Developer Louis R. Cappelli has sold his company’s majority interest in City Center in downtown White Plains to a real estate investment trust based in suburban Chicago, while retaining a minority interest, a CB Richard Ellis spokesperson told WPCNR.

The buyer is identified as  Inland Diversified Real Estate Trust, Inc., of Chicago. 

Alyson Leiter of  Great Ink Communications, speaking for CB Richard Ellis, said in a statement to WPCNR,

"Basically, Mr. Cappelli sold his majority interest in the property to Inland, but he still retains a minority interest (in the form of two subsidiaries, White Plains Retail L.L.C. and White Plains Recreation LLC, each an affiliate of Cappelli Enterprises).

"The new joint venture ownership of Inland (majority interest) and Cappelli (minority interest) valued the City Center at $166.4 Million. The sales price isn't disclosed in the press release.

Since Mr. Cappelli is still the minority holder, I assume the City Center Parking Garage is still owned by him, But I am confirming this."

Thursday morning, John Callahan, the White Plains city Corporation Counsel in a written statement to WPCNR, wrote "Nothing relating to the ownership or operation of the garage has changed."

The terms of the transaction according to the Form 8-K filing with the Securities and Exchange Commission are very complex. Inland Diversified has taken out a $99 Million loan from Bank of America (cash proceeds of $87 Million) and $42.4 Million of their own cash. The 8-K reports Inland will use the $139.4 Million to pay off Mr. Cappelli's first mortgage on the property of $124.6 Million, maturing on October 7, 2016, and $4.8 million to repay a second loan Cappelli Enterprises holds from New York State Urban Development Corporation. The remaining $10.4 Million is going to pay "preformation expenditures and closing costs."

The 8-K  states that "management of the property will be the sole responsibility of Inland White Plains. Inland Diversified Real Estate Services, LLC has been appointed by Inland White Plains (subsidiary of  Inland Diversified)to serve as property manager of the Property and will be paid a 4.5% annual fee."

Complex finanical distributions to the majority and minority partners are described in the 8-K

To view the 8-K go to: http://www.sec.gov/Archives/edgar/data/1438897/000143889712000035/idiv8koct4.htm

 

City Hall has not answered WPCNR's question as to whether Mr. Cappelli retains the parking garage. The air rights and the New York Sports Club and 24 apartments atop the garage ownership has been sold to Inland according to the CB Richard Ellis news release. (Cappelli Enterprises presently receives revenues from the parking garage up to $600,000 and invests the excess in garage maintenance.)

No connection, but the surprise deal comes after the city of White Plains  recently increased assessed value of the complex through to 2019, by $300,000 a year, after the original Payment In Lieu of Taxes Agreement with the city expires in January 2016. The extension of PILOT agreement means that the new buyer and the new minority interest will not be reassessed until the year 2019.

Councilman John Martin is the only city official to comment on whether or not the city knew Mr. Cappelli was in the process of selling majority interest when the city agreed to extend the assessment incrementally beginning in 2016.

Mr. Martin,wrote WPCNR today: I do not believe that the sale was made known at the time we amended the PILOT but also don’t think it would have changed anything. The decision remains valid based on the marketplace for large leasehold space.

The original news release from CB Richard Ellis follows: