With municipal (and family) budgets still strained, New Rochelle continues to explore every opportunity for efficiency and cost-savings. In this spirit, the City has just refinanced the debt on the New Roc City parking garage, reducing the interest rate by more than 3%, for a net savings to taxpayers of roughly $4.5 million over the 11-year life of the bonds.
This transaction is a little more complicated than a standard mortgage refinancing, because the owner of the garage prior to now had been the New Rochelle Industrial Development Agency, which leased it to a Local Development Corporation (LDC) established at the time of New Roc’s construction. The City then sub-leased the garage from the LDC, with lease payments calibrated to equal annual debt service … so for all intents and purposes, the City was already responsible for paying off the bonds. In order to achieve a lower interest rate, the City will discontinue this lease arrangement and assume direct ownership of the garage.
The New Rochelle Business Improvement District (BID) has played an invaluable role in promoting downtown commerce. Among many other things, the BID organizes cultural and family gatherings to attract people to the central business district. The latest example was a New Year’s Eve celebration at New Roc City, featuring music, arts & crafts, magicians, and more — even a balloon drop at noon. Check out the video above to get a little more of the event’s flavor.
Three years ago, the operators of New Roc City announced that a large portion of the entertainment center would be reconfigured to accommodate two new department stores. Like many other residents, I was excited about this prospect. New Roc, after all, had been originally conceived as a retail facility, and New Rochelle has lacked a department store since the closure of Macy’s in the early 1990s. The planned arrival of Target and Kohl’s would have established new anchors of downtown commerce, generated significant sales tax and otherwise strengthened the local economy. The City’s IDA put together a package of incentives to facilitate the change-over, while Parks & Rec began a parallel initiative to set aside space at City Park for a new municipal ice rink.
Well, needless to say, there are still no department stores at New Roc. And just this past week, Monroe College established a new basketball arena within the space previously occupied by the New Roc ice sheet. What happened?
In a word: recession.
Bringing department stores to New Roc City would require a significant internal reconstruction of the center, with an estimated price tag exceeding $50 million. In addition, several portions of New Roc would have to “go dark” during this construction period, temporarily reducing rental income for the owners. That’s all well and good, provided that future income from new retail tenants is sufficient to exceed these losses. In other words, the viability of the retail conversion is dependent upon retailers’ willingness to spend adequate amounts on space rental or purchase. In a relatively strong economy, like that of 2007 when these plans were first conceived, that’s a pretty safe bet. In today’s relatively weak economy, the numbers don’t add up. And so we must wait.
Enter two other players . . .
Last year, as part of a legal settlement spanning multiple properties (most outside of New Rochelle), Cappelli Enterprises relinquished its share of ownership of New Roc City — along with day-to-day management responsibilities — to Entertainment Properties Trust (EPT), a large national concern based out of Missouri that owns millions of square feet of entertainment and retail space. In both private conversations with City officials and public statements to the press, EPT has reaffirmed the planned transition to retail at New Roc . . . but they have also counseled patience, citing the economic calculus above.
More recently, Monroe College struck an agreement with EPT to use the space of the former ice rink for a new college basketball arena. Monroe is a for-profit, tax-paying institution of higher learning that has assumed an increasingly important leadership role in the downtown. (The head of Monroe’s New Rochelle campus, Marc Jerome, is also the President of the Downtown Business Improvement District.) The terms of Monroe’s agreement with EPT and their public statements on the subject make clear that the basketball arena is viewed as a short-to-medium term use that can activate New Roc on an interim basis, until prospects for retail are brighter.
I continue to believe that retail would be the most publicly-beneficial use at New Roc City. In the context of a five-year time horizon, I am highly optimistic about achieving this objective. In the context of a one or two year time horizon, the odds are less promising (although retailers smaller than department stores remain a real possibility.) In the meantime, the City will continue its aggressive planning and development efforts downtown and on the waterfront, aimed at positioning ourselves for immediate progress once national economic conditions turn brighter.
