Con Ed gas moratorium impacts Huguenot Partners’ New Rochelle project

Con Edison”™s newly instituted moratorium on new natural gas hookups has impacted a New Rochelle project to the tune of about $1 million, according to what the New Rochelle Industrial Development Agency (IDA) was told at its March 27 meeting. The affected project is to be built at 327-339 Huguenot Street and 33 Centre Avenue by Huguenot Partners LLC.

A rendering of the proposed project. Courtesy city of New Rochelle

While the utility has accepted gas service applications from developers of some new projects, it has called for a two-year time limit for the projects to be completed and hooked up to the gas lines. Those unable to meet the two-year deadline would have to install heating systems that can be switched to an energy source other than gas.

Con Ed has said it may not have enough natural gas to meet future demand and foresees having to cut service to some customers, thus requiring some new natural gas installations to be capable of being switched to use other forms of energy. Con Ed initially suggested that electric heat pumps be considered by developers.

“They say, ‘We”™ll work with you. We might be able to give you some extra time,”™ but I can”™t bet $100 million on ”˜we might give you some extra time,”™” developer Daniel Hollander told the IDA regarding the decision to install heating systems that can use both gas and oil. He placed the additional cost at about $1 million to cover dual-fuel boilers and oil storage tanks in order to meet Con Ed”™s interruptible service requirement.

“You don”™t have to put a lot of oil storage, but it has to get you through about a week, I think. I doubt we”™ll ever use it, but I just don”™t know. So, we”™ll have to keep dual-field boilers and have the oil on the site,” Hollander said.

The IDA voted its final approval for tax breaks for the project, which will feature two 14-story towers. The plans call for 305,000 gross square feet with 182,000 square feet devoted to residential use and 13,000 square feet for retail. There would be 115 studio apartments, 120 one-bedroom units, 40 two-bedroom units and 10 three-bedroom units.

A 259-space parking garage would be in the base of the south tower.

The IDA passed a resolution approving a mortgage tax exemption of $600,000 and $2 million in sales tax exemptions. The project would pay about $18 million in a 20-year PILOT (payment in lieu of taxes), resulting in an estimated property tax saving of about $11 million. It had given preliminary approval at its Feb. 27 meeting.

Huguenot Partners an affiliate of DHA Capital LLC. Hollander is DHA”™s managing principal.