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October 15, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

Towns, trains and water are the keys to development in Westchester

Most people ask me “What is all the building going on in Westchester?” Even more people ask me “Why are they building so many apartments?” The answers have a lot more to do with new societal trends than they do with real estate. Westchester has morphed from a sleepy bedroom community that rarely saw any interest from developers outside the county to a vibrant county attracting major developers from not only New York City but from throughout the U.S.

Greenberg

Millennials (who at 75 million strong now compose almost a quarter of our population and almost 40% of our workforce) are marrying later and having children later. They prefer to live in cities or towns where they can walk to transportation (Metro-North), restaurants, entertainment, retail and services. They likely do not own or lease cars, but will use trains, Ubers and Zipcars when they need to travel. They are content living in small studio or one-bedroom apartments, so long as there are other amenities in their building such as game rooms, business centers, swimming pools and roof decks or barbecue areas. Their lifestyles do not involve much entertaining in their apartments, but do involve hanging out with their friends and fellow tenants in the common/amenity areas of their building.

DON’T FORGET ABOUT THE BOOMERS
At the other end of the age spectrum are the baby boomers. Primarily empty nesters, many of them want to sell their homes and downsize. They may not want to buy again. They may not want to live in a townhouse or condominium. So, they are also attracted to these amenity-rich new apartments. They may not need two cars anymore. They will also appreciate the amenities on site. These apartments are open concept and move-in ready, which is very attractive to this demographic. Don’t forget the people who are in transition, including the divorced and those who have sold their houses and are not sure of
their next steps.

There are also retirees who come from Westchester and are now official Florida residents. But they also want a full-time home here. This is another market segment that the new buildings attract. For the very affluent downsizers, there are two condominium developments that are very attractive: Watermark Pointe on the Sound in New Rochelle  and the St. Regis condominiums on an inland site in Rye.

I recently heard a very savvy developer say, “You want a town, trains or water” to attract new residents. If you look at Yonkers (the Hudson River and Metro-North Hudson Line), New Rochelle (the Long Island Sound and the Metro-North New Haven Line) and White Plains (restaurants, bars, entertainment and the Metro-North Harlem Line), you see how that logic is playing out in Westchester.

The market has proven that the developers are correct. I have heard uniformly that new buildings are leasing faster and at higher rents than the developers had projected. And the few condominiums are selling quickly at high prices. Don’t forget that prior to all this new construction the median age of Westchester’s apartment stock was about 50 years, and not at all in sync with today’s lifestyles. New product, with big amenity packages, is attractive to today’s renters.

The building on Mamaroneck Avenue was built in 1927. Photo by Aleesia Forni

REINVENTING OLD BUILDINGS AND SITES
Many buildings in our county (office, residential and other product types) have reached the age where they are functionally obsolete. One example of this is the YMCA building on Mamaroneck Avenue in White Plains, which was just sold to an out-of-town developer to develop multifamily residential. Another is the former Esplanade, which served primarily as a nursing home and assisted living facility. Though this redevelopment project has stalled, it will likely be multifamily as well. Across the street, on the former Westchester Pavilion site, developer Lennar (the nation’s largest residential developer) on March 6, 2019, received approvals for a revised mixed-use project with 814 apartments in two buildings to be built in two phases.

A rendering of the 440 Hamilton project.

BIG-NAME DEVELOPERS COME TO WESTCHESTER
Prominent New York City-based developer Rose Associates is focused on redeveloping the former AT&T office building at the corner of North Broadway and Hamilton Avenue into multifamily residential, including the conversion of the existing office building to apartments, and the development of the present parking lot into townhomes and a parking structure. This is one of the very few conversions of an existing office building to residential. At the corner of East Post Road and Mamaroneck Avenue, Lennar has demolished the existing office/retail buildings and is now doing site work for another 450 units or so, with retail at street level. This site had been considered a prime development site for at least three decades.

On June 28, Rose Associates announced that, with a partner, it had bought the former United Hospital site in Port Chester from an entity controlled by Starwood Capital. Starwood had purchased the abandoned hospital site in 2006, and planned an approximately 1 million-square-foot development including apartments, a hotel, restaurants and offices. Then the project stalled and Starwood put the property on the market again a couple of years ago. This is a key site for Port Chester and the village is very anxious to have this major site redeveloped after languishing for so long. At the confluence of I-287, I-95 and Route 1, this will be one of the largest developments on the east side of the county.

An important project in White Plains is City Square. This was the former two-building Westchester Financial Center office complex across from the Metro-North station. Martin Ginsburg is in the early stages of seeking approvals from the city to convert most or all of the 1-11 Martine Ave. former office building into apartments. This is another one of the very few conversions of an existing building to a different use. He has applied to White Plains to expand the street level space of the adjacent 50 Main St. to create a streetscape of restaurants and specialty retail. He is also creating a large amenities floor on the mezzanine of 50 Main and recreating a green plaza that will serve both the office and residential tenants. This is a much-needed improvement near the train station as this area is completely devoid of restaurants, retail and services. It is also taking more office space off the market, further tightening up the CBD (central business district) market, which has boomed in the past few years.

The White Plains Mall is emptying out and will soon be demolished to build the four-building Hamilton Green complex, occupying a full city block. This is a long-overdue improvement on this site which has been considered for redevelopment for more than 30 years.

