A year ago, an executive representing the developer that plans to build a massive $1.6-billion mixed-use project in downtown Yonkers announced it was revising its original plan in order to tap into significant retail interest.
Today, while that same executive is confident the project will eventually break ground, a number of obstacles, including a difficult economy, have backers of the ambitious venture reticent about predicting a construction start date.
Joseph Apicella, executive project manager of SFC, said the project has indeed garnered significant interest from a number of retail tenants and some have signed letters of intent to lease space. He also said SFC is looking to attract a joint venture partner to develop the residential component of the plan. No deal has been finalized as yet, he said.
The SFC partnership now consists of Cappelli Enterprises of Valhalla and Fidelco Realty Group of Millburn, N.J. Original partner Struever Brothers Eccles & Rose of Baltimore was a victim of the real estate downturn and is no longer involved in the venture. The SFC plan received final approval from the Yonkers City Council on Oct. 13, 2009. SFC officials said at the time that the development was expected to create more than 13,000 construction jobs and some 5,400 permanent jobs when fully built and operational.
Recession, competition and other delays
Apicella said a cause for delay has been ongoing discussions between the city and the Dormitory Authority of the State of New York, or DASNY, concerning the release of a $24 million grant for the Saw Mill River daylighting project. Part of those funds will be used for necessary land acquisitions for the $42-million project.
He said many retailers are reluctant to sign long-term leases until the city, through the nonprofit New Main Street Development Corp., secures those properties that will be impacted by the daylighting project. Apicella, who is also senior vice president and a partner with Cappelli Enterprises, said SFC planned to go back to the city May 11 for an extension of its site plan approvals.
Part of the reason why a shovel has not been put in the ground is because of “the state and the city”™s inability to marshal these properties that they are obligated to marshal,”  he said. “I cannot even begin my brownfields cleanup work. ”¦Everything is kind of backed up subject to getting these properties closed and then sold to us.”
The first phase of the project cannot go forward until an easement agreement is reached by the city on a parcel of land adjacent to where a new firehouse will be built on New School Street.
Apicella also said the project has been adversely impacted by the recession. “A number of the major retailers, particularly the discount or value-oriented retailers, are spread thin because projects like Ridge Hill, which had always been envisioned as nothing but luxury, luxury, luxury, are still luxury but they are now considering, and negotiating with, value-oriented retailers to our disadvantage.”
He said competitors, including Ridge Hill, are able to deliver pad sites to retailers, while SFC cannot due to the issue between the city and DASNY.
James Pinto, director of the Office of Downtown and Waterfront Development for Yonkers, confirmed the city is in discussions with DASNY regarding the release of the $24 million grant, which was approved during the Pataki administration. “We have completed all of the appraisals on the properties and we are waiting for DASNY to execute the grants in order to acquire properties.”
Pinto said a portion of the grant will pay for the acquisition of 13 properties in the Saw Mill River daylighting project area. He added the city would also have to acquire some additional properties when SFC”™s financing is in place.
“We are finalizing our discussions with them (DASNY) and expect to secure the grant funds in the next few months.”
Creating jobs, luring tenants
The worst of the recession appears to be over, Apicella said. “We have weathered the storm. This partnership has spent $34 million to date on acquisitions, legal, architectural, option payments, engineering and so forth.”
SFC also has a development lease for a site on the waterfront where it plans to build Palisades Point, a luxury condo project comprising 436 units, in a future phase. Apicella said SFC has also bought some properties on Alexander Street, including the ATI site, and has an option on the Sun-Chemical property.
He termed its project funding thus far as a “blind investment” in the city of Yonkers. “That is how much we believe in the potential of that city, notwithstanding economic downturns, notwithstanding potential changes in administrations and the political upheaval that has characterized Yonkers for 30 years.”
When asked if the project will be built, Apicella replied: “We have 34 million reasons why this job has got to happen and will happen both for the city of Yonkers, the county of Westchester and the state of New York. What we need more than anything else is jobs, jobs, jobs. This project will create thousands of construction jobs and hundreds of permanent jobs.”
While still in discussions with anchor tenants for approximately 135,000 square feet and 124,000 square feet, Apicella revealed SFC has inked a term sheet with a supermarket chain for 75,000 square feet, has an agreement with a home-accessories retailer for 32,000 square feet and has letters of intent with two movie theater operators for some 75,000 square feet.
When the project breaks ground, the first work will involve brownfield remediation, site clearing and the Saw Mill River daylighting project.
Recently, Fleet Mill Street L.L.C. of Millburn, N.J., an affiliate of SFC partner Fidelco Realty Group, submitted plans to the Yonkers Planning Board to build a mixed-use residential and retail project at the site of the former Yonkers Public Library and Genung”™s department store on Main Street. The project calls for 22 live-work rental housing units and 7,500 square feet of retail space.
Peter Klein, vice president of Fidelco Realty, said the company hopes to break ground on the project by the fall.
We too hope that this project get green-lit and we can see groundbreaking in the fall. Yonkers is currently undergoing a boom of new construction, most of which is mixed use and this project will fit in perfectly. Add to that additional new Westchester condos and apartments and the whole county seems to really be going for the fences.