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WPCNR Monday Rundown: Stop N Shop and Pep'e "working things out"-- plan by midweek? City says "not so fast" to Solomon-Schechter and Temple Israel; Pettinicchi Property in Woodcrest Heights "very attractive" to development--Concerned Citizens for Open Space considers lobbying city for park plans on Pettinicchi site; Schools/Teachers still talking, no agreement yet. Pathways to Housing places first homeless single in county.

June 4, 2000

Scarsdale, June 4: Nick Pep'e, contacted by WPCNR today, said that his architect and the architect for Stop N Shop are "getting along well so far," in designing a combination supermarket and Westchester One parking facility. Last week, the two designers had met to discuss mutual preliminary design concerns about how to combine a Stop N Shop Supermarket with a parking facility for Westchester One on the city Department of Public Works garage site and the Post Bowl property.

Nick Pep'e reports that Stop N Shop took the Pep'e plans back with them to their offices and are working on designing a hybrid of the two plans. He said he expects a design back by the middle of this week. "That's not to say we have a deal yet, " Pep'e said, "but we're getting along well so far."

Idle Forest, May 30/City Hall, June 2 -- The White Plains Department of Planning has said that there is no foundation to reports circulated by Solomon-Schechter School of Westchester that their proposal to run first grade classes totally 70 students at Temple Israel for the next two years has already been approved by the city.

A committee of five representatives from the Idle Forest Association met with the President of Temple Israel and representatives from Solomon-Schechter May31 to air their concerns to the Temple about the Solomon-Schechter application to move their First Grade class to the Temple in the fall. The association is concerned that with three school classes operating out of the site at 280 Mamaroneck Avenue, traffic at the site will be very congested five days a week, mornings and afternoons (A nursery school and after-school program currently conduct classes at the Temple Israel site.)

Though the application is slated for an initial public hearing before the Zoning Board of Appeals Wednesday, June 7, Solomon-Schechter is promoting as fact that their first grade classes will definitely be run out of Temple Israel this fall. This public presentation on the part of Solomon-Schechter was independently confirmed by WPCNR by two independent sources.

One source reports (when she asked if the First Grade was going to the Temple), the Solomon-Schechter spokesman at the school said "it's all set." Another source, querying closely to see if her daughter's first grader would be attending at the temple, if they decided to enroll, received "unequivocal" assurance that the first grade was going there.

WPCNR contacted Mike Graessle, Commissioner of Planning to get the city reaction to this public expression of "pre-approval" by the city before a Zoning Board hearing. Graessle told WPCNR that the school has routinely met with various departments to discuss the first grade transfer to Temple Israel because the size of the school population at the Dellwood Road site has exceeded their enrollment cap of 500 students.

The school has chosen not to reapply for an extension of their cap at the Dellwood Road campus, and needs to find an interim site to house their first grade, according to Graessle. Solomon-Schechter is attempting to build a high school in Greenburgh to move their upper level students there and eventually house the First grade back at Dellwood Road.

WPCNR has confirmed that the high school proposal has been approved for consideration by the Town of Greenburgh Town Board, by the attorney managing the project for Greenburgh, Anthony Russo of Allee, King, Rosen and Fleming of White Plains. The Solomon-Schechter high school proposal will be considered for final approval by the Town of Greenburgh on June 28.

Mr. Graessle was firm on the city position, saying no preliminary assurance has been given to Solomon-Schechter, or Temple Israel that the First Grade transfer to the Temple would be approved. Graessle said Solomon-Schechter promoting the move as definite "was inappropriate and inaccurate at this time."

Graessle said that there appeared to be no environmental issues involved on the Temple Israel site, though that was up to Rob Roston of the Conservation Board to decide. Graessle described the primary concern was that of traffic, and that the Traffic Commission and the Department of Traffic would be considering the impact of increased vehicular traffic in the close-in neighborhood.

A representative from the Idle Forest Association told WPCNR that, at the meeting with the Temple, the landscaping of the Temple steeple which has been a source of controversy with the residents in the area was discussed.

