New investors spark a revival in downtown redevelopment
In Yonkers and White Plains, two development companies that have worked with city officials for about two decades have taken on new financial partners to revive transit-oriented, high-rise apartment projects sidetracked for several years in the economic downturn.
In Yonkers, the U.S. investment arm of a Chinese construction and real estate conglomerate has been welcomed by city officials as a major new player in downtown redevelopment. Strategic Capital LLC, a Jersey City-based subsidiary of China State Construction Engineering Corp., will invest about $200 million to acquire the Hudson Park properties on the downtown riverfront from Stamford-based Collins Enterprises LLC and build the third and final apartment tower on the 16-acre Hudson Park riverfront site beside City Pier.
In White Plains, LCOR Inc., which pioneered mixed-use redevelopment near the city”™s Metro-North Railroad station more than a decade ago with its 502-apartment Bank Street Commons, has returned to Bank Street this fall, propelled by an $80 million construction loan from Wells Fargo for the first phase of its approximately $250 million, twin-towered residential development on a former municipal parking lot in an urban renewal zone. The developer”™s bankrupt former financial partner, Lehman Brothers, has been replaced by the California State Teachers”™ Retirement System as LCOR begins construction this month after a five-year delay.
In Yonkers, owners of Collins Enterprises and city officials were joined by their new Chinese business partners at a Sept. 15 groundbreaking ceremony for Hudson Park River Club, a 24-story, 230,000-square-foot building that will include 213 studio and one- and two-bedroom rental units. Ning Yuan, chairman and CEO of Strategic Capital and president of China Construction America, said he expects his company”™s $85 million project, in which Collins Enterprises holds an equity stake, will be completed in late 2017.
As head of China Construction America, Yuan in 2013 formed Strategic Capital as a platform for investment in public infrastructure and private real estate ventures across the Americas. The company, which has said it aims to build a $3 billion property portfolio within three years, last year acquired New York City-based Plaza Construction, the general contractor on Hudson Park River Club.
(Plaza Construction CEO Richard Wood “married a girl from Yonkers,” said Yuan, pointing out his Chinese company”™s links to the city. For Strategic Capital working with city and business leaders on its debut project in the city, “Yonkers has been like a family to us.”)
Strategic Capital is wrapping up deals to acquire the entire mixed-use complex of Collins Enterprises in Yonkers, which includes Hudson Park South, a 266-unit residence with office and retail space that opened in 2003, and Hudson Park North, a 294-apartment building completed in 2008 as the credit market crisis brought large-scale development projects to a halt throughout Westchester County.
Brothers Arthur and Dwight Collins, co-principals of Collins Enterprises, in 2012 renewed plans to proceed with the third phase of their riverfront development after Berkshire Property Advisors acquired a majority stake in Hudson Park in a $147 million recapitalization. Berkshire, though, decided it did not want to invest in the final project phase, Arthur Collins said at the groundbreaking ceremony.
“We had a lot of prospects” when seeking a financing partner, Collins said. “We were asking the city to be patient. We were a victim of the market.”
“I think this is a great investment,” Yuan said of his company”™s first venture in Yonkers and Westchester County. “We are seeing more potential U.S. opportunities,” including additional investments in Yonkers, he said.
Collins said the Hudson Park complex “has rented up faster than any project” in his company”™s development portfolio in its 30-year history. Hudson Park North was fully leased less than a year after its opening, he said. Hudson Park River Club will add studio apartments to the mix at the complex, where about 70 percent of tenants commute by train to work in midtown Manhattan. “We think that”™s a great opportunity because I think there”™s a great demand for that,” Collins said of the studio rentals.
At 55 Bank St. in White Plains, LCOR initially will build a 16-story tower with 288 rental units, 3,000 square feet of ground-floor retail space and a 381-space underground parking garage. The development is expected to open in spring or summer of 2017.
The second phase of the 55 Bank St. development will include a second 16-story tower with 273 rental units, 3,350 square feet of ground-floor retail space and underground and above-grade parking for 570 vehicles.
“Our intention is to build out both towers and our timing for the second phase will be based on the market,” said James M. Driscoll, senior vice president at LCOR”™s Manhattan office. “Obviously White Plains is a great market and we”™re very excited about it.”
Driscoll said the market for transit-oriented development has grown since White Plains officials first approved the $15.5-million sale of city property to LCOR for its 55 Bank St. project in 2007.
“There continues to be an increasing preference with the millennial-generation renters and the move-down baby boomers to live in urban locations that are convenient to public transportation,” he said. “That trend continues to mature. We think there”™s a long runway ahead of us” for the transit-oriented redevelopment projects that LCOR has done for 30 years.
Driscoll noted that retail development has lagged in the city”™s downtown Bank Street area. With the completion of LCOR”™s construction project, “There”™s going to be a greater critical mass in place to support retailers in that corridor,” he said. “The more residential development that is added to Bank Street will only help.”
Like the new Chinese investor in Yonkers, LCOR expects to pursue more development projects at the southern end of the county.
“Yes, we will be looking for more opportunities to add to our portfolio,” Driscoll said. “We think Westchester is still an underserved market” both for apartment rentals and office space in urban locations more accessible to mass transit than are the county”™s office parks.