The New Rochelle Industrial Development Agency has amended a tax abatement deal to protect itself against the possibility that a portion of the $48 million 70 Nardozzi Place project isn’t built.
Simone Development Cos. in the Bronx and G&S Investors in Manhattan are building a $22.6 million public works facility for the city at Nardozzi Place. They also have approvals to build a health club and self-storage facility at the site and for a 25-year tax relief deal for the commercial elements.
Now the self-storage facility is in doubt, and if it is not built, an attorney for the developers said in a letter to the IDA, they would not achieve the financial benefits they expected under the original payment in lieu of taxes agreement.
Part of that PILOT agreement was designed to cover $2.6 million in capital costs for the public works facility, Luiz Aragon, commissioner of development, told the IDA board on Wednesday. If the storage facility is not built, the city would be on the hook for another $700,000.
He said extending the PILOT by five years would enable the city to recapture the $700,000.
The amended PILOT would cost the developers $1.6 million over 30 years, saving $9.2 million on the estimated full tax rate of $10.8 million.
The city plans to lease the 130,000-square-foot ground floor for $260,000 a year for 45 years, for offices and a garage.
LA Fitness will lease 37,000 square feet on the second level. The proposed self-storage facility would be in an adjacent, five-story structure.
The city also has started an eminent domain process to take the Auto Sunroof property at 54 Nardozzi Place, for more offices and a fueling station.
Charles B. Strome III, the city manager and IDA chair, said a couple of factors make a five-year extension acceptable. One, the city is saving about 30 percent on construction costs by having the developers build the public works facility. Two, the commercial elements of the project will not burden the school system with more students.
Ivar Hyden, vice chairman, said 30-year PILOTS are not policy, but the arrangement works because of the public works facility.
“We’re not going to be giving out 30-year PILOTS on residential buildings,” he said.
The board unanimously approved the 30-year PILOT resolution. It is meant as an alternative to the 25-year tax abatement deal, only if the self-storage facility is not built.
“We’re still trying to get the self-storage deal done,” said Peter J. Wise, the developers’ attorney.
“So far, it just hasn’t gelled.”