Writer questions Yonkers downtown plan
By HARRY L. LANGER

 

The Yonkers Master Development Plan (YMDP) is a great deal for the developers, but a bad one for the city and state.

– First, it cedes indefinite control of the city’s future to a private shell development corporation without completion guarantees for the entire plan; is not the highest and best use and price for invaluable, irreplaceable waterfront and large downtown sites owned by the city; gives away public property worth hundreds of millions of dollars without obtaining independent appraisals as up-zoned for their highest and best use; will not produce the permanent jobs and revenues Yonkers needs for its fiscal and social viability; and could ultimately result in municipal bankruptcy, perpetual financial crisis, renewal of Financial Control Board oversight and municipal impoverishment.

At the very least, the YMDP must be completely revised and renegotiated. Following are better alternatives which could provide Yonkers with the quantity and quality of permanent jobs, revenues and commercial, residential and retail development to meet its present and future needs; enable it to realize its great potential; and obtain hundreds of millions of dollars for its development assets.

The city’s current plan is to waste Chicken Island, which is the key to the redevelopment and revitalization of its downtown business district and its future prosperity on a $40 million-plus, limited use, limited capacity, and money-losing stadium for a financially risky bush league baseball team.

This stadium would sit on top of a proposed three- or four-story retail center for big bulk discounters. Parking facilities and a misplaced 50-story luxury residential tower would occupy the rest of the site. These inadequate uses should be abandoned to fulfill this property’s enormous potential as a major job-producing office building complex.

Yonkers needs permanent quality jobs and revenues for its fiscal and social viability. It is important to note that housing does not produce permanent jobs and requires many costly public services; construction jobs are only temporary and inconsistent in a down economy; and minimum wage jobs reinforce dependency.

– Second, as an alternative, the entire area encompassing Chicken Island, Main Street, and the Larkin Plaza District would: (1) first be up-zoned for high-rise, high-density office buildings with retail on the street and second floors and parking below grade; (2) then separated into 20,000- to 60,000-square-foot parcels in accordance with an overall downtown plan with each parcel given a pre-approved environmental impact statement; and (3) thereafter commence a public bid process on a single or multi-parcel basis. This would maximize property values; save builders the expense, effort, and long bureaucratic delays associated with obtaining such approvals; attract greater major developer competition; and result in substantially higher prices for the properties. This alternative would provide many millions of square feet of office space and tens of thousands of decent jobs and position Yonkers to capture the back-office needs of major corporations forced to leave New York City for space, cost, and security reasons. The retail would also be supported by the office workers. The bid process would renew and revitalize downtown and create an imposing and beneficial gateway corridor to the city better and faster.

Additionally, a high-tech export free zone light industrial job development program (EFPZ) incorporating relevant educational technical and apprenticeship training should be established on a substantial part of the Hudson River waterfront. It could provide tens of thousands of quality hi-tech jobs plus related support service and supplier jobs. An EFPZ would make zone users cost effective in select categories of high value, hi-tech light manufacturing and enable them to capitalize on Yonkers’ superior waterway access to the world markets and compete in the global economy.

– Third, the developers, with mayoral and the City Council president backing, are claiming developer tax credits of 18 percent of the total costs of the $3.1 billion downtown projects under the brownfield law. However, there is no history of any material contamination at Larkin Plaza, Chicken Island, Main Street and much of the waterfront. At best, any contamination would be modest and have little impact on public health, safety, or water supply. Any such tax incentives should be limited to actual cleanup costs. Said tax incentive request appears to be an abuse and gross violation of the intent and purpose of the Brownfield Law, enriching private developers at public expense.

– Fourth, an unorthodox, inappropriate use of tax incremental financing (TIF) would have Yonkers unnecessarily assume and issue municipal bonds to pay for about $200 million of infrastructure improvements and parking facilities that are normally the responsibility of the developer in projects of this size and scope. Yonkers would then incrementally increase the real estate taxes on the surrounding small property owners to pay an incremental bond debt service payment schedule through 2035.

Extensive use of TIF financing is risky for Yonkers, particularly in a down economy or if a project is unsuccessful. Tax and revenue shortfalls could create municipal fiscal crisis, leaving the city without enough funds to meet its increasing obligations including schools. Also, is there an accretion fund provision to fully retire said TIF bonds by 2035?

Instead, to protect the city and the community, TIF project improvement bonds should have their debt service and full retirement solely borne and guaranteed by the private developers and levied as tax surcharges on their projects.

It also might be in the best interests of the city and the public if the Empire State Development Corp. undertook the redevelopment of downtown Yonkers. The ESDC was created and empowered for such purposes and has the staff, skills and proven ability to do it.

 

Harry Langer is president of H.L. Langer & Company Inc., a commercial real estate company in Manhattan.

 

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