Developers Flock to Westchester’s Cities to Build New Projects
John Jordan | April 25, 2017
WHITE PLAINS—Multifamily development has truly taken hold in downtown districts in White Plains, New Rochelle, Yonkers and Mount Vernon. Private investors are now preparing plans or breaking ground on a host of major transit-oriented projects that will no doubt reshape the skylines and fortunes of Westchester’s major cities.
Recently, developers and chief elected officials took to the stage at a number of business events to chronicle the developments in the works and offer their perspectives on why investors are betting that Millennials and empty nesters will be flocking to Westchester County in the years to come.
A panel of real estate investors at a recent event staged by The Business Council of Westchester discussed the growing number of multifamily and mixed-use development projects under construction or near breaking ground in Westchester County’s major cities near transportation hubs.
The BCW event held at the Tappan Hill in Tarrytown featured: Seth Pinsky, executive vice president, RXR Realty; Martin Berger, managing principal of Saber Real Estate Advisors; Anthony Vulpi, vice president of development for Mill Creek Residential Northeast Division, and Joseph Apicella, managing director, MacQuesten Development. Geoffrey Thompson, partner with Thompson & Bender, was the moderator.
“Over the past several years we have witnessed a phenomenon sweeping across the downtown centers of Westchester’s four most populous cities. The face, shape and dynamic of Yonkers, Mount Vernon, New Rochelle and White Plains are undergoing dramatic transformations, bringing new life and opportunities unlike anything we’ve seen in the last 50 years,” said Marsha Gordon, President and CEO of The Business Council of Westchester. “These are exciting times for our cities and our county. But to capitalize on these opportunities we must understand what is driving them and how we can ensure their continued success.’’
Thompson reported that in White Plains there are 4,000 multifamily units that are either under construction or in the pipeline and approximately 500,000 square feet of new retail/commercial space. In the City of New Rochelle there are approximately 1,000 multifamily units under construction or approved, with another 2,000 units in the planning stages. He added that in Yonkers there is approximately $1-billion in development projects underway. A total of 5,000 multifamily residential units have been recently completed, are under construction or approved for development. The hotel market in Yonkers is growing considerably with 1,200 rooms slated to be added to that sector. Finally, the City of Mount Vernon is also seeing significant development interest with 8,000 residential units either proposed, in the regulatory process or under construction. By 2018 the city expects to add more than 1 million square feet of new retail space, Thompson added.
Pinsky said the strong New York City economy has fueled tremendous commercial and multifamily growth in the New York metropolitan area. That development boon has fueled higher costs in not only Manhattan but also in the outer boroughs of Brooklyn and Queens that have pushed some residents or apartment seekers out of those areas. He added that in two key demographics—Millennials and empty nesters—“there is an increasing desire for walkable and diverse neighborhoods with character and transit connectivity.” Pinsky’s RXR Realty is currently building major suburban residential projects in Downtown New Rochelle and Yonkers.
He said another recent trend is that some suburban locations prime for multifamily development have reversed previous policies and are now welcoming new development. He said the suburbs in the past two decades had a difficult time retaining some segments of its population as well as businesses. Due to those market forces, government costs have increased, while tax revenues have declined or remained flat. He said that some communities are now welcoming new development and specifically cited major cities in Westchester County as clear examples of the new government mindset.
Another emerging demographic driving interest in new rental housing in Westchester are divorced parents that Pinsky noted are looking for a new lifestyle but want to stay close to their children.
Apicella said that municipal investment in its infrastructure is a critical component to bringing in new development. Apicella is a former executive with Cappelli Enterprises, which built or proposed major high-rise multi-family and condominium developments in White Plains, New Rochelle and Yonkers. He now is an executive with MacQuesten Development, which is building the 81-unit, 11-story The Modern and looking to develop 22 S. West, a 20-story mixed-use residential project located near the Mount Vernon West Metro North Railroad station.
He praised Mount Vernon Mayor Richard Thomas’ recent efforts in securing state funding for infrastructure projects that will help attract investment in the city.
Vulpi, whose firm Mill Creek Residential is developing Palisades Point, a 324-unit high-rise on the Yonkers waterfront, said that at its projects the diverse mix of Millennials and baby boomers/empty nester and divorcees have been driving sales throughout its portfolio.
He noted that the company forecast empty nesters and divorcees would make up about 15% of the leases signed at a property in Mineola. In fact, the empty nester/divorcee niche made up approximately 50% of the apartment tenants at the property.
