In M1-6 Districts located within the rectangle formed by West 35th Street, Fifth Avenue, West 40th Street and Sixth Avenue, no dwelling units shall be permitted, except that:

(a)        dwelling units which the Chairperson of the City Planning Commission determines were occupied on May 18, 1981, shall be a permitted use provided that a complete application to permit such use is filed by the owner of the building or the occupant of the dwelling unit not later than June 21, 1983.  For the purposes of Article 7C of the New York State Multiple Dwelling Law, such a determination of residential occupancy shall be deemed to permit residential use as-of-right for such dwelling unit; and

(b)        in any building for which an alteration application for conversion of floor area used for non-residential use to dwelling units or for an extension or minor enlargement of existing residential use, was filed prior to May 18, 1981, dwelling units shall be permitted, provided that such alterations shall comply with the regulations in effect on the date of such filing.  The right to convert to dwelling units or extend or enlarge existing residential use pursuant to the provisions of this paragraph shall expire one year from July 23, 1981, unless a temporary or permanent certificate of occupancy has been issued.