CE Touts Biomed, Healthcare and Multifamily Growth in Westchester

John Jordan | April 2016

County Executive Robert Astorino

A Conversation with County Executive Robert Astorino

WHITE PLAINS—The prospects for the county’s economy and specifically its commercial real estate market have not been this bright in decades. The county’s biotech and healthcare industries are driving growth and creating new jobs in the construction trades as well as in their respective sectors.

Combine that with the plethora of multifamily real estate projects taking place in the county, particularly in the downtown districts of White Plains, New Rochelle and Yonkers, as well as surrounding communities, and there is a palpable air of confidence in real estate circles in early 2016.

In the biotechnology sector, Westchester County’s success story in the biotech industry continues to center around Regeneron Pharmaceuticals, which in November at an opening ceremony for two new buildings on its property at the Landmark at Eastview complex in Greenburgh, announced it would embark on another major expansion there. In January, Westchester County Executive Robert Astorino announced the county was moving forward with an ambitious plan to build a $1.2-billion biotech campus nearby on the site known as the “North 60” on the Westchester Medical Center campus in Valhalla.

On the healthcare front, acquisitions and expansions in the medical field have dominated the headlines of late and many health care institutions are embarking on capital improvement initiatives aimed at bringing advanced care and new technology to their respective institutions. The county, through its Industrial Development Agency and its Local Development Corporation have provided key financial incentives that have allowed these ventures to proceed, including most recently the $230-million expansion at the Westchester Medical Center.

Real Estate In-Depth recently sat down with Westchester County Executive Astorino at his office in White Plains to discuss his views on the county’s economy and how the county is facilitating the expansion of key economic drivers in Westchester.

 In-Depth: Health care and biomedical are driving growth in the Westchester economy. How is Westchester helping to facilitate that growth?

 County Executive Robert AstorinoAstorino: In a couple of ways I think. First of all, the demographics are in our favor. In reaching out to Millennials, we are finding that we have the kind of careers that these young professionals want. We have a talented workforce here. If you can link up that talented workforce with the businesses that are already here and those that are going to invest and expand, as well as attract new businesses, then you have a smart formula.

I remember when we first started in 2010, we were having an interesting debate with some of the real estate developers and business people about what (growth sectors) we should start to look at as we moved forward.  There were those that argued that we should look more towards the more traditional route—the I-287 corridor, the office parks and get some of the traditional businesses in. Others were arguing that you have to start looking ahead towards what could be, where seeds have been planted and sort of till the garden. I ended up being convinced that biotech was a real opportunity for the county and I am glad because we have forged some really good partnerships. Regeneron now has really heavily invested here to the point where they are going to have 2,000 employees. They are making millionaires every year, which is fantastic. Acorda Therapeutics (based in Ardsley) and Dr. (Ron) Coen have done a fantastic job. We were there with them at the beginning as they really started to cultivate the county as an opportunity.

We also have (New York) Medical College and the (Westchester) Medical Center on the Grasslands campus. So with all these businesses and institutions in close proximity to one another, they will all sort of integrate and feed off each other. The Medical Center campus and the Grasslands campus are a perfect opportunity along with the North 60 (project). The argument has always been that (the vacant North 60 property) is for future use; they have been saying that for three generations now so at what point is the future now? I think we have said quite loudly that we feel that this is the right timing with everything happening around that area with the Medical College, the Medical Center, Regeneron right down the road and all the other opportunities—this is the right time to start building that out… Our skilled labor, the educated workforce, the Millennials and the young companies that are willing to take a chance here show that we are on the right side of history moving forward.

 In-Depth: The county’s IDA and LDC have helped White Plains Hospital, Westchester Medical Center, Phelps Memorial and Northern Westchester Hospital to name a few. Those agencies have helped facilitate growth have they not?

 County Executive Robert AstorinoAstorino: I think directly what the county can do is facilitate growth through the Industrial Development Agency and the Local Development Corporation, both of which we invigorated. The IDA is a tool that was available to us and we wanted people to realize we were ready to use it. I think we have used it in the right fashion in that it is meant to spur growth; whether it was putting together a multi-agency deal with New York State like we did with PepsiCo., or using it aggressively to facilitate direct development like here in White Plains for Lennar ($275-million redevelopment of the former Westchester Pavilion mall) or LCOR ($250-million 55 Bank St. multifamily project). The LDC (formed in 2013) clearly filled a gap to help promote growth on the not-for-profit side.

 Editor’s Note: Since the LDC’s formation the county has approved financial incentives for a number of major not -for-profit projects, including White Plains Hospital’s $108-million expansion and the Westchester Medical Center’s expansion project, which required amending the powers of the LDC to cover public benefit corporations.

In-Depth: The multi family sector, particularly in the urban centers, is now finally seeing significant capital investment. How will this help the county’s economy in the future?

