Westchester County Approves Incentives for Projects Worth Nearly $500 Million

John Jordan | November 2015

WHITE PLAINS—The Westchester County Industrial Development Agency granted sales and mortgage tax exemptions to four development projects valued at a combined $496 million on Sept. 24th. The largest project by far is the $275-million redevelopment of the outdated and nearly vacant Westchester Pavilion mall.

All four projects are expected to create more than 3,100 construction jobs and 422 permanent jobs upon completion.

The IDA Board granted incentives totaling more than $14 million in sales and mortgage tax exemptions for the project to be developed by Lennar Multifamily Communities that will involve the demolition of the existing Westchester Pavilion mall and the redevelopment of the property into a high rise mixed-use development.

The project calls for 756,300 square feet of residential space and 95,600 square feet of residential space. The project will create 2,895 construction jobs and 72 permanent jobs. Tim Mulcahy, president of Lennar Multifamily Communities Division for the Mid-Atlantic and Northeast, said the development will feature 707 residential units, 10% of which have been earmarked as affordable. The company is deciding whether to set side 6% of the units for low-income tenants in place of the 10% affordable requirement.

He said that there is a “tremendous pent up demand” for high quality rental communities in Westchester and specifically in the City of White Plains.

Lennar entered into a contract earlier this year to acquire the property from Urstadt Biddle Properties Inc. of Greenwich, CT. Mulcahy said that he hopes to close on the purchase of the property in the first quarter of 2016 and would like to begin construction shortly thereafter. The development is expected to be finished in the third or fourth quarter of 2018, with 95% of the property rented a year later. Mulcahy refused to divulge the contracted purchase price for the Westchester Pavilion.

He said initial construction would involve the demolition of the existing 185,000-square-foot Westchester Pavilion mall to be followed by the construction of the mixed-use development. He said that Lennar expects to retain Tishman Construction as the general contractor for the project.

Seth Mandelbaum, an attorney representing Lennar Multifamily, said that Lennar is in negotiations with the Building and Construction Trades Council of Westchester & Putnam Counties concerning a Project Labor Agreement on the project.

The project is now before the City of White Plains for site plan approval. Previously, the White Plains City Council granted a zone change for the property that would allow for the residential/retail use at the site at the intersection of Post Road and North Broadway. The property is adjacent to the Westchester One office building and The Westchester shopping mall.

“We are going to try and bring a state of the art multifamily rental community to the City of White Plains and step it up another notch,” Mulcahy said.

The average size of the units will be approximately 900 square feet. Approximately 60% of the units will be one-bedroom or studio units. There will also be two-bedroom and three-bedroom units. The average rent will be approximately $3,000 a month per unit. The range will run from approximately $1,800 for a studio to larger penthouse units that will be about 1,600 square feet that will command rents in the high $4,000s to low $5,000 range.

The IDA also approved incentives for a biotech firm’s expansion in Tarrytown, an affordable housing development in Chappaqua and a new hotel at the Rivertowns Square project in Dobbs Ferry.

The other projects approved by the IDA included sales tax exemptions for a $196-milliion expansion of Regeneron Pharmaceutical’s headquarters at the Landmark at Eastview in Tarrytown. The IDA reports that the project includes $150 million for the expansion and $46 million for renovations of existing facilities.

A 32-unit affordable housing development at the former Reader’s Digest headquarters building in Chappaqua was approved for approximately $6 million in bond financing for the $10.9 million project.

In addition, the IDA granted approximately $1.4 million in sales and mortgage recording tax exemptions for the development of a 138-unit Hilton Garden Inn to be developed by White Marsh Holding LLC at the Rivertowns Square mixed-use retail development currently under construction in Dobbs Ferry. The project has been estimated to cost approximately $17 million to complete.

John Jordan
Editor, Real Estate In-Depth