Target Deal in Yonkers Helps Fill Westchester’s $17M Budget Gap

John Jordan | June 2016

YONKERS—A more than 30-year effort to develop a parcel of land adjacent to the New York State Thruway has finally come to an end.

A deal reached last week between the City of Yonkers, Westchester County, its respective Industrial Development Agencies and the developer will facilitate the construction of a new 175,000-square-foot Target store at the site.

Target, which tried to secure approvals 15 years ago to build a store on the property, will build the new location at the site once it secures approvals for a zone change for the parcel. The new development was facilitated by the sale of the Austin Avenue site by the Westchester County Industrial Development Agency to Morris Builders, LP of Rutherford, NJ (operating as The Morris Companies) for $32 million.

“This has been a long time in the making, but the result is that this currently vacant property will provide taxes, provide jobs, and provide a public park,” says Yonkers Mayor Mike Spano who chairs the YIDA. “Target will now join Stew Leonard’s, Costco, and Home Depot as major destinations for shoppers coming to Austin Avenue.” Upon opening, the Target store is expected to create 560 permanent full-time jobs.

The sale could not come at a better time for Westchester County, which is in the midst of trying to close a $17-million budget gap. Terms of the sale have Westchester County eventually receiving $19 million from the land sale, while the City of Yonkers will receive $13 million from the deal. The parties to the deal are Westchester County, the Westchester County IDA, the City of Yonkers, the City of Yonkers IDA, and Morris Builders, L.P.

The Yonkers Industrial Development Agency approved the transaction on Wednesday, while the Westchester County IDA Board approved the land sale this morning. The deal now goes to the Westchester County Board of Legislators for approval.

Upon closing, Morris Builders will pay $15 million to Westchester County and $10 million to the City of Yonkers. The county will receive an additional $3 million when Yonkers issues a building permit for the big box retail store on the property, and $1 million more when the store opens. Yonkers city officials say the remainder of the funds it expects to receive from the sale will come in stages during the construction process.

Under the terms of the agreement, Morris Builders also receives an option to purchase an adjacent nine acres from the county between Sprain Road and the New York State Thruway. Additionally, the City of Yonkers will receive up to 11 acres of land from the county to establish New Hogan Park. The YIDA anticipates providing Morris Builders with a temporary property tax abatement in the future, with the abatement having a term of 10 years.

Westchester County Executive Robert Astorino says of the deal, “This agreement is an example of how county assets can be unlocked to create benefits for our residents and businesses. The $19 million in new revenue will help mitigate an anticipated budget shortfall, shore up funding for non-profits, and allow for the hire of three new police officers.”

Yonkers officials say the deal ends efforts lasting more than three decades to develop the Austin Avenue property. They note that Morris Companies has been attempting to develop the Austin Avenue property since 1985 when an agreement was originally made with the city. Target proposed 15 years ago to build a store but those plans were abandoned later due to a host of issues including failed negotiations between the county and Yonkers agencies on how to divide up the purchase price revenue.

The property is located across the New York State Thruway from the Ridge Hill shopping center.

Photo Caption: The Morris Companies’ 348,312-square-foot portfolio in Yonkers includes Stew Leonard’s Costco and Home Depot and is fully leased.  Featured photo of a Target in the Morris Companies portfolio in Heritage Square, South Brunswick, NJ

 

John Jordan
Editor, Real Estate In-Depth