$21M in IDA Tax Breaks Included
By Dan Murphy
As the redevelopment of the downtown Waterfront in Yonkers continues, one large piece of riverfront real estate remains undeveloped. Some call this swath of property that sits between the Yonkers and Glenwood Train stations “the last gem” for the city to use as a way to turn around its yearly budget sagas.
Several attempts to redevelop this land, which used to house old industrial properties, have come and gone over the past decade. But during this time, the city – with the help of Brownfield clean-up grants – have prepared the 22 acres for the next project.
That project has come from Extell Development, a Manhattan-based company with success in residential, commercial, retail, hospitality and mixed-use properties, most notably a 90-story building on West 57th Street, ONE57. Their portfolio includes more than 20 million square feet of space.
Extell has expressed an interest in Yonkers and Alexander Street in 2016. The Yonkers IDA recently granted the company $21 million in tax incentives for the properties, which stretch along Alexander Street from the Excelsior packaging plant at 159 Alexander St., to the old BICC Cable Corporation at 1 Point St. These properties are adjacent to the Metropolitan Transportation Authority garage, which the city has been trying to move off the riverfront to another location. .
Mayor Mike Spano and his administration have threatened legal action against the MTA to force a move, but the garage is not a part of Extell’s project.
Extell’s $502 million redevelopment plan includes 1,395 units of apartments, 51,800 square feet of commercial space, more than 1,600 parking spaces, and 8 acres of open space including a continuation of the riverfront walkway-promenade, and more than 4 acres of rooftop gardens.
The project is expected to be built in phases over a 10-year period. Zoning changes may not be required because the project is located in the city’s Alexander Street urban renewal area. The project is estimated to create 200 permanent jobs and 450 to 500 construction jobs.
The IDA tax break for Extell is the largest residential project to receive financial incentives from the Yonkers IDA. The apartments to be built will include affordable units and market-rate apartments.
The hope is that the project will attract millennials and commuters to New York City, who are being forced out of the expensive rental market in NYC. A transit-oriented development project has always been the plan for the property, with two Metro-North train stations on either side of the project.
Mayor Mike Spano pointed to the Extell project during his State of the City address in March, but details of the project have come out in bits and pieces. Here’s what we have been able to find out:
The plan calls for constructing five, seven-story buildings and one large residential apartment tower.
The smaller buildings will be built in the first phases of the project, on the southern portion of the property, closer to the Yonkers train station. While they will be smaller in height than prior proposals, they will consist of 1,014 residential units, or more than 150 units per building, and will have residential units above with commercial spaces and parking below.
The average size of each apartment will be 1,000 square feet.
The large tower would be built at the current site of the “Blue Cube” located at 1 Point St. Formerly an industrial lab, the unique property that can be easily spotted along the Hudson River has had several proposals over the years, including a movie studio and a hotel, but has remained vacant for many years.
The final phase of construction will include the demolition of the Blue Cube and construction of the tower and another 103-unit smaller structure. This mixed-use proposal, with a combination of townhouses, smaller retail stores, and only one large apartment tower, are different from prior proposals, which consisted of several large apartment towers along the river.
Former interested developers include Robert McFarlane and Ron Shemesh, who owned the Excelsior packaging property on Alexander Street. Both of their proposals had city support and approval but were never able to break ground.
For the project to move forward, both the Planning Board and the City Council must approve a special permit for the project.
Spano pointed out that currently, the property sits as an unused piece of the Yonkers Hudson riverfront, with no accessibility for the public, along Alexander Street, Water Grant Street and Babcock Place. Extell’s project provides additional greenspaces and walkways.
“Having access to the waterfront shouldn’t just be for the exclusive use of the few, but for the use of the entire city,” he said.
Off-the-record conversations with many city officials finds support for the project with no opposition. But some taxpayers and homeowners do have concerns, and call into question the rationale behind giving out $21 million in tax breaks after just passing a budget that includes a 6.1 percent property tax increase.
Former City Councilwoman Joan Gronowski, when she served on the council, opposed the overall concept of tax incentives for development projects. “I feel that too many financial perks are given to developers, especially for properties like the precious waterfront,” she said. “The mom-and-pop businesses do not get the perks that the big developers do.
“As you wrote, there is no STAR rebate for us this year because of the overridden tax cap. So much for the homeowner. A 6.2 percent tax increase, to boot. Too bad they are not developers. Right now, the main concern should be the 2020 budget. If I remember correctly, the Board of Education was forced to use its $24 million fund balance and the city side used much of its fund balance.
“We have almost ended the first quarter of this budget period,” continued Gronowski. “I have not seen any budget meetings scheduled to address these issues. Why are immediate family members of the City Council being hired for non-competitive jobs? So much for the legislative branch of Yonkers government being a checks and balances for the executive branch.”
The IDA recently held a public hearing to get input on its plan for incentives for Extell. Several representatives of the city’s unions were in attendance, as was Frank Spotorno, who ran for City Council president in 2013. Spotorno spoke out at the meeting to reiterate many of the questions he has about the project.
“My question to the mayor and the City Council is: Can the taxpayers and homeowners of Yonkers afford to give these tax breaks to Extell?” he asked. “Is this in the best interests of the city and will the people of Yonkers benefit from this project? Who else benefits from this project?
“I also question whether the 400 to 500 construction jobs will be union jobs, where a worker can earn a wage and a benefit to support his family and pay their property taxes in Yonkers? How many will be hired with Yonkers labor and Yonkers residents?
“I have spoken to union leaders in Yonkers who are concerned, but I have not heard any discussion or opposition coming from any elected official in the city. I think the homeowners who were just hit with a 6.2 percent property tax increase have a right to hear from someone why this is a good deal for the people of Yonkers.
“Is this the best deal we could get for the city for this property?” continued Spotorno. “I have yet to see a rendering of what the project will look like. Previous proposals for Alexander Street included a riverfront public park and greenspace for all of the people of Yonkers to enjoy. Does this project include a park?
“The plan also includes almost 1,400 residential units. Will 10 percent of those units, or 150 apartments, be set aside for affordable housing?”
Extell has argued that the project isn’t viable without the taxpayer subsidies because of the high cost of conventional financing and the higher cost of development in Westchester County, compared with other parts of New York. Affordable units are also a part of the project, but details have yet to be released.
City Council President Mike Khader said, “Incentivizing businesses is great for the revitalization of Yonkers, however granting long-term tax breaks puts a serious fiscal strain on the city-one that we can no longer afford to take on.”
