Michael V. Coratolo has worked in commercial real estate for more than 30 years as a mortgage broker, developer, property owner and manager in New York City and in Westchester and Rockland counties. Nothing in his experience compares to what he calls “this drastic time” in the market for tenants and landlords alike.
“It”™s been a rough couple of years,” said Coratolo. With banks not lending and long-time tenants forced out of business by the economy, “2008 and 2009 were probably the worst two years that I can remember.”
He stood on North Central Avenue near the corner of East Hartsdale Avenue in the town of Greenburgh, where he and his partner at Coratolo & Carrieri Associates have their office and own a row of retail stores. Coratolo, who has a vision of retail and residential redevelopment that would transform the corner into a village neighborhood, less than a mile from the Hartsdale Metro-North train station, pointed out adjacent properties, some vacant, that he wants to acquire for his dream project.
He expects town officials in Greenburgh will oppose his plans. His conviction stems from his frustrating experiences with officials in Greenburgh and Pelham Manor and in Rockland County communities too.
”˜This is criminal punishment”™
On Central Avenue in Greenburgh, other developers, real estate brokers, landlords and tenants share his frustration and a sense of urgency in surviving this unprecedented time.
At 2 N. Central Ave., a new tenant, Najib Alkaifee, waited for the town”™s plumbing inspector to check out his Greenland Deli. Inspection delays forced him to postpone delivery of his perishable stock. The deli owner has invested $200,000 in new equipment and renovations to the 1,400-square-foot corner store, vacated more than two years ago by a florist who was forced to close after 38 years.
“We planned to finish in two months,” said Alkaifee. “Now it”™s seven months. I finished everything. I just wait for them now.” Dealing with government inspectors who don”™t return his phone calls, “Sometimes you wait for nothing. You don”™t know what to do,” he said.
The Yemen native and a family relative also opened Gn Deli on White Plains Road in the Bronx. “One month there and we”™re finished” with the required city approvals, he said. “The small towns, they squeeze you too much.”
“This man”™s paying rent for several months,” said his landlord Coratolo, “in a space where he cannot make a dime. The bleeding has to stop. This is criminal punishment, what this man has gone through here.”
Town of Greenburgh Supervisor Paul Feiner agreed the town needs to become more “business-friendly” to reverse the mounting retail vacancies on Central Avenue and increase the city”™s tax revenue from business properties. “We”™re sometimes treating businesses like criminals,” he said. “I basically feel if we want to be business-friendly, we have to ease some of the regulations.”
Supervisor calls for action
Feiner recently led a round-table discussion of solutions to the Central Avenue vacancy crisis that drew about 50 property owners and developers, brokers, tenants and town officials. The town needs to be more active in attracting retailers, he told the group, especially at a time when companies already doing business in Greenburgh are filing court challenges to tax assessments on properties that have steeply lost value in the recession.
“Unless we do things a little differently, it”™s going to be impossible to keep the taxes under control” for residential owners, Feiner said. “In this economy, we really don”™t have a choice. We have to be more business-friendly.”
Greenburgh Assessor Edye McCarthy said the town this year will refund about $3.5 million to property owners in tax certiorari cases. The town”™s tax refunds in 2011 are projected at $5 million, she said.
Feiner said the opening of Ridge Hill, the Forest City Ratner Cos. mixed-use development in Yonkers, could create even more vacancies on Central Avenue.
David Wroclawski, a broker at Seville Realty L.L.C. in Yonkers who works with 30 to 40 retail tenants on the avenue, said Ridge Hill “is definitely going to siphon off traffic from Central Avenue” as well as from downtown White Plains malls and the Cross County Center in Yonkers. “You”™re going to have to split the pie up” to carve an extra slice for Ridge Hill, he said.
“Guys, it”™s bad out there now but it”™s going to get much worse in the next 18 months to 20 months,” Wroclawski told the group. “This is just the tip of the iceberg.”
“I”™ve never seen this many vacancies on Central Avenue,” Wroclawski later said. “That”™s very disturbing.”
With numerous leases coming up for renewal in the next two years, tenants “are hesitant to do an early renewal,” thinking rents might come down even more, he said. And with so much space available, “There”™s an empty store across the street, so I”™m negotiating against the empty store.” In the last two years, the broker has worked out short-term rent reductions for several hurting tenants.
A need to expedite the process
Many at the meeting said excessive parking-space requirements, floor area ratios that restrict owners to building on only about 13 percent of their lot space and a lengthy and costly approval process of up to three years keep prospective retailers off Central Avenue.
A new comprehensive plan being drafted by town officials will address the floor area ratio and parking issues. But the plan is not expected to be adopted until summer of 2011. That is too late for Central Avenue, Coratolo and others in the market said. They urged town officials to take emergency measures to speed tenants”™ entry and fill vacancies despite the risk of legal challenges to those actions.
“What should take three months and takes three years should be reduced,” shopping-center developer William B. Weinberg said of the town approval process. He later called the town”™s floor area ratio for Central Avenue commercial properties “totally counterproductive” and said it “renders much of the land unusable.”
Weinberg”™s company, Bilwin Development Affiliates, owns an approximately 15,000-square-foot shopping center in Greenburgh and the Bed Bath & Beyond center on Central Avenue in Yonkers. After initial resistance, the Eastchester developer said, Yonkers officials brought together the various boards whose project approvals were needed in joint sessions that expedited the process. Weinberg suggested Greenburgh do the same.
Greenburgh Commissioner of Community Development and Conservation Thomas Madden said the approval process has been reduced from three years to nine months since he took over the office.
“Nine months, in this economy, in this environment, is totally unacceptable,” Weinberg shot back.
“Greenburgh is not open for business in the minds of retailers,” said Bonnie Silverman, president of Silverman Realty Group Inc. in White Plains.
“They”™re going to White Plains and they”™re going to Yonkers because it”™s easier to get approval.
“I think all the retailers want to know is, how long is it going to take to get in and how much?”™”™ said Silverman.
“You will see positive changes in the town,” Feiner assured the brokers and landlords. “We”™re going to be much more business-friendly.” Get out that message to tenants, he urged.
At his corner on North Central Avenue, Coratolo said he doesn”™t expect to make money on the development he envisions. At this point in his up-and-down-and-up-again career, he doesn”™t need it, he said. If he doesn”™t develop the corner, he hopes someone else will.
“I”™d love to see this town thrive, not just survive,” said Coratolo. “It”™s a great town, really a nice place to be. We just need the sheriff to back off a little bit.”
