Platinum Mile landlord Normandy plans office-park housing
In a move long expected in Westchester”™s real estate industry, a major landlord on the Platinum Mile has asked Harrison town officials to allow a multifamily residential development to be built in an underused office park in what would be the first conversion project of its kind along the Interstate 287 commercial office corridor.
Normandy Real Estate Partners LLC, owner of The Exchange portfolio of office parks in Harrison and White Plains, plans to partner with Toll Brothers, a builder of luxury homes around the nation, to build a 421-unit rental apartment building on Corporate Park Drive in Harrison. Two office buildings, one vacant and boarded up and the other with the New York State Insurance Fund as its only remaining tenant, would be demolished to make way for a residence expected to attract young professionals and empty nesters ”” older adults in the area with grown children looking to downsize their homes. A Normandy partner said the developer has estimated that latter group will make up half of the tenant population at the site.
Representatives for Normandy appeared at the Oct. 15 meeting of the Harrison Town Board to petition for zoning amendments allowing multifamily dwellings, retail and restaurants in the town”™s special business district zone that includes office parks. Those additional uses would be allowed by special exception-use permits approved by Harrison officials, White Plains attorney Frank S. McCullough Jr. wrote in the petition. McCullough represents the Normandy subsidiary that owns the properties targeted for redevelopment at 103 and 105 Corporate Park Drive.
Based in Morristown, N.J., Normandy Real Estate Partners took over the Platinum Mile office portfolio in early 2009 as a mezzanine lender to RXR Realty LLC after the Long Island-based company reportedly defaulted on its Westchester loan. The new owner renamed the approximately 1.5 million-square-foot, 15-building assemblage spread across four office parks as The Exchange.
Justin Krebs, a partner at Normandy, told Harrison officials his company has invested about $15 million to reposition its office assets on the Platinum Mile. But the new owner chose to mothball 103 Corporate Park Drive, a building with paint peeling from its outer walls that was built in the 1960s.
McCullough said the vacant building and an adjacent office building at 105 Corporate Park Drive “are both in very bad shape. There”™s been no real infusion of capital in these buildings in the last 20 years.”
Krebs said a residential development is a more attractive option that “creates a huge benefit” for the two converted properties, the Corporate Park Drive office park and the town of Harrison and its commercial corridor.
According to the updated Harrison comprehensive plan adopted by town and village officials last December, the Platinum Mile at its height in 1984 generated about 60 percent of the town”™s entire tax revenue. By 2012, however, only 12 percent of Harrison”™s tax revenue came from corporations. In the economic downturn, Harrison and other Westchester municipalities have paid out millions of dollars in legal settlements of tax certioraris brought by landlords claiming overpayment of property taxes on vacant and underleased office buildings.
“I am personally tired of paying certioraris to vacant office buildings,” Harrison Supervisor/Mayor Ronald Belmont said after hearing Normandy”™s proposal, “office buildings that are 30 percent occupied throughout Westchester County.” The town recently paid $1 million in a certiorari settlement, Belmont said, “and it”™s not going to stop.”
Krebs said demolishing the Corporate Park Drive buildings would remove more than 200,000 square feet of vacant office space and thereby spur a rise in rental rates in a tighter market. Though no retail conversion is planned on that site, Krebs said tax revenue-generating retail uses on other office-zone sites are expected to follow residential development.
Krebs said the proposed project would meet a critical need for housing for the young, highly educated and typically transitional employees drawn to work at biotech companies such as Regeneron Pharmaceuticals and Histogenics, whose new headquarters is directly across Corporate Park Drive from the proposed development.
“We”™ve heard it consistently that there”™s a lack of this kind of high-end product in the area,” Krebs said. “It”™s a huge issue for a lot of these employers that are trying to compete against people who are looking for talent in New York City or other locations.”
McCullough told town officials the redevelopment would be “a beneficial opportunity” to connect the property by walking paths to the nearby Lifetime Fitness Center on Westchester Park Drive and Heritage Realty”™s Westchester Park Center, the former Gannett Office Park. He said the developer also is discussing “ways to connect the roads so you create more of a village-type atmosphere” in the adjacent office parks in Harrison”™s so-called “teardrop area” along Westchester Avenue, a part of town that does not abut any residential neighborhoods.
“That”™s one good thing,” said Belmont, “if we get these roads connected, these parcels connected, that would be wonderful.”
The town”™s office park zone now allows special exception uses only for education ”” such as the Fordham University Westchester campus ”” and hotels, day care centers and fitness centers. However, the town”™s comprehensive plan suggests the town create a new mixed-use zone in the Platinum Mile teardrop area to allow assisted-care facilities, senior housing and other residential development as well as retail service, retail businesses and restaurants approved for special exception permits.
“Our goal is to revitalize these areas,” McCullough said. “I think this is a moment where we could do something special.”