  requiring  the  approval  by  the commissioner of
  housing of the persons incorporating a  limited-profit  housing  company
  and  the  provisions  of  section fourteen of article two of the private

  housing finance law requiring the consent of the commissioner of housing
  to the filing of the certificate of incorporation of such a  company  in
  the office of the secretary of state and the amendment thereof shall not
  apply  to  a  corporation created pursuant to article two of the private
  housing finance law on a cooperative basis for the purchase or lease  of
  a  municipal  project  pursuant  to  this  section; nor shall any of the
  provisions of article two of the private housing finance law  conferring
  upon the commissioner of housing any powers in respect of limited-profit
  housing  companies  apply to such a corporation. The application of this
  subdivision shall be limited to corporations undertaking a project  with
  the  aid  of  a  municipal loan under article two of the private housing
  finance law.
    5. Any project that received a tax exemption under this  section  may,
  upon  the  expiration  of  the  tax  exemption  period,  be  granted  an
  additional tax exemption period of up to fifty years, or until such time
  as the project is no longer operated under the restrictions and for  the
  purposes set forth in this article, whichever is sooner.