Berger stressed that a location in addition to having nearby transit, must offer diversity and cultural opportunities. His firm Saber Real Estate Advisors is looking to build “The Collection,” a mixed-use residential project to be built on the former Key Ford site on Westchester Avenue in White Plains. The project will feature luxury residential rental apartment units, retail space and a hotel
“No one is going to move into a Westchester city only for an apartment unit,” he said. “They want a unique experience. They want culture and they want it at their doorstep. So, for a city to be successful, it is going to have to offer that unique experience within a stone’s throw away.”
White Plains Mayor Thomas Roach, who was the guest speaker at the March 23rd meeting of the Hudson Gateway Association of Realtors Commercial Investment Division, provided updates on a host of major projects in the development pipeline, including ongoing construction at Lennar Inc.’s 55 Bank St. apartment development near the White Plains train station and the redevelopment of the shuttered Westchester Pavilion into a mixed-use multifamily development. Other major projects in the planning stages include mixed-use development projects on Westchester Ave., adjacent to the Westchester shopping mall; on Post Road at the former Sholz car dealership parcel; as well as the redevelopment of the former AT&T building in Downtown White Plains and the planned redevelopment of the former White Plains Mall.
The mayor revealed at the CID event that requests for expression of interest in the White Plains Metro North train station area development project will go out in the next several weeks. The solicitation is an outgrowth of a study of the train station and adjacent city parcels financed by a $1-million grant from New York State.
The property that could be developed includes parcels adjacent to the Metro North White Plains station as well as the existing city-owned parking garage. After the solicitation, Mayor Roach said the city and interested parties will assess the market to determine what types of development would be viable. Afterwards, the city would then issue a Request for Proposals and eventually select a winning development proposal.
Mayor Roach said he hopes that the entire process will take about a year to select a winning bidder for the project. During his presentation at the CID meeting, the mayor said initial development possibilities would include street retail, multifamily development, as well as event-oriented space and some open space.
He added that in addition to the potential private development at city-owned parcels at or near the station, Metro North has also promised both near-term and long-term improvements to the White Plains station. Metro North was one of a host of stakeholders that participated in the state-funded study of the train station. Others included: Westchester County and the New York State Department of Transportation. He said that Metro North’s planned investment in the train station is based in large part on the city’s goal of making improvements in the area surrounding the station.
Mayor Roach said the future improvements and private investment at or near the train station “will change the perception of the city from people who only see it from the train,” he said. “It will be a huge benefit and it will improve the quality of life of people who live at that end of the city.”
He noted that urban renewal beginning in the 1960s and 1970s removed street retail from the three-block area beginning at the train station and running the length of the Galleria Mall until near Mamaroneck Avenue, thus creating an unsightly corridor from the station.
The mayor said that the future development and improvements will also relieve the “chaos” that now exists by the train station with taxi-cabs, corporate shuttles etc. that now line up there, particularly at peak commuter periods.
At a meeting of the Building Owners and Managers Association on April 13th, Yonkers Mayor Mike Spano, New Rochelle Mayor Noam Bramson and White Plains Mayor Roach listed some of the impressive projects that will help revitalize their respective downtown districts, but also discussed the challenges they believe their cities will need to overcome in the years ahead.
Each mayor had a different take on the challenges they face in the next five to 10 years. Mayor Spano said that Yonkers and other municipalities in New York will continue to struggle with keeping their budgets in line and in conformance with the state’s 2% tax cap. Mayor Roach said his city’s biggest challenge will be how it can promote and foster the addition of affordable housing stock to its inventory while development costs continue to go higher.
Mayor Bramson said there was a “polarized reaction” when the first new high-rise buildings were erected in the City of New Rochelle. Since then, the city has successfully adopted a new downtown master plan, rezoning and expedited approval process that has met with overwhelming public support and has prompted significant investor interest.
He said the city must continue to work “to create a climate in which all people feel they benefit from these changes, recognizing an enhanced tax base, a broader range of goods and services and an opportunity for our kids and our grandkids to find a place where they can live and want to live.”
Bramson also said that the extent of the development boom in the Queen City and other cities and municipalities in Westchester is contingent on a healthy national economy.
“I am kept up at night by fears of the overall national economy,” Mayor Bramson said, noting that his administration first took office in New Rochelle just as the “Great Recession” took hold in 2007-2008. “You can have the greatest plan in the world, you can have the greatest team executing that plan, but if the economic circumstances are not right, nothing is going to happen,” Mayor Bramson said.
He later added, “I very much hope that we will have enough of a window, you know two, three, four or five years. We don’t need a blazing economy, we just need a good enough economy during that period of time to get a chance to execute on our plans.”
Editor, Real Estate In-Depth