According to Frank Pandolfo, President of the Idle Forest association, the Solomon-Schechter and Temple Israel refused to postpone the association request that they delay their request for a Special Permit to run the first grade at the Temple. An Idle Forest representative at the meeting, said the Temple President, David Gressler, indicated the Temple might landscape the new steeple with higher than 10-foot trees, if the Association would "cooperate with the Temple on the First Grade issue" and not oppose the First Grade proposal at the Zoning Board hearing Wednesday evening, June 7.

According to the meeting source, the school anticipates sending 70 children to Temple Israel via 7 vans for two years, and the source expresses concern that the arrangement will be open-ended. The source also said, that motorists dropping off present attendees at the school bypass two traffic lights on Old Mamaroneck Road by cutting through Miles Avenue, Leith Place, Ritchey and Ildlewood Road, creating a dangerous traffic situation on the narrow residential streets.

Woodcrest Heights, June 1: The Pettinicchi Property, 10-1/2 acres of wooded slope on the bank of Silver Lake in Woodcrest Heights, is now on the open market, zoned for two-family housing making it a very appealing site for development. The land is available to the highest bidder, since the Westchester County proposal to purchase it and turn over 1-1/2 acres for construction of a senior citizen complex was withdrawn by the County.

(The senior citizen complex may be built over the abandoned A & P store on Main Street opposite city hall, according to a report in The Journal News.) White Plains Concerned Citizens for Open Space is slated to discuss forming a policy towards the Pettinicchi parcel at its annual meeting Monday, June 12, at Memorial Methodist Church, 250 Bryant Avenue. Alan Teck, a member of CCOS, said he expected CCOS to approach the city to discuss the city's thoughts on how the land could be put to park use. Teck said CCOS wanted to facilitate more formal plans for the use of the property as a passive city park.

WPCNR contacted a White Plains realtor this week on the matter. The realtor obtained a property listing of the Pettinicchi parcel and speculated on the marketability of the parcel. According to the WPCNR expert, the property is presently zoned to permit 15 to 16 homes after site clearance and road access is figured. This savvy analyst of the White Plains market felt new homes on the waterfront wooded slope could be sold in the $270,000 to $400,000 range. They thought the land was priced too high at $1.5 million.

The WPCNR commentator said they did not expect that a developer would choose to build estate-type homes in the $800M to $1MM range because the area is surrounded on the East Harrison side "by two-family homes and a lot of illegal three-family homes," making the area not as attractive to the clientele interested in million-dollar homes.

Our source said the two-family housing could allow a developer to build 12 two-families, marketing in the $400,000 to $450,000 range. Townhouses, the source said, could be made to be very attractive. Though, the gut feeling on the part of this realtor was that a developer would build 12 to 16 straight two-family homes at the $300M-$400M range.

Dammann House and Education House, June 2 -- Jerry Gorski, President of the White Plains Teachers told WPCNR by telephone that the talks between the teachers and the White Plains School Board were at a delicate stage. He and Michelle Schoenfeld, spokesperson for the School District, confirmed that sides were talking informally via phonecalls about possible solutions involving both pay and accountability issues tied to compensation issues. (Accountability, it should be noted, does not involve state achievement test score performance levels tied to salary.)

Gorski said that teacher members have confidence in their negotiating team, led by Alma Cormack, but said that any final agreement would still have to be voted on by the White Plains Teachers. He described the talks as being "in neutral," as of Friday afternoon. Gorski said he held out hope that an agreement would be hammered out by the end of the school year, June 23. When asked if there was not an agreement by that date, Gorski said "I hope so. I don't want to talk about that (not reaching an agreement.)"

The Board of Education was to meet Monday night.

New York, June 2 -- Dr. Sam Tsemberis, Executive Director of Pathways to Housing, which is undertaking a pilot program with the Westchester County Department of Social Services to house homeless single adults now in shelters in single private apartments, told WPCNR Friday afternoon that his program has housed its first client in Yonkers as of May 10. The organization is currently working with 5 other individuals, one from White Plains who is currently in White Plains Hospital. Tsemberis told WPCNR that he will be addressing a public forum at a meeting of the Westchester County Coalition for the Hungry and Homeless on June 22 at 7 PM at the White Plains Public Library to discuss his Pathways to Housing program. Tsemberis said Pathways is working through the list of homeless individuals provided him by the Department of Social Services, and is currently working with one White Plains-based individual who wishes to remain in White Plains. The Executive Director said his new program is "going well." The first individual housed, he said, did not believe he was actually being offered an apartment with no strings attached. Now, Tsemberis reports, after three weeks, the formerly homeless man is in a peer counseling program where he's working to help counsel other homeless persons, and the first placement is working out well.

