Licensing Agreement With Metro-North Provides Hefty Financial Gain for SHLDC

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March 2, 2016

by Robert Kimmel

Metro-North railroad siding on two acres within the East Parcel of the former GM site has become a financial catalyst for the Sleepy Hollow Local Development Corporation (SHLDC) to start preparing the 29-acre site for community projects.

Terms of a licensing agreement announced last month have Metro-North paying the SHLDC as much as $1.8 million for the past and future use of the acreage where the tracks are located, as well as its potential ownership.

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Approved by both the MTA Metro-North Railroad Board and the SHLDC Board, the railroad’s payment includes a one-time fee of $284,731 for past use of the siding, retroactive to when the title changed hands. A monthly licensing fee of $13,109 will be imposed for continued use, and the agreement also includes an option for Metro-North to buy the siding track property for $1,573,155 by the end of the year. Legal activities leading to that sale are already underway.

The Local Development Corporation took possession of the East Parcel through provisions of a 2011 Special Permit issued by the Village of Sleepy Hollow that enabled General Motors to sell the adjacent 67 acre riverfront West Parcel for what is now the Edge-On-Hudson residential and commercial development.

On the East Parcel, the LDC has plans to construct a Sleepy Hollow Department of Public Works facility, athletic fields, additional parking for events at Historic Hudson Valley’s Philipsburg Manor, and possibly, a repair garage for the Tarrytown School District. Local Development Corporations are not required to follow certain New York State rules that make public construction more expensive for municipalities, thus saving an estimated 15% to 20% of the costs for the East Parcel projects.

To finance the projects, the LDC will issue bonds, and when the facilities are built, lease them to the village and school district, at a savings for both.

“This is a remarkable moment in Sleepy Hollow’s history, as opportunities on the former General Motors begin to be fully realized,” stated David Schroedel, Chairman of the SHLDC. “The license and potential sale of track sidings to Metro-North provide a valuable financial underpinning for the Sleepy Hollow LDC as we proceed with plans to transform the East Parcel into a vibrant center of community activity in the heart of Sleepy Hollow,” he added.

The licensing fees will also be used in part to repay the village for financial advances it provided to the SHLDC for early expenses, administrative and legal costs and also help it hire several staff, possibly a bookkeeper, executive director and site manager, Schroedel explained. Last year, the SHLDC was able to file a legal grievance with the Town of Mount Pleasant to reclaim approximately 85% of $20,000 in water and sewer tax fees it maintained were improperly assessed. It also had to retain various engineering and planning consultants in anticipation of the development of the property, according to Schroedel.

Income from the Metro-North siding was unexpected until after the SHLDC acquired the property. “Our physical inspection of the East Parcel revealed that Metro-North Railroad was utilizing siding belonging to the LDC without permission,” Schroedel has told The Hudson Independent. The siding was originally used in conjunction with GM’s operation of its auto plant on the site.

With the low lying site vulnerable to flooding, fill will be brought in to bring parts of the East Parcel’s ground level higher by as much as four feet. “If we are going to build a multi-million dollar DPW facility and recreational fields there, we certainly need them protected from flooding,” Schroedel said. The concrete fill will come at little cost from a Yonkers location where it was illegally dumped by a carter who is responsible for its removal. The arrangement could save the SHLDC “well over a million dollars,” according to Schroedel. It will be crushed on site.

The fill’s arrival awaits a village evaluation of the sewer lines from Continental Street, prior to bringing in heavy trucks, he explained. When it does come in, possibly beginning this month, “We will be adjusting the schedule to minimize the effect on the local community,” Schroedel explained. “There has been a lot of communication with the folks on Continental Street and adjacent streets. We are an arm of the community… and we are going to be very sensitive to the impact on the local community and will monitor it very carefully.” He said the schedule called for the arrival of 25 truckloads a day, six days a week, and that it “should be completed in under six months.”

With an environmental review expected to be completed by the end of July, and with other details worked out, Schroedel said he expects the SHLDC “to go out for bids by Labor Day and have a shovel in the ground before 2016 is over, assuming everything goes well.”

While the non-profit SHLDC was formed initially to take possession of the East Parcel, its wider role is to “…promote and support employment opportunities and economic development in Sleepy Hollow and surrounding communities through the use of selective financing, real estate development, public works, and related business partnerships.” Following a change of its board last June to include members with specific expertise, it consists of Schroedel, Michael Dawley, Teresa Oesta, Anthony Scarpati, and Mayor Ken Wray as an ex-officio member.

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