A hard-negotiated agreement between the Yonkers City Council and the city”™s private development partner will allow the developer to move ahead with high-rise condominiums on the Hudson waterfront and could bring the city $101 million in tax revenue and cost savings over the next 30 years.
The deal, the result of roughly five months of negotiations, gives the developer, Struever Fidelco Cappelli L.L.C., up to four years to secure financing and acquire privately owned parcels to build River Park Center, the long-sought mixed-use downtown development that would transform the Getty Square retail area and is the centerpiece of SFC”™s approximately $1.5 billion redevelopment proposal.
The council”™s real estate committee Thursday night unanimously approved the land disposition agreement, or LDA, with SFC. The full seven-member council is expected to vote on the deal Oct. 13. Council President Chuck Lesnick this week said he has a five-vote majority to pass the agreement.
In a key concession to SFC and acknowledging current market conditions, city officials uncoupled the developer”™s waterfront housing project, Palisades Point, from the downtown development, which also includes Cacace Justice Center, where a six-bay firehouse with fire department headquarters, 150-room hotel and 150,000-square-foot office building are proposed. SFC already has secured site plan and zoning approvals for Palisades Point, a 436-unit building with two 25-story towers and a five-story wing that would rise just north of the American Sugar Refining Inc. plant.
SFC will pay the city $2.85 million for two waterfront parcels and assume $12,178,000 in costs for shoreline restoration there and permanent and temporary parking at adjacent Scrimshaw House apartment building. The city expects to reap about $72.2 million in tax revenue from the waterfront development over 30 years.
As an incentive for SFC to build River Park Center after Palisades Point, council members negotiated an additional payment to the city of $2.18 million if the developer does not close on the downtown project within four years. River Park Center when fully built would include a 6,500-seat ballpark, 950 housing units in two high-rise towers and retail, restaurant, movie theatre and office space.
At full build-out, SFC”™s net purchase price for city-owned downtown and waterfront parcels will be approximately $7.1 million.
The council”™s financial consultant, G. Lamont Blackstone, said the final LDA gives 40 percent of tax revenue generated by the downtown development to the city, while 60 percent would be used to pay off bonding for infrastructure improvements needed for the downtown project. In the initial agreement worked out between Mayor Philip Amicone”™s office and SFC, the city would have received 25 percent of tax revenue in the redeveloped area, with 75 percent reserved for bond debt payments. Over 30 years, the formula change will bring the city approximately $57.4 million in added revenue, Blackstone said.
The final deal also frees the city from an obligation to purchase office space for city government in Cacace Center, making the city”™s move there optional instead. That change could save the city approximately $44 million.
In the initial proposed LDA, SFC had two years to close on the purchase of city land. Blackstone said it was important the developer have that term doubled to four years.
“We are and have been in the past two years operating in an unprecedented development environment and a very challenging one,” Blackstone said. He predicted the next two years will be “extremely challenging” for developers.?Peter Klein, SFC project director in Yonkers, said the developer negotiated to have the waterfront and downtown projects uncoupled because that was required by lender banks. “We”™re hoping the LDA vote will empower us to sign tenants and secure financing” for Palisades Point, he said.
“We”™re very committed to building on the waterfront and Getty Square,” he said.
