Commercial Real Estate Projects on the Rise in Rivertowns
by Alexander Roberts –
The trend towards new urbanism has entered the rivertowns, with each village charting its own path on its various commercial real estate projects. Sleepy Hollow, Tarrytown and Irvington are all struggling to accommodate the trend, which includes greater density and multi-family development in suburban downtowns, accommodating mixed uses that allow for walkability. These zoning regulations clash with traditional land use regulations developed nearly a century ago that favor exclusive commercial districts surrounded by single-family home neighborhoods that get bigger and bigger the further out you go.
As The Hudson Independent has reported in recent issues, Tarrytown, Sleepy Hollow and Irvington are all in the midst of preparing new comprehensive plans, which are required every 10 years or so to serve as a basis for changes in zoning.
Reflecting the ambivalence of adapting to new millennials’ tastes, Tarrytown Mayor Drew Fixell said, “The idea of living spaces downtown close to stores and restaurants is great, but on the other hand it’s not without its downside. How much can the infrastructure handle? Does 500 units make sense or 200? And what’s the right number of parking spaces?”
Building on the marketing success of its Hudson Harbor waterfront development, Tarrytown’s new Comprehensive Plan includes a waterfront study looking at under-utilized properties like the recycling plant next to the train station. Coco Management Inc. and Kaufman Tarrytown Company, LLC have proposed a 225-unit, seven-story development that would replace the CVS, as well as the now-vacant Mrs. Green’s and Bolton’s on Broadway. (See sidebar.)
With affordable housing a major component of the plan, reliable sources tell The Hudson Independent that the village and National Resources have reached agreement, in principle, to finally open the 12 units of affordable rental housing that replaced the old village hall on Wildey Street. Company President Joseph Cotter has reportedly agreed in principle to follow Tarrytown’s new code that eliminates preferences for village employees and residents and has accepted the lower rents and guidelines that cap maximum household income for tenants at 60% of the county median income adjusted by family size. That’s $56,200 for a two-person family. The code was changed to comply with Westchester County’s model affordable housing ordinance, developed after a federal settlement between HUD and Westchester County in 2009. Neither the village nor National Resources would comment on the record but the company had threatened to sue the village because the housing ordinance in force when it originally committed to the affordable housing allowed higher rents.
Sleepy Hollow Faces Growing Pains
In Sleepy Hollow, construction begins on the huge General Motors redevelopment called “Edge-on-Hudson,” where Toll Brothers will start building 306 units, a mix of apartments, townhouses and condominiums. It’s the first phase of 1,177 units approved for the site. But for Village Administrator Anthony Giaccio, the challenge today is redevelopment of its aging downtown buildings.
Developer William “Billy” Procida of Procida Funding and Advisors acquired eight buildings in bankruptcy in 2017 in the Cortlandt Street neighborhood. He invested new energy and money into the properties, vowing to turn them around. But he soon soured on the village, after he says he received dozens of violations for conditions that existed decades prior to his purchase and little cooperation from the building department. He even put the properties up for sale.
“We do understand his frustration,” Giaccio said of Procida.“He blames the village, but these are the rules we have, and we’re looking to change the rules, and he may be able to benefit from that.”
In the wake of an Urban Land Institute (ULI) study that offered a new business-friendly blueprint for the village, and after a meeting on August 17th with village officials, Procida expressed renewed optimism, “I’m feeling good again about investing in Sleepy Hollow.”
Giaccio said the village is actively considering changes that would help Procida and other businesses in the downtown with eased zoning restrictions, payments in lieu of parking and other incentives.
Irvington Cautious about Development
Irvington has been slower to embrace the new urbanism, and remains a cautionary tale for developers. Brightview Senior Living, an assisted living builder and operator, was given positive signals by the village to redevelop an eight-acre commercial site on North Broadway and reportedly spent over $1 million seeking approvals before it gave up in the face of opposition from Mayor Brian C. Smith. Purchased by Luxor Homes and Investment Realty, the property is being used the same way the previous owner had, by leasing office space. Luxor manager Gordon Sokich said, “It’s a battle with these small towns. They typically don’t like change.”
Irvington Village Administrator Larry Schopfer pointed to thriving properties such as Red Hat on the River restaurant on Bridge Street and efforts to rezone the Route 9 corridor to allow more uses as evidence of the contrary. The village recently completed an updated comprehensive plan.
“All of it,” he said, “is designed to create a proper balance between acceptable uses and preserving the corridor the way it is. The idea is to create uses acceptable to the community and as of right.”
Schopfer noted that all of the commercial properties on the Route 9 corridor were zoned residential and operate under variances or special permits. Unlike Tarrytown, Irvington has not, as yet, moved to accommodate multi-family development around its Metro North station and Astor Street.
Office and retail holding their own
The market for office and retail development remains quiet but stable, according to John Barrett of RM Friedland Commercial Real Estate. He said from June of last year to June of this year there were only a handful of sales of commercial buildings, but included one of the largest with the sale of Talleyrand Apartments at 1202 Crescent Drive at a price tag of $91 million for 311 apartments ($292,000 per unit). However, Barrett said the rivertowns are out-performing the national market. Industrial space, which sat vacant for decades as jobs and manufacturing departed the area, has recovered, and what’s left is commanding 50% higher rents than 10 years ago.
With several low-occupancy office buildings in Tarrytown ripe for re-purposing, the troubled 555 White Plains Road got a temporary reprieve when it became the headquarters for Tappan Zee Constructors, the prime contractor for the new Mario Cuomo Bridge. Barrett says it may be a bellweather for the future of the office market segment in the rivertowns when the bridge is completed and the bridge staff vacates the premises.