Reported by John Bailey, based on reliable sources.

Anatomy of "The New Tishman-Speyer Deal:
City recovers $23MM investment in 10 years. Sees $44MM-Plus "Profit" on project over 25 years. Fundraising "Feelers" put out. City to share, then own new garage.

City Hall, May 31- June 2, 2000

Two of the city financial architects of the "Tishman-Speyer New Deal," George Gretsas, the Mayor's Executive Officer, and Susan F. Habel, Deputy Commissioner of the White Plains Department of Planning, discussed with WPCNR this morning why the "New Tishman-Speyer Deal" is a better deal for the city:

The city will recover their initial $23 million dollar upfront investment in the project in 10 years. The Town Center is projected to generate positive sales and property tax flow in its fifth year. Should the city go for the maximum 25 year financing of their commitment, the city will pay out of pocket $44 million to generate $88 to 100 million in new direct sales tax revenue and property taxes.

Actual city investment expected to lower to $17MM
Other sources expected to contribute funds.
Westchester IDA "Very Favorable" after Thursday meeting.

Ms. Habel said she expects the money the city will need to borrow to finance their commitment will be reduced.

(On May 25, the city announced that Loews Cineplex had agreed to be part of the Town Center Project. In the new agreement, the City will furnish $23 million in upfront money to kickoff the project and will keep parking rates in the new garage to 50 cents an hour.)

Habel said the Urban Renewal Agency has agreed to provide $2 million towards the $23 million, reducing the borrowing amount to $21 million. Habel said the city expects to "get that down" to $17 million. This may be achieved by a concentrated city effort to find federal, state and county sources for funding. Paul Wood of the Mayor's office told WPCNR Tuesday that the city will meet with the Westchester County Industrial Development Agency this week to acquire financial support for the project.

Thursday, Wood reported that the Westchester IDA reaction to the city request for was "very favorable," according to Wood, and the actual dollar amount would depend on the final financials presented July 13. Wood said other fundraising conferences have been held by representatives of Mayor's Office with State Senator Suzi Oppenheimer and US Representative Nita Lowey. Lowey's office, Wood said, is checking on possible federal grants and programs that might fund the project.

Mark Schuyler, Executive Director of White Plains Downtown Business Improvement District, told WPCNR Tuesday that BID is standing by -- awaiting word from the city -- "to partner with the city." Schuyler said BID could be helpful in presenting the city case for funding to organizations which finance municipal/private improvements if the projects are supported by nonprofit community groups (like BID).

New Deal Difference: Tishman will "eat" parking facility losses from stable 50 cent an hour rates.

Habel stated that the Loews Cineplex wanted to keep parking rates in the new parking facility to 50 cents an hour to be competitive with other theater complexes in the area. This Loews demand took away the city Parking Authority flexibility to increase parking rates in future years to reduce city losses which was part of the first Tishman-Speyer Loews agreement.

(In the January deal, the city would have paid Tishman-Speyer a $500,000.00 a year operating subsidy, beginning in year three (2002-2003) and continuing until 2024-2025, for a total of $12,500,000.00. Half of this would have been reimbursed by Tishman-Speyer, but only up to $250,000, making the potential for city losses on the garage higher than $250,000 a year. Under the previous deal, the city would have been able to offset greater losses by increasing parking rates. The city had a problem with this when Loews stood firm on the 50 cents per hour rate.

The new deal relieves the city of any losses from the operation of the new parking facially. Tishman-Speyer suggested that for more money invested by the city initially, they would waive the $500,000 operating subsidy. "Tishman-Speyer is eating any shortfall created by the stability of the parking rate," according to Habel.