The former Walmart building will soon be empty as Burlington Coat Factory moves across the street to City Center. It is unlikely that this 270,000-square-foot building will be used again for retail, and may well be redeveloped into residential in the future.

DEVELOPMENT IS RAMPING UP IN THE SUBURBS
Outside of the White Plains downtown area, the owners of 120 Bloomingdale Road have applied for approvals to build a senior living residence on their parking lot. The Collection, a proposed fitness lifestyle retail center just south of White Plains Hospital, has extended its approvals for another year as they continue their campaign to pre-lease its space.

The French-American School, which has been mired in litigation for more than seven years over its attempt to build a school on the former Ridgeway Country Club, has decided to put three parcels on the market for single-family home development. And RPW Group has received approvals to build 303 residential units in three buildings on the site of the office building at 1133 Westchester Ave. This is an example of how office parks are using excess land to add residential product to their mix, and another example of the live/work/play lifestyle that developers are looking to create. The biggest example of this phenomenon is on Westchester Park Drive, on which there are two office buildings and a 210,000-square-foot LifeTime Fitness center. A vacant 160,000-square-foot office building will be demolished to construct two multifamily residential buildings, bringing the live-work-play concept to full fruition.

The Yonkers waterfront.

PLENTY OF ACTION IN YONKERS
Downtown Yonkers is continuing its building boom. RXR is in the final stages of construction on its two-building complex and the Modera opened for leasing a few months ago on the Hudson River waterfront. Martin Ginsburg continues his march up and down Warburton Avenue with new buildings. Great river views and short walks to the Metro-North station make these buildings very attractive to renters. The RiverWalk along the Hudson is another great amenity, as are the nearby daylightings of the Saw Mill River that Yonkers has completed. These are areas where the (formerly underground) river has been opened up with plantings and waterfalls, forming parks in the city (and other water features in addition to the Hudson River) for residents to enjoy.

Restaurants that had been pioneers in Yonkers (X2O, Dolphin, Zuppa and Yonkers Brewing Company) are busier now, with the new residents patronizing the local establishments instead of only people driving in from other communities.

The Chicken Island site behind City Hall has been purchased by AMS Acquisition Corp. and will likely be the site of high-rise residential and retail. This group has also purchased the former Teutonia Hall site, which they will develop, as well as an office building on the river, which it is renovating. New York City-based Extell has received approvals to build approximately 1,400 low-rise units on Alexander Street.

The next wave of development will likely be entertainment/retail and service establishments, to serve the growing population downtown. It is very hard to find brick-and-mortar retailers today, but with the quick leaseups of new apartments it will be easier for them to make lease commitments than it was a few years ago when the new buildings were only concepts and there were no residents.

A rendering of RXR’s apartment tower development at 26 S. Division St. in New Rochelle.

NEW ROCHELLE’S SIGNIFICANT GROWTH
Development in New Rochelle is ramping up significantly. RXR has begun leasing its first 28-story building. It also has two more 28-story buildings approved at the site of the former Church-Division Parking Structure. New York City developer Fisher Brothers is proposing a large residential development at 277 North Ave., just across from the Metro-North station. MacQuesten Companies is proposing a large project downtown which will contain housing plus a relocated City Hall. L&M is clearing the site for a large project that will front on LeCount Place and Main Street.

Cappelli Development has topped off a 14-story, micro-unit residential building on LeCount Place, and has just been approved to construct a 28-story building opposite the new RXR building. At these heights, many buildings in New Rochelle will have views of Long Island Sound and/or the Manhattan skyline. The Burling Triangle adjacent to the Metro-North station is in the final stages of being redeveloped into a series of boutique apartment buildings all built with modular construction.

Pratt Landing is in the early stages of its approval process. This project will transform the New Rochelle Public Works site into a waterfront development containing approximately 450 residential units, 100,000 square feet of retail, restaurant and entertainment space and a hotel. A waterfront esplanade and open space will be included. This is a great upzoning of a site that formerly stored city garbage trucks and will open up the Long Island Sound waterfront to the public.

A TRYP Hotel by Wyndham received approval in New Rochelle recently. This 225-room hotel will feature extended-stay rooms, standard hotel rooms, a roof deck with a swimming pool and venues for small business meetings and social engagements. It is adjacent to I-95 and its distinctive architecture will make it a landmark in the city and to the thousands of cars that will pass it every day. It will also incorporate a 1905 loft building as its lobby and amenity space.

THE BIG PICTURE
While apartment living will not attract everyone, it will attract many people and will revitalize many downtown areas in our cities. The towns and villages of Harrison, Chappaqua, Pleasantville, Ossining, Peekskill and other municipalities are jumping on this bandwagon as well, primarily with low to mid-rise developments in the center of town, near Metro-North stations.

These projects not only work for the residents, but for cities as well. They are getting significant fees for project reviews, approvals and for applications to the IDAs (industrial development agencies) for sales tax, mortgage tax and real estate tax benefits. In cities like Yonkers and New Rochelle, smaller and older buildings are being demolished to build high-rise buildings on those sites. These large new buildings will pay many multiples more in real estate taxes than what was there originally, even after the PILOTS (payments in lieu of taxes) that are granted to the developers. The developers also have to contribute to funds that will improve the city infrastructure, including new equipment for fire, police and other departments that serve and protect the increased population.

Howard E. Greenberg is the president of Howard Properties Ltd. in Valhalla. He can be reached at howard@howprop.com.