Section 127. Acquisition by mutual redevelopment companies

Anything in this
  article to the contrary notwithstanding:
    (a)  With  the approval of the supervising agency, any person owning a
  project may convey such project to a mutual redevelopment company and  a
  mutual  redevelopment  company  may  be organized to acquire an existing
  project prior to expiration of an initial tax exemption granted pursuant
  to section one hundred twenty-five,  and  may  own,  maintain,  operate,
  sell,  and convey such project pursuant to this article. In part payment
  of the purchase price therefor, such company may execute and  deliver  a
  bond  and  mortgage  or  an  issue of bonds under a trust indenture, the
  aggregate principal amount of which does not exceed ninety per centum of
  such purchase price, and which shall be secured by a first mortgage upon
  all the real property of which such project  consists.  Such  bonds  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, administrators, guardians,
  trustees, and all other  fiduciaries  in  the  state  may  properly  and
  legally invest the funds within their control. The total capital created
  and  bonds  or  debentures  issued  by such mutual redevelopment company
  shall not exceed the total cost of the purchase of the  project  and  an
  allowance  for  working  capital  not  greater  in amount than three per
  centum of such cost.
    (b) With the consent of the local legislative body,  any  initial  tax
  exemption  granted  pursuant  to  section one hundred twenty-five, shall
  continue after conveyance of a project to a mutual redevelopment company
  for the period of years originally provided for in the contract, or  for
  the  unexpired  portion  thereof  if  such  period shall have commenced,
  subject to prior termination pursuant to section one hundred twenty-four
  or section one hundred twenty-five, and this article shall  continue  to
  be  applicable to such project as though such project had been initially
  undertaken by such mutual redevelopment company; provided, however, that
  nothing herein shall require the resubmission of the plan of the project
  and the contract relating thereto for approval pursuant to  section  one
  hundred  fourteen.  The  contract  may,  with  the approval of the local
  legislative body and of the holder of the mortgage on  the  project,  be
  modified in a manner consistent with this section.