WPCNR notes that the $12,500 subsidy originally requested and the $10 million upfront investment in the old deal is just $500,000 less than the $23 million the city pays upfront in part of the new agreement announced last week.

$23 million city investment is recovered in 10 years.
$10 million gain on investment in 15 years.
Habel takes us WPCNR through "the numbers."

Habel walked WPCNR through the City Financing Plan for the Demolition and Building the Tishman-Speyer multilevel garage. The plan uses sales tax and property tax growth rates based on a Tishman-Speyer study and an independent study by Ernst & Young.

The figures quoted are based on borrowing $21MM for 20 years at 6% interest, and includes the parking authority debt service and capital outlays compared for the new garage. The computer models anticipate sales tax and property tax revenues foreseen for the Town Center, demonstrating how the City of White Plains sees an early recovery of its $23 million investment.

Habel's projections show the new T-S Deal pays back the city borrowing quicker and protects its interests, while generating a 10% higher return on investment in the first 10 years, paying for itself in new sales taxes and property tax revenues in 10 years. 7 year payback.

The City pays out $21,105,072 in operating expenses, capital outlays, new debt service and existing debt service (on the former Martine Avenue garage) after 10 years in the new plan.

After only 7 years of operation, the Tishman-Speyer Town Center is projected to pay back a total of $23,345,708 by the end of the 10th year, into city coffers, consisting of new direct sales taxes, new sales taxes from surrounding businesses,(the HALO effect), and in new property taxes.

Habel's figures, extrapolated by WPCNR from the City Financing Plan, show the new plan generating a net gain of 10% on the city borrowing investment. It generates $2,240,635 more in direct sales tax and property taxes over the original $23 million investment when compared to the first deal where the $500,000 subsidy was included, and less money was borrowed. (The first deal borrowed $11,000,000 for 15 years at 6% interest),

The $2,240,635 gain on the new deal is over seven times more than the return on investment generated after 10 years by for the old deal ($304,699). The former deal payback after 10 years was $304,699, or a 1.6% return on investment of $18,877,702, ( the figure representing projected parking garage operating expenses, capital outlays, debt service and existing debt service over the decade).

After 15 years, the "profit gap" of the new deal over the old deal widens. The Planning Department estimates a net gain of $10,082, 617 in direct sales taxes, sales taxes from HALO businesses and new property taxes over the $23 million investment, as opposed to $5,445,563 over the former Financing plan after 15 years. At 20 years, the net gain is 43 million.

City to seek 6-1/2% money over 25 years or 6% over 20 years.
Anticipates $88 to $100 million in sales, property tax windfalls.
$44 million-plus payback, 100% Return on Investment over 25 years

The Deputy Commissioner reported that the city expects to borrow approximately $21 million dollars at prevailing municipal bond market rates which Habel quotes as 6-1/2% for a 25 year financing, or 6% if they finance over 20 years. She said the City Common Council is expected to vote on approving the floating of this bond issue at the June 5 Common Council meeting.

Asked what the cumulative cost to the city of financing the $23 million upfront payment plus interest was compared to the revenue the city expected over the longest term financing, Habel said she projected the cost to the city of the loan, plus interest was $43 million, with sales and property revenues expected to be approximately $100 million, and is working on those figures for us.

WPCNR calculated from the City Financing Plan that the loan payback and interest was $45 million compared with sales and property tax revenues from the project over 25 years to be $88.6 million. WPNCR calculates this as a net gain on a city investment of about 44 million or a 98% return on the $43 million investment for the city.

Allocation of the City $23 Million may be invested in amenities in Town Center area not just the Parking Facility
City to CO-Own "state-of-the-art" garage for 25 years, then assume full ownership.

"Either we're going to put all $23 million into the garage or split it between garage or other job related improvements, such as redoing of the sidewalks on E. J.Conroy Drive, new street trees, new lighting, totally new sidewalks, and other public improvements," Habel said. "We want to spend it in the most cost-efficient way."

Another favorable condition of the deal is that the city would be a CO-owner with Tishman-Speyer of the new garage for the first 25 years of the new deal, where the city would jointly share policy decisions involving the garage. After the twenty-five years, the city assumes sole ownership, "free and clear."

