Consultants who have reviewed plans by Westchester County to lease land for a $1.2 billion biotechnology research center have given the project a green light.
The North 60 lease, as the proposal has been called, has been in the works since 2012 when the county sought proposals to develop 60 acres in the Valhalla section of Mount Pleasant.
The county’s concept is to create a research and development complex that will support Westchester’s growing medical and biotech industries.
Fareri Associates LP, Greenwich, owns 20 acres next to the North 60 and won the rights to develop the property.
Fareri has proposed building 3 million square feet of space for medical offices, research, retail, restaurants, a hotel and a children’s museum. The first phase would include about 500,000 square feet of development. The whole project is expected to take at least 25 years to finish.
The developer has estimated that the project will create 4,000 construction jobs and 8,000 permanent jobs, pay $7 million in annual rents to the county and generate $9 million a year in local real estate taxes.
The site is located along Sprain Brook Parkway and next to Kensico Reservoir.
More importantly, it is part of the 512-acre Grasslands Reservation that the county bought in 1915 to provide an isolated setting for a poor house, a penitentiary and a public hospital.
The location is no longer isolated, as it is surrounded by commercial corridors and office parks.
The Grasslands campus is home to Westchester Medical Center and New York Medical College. The county operates a lab and research facility, a fire and emergency training center, a public works facility and a jail.
Fareri has an emotional connection to the campus. He raised money for the Maria Fareri Children’s Hospital, in memory of his daughter who died in 1995 at age 13.
North 60 is also near Regeneron Pharmaceuticals, the state’s largest biotechnology company, in Tarrytown.
Initially, the county would rent the land for $125,000 a year. As buildings are occupied, the county would receive from 3 percent to 6 percent of gross rental income, based on the type of space.
Developer John Fareri and Robert Astorino, the county executive, have expressed hopes that the lease will be approved by the end of the year. But the consulting may have pushed the process into next year.
The county is going over the lease “word-by-word,” said Michael Kaplowitz, chairman of the Board of Legislators, to incorporate the consultants’ recommendations.
Legislators are proceeding quickly, he said, but they also are under pressure to finish the 2017 county budget and a proposed airport lease by Dec. 27.
The deal would run for 99 years. The county charter limits leases to 30 years, so legislators would have to hold a public hearing and amend the charter.
The deal must first be approved by committees and then by 12 out of 17 legislators.
“This is probably the biggest deal we’ll do in our careers here as legislators,” MaryJane Shimsky, chairwoman of the infrastructure committee, said at a Nov. 15 meeting to review the consultants’ reports.
She expects her committee to vote on the lease in early January.
The board hired Hudson Property Advisors to appraise the property, Zarin & Steinmetz land use law firm to review the proposed lease and the Weitzman Group to do an economic analysis.
The appraisal concludes that the property is worth $27.7 million and the annual rent is worth $1.8 million. The report assumes that the acreage will be subdivided from a 90-acre tract and that the property receives all necessary regulatory approvals.
The developer would be responsible for installing all utilities, at a cost that Fareri estimates at $30 million to $40 million.
Hudson Property Advisors concludes that the proposed development is physically possible, financially feasible and the highest and best use of the land. The report also notes that it will take many years for the market to absorb all 3 million square feet of space.
David Steinmetz told the infrastructure committee that some of the terms of the proposed lease were not well defined and some aspects needed to be tightened up.
He also recommended that the legislators take a more active role than usual as the planning department oversees the project.
Weitzman reported that Westchester has emerged as a major regional healthcare hub. But the lack of available space and a scarcity of large undeveloped tracts has deterred biotechnology tenants from moving here.
Weitzman cited several challenges. The developer still must get the land rezoned by the Town of Mount Pleasant. Biotechnology requires heavy water usage and there are potential watershed issues, so the site will need approval from the New York City Department of Environmental Protection. The consultants were unable to say whether Fareri’s preliminary construction estimates are reasonable. And Westchester Medical Center has rights concerning the property and approval of medical tenants.
Overall, Weitzman concluded that the North 60 tract is marketable and the projected rents appear reasonable. It recommended that the county enter into a long-term lease with Fareri Associates.
Neil DeLuca of Fareri Associates told the committee that the developer expects Mount Pleasant to take two years to approve the project. Preliminary site work would take about three years. The first building would open in five years, after the board of legislators approved the lease.