The developers of Victoria Tower in Harlem have filed a lawsuit against New York City’s Department of Finance, alleging that the agency’s handling of a tax incentive application led to the loss of nearly $17 million in benefits for their project.
Danforth Development, along with Exact Capital, the Lam Group, and Falconwood Corporation, claims in Manhattan Supreme Court that they were wrongly denied a full property tax abatement under the Industrial and Commercial Abatement Program (ICAP) for their 26-story building on 125th Street. The developers assert that this decision could threaten the financial stability of the tower.
Victoria Tower was completed in 2023 at a cost of $80 million. The mixed-use project features 191 residential units and a Renaissance hotel with 210 rooms. It also includes a restored Victoria Theater and a state-backed cultural center occupying 25,000 square feet at its base.
According to the suit, the developers sought approximately $33 million in property tax relief over 25 years through ICAP—a program intended to encourage investment outside major business districts—but were granted only $16.5 million due to what they describe as outdated filing requirements. The dispute centers on determining when construction officially began. Danforth submitted its initial ICAP application in 2014 but renewed permits three years later. Rising costs from pandemic-related delays pushed expenses above original estimates.
The lawsuit contends that city officials failed to adjust the project’s start date from 2015 to 2017, which would have better aligned with its completion date and affected tax calculations accordingly. The Department of Finance reportedly declined this request, arguing that it relied on rules not yet established when the original application was made.
The developers argue that this timing issue stems from city delays: “DOF waited nearly a decade after state and city lawmakers created ICAP in 2008 to finalize implementing regulations — a lag that the lawsuit says violated separation-of-powers principles and undermined the program’s purpose.”
A spokesperson for DOF responded by stating: “the agency administers programs ‘within the parameters established by state and local law.’”
Steven Williams, founder of Danforth Development, did not provide further comment.
