Following its recent debt-shedding bankruptcy filing, The Reader”™s Digest Association Inc. is reviewing its real estate needs and costs and exploring options that include the global media and marketing company”™s relocation from the landmark headquarters in Pleasantville it has occupied for 70 years.
Even if a move is made, the company is likely to stay in Westchester County, a Reader”™s Digest spokesman said last week. And the owners of the 116-acre campus sold five years ago by Reader”™s Digest are in talks with company officials to keep the publishing giant as a tenant in possibly reduced space at the property in the town of New Castle.
Meanwhile, New Castle officials recently ended an extended public comment period on Chappaqua Crossing, a 278-unit housing development, made up largely of age-restricted residences for persons 55 and older, proposed by Summit Development L.L.C., of Southport, Conn., and Greenfield Partners L.L.C., of South Norwalk, Conn., on the former Reader”™s Digest grounds. The partners”™ planning consultant, Divney Tung Schwalbe L.L.P. in White Plains, over the next couple of months will incorporate some 185 received comments into a final environmental impact statement that is expected to be presented to the town board for hearings this coming winter, a spokesman for the developers said last week.
“Despite all these delays, the town board has kept the process moving,” said Summit/Greenfield spokesman Geoffrey S. Thompson. “It hasn”™t moved as quickly as we”™d like, but it has kept moving.”
Summit/Greenfield paid $59 million for the property in late 2004. Reader”™s Digest currently leases about 290,000 square feet of space for its global headquarters operations in the 690,000-square-foot office complex, built in seven stages over the years as Reader”™s Digest grew out of its original building that opened in 1939. Other tenants there are the Mount Kisco Medical Group, Northern Westchester Hospital and FiberMedia”™s Westchester data center, which together occupy a total of about 90,000 square feet.
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Town zoning law limits office occupancy on the campus to four tenants and 490,000 square feet.
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Summit/Greenfield is seeking a zoning change to allow multiple tenants and full use of the 535,000 square feet of commercial office space that will be available if the Chappaqua Crossing project is approved and two buildings are demolished to make way for housing construction. But the New Castle Zoning Board of Appeals will not act on the developers”™ appeal until the town board first decides the fate of Chappaqua Crossing, Thompson said.
Reader”™s Digest spokesman William Adler said the company has looked at other real estate and prices as part of its review of existing contracts in its Chapter 11 bankruptcy filing for its U.S. companies. The corporation in August filed the bankruptcy petitions as part of a debt-for-equity restructuring plan that will allow it to reduce its total debt from approximately $2.2 billion to $550 million.
“We”™re in a research mode right now and haven”™t made any decision regarding real estate,” Adler said. A similar review is under way for the company”™s New York City operation, he said.
“We are making an assumption that we likely will stay in Westchester and New York, where we have two big locations. We are looking at both costs and also the implications for employees, such as commuting. A likely outcome is that we will continue to be in Westchester and New York. We have functions that work very well in New York City and we have functions that do very well here in Westchester,” Adler said.
Chappaqua Crossing”™s developers want to keep those functions on the Pleasantville campus. “Summit/Greenfield is having active discussions with Reader”™s Digest and trying to see what can be done to keep them as a tenant in the building and as a corporate citizen in the town of New Castle,” Thompson said.
