The Related Companies are asking for nearly $445,000 in financial assistance from the Westchester County Industrial Development Agency for a $32.3 million renovation of Armory Plaza senior housing in White Plains.
Related is also seeking $15 million in private tax-exempt bonds and state and federal tax credits to finance the project, according to a cost-benefit summary presented today to the IDA.
Without the financial assistance, Related will not renovate the building, according to a report presented to the IDA by economic consultant Michael Grella.
Armory Plaza is a 4-story, castle-like structure on South Broadway and across the street from The Westchester mall in downtown White Plains. It has 52 subsidized apartments for seniors and an adult community center.
The site is listed on the National Register of Historic Places. In 1776 the New York Provincial Congress met there at the original courthouse and declared New York an independent state, according to the Grella report. The armory was built in 1909.
In 1983, the City of White Plains sold the armory to The Related Companies. In 2007, Related financed a renovation with tax-exempt bonds issued by the White Plains Housing Authority, tax credits and property tax abatement.
Now Related – a New York City based real estate firm with more than $60 billion in assets – wants to install new flooring, cabinets, counters, fixtures, appliances, lighting, pipes, toilets, doors in every apartment. Building systems will be upgraded, better security cameras will be installed, and free WiFi will be made available to everyone.
Residents will be moved to vacant apartments or to off-site locations while their apartments are renovated. Their belongings will be moved to their temporary housing or placed in storage.
The project will create 18 construction jobs. Work is expected to begin in June and take 12 to 18 months to finish.
The Related Companies created a new company, Armory Plaza Housing LP, to acquire the property for $14 million from the existing affiliate and then mortgage it for $15 million.
Related is seeking $15 million in tax-exempt bonds to be financed by a federally-backed mortgage company — Fannie Mae or Freddie Mac — or by a commercial bank.
The bonds will qualify the project for state Low-Income Housing Tax Credits that can be sold to investors. Related is also seeking Federal Historic Tax Credits, and intends to transfer the property tax abatement deal to the new affiliate.
The IDA is being asked to approve $444,874 in financial assistance: a $150,000 exemption on the mortgage recording tax and $294,874 exempted on sales taxes for construction materials.
Related said it is committed to hiring 65% local labor, according to the Grella memo. It wants the IDA to waive its policy of requiring 85% of workers to be hired from Westchester and five surrounding counties, because “the margins on affordable housing are thin.”
The project would generate an estimated $15,394 for the county in one-time sales revenue from construction earnings. It would cost the county $199,292 for its portion of foregone tax revenues.
That works out to a meager cost-benefit ratio of 8 cents received for every $1 of financial assistance.
Although “not a highly favorable” costs-benefits ratio, Grella told the IDA board, the calculation does not include the impact of new residents, as is done with new projects. But if the impact of existing residents were counted, he said, the costs-benefits ratio would be closer to 1:1, and it is a “great project for the county.”
The IDA is expected to consider preliminary financial assistance approval next month, after which a public hearing would be held and final approval could be considered.