RE-PUBLISHED: A primer on the proposal for grocery and retail at Chappaqua Crossing
Monday, May 19, 2014
Reprinted from November 26, 2012, April 19, 2013 and—most recently, with updates—Monday, May 19, 2014
by Christine Yeres
Editor’s Note: This primer on the Chappaqua Crossing situation is still a good one. With a Tuesday, May 20 meeting at Town Hall scheduled, here it is again, with further updates:
Chapter One in the saga of town’s relationship with Summit Greenfield and Chappaqua Crossing concluded with the Town Board’s decision in April 2011 to allow 111 units of multi-family housing (60 market-rate fee simple and 51 condos, 20 of them affordable) to be built on the former Reader’s Digest property and a lifting of restrictions on the number of tenants allowed in the 662,000 square feet of office space. Of the two lawsuits that are part of that chapter, the state suit (dismissed and appealed) and the federal case against the town have been suspended in a settlement between Summit Greenfield and the town.
So could Chapter Two work with a grocery and retail?
While Chappaqua Crossing’s last application showed that the developers might have liked to construct more residential units than the 111 units they are permitted to build, last spring [March 2012] Supervisor Susan Carpenter floated the idea of a grocery instead.
Getting Chappaqua Crossing from tax certiorari refunds to tax revenues
Town officials involved in the environmental review of Chappaqua Crossing’s various applications have expressed confidence that their review process was a proper and fair one. They have denied that their consideration of a change in zoning to permit a grocery and retail is aimed at settling any lawsuit. There is a great desire on the Town Board’s part, however, for the property to bring commercial revenue to town and school coffers. Town records show that from 2008 to 2012, Chappaqua Crossing has paid, each year, between $1,075,509 and $1,185,982 to the school district and between $376,223 and $428,991 in town (including county) taxes. See below:
In 2005, the town and the school district refunded over $1 million in taxes paid in the three previous years. And Chappaqua Crossing has a certiorari claim in the courts right now, for the years 2008, 2009 and 2010, asking that its taxes be re-figured for those years based on about half of its full assessed value—currently around $11 million. Halving the assessed value for that period would halve the taxes it has paid in those years. The certiorari is currently being negotiated by Chappaqua Crossing, town and school district attorneys, as are all certiorari claims.
As the Town Board explained in its findings in April 2011, by limiting the residential units in the approved project to 111, they meant to leave the property – the last large business-zoned property in the town—available for increased business/commercial revenue, relieving residential taxpayers to some degree of a town budget of around $36 million ($18 million from taxes and $18 million from revenues) and of a school budget of around $112 million (mainly property taxes, with very little outside funding). Currently, around 97% of tax revenues are supplied by the 6,500 households in New Castle (5,400 of them in CCSD); only around 3% of revenues come from commercial/business taxes.
According to the SEIS submitted by Summit Greenfield, the commercial component of the project already approved by the town – the leasing of 662,000 square feet of office space (only 140,000 square feet are leased at the moment) – should generate around $2,345,000 per year in tax revenue. The proposed grocery-retail project – the leasing of 120,000 square feet of retail plus the other 542,000 square feet of office fully leased – would generate a little over $3 million, or around $650,000 more per year than the project approved in April 2011. Of that total $2,345,000, each year a little less than $300,000 would come to the town, and a little over $2 million to the school district.
The above charts do not include tax revenue from the residential portion (111 units) of the approved project.
Because only 140,000 of the 662,000 square feet of office space is leased currently, much less than the $2.3 million comes in taxes now. But, the thinking goes, situating a grocery and retail at Chappaqua Crossing will make the empty 400,000 square feet of office space a more attractive destination to potential office tenants, thereby helping to lease up the space.
A grocery in Chapter Two?
When D’Agostino’s closed in fall of 2011 and its landlord chose to lease the space to Walgreen’s, it was clear that another supermarket would not replace D’Agostino’s. (Although the place is still vacant, Walgreen’s does intend to inhabit the space.) [UPDATE: May 19, 2014: Walgreens is up and running now.]
At the time, around 600 residents signed a petition to keep a grocery at the D’Agostino site. However, it was not, the town board emphasized at the time, within the town’s power to dictate to landlords whom they may have as tenants. But from that time, “grocery” was on the Town Board’s collective mind.
A matter of timing: An interested grocery may grow uninterested without zoning in place
In a March 6, 2012 work session, the town board asked a resident of New Castle—a business development professional who matches groceries with developers—whether New Castle could expect to attract a grocery store in the Chappaqua hamlet. He told the board that “[n]o developer is going to build a small supermarket in the downtown area.”
Although Chappaqua Crossing is not mentioned in the March 6 minutes, the Town Board did ask the business developer during the meeting whether a specialty grocery such as Trader Joe’s or Whole Foods would be interested in the New Castle market with a Chappaqua Crossing location. “Not enough population density,” he responded. [UPDATE May 19, 2014: In early April 2014, Supervisor Greenstein said, “It still doesn’t have the density they [Whole Foods] want, but it will allow them to do some of the sustainability initiatives they want. Over past couple of days they’ve been working on that community garden idea.” See Supervisor’s first 100 Days: Chappaqua Crossing and Spa—now “Homes”—@ New Castle, 4/8/14.
According to meeting minutes, the business development professional suggested that the town conduct a marketing program and consult a “specialty broker” that deals “only with stores such as Whole Foods or A&P. Their service does not cost anything to the Town because the owner of the property pays their commission.”
According to the minutes of the meeting, the next step, he explained, would be to deal with “issues such as zoning and permitted developments,” adding that “[o]nce the Town takes this on it has to continue in earnest otherwise the retailer will move on.”
The Town Board seems from around this time to have believed that although New Castle’s population was not great enough to attract a grocery as big as or bigger than D’Agostino’s, a larger anchor-grocery at Chappaqua Crossing that could itself attract a complement of pharmacy-bank-dry cleaner-restaurant establishments might be viable. [UPDATE: The project is now expected to be a Whole Foods grocery of 40,000 square feet and 80,000 square feet of additional of retail. Originally, the grocery was to have inhabited the existing 100 and 200 (cupola) buildings; in the most recent plan, all of the proposed retail is new footprint—although the 100 building is slated for removal and Greenstein has said that Summit Greenfield will decommission an amount of square footage from existing buildings to equal the added 120,000 square feet of retail outside the existing buildings].
Two days later, the Town Board issued an invitation to residents to weigh in on the idea of grocery-plus-limited-retail at Chappaqua Crossing. On March 27, two residents attended the hearing; both registered their disapproval of the concept. The Town Board still had no application or description of the project from Chappaqua Crossing to show.
Over the summer, the Town Board drafted legislation to change the zoning at Chappaqua Crossing to permit an anchor grocery of around 50,000 square feet and other retail—each at least 5,000 square feet each—totaling around 150,000 square feet, and set a September 24, 2012 public hearing date for the proposed zoning change.
Killing several birds with one stone
Since purchasing the property, Chappaqua Crossing has maintained that fundamental changes in the economy have made the marketing of its vast supply of office space highly problematic. Westchester seems awash in modern office space, and Chappaqua Crossing’s is not modern space. [UPDATE May 19, 2014: There have since been conflicting accounts of the condition of the cupola building; Supervisor Greenstein has described it