Breaking News: Westchester IDA Approves Incentives for Projects Valued at $755 Million

John Jordan | August 26, 2021

A rendering of the Gateway II project that will feature 500 apartments and 19,000 square feet of retail space in the heart of Downtown White Plains.

WHITE PLAINS—The Westchester County Industrial Development Agency this morning in a session that lasted less than 12 minutes, voted to grant incentives totaling $14.7 million to two major projects in Greenburgh and White Plains valued at a combined total of $755 million.

The IDA Board unanimously (5-0) approved granting $7.7 million in sales tax incentives for the $480-million expansion project by Regeneron Pharmaceuticals in the Town of Greenburgh. In another unanimous vote, the IDA Board approved a final resolution granting the developers of the Gateway II mixed-use project in White Plains $5.36 million in sales tax exemptions and $1.65 million in mortgage recording tax exemptions in connection with their $275-million project to be developed at 25 Lexington Ave. in Downtown White Plains.

The only discussion during the IDA session centered around the Gateway II project and the contention by the developer— GS White Plains Owner, LLC, which is led by Greystar Real Estate Partners and the Alaska Permanent Fund, and its general contractor that it could not fully abide by the IDA’s recent local workforce hiring policy.

IDA Chairperson Joan McDonald said that after the IDA approved the preliminary inducement of the project at its June 24th session, the county and the IDA worked with the developer to hire more local labor. The county held a Construction Career Fair on Aug. 23 at the New York Power Authority building in Downtown White Plains where approximately 200 potential job applicants attended the three-hour event. General contractor LRC Construction and a number of sub-contractors were on hand looking to fill positions for two major projects: Gateway II, which will involve the development of 500 housing units and The Mitchell—a mixed use luxury development on the corner of Mamaroneck Avenue and East Post Road that is currently under construction. Both developments are located in Downtown White Plains. Available job positions included: Laborers, carpenters, plumbers, drivers, electricians, sheet rockers, building maintenance, security, masonry, and more, the county stated in its announcement.

McDonald said this morning at the IDA session that in June she committed that the county and the IDA would work with the developer, the general contractor and others “to help promote the project and encourage as much local labor as we could to increase the numbers that were in the resolution.”

She added that based on the interest at the Construction Career Fair, which was attended by Westchester County Executive George Latimer, the event “shows how the IDA and the county can work with our developer community, with the building trades, with our local governments to get as many people in Westchester County and the immediately surrounding communities employed in good paying jobs.”

It should be noted that labor representative on the IDA Board, Richard McSpedon voted against the Gateway II incentives back in June due in part to the workforce modifications, but voted in favor of the incentives at this morning’s session.

A map of the proposed Parcel D building property in Greenburgh supplied to the Westchester County Industrial Development Agency by Regeneron Pharmaceuticals, Inc.

The proposed Gateway II project seeks to redevelop existing surface parking at 25 North Lexington Ave. into a 500-unit, 25-story residential apartment building. The project includes 19,000 square feet of ground floor retail and 755 parking spaces (626 serving the project and 129 spaces dedicated to the adjacent Gateway One office building, which is owned by the Alaska Permanent Fund.

The mix of apartment units includes 167 studio units, 208 one-bedroom units, 117 two-bedroom units, and eight three-bedroom units. A total of 15 on-site units will be classified as affordable in compliance with the city’s Affordable Rental Housing Program Regulations in addition to a $3.8-million contribution to the City of White Plains’ affordable housing contribution fund.

The Regeneron project is an expansion of its “Parcel D” project originally proposed in 2015 as a building not to exceed 192,000 square feet that secured Westchester IDA approval, but never moved forward.

The amended incentives application with the IDA approved this morning calls for the construction of a new two-story, 207,940-square-foot building, along with a parking structure and other infrastructure that will increase the development cost of the original project (including equipment) by approximately $331 million to $480 million.

Regeneron estimates that construction costs will total $310 million, design costs $21.7 million and FF&E (furniture, fixtures and equipment) $148.9 million. The cost of the original project in 2015 was estimated at $150 million.

The new building will primarily house Regeneron’s pre-clinical manufacturing and process development operations.

At the Westchester County IDA’s July 22 meeting, Regeneron Pharmaceuticals representatives told the agency that it expects to come before the IDA “very shortly” with another major new development project in the Town of Greenburgh.

Although Regeneron representatives did not provide any details on the new project at that session or again this morning, its representations at the July session pointed to a parcel of land where the firm has previously secured approvals from the Town of Greenburgh for the construction of a group of buildings that could total approximately 1 million square feet at 555 Saw Mill River Road.

John Jordan
Editor, Real Estate In-Depth