The Front Page:
JPI demands 54% tax cut to continue 300 Mamaroneck Avenue Project.
Mayor and Council say "No" to 15 year tax abatement, fear setting precedent for subsidizing luxury residential apartments in the city.
JPI may be out of the project in 24 hours as owner requires million dollar payment from JPI on their contract to purchase on Friday.
Englert, JPI regional manager undecided as of Thursday night whether JPI will pull out altogether. No news Friday on whether they stay or go.
By John F. Bailey
CityLine: May 18, 2001 -- City Hall
The phone came to the Mayor's office at 10 AM Thursday morning.
JPI was in trouble.
JPI, the national builder of luxury housing, that was up until last night, the savior developer to fill the 20 year vacant lot at 300 Mamaroneck Avenue with 281 luxury apartments, was having trouble with their numbers.
They wanted an emergency meeting with the city to discuss their financial problems with the project.
Two weeks ago, JPI had advised the Mayor's office they were having "problems," but did not reveal what they were until last night, Thursday evening.
The Mayor put JPI on the agenda with the scoping session of the New York Presbyterian Hospital.
At about 6:10 PM, with only 5 Council Members present (The Mayor, Benjamin Boykin, Larry Delgado, Robert Greer, and Rita Malmud, with William King and Pauline Oliva absent), JPI made their play.
John J. Englert, Area Managing Partner for JPI (of Westborough, Mass), said that JPI had underestimated their construction costs for the 281-unit combination high rise and townhouse development, due to the high cost of conforming to the White Plains plumbing codes, which he described later as requiring a more expensive piping material than is commonly used.
Englert said the larger problem with financing was the assessment per unit they estimated they would be paying which would force them to charge more in rent than they felt the market could sustain.
Mark Weingarten, of DelBello, Donnellan, Weingarten, Tartaglia Wise & Wiederkehr, spokesman for JPI, outlined what they wanted from the city to make the numbers work. Weingarten said by their numbers the JPI project would be accessed by the City of White Plains at $3,850 a unit, requiring a rent of $2,900 a month.
Weingarten said that number was higher than White Plains is used to, and that the company wanted the city that very night to authorize a Payment in Lieu of Taxes agreement for 15 years to $1,770 , a tax abatement that amounts to 54%, and would enable them to lower their rentals to $2,700 a month.
After the meeting, WPCNR learned that these assessment figures were arrived at by JPI without any consulting with city assessor, Edye McCarthy, according to Ms. McCarthy. Speaking to WPCNR Friday, Ms. McCarthy said the figures JPI arrived at were based on expenses JPI had calculated.
Paul Wood of the Mayor's office said PILOTs had been granted to Bank Street Commons, Tishman Speyer and Clayton Park developments because those developments were in depressed or blighted areas.
Mr. Weingarten indicated that there was a possibility that the Westchester County Industrial Development Agency would grant clearance for PILOT relief, as well as sales tax abatements, but had not done so as of yet. (Mr. Englert told WPCNR at the close of the evening that the School District would also have to agree to the tax abatement, and that the council approval of the PILOT request was the first step.)
At this point, the Mayor asked the council members if they could go into executive session to discuss the tax abatement, and Ms. Malmud objected.
She said she had to go to a Recreation Advisory Committee meeting at 7:30 PM, and that she wanted to go over the scoping session of the New York Presbyterian Hospital property first, as scheduled. She said she had a limited amount of time to discuss the hospital scoping draft, and that the JPI proposal should come second to the originally scheduled item, the hospital scoping review.
The Mayor asked for a vote and Mr. Greer, Mr. Boykin, Ms. Malmud, and Mr. Delgado voted to follow the agenda, with the Mayor abstaining. Mr. Englert, Mr. Weingarten and the remaining JPI entourage left the chamber at approximately 6:30 PM and waited until 7:30 PM at which time the Council met in executive session for 20 minutes, and reached a decision.
All 4 Councilmembers and the Mayor made brief statements saying they would not agree to an abatement, because it represented a precedent of offering PILOT or tax abatements or subsidies for residential projects outside the urban renewal or depressed areas which other developers would want.
Responding to the comments, Englert, speaking for his company since Mr. Weingarten had chosen to leave by this point, vehemently denied that his company needed to be subsidized, but that he needed this abatement to be competitive and to make residential housing work in White Plains.
Leaving the meeting, Englert told WPCNR that he did not know as of Thursday evening whether JPI would pay the million dollars due Friday to continue going ahead with the purchase of the land to build the project. Englert said JPI had already invested $1.2 million in the project and was prepared to walk away, but he did not know. He said he was going to talk over the situation with his financing company, General Electric Credit Corporation, which required a 9.25% return on investment.
The Mayor left the door open, and said he "could not thank the company enough for their efforts" in customizing the project to answer every neighborhood objection.
As of Friday evening at 5:15 PM, the city had not heard from JPI as to whether they were still "in" or "out" for good.
Mark Weingarten, JPI's attorney told WPCNR at 5:15 PM Friday, that he had not heard from his client (JPI) all day, and did not know what JPI had decided.
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