County Executive Robert Astorino Astorino: One of the measures of whether an economy is growing is whether people want to actually live there and whether there is housing that will be built for new business or potentially new residents. That sector is on fire and in my discussions with developers in New York City who haven’t dipped their toes in Westchester waters, they are now coming here. (For example) Scott Rechler of RXR Realty has been getting very aggressive coming into Westchester as a market. (Editor’s Note: The firm is pursuing multifamily projects in Yonkers and New Rochelle). In fact I brought Scott up to meet with Mayor (Richard) Thomas of Mount Vernon. The three of us sat down to discus potential redevelopment opportunities in Mount Vernon. They have two train lines; they have real opportunity there. Clearly in White Plains, Mayor (Thomas) Roach and I work wonderfully together and he has done a great job expediting the approval process in White Plains. We have worked together with Lennar on the redevelopment of the Westchester Pavilion (mall) as well as the whole new LCOR development (55 Bank St.).

So as these buildings go up and people begin to populate them, they will want places to go to work, and they want places to eat and shop. So you have more people going into the dry cleaners and the delis and the restaurants and that is how an economy grows.

 In-Depth: How is the county playing a role in the transformation of the downtown districts in the villages and towns?

 County Executive Robert AstorinoAstorino: One of the things I have fought vociferously with the HUD over with respect to the (Fair Housing) settlement is that land use decisions, as per the New York State Constitution, are the right of the local community and I will continue to fight for that. Ultimately, these towns and villages have to want to redevelop their downtowns and I think most of them are starting to see that is a good thing to do. The county can play a role—not in zoning—but in planning. The county’s Planning Department for instance in the Village of Tarrytown has lent expertise in the mapping and the overall regional planning (of the area). We have lent and really assigned a member of our Planning Department to work with the village and that person sat on the committee that dealt with the redevelopment of the downtown in Tarrytown. So I think in that respect we can play a secondary, but important role both in a particular municipality or regionally.

 In-Depth: Can you give us an update on Rye Playland?

 Astorino: Playland is I believe for the final time coming down the home stretch. When you have 17 different opinions, from 17 different legislators, all putting their advice in, it takes time to work through the process. The good news is that we all feel good about it—that it is going to be approved. That is the likelihood. I think the deal we put together is an overall good one for the taxpayers. Playland is falling apart and it has got to be rebuilt if it is going to be saved and that money can’t all come from the county taxpayer. So to have a deal where we bring in an outside company (Standard Amusements, LLC) that is going to invest its own capital is something that was attractive to me and part of a long-range vision for how to save Playland.

Right now we have seen Playland fall out of favor with the person who has gone to there over the last decade or so because the park is kind of run down, and it is not as exciting. It is the same-old, same-old and the county can’t put the money into it that is required to turn it around, not on its own without major tax increases. On the other hand, we can’t just let it fall apart and close it up. Both were unacceptable. So the deal that we put together is going to require the county as the owner of the property to fix up some things that are our responsibility and then when we do, have the outside company to start investing tens of millions of dollars that we would ordinarily have had to spend.

Editor’s Note: The County Executive said he was hopeful that the Board of Legislators would approve the contract in the near term.

 In-Depth: What’s the latest on the North 60 proposal?

 County Executive Robert AstorinoAstorino: We are moving forward (on the North 60 project). The deal was put together (with Fareri Associates of Greenwich, CT) after a year’s work with our administration and our Law Department. Some of the negotiations were so meticulous, that for me as a non-lawyer it got ridiculous—but these are the kinds of things that had to be tied up so it is not tied up in court five years from now or 10 years from now on minor issues… It is now in the hands of the County Board to review the lease. The Town of Mount Pleasant is also part of the process, and I have talked with Mount Pleasant Supervisor Carl Fulgenzi often about this and the town is excited because it is going to be all ratables. When fully built out we expect it to generate $16 million in taxes and rent. And it really fits in with the grand scheme of where this economy in Westchester is going and that is high-tech, it is biotech, it is health care, it is high skilled….

 In-Depth: What do you think are the chief impediments to growth in Westchester are?

 Astorino: I think the one thing that we are concerned about is what is happening in New York City. It is very overheated right now in terms of development, certainly high-end residential and we are concerned that if something bursts in New York City it is certainly going to affect Westchester and the Hudson Valley. Having said that we are trying to insulate ourselves. We have a separate economy here that runs on its own engines. Health care, bioscience and life science industries are so important because they have a lot of pluses with regard to the talent we are trying to bring in and with the housing that is being built. So it is all integrated.

The world of having a major corporation that employs 5,000 or 10,000 people in your town or county is just not where we are today. We are thrilled that PepsiCo wants to stay here. They are a very big part of our county, as are MasterCard, IBM, Dannon and others, but you have to be diverse…

 In-Depth: How do you see the county’s economy performing in 2016?

 Astorino7Astorino: I think the economy in the region is moving in the right direction. There are some caution flags that we have to be cognizant of and they generally have to do with New York City, and we could feel those (possible negative) effects. You look at the sales tax. Our sales tax is down for the first couple of months (of 2016) and that is an indication of how consumers are spending their money and where they are spending it. A part of that is due to gas and oil prices still being low, but some sectors are doing better than others… One of the reasons we have had six years of no (county) tax increases is because we manage very carefully as we go through the year so nothing is a surprise when we are doing the budget for the following year. We have been able to hold down some of the hirings that we would do and the spending that we would do and that is not going to change despite the outcries from some.

John Jordan
Editor, Real Estate In-Depth