Home Banking & Finance New Rochelle IDA approves $41.7M in tax subsidies, considers another $67.8M

New Rochelle IDA approves $41.7M in tax subsidies, considers another $67.8M

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The New Rochelle Industrial Development Agency approved $41.7 million in tax relief for two apartment-retail projects on June 27, as well as gave preliminary approval to two more projects that could get $67.8 million in subsidies.

Together, the four developments are budgeted for $689.4 million and could receive $109.5 million in tax incentives over 20 to 30 years.

Six residents objected to the property tax abatement plans as too generous and as unnecessary. “These are wealthy developers,” said Greg Gorman. “They don’t need breaks.”

But Charles B. Strome III, the city manager and IDA chairman, said that when all fees and taxes are calculated, the city and school district will receive more revenues than the underdeveloped properties produce now. What’s more, the projects create jobs and the developers are required to provide subsidized housing.

As proposed, the projects would create 1,607 new apartments, including 126 subsidized units in the buildings and another 73 to be built elsewhere.

The plans call for nearly 56,891 square feet of retail space, 1,983 construction jobs and, when the buildings open, 44 full-time and seven part-time jobs.

Most of the incentives are in the form of property tax abatements for 20 to 30 years. Developers would pay $91.5 million in fees and save $84 million on property taxes. Sales tax exemptions during construction would be worth an estimated $20.4 million. Mortgage recording tax exemptions are estimated at $5.1 million.

The IDA approved subsidies for a four-story addition to a two-story building at 545 North Ave., the smallest structure among the projects discussed but arguably the most innovative. The 90-year-old building is across the street from City Hall and has storefronts and offices. The ground floor retail space will be kept and 56 apartments will be built.

The four-story addition will employ “mass timber” technology, in which cross-laminated timber is prefabricated and then quickly assembled on site like a Lego kit. The wood weighs significantly less than concrete, enabling the old building to support more floors.

The IDA approved a 20-year payment-in-lieu-of-taxes agreement that will cost the developer nearly $3.4 million in payments but save $2.2 million on the full property tax rate, $524,708 on sales taxes and $119,492 on recording the mortgage.

The National Development Council, a consultant that analyzes tax incentives for the IDA, estimated a net value of $1.2 million to the city over 20 years.

The developer is Two Hamilton Ave Co. Inc., with addresses in Manhattan and Cos Cob, Connecticut, where Mark Hellman is president. Spiritos Properties LLC, based in Manhattan, is the development manager.

The IDA also granted incentives for a $166.1 million structure at 14 Le Count Place, including a 30-year pilot agreement costing $20.4 million. The pilot saves the developer $32.6 million in property taxes, a 62 percent break. It also received a sales tax exemption estimated at $5.1 million and mortgage recording tax exemption of $1.1 million.

It was the Le Count project that residents objected to the most during a public hearing. Thirty-year pilots are too long, Denise Ward said. “The citizens of New Rochelle are not going to let this go.”

The unique aspect of the Le Count project is the size of the housing subsidy. Most projects approved by the IDA price “affordable housing” rents at 80 percent of the area median income (AMI). That works out to an annual income of about $112,000 for a family of four.

“That shuts out a lot of people,” Strome said. “This project is at 50 to 60 percent of AMI. That’s a big positive in my view.”

The 27-floor structure will have 379 apartments, including 76 subsidized units, and 6,200 square feet of retail space. The building will feature a pair of outside terraces, dog run, gym, children’s playroom, workspace for artists, lounge and game room. Several two-story structures, including a former funeral home, will be razed.

The project is expected to create 758 construction jobs and then one part-time and 10 full-time jobs.

The developer is WBLM 14 Le Count Owner LLC, a partnership of Chappaqua-based Wilder Balter Partners Inc. and Larchmont-based L+M Development Partners.

The IDA also scheduled public hearings for two projects and gave them preliminary approvals for potential savings.

Fisher Development Associates, based in Manhattan, wants to build a $170 million, 23-story tower at 277 North Ave. The structure would have 442 apartments and 13,000 square feet of retail space.

The developer is proposing about $25.1 million in IDA subsidies, including $14.5 million in property taxes, $5 million in sales taxes and $1.4 million in the mortgage recording tax.

RXR Realty, based in Uniondale, has budgeted $335 million for two 28-story towers at 26 Division St., with 730 apartments, 25,221 square feet of retail space and a pedestrian plaza separating the buildings.

Seventy-three subsidized apartments would be provided off-site. The project is expected to create 750 construction jobs and 107 full-time jobs.

The work would be phased — beginning with one tower and the plaza, followed by the second structure — over four years.

RXR is proposing $42.7 million in subsidies, including $29.7 million in property taxes, $10.5 million in sales taxes and $2.5 million on the mortgage recording tax.

The seven-member IDA consented to all four projects by unanimous votes.

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2 COMMENTS

  1. IDA’s were created to brings commerce and industry into an area and help feed the economics; now they have become welfare for any developer wanting to erect single or multi use residential projects. And the Boards who make these PILOT decisions never take into account the hundreds and thousands of people that will drain the infrastructure, schools and resources without paying their fair share of taxes.. Lower Hudson Valley is soon going to become bankrupt.

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