Developer Louis R. Cappelli, a recent proponent of “smart growth” that yokes development with downtown mass transit hubs, will forge ahead this year with plans to build large-scale office space near a commuter station to lure tenants from Manhattan.
It just won”™t be in White Plains, where his $1 billion Station Square project was derailed by elected city officials and a groundswell of opposition from residents and competing developers not long after the president of Valhalla-based Cappelli Enterprises Inc. publicly unveiled it.
The White Plains Common Council last month thwarted Cappelli”™s request for exclusive rights to develop the Metro-North Railroad station area with a mix of office towers, elevated pedestrian walkways and retail stores in a new glass-sheathed train station designed by the New York City architectural firm of Skidmore, Owings and Merrill. The developer has since shifted his “smart-growth” focus to downtown New Rochelle. Cappelli Enterprises recently announced plans to reposition its LeCount Square mixed-used development on a city block there to meet “the growing and unmet demand” for office space near Metro-North train stations.
Revised plans
Plans for the LeCount Square project, which features two high-rise towers, previously included 126,000 square feet of office space and 527 residential units. In an alternative plan recently submitted to the city of New Rochelle as part of a supplemental environmental impact statement, office space would more than triple to almost 400,000 square feet, while the number of residential units would be reduced by more than half to 258.
The two towers would rise from a three-level retail podium. In the revised plan, the north tower would contain only office space. The first two floors above the retail podium would feature financial trading floors with 40,000-square-foot floor plates. The remaining office floors would have floor plates of approximately 23,500 square feet. The total height of the north tower would be reduced from 500 to 375 feet.
The south tower, which would retain its previously planned height of 500 feet, would have a 209-room hotel on the lower 13 floors with residences on the remaining upper floors. There would be 200 residences in the south tower and 58 in an adjacent loft building.
The mix of retail and restaurants would change slightly, with 200,000 square feet of retail, up from 180,192 square feet, and 12,000 square feet of restaurant space, down from 22,000 square feet.
“Our new alternative plan for LeCount Square more accurately reflects the growing demand in our region for class A office space that is located near major transportation hubs,” Cappelli said in a written statement. “The concept of transit-oriented office use is a relatively unique product in Westchester County. Our project will be ideally situated to serve this important sector of the high-end office market.
“The office space at LeCount Square will be on par with the quality you expect to find in a Manhattan office building.”
Bounded by LeCount Place, North Avenue and Huguenot Streets, LeCount Square is a short walk from the city”™s new Intermodal Transportation Center.
In a statement accompanying the company”™s announcement, New Rochelle Mayor Noam Bramson said city officials were “encouraged” by the alternative plan for LeCount Square. “Developing office space in close proximity of our new Intermodal Transportation Center is consistent with our city”™s commitment to ”˜smart growth”™ planning,” he said. “The addition of more office space to our downtown will enliven the daytime streetscape and further energize our retail stores.”
”˜Limited shelf life”™
For his company”™s Station Square project in White Plains, Cappelli proposed to build 1.5 million square feet of office space in three towers beside a new Metro-North station. As with the LeCount Square plan, the buildings would have included financial trading floors designed to accommodate major firms moving from Manhattan because of the tight office market there and rents that in some midtown locations have risen to $100 per square foot.
Joseph V. Apicella, senior vice president at Cappelli Enterprises, last week said the company would have altered its plans for the $375 million to $400 million project in downtown New Rochelle even if White Plains officials had expeditiously approved the Station Square project.
“We believe it”™s a strong enough market to support the project that we proposed at Station Square and this project,” Apicella said. “But we also recognize that the market for financial and business office space in the Westchester area has a limited shelf life” of two years. “If New York City can adjust its office market rates and they come down because they fear market competition from the suburbs, then the office market would dry up” here.
Currently, “There”™s an excellent market at $50 a square foot for class A buildings with trading floors.” That market outlook is shared by Cappelli company analysts and major brokers such as CB Richard Ellis and Cushman and Wakefield, Apicella said.
Apicella did not disclose which Manhattan financial firms have shown interest in moving their trading operations to Westchester. “The Morgan Stanleys of this world, of course we”™re talking to all of them,” he said. “We don”™t just hold up a finger in the air to see which way the wind”™s blowing.”
Regarding his company”™s decision to steeply reduce the number of residential units at Le Count Square, Apicella said, “Any time you put 500-plus units on the market at one time, that”™s not smart. You mitigate that with an appropriate mix” of office and residential space. “Then I think it makes for a smarter economic investment for us and the city.”
Despite the shift in plans, “We”™re not reticent to proceed” with residential development, he said.
”˜Ready to rock and roll”™
At Trump Plaza, another Cappelli development in partnership with Donald Trump that is nearing completion in New Rochelle, almost 70 percent of the high-rise luxury condominium tower is sold out, according to a spokesman for Cappelli Enterprises. The first residents there are due to move in next week.
Apicella said Marriott Corp., which operates a Residence Inn near the LeCount Square site, is a prospective operator of the full-service hotel planned there. He said Starwood Hotels and Resorts Worldwide Inc., which is searching for larger corporate headquarters in the region, could be both a hotel operator and office tenant at LeCount Square.
As for retail tenants, “We”™re definitely speaking to Target, Bed Bath and Beyond” and other major retailers, Apicella said.
Regarding the shift in focus to office space in New Rochelle, “We absolutely did not do this in response to the lack of action on Station Square,” Apicella said “This was just a very smart business move” that was backed by city officials. “It”™s a win-win for the city of New Rochelle.”
Even if White Plains officials had promptly granted development rights, “The approval process would have been at least 12 months behind this project,” he noted. In New Rochelle, “It”™s kind of ready to rock and roll.”
Apicella said the developer hopes to have the LeCount Square project approved by October. “We could be in the ground by the end of the year” for a 24-month construction period, he said.
“Smart growth” at the Metro-North station in White Plains?
“At this point the ball is in the court of the City Council,” Apicella said. If the city issues a request for proposals from developers, “We”™re anxious to participate.”
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