The Deputy Commissioner said that during the period of CO-Ownership, the garage would be open to use by the public whether or not they were going to the Town Center or the movies.

Garage amenities described.

Habel described the parking garage as being similar to The Westchester with one exception: multi-station parking would be installed in the garage, (similar to the system in place at New Roc City in New Rochelle). This system requires the consumer paying for parking at a central terminal at the time they park, with parking attendants checking meters by a central computerized system. (WPCNR note: this is actually a convenience to the consumer, enabling one to extend one's parking time from conveniently located consoles within the Town Center, without returning to your parking space.)

Other features of the garage, she said, would incorporate 9 elevators (compared to two in the present Main-Martine garage). Parking capacity will be expanded to 2,038 spaces from the previously planned 1,914. Exit and egress to the garage would be by a double up and down circulation system providing multiple access to any floor without having to drive through each floor, as you have to do now at the Main-Martine facility.

City borrowed on larger scale to build Galleria garage,
Main-Martine garage, and is still paying.

Mr. Gretsas said he advocated the city decision to finance the Tishman-Speyer garage because the deal was better and presented less exposure to the city than in more substantial borrowings in the past.

He told WPCNR that the city borrowed $30MM over 30 years to construct the Galleria Garage in 1980, where the city assumed all the subsidies. He said the city financed a garage for Macy's when the city built the Main and Martine garage, which is still being paid for by the city.

Bond Market Good

Ms. Habel said the city was entering the bond market at a most opportune time with interest rates low, and more investor interest in municipal issues. She anticipated, pending Common Council approval, getting the bond issue underwritten in place within 30 days after the July 10 approval of the project.

She reports Tishman-Speyer was seeking their financing through the Westchester County Industrial Development Agency, to take advantage of tax-exempt bond financing rates, but did not know if this would be approved. She saw no problems with the city selling its bond issue because the White Plains credit rating, with the city currently rated AA-1, "is as high as you can get," she said.

Gretsas: Tishman-Speyer and Mayor's commitment to project saved it

Mr. Gretsas said that Tishman-Speyer was genuinely surprised when Loew's said they were pulling out of the deal. He credited a combination of Mayor Delfino's shuttle diplomacy with Loews Cineplex and Tishman-Speyer's commitment to the project that made the new deal possible.

The Executive Officer said that Tishman-Speyer not only had spent from $20MM to $25 million on the cost of the land, but the company did not want the impression that they would walk away from projects they had started. "Jerry Speyer, President of Tishman-Speyer, has a very strong interest in regenerating small to medium-sized cities. He feels Tishman-Speyer has found in White Plains an ideal partner to realize this interest," Gretsas said.

Gretsas: Private Sector/public sector negotiating the reason for privacy;
Contends project is moving fast.

Mr. Gretsas took the opportunity to apologize for the need to keep the proceedings of the negotiations private from the public. He said that this was necessitated by the fact that the private sector always negotiates privately. Gretsas explained that any disclosure of what was being considered could weaken the negotiating positions of all parties. Gretsas emphasized that the Common Council was kept fully informed by the Mayor during the negotiations, and asked for their input at crucial stages.

He noted that the city has moved very fast on the project, though movement may be perceived to be slow.

He said, for example that the New Roc City project took 8 years to complete from when first conceived to when finished. Whereas the Tishman-Speyer project has only taken 2-1/2 years to date and if approved by July 10, is expected to be operating by 2003. The Executive Officer added that project had taken more time because the Common Council was firm that signed tenants had to be in-place before any commitment to the project could be considered. He noted that the demise of the SONY project at "The Hole in the Ground," as a lesson the Council has taken to heart.

Habel echoed this, saying that "In the '80s you could have a facility 20% rented and then seek financing. Now, a developer needs 80% in committed rentals before financing can be sought."

From an Interview with Susan Habel, Deputy Commissioner of Planning, and George Gretsas, City Executive Officer at City Hall. Financial documents on which the calculations in this report are based were provided by Ms. Habel, and some comparative calculations made from them by WPCNR, which are subject to interpretation and inadvertent mathematical error. Original spreadsheets are available from The Planning Department.

To comment on this report, CLICK-ON "REPORT NEWS" or CLICK-ON "WP SOAPBOX," or send E-mail to WPCNR@aol.com.

FLASH

Leow's Cineplex agrees to stay in Tishman-Speyer Town Center! City upfront investment now $23 million; to seek federal, state assistance. Tishman-Speyer to subsidize Loew's Theaters Construction. Target Stores Officially onboard. Mayor says new deal means $9 Million more annual revenue to city.

The Mayor's Office May 25, 2000

Mayor Joseph A. Delfino announced tonight that Leow's Cineplex has agreed to stay in the Tishman-Speyer Town Center project. WPCNR was notified of the statement at 4:30 this afternoon, and the statement read to the public at 6 PM.

The Mayor read a prepared statement at the top of the Common Council meeting that Leow's agreed to stay because the city and Tishman-Speyer have agreed to three conditions:

City has committed to approval of the project by July 10, 2000.
The city has agreed to keep the parking rates at the new planned Main/Martine
parking garage to a maximum of 50 cents per hour.
The City and Tishman-Speyer restructured the business agreement to cut the costs to Loews
of constructing the interior of the second floor of the Town Center housing the Loews Theaters.

City upfront investment increases to $23 million.

In order to meet Loew's demands for construction cost relief, the city will pay an additional $10 million dollars upfront. This payment is in addition to the $13 million the city has already committed towards the construction of the new $35 million parking facility, bringing the total upfront city outlay to $23 million. (This was not spelled out specifically in the Mayor's statement faxed to WPCNR. The $13 million is the original upfront cash commitment by the city towards the construction of the new Main/Martine garage.)

The Mayor announced that he and the Common Council have agreed to seek partial funding for the city's $23 million investment from County, State, and Federal officials in the next two weeks.

The new agreement retains the original negotiated Payment-In-Lieu-of Taxes agreement which will, according to the Mayor "will provide the City and the School District with twice the real estate tax revenues, that we are currently receiving during the initial years, increasing to more than 4 times the current tax revenues at the end of the Pilot agreement term." (WPCNR will attempt to find out the details.)

City relieved of garage future revenue liability

The Mayor's statement said that in return for increasing its upfront cash outlay, Tishman-Speyer has relieved the city of its $12.5 million dollar "potential obligation," the city would have had to pay under the previous agreement (if the new garage did not meet revenue expectations).

The Mayor stated that the new agreement, though demanding more money from the city upfront, actually "makes even better financial sense for the city," Delfino said. "This new agreement will generate $9 million more in revenue for the City than the original agreement, and completely removes the city from any liability in the event of shortfalls in parking revenues in the Main/Martine garage."

Tishman-Speyer will subsidize Leow's theater construction.

The increase in the upfront city financial stake, according to the Mayor's statement, reduces Tishman-Speyer debt on the garage, freeing Tishman-Speyer "to assist Loews with the construction of the theaters," according to the statement.

Target Stores formally signed to the project

The blockbuster announcement confirmed that Target Stores Inc. has entered into a formal agreement with Tishman-Speyer Properties to open the 145,000 square foot anchor store in the project.

Mayor praises Council efforts,
their step-by-step approval of the negotiations and Tishman-Speyer cooperation

Mayor Delfino began the statement with special praise for his Common Council, saying "I would like to personally thank the Common Council for the support they have given me on this issue. From the moment we were informed that Loews was withdrawing from the project, the Council rallied behind the effort to bring Loews back...We have had 10 special meetings with the Council to keep them fully informed and to collectively decide on the policy issues involved."

Delfino said "Everyone here has risen to the occasion and has gone above and beyond the call of duty because they understand how important this project is for the City and again, I cannot thank them enough."

The Mayor praised Tishman-Speyer for "working hand-in-hand" to keep the project alive and devoting top staff and resources "to keep this project alive."

From an Official Statement issued to WPCNR from Paul Wood, Media Relations, City Hall.

To comment on this report, CLICK-ON "REPORT NEWS" or CLICK-ON "WHITE PLAINS SOAPBOX," or send E-Mail to WPCNR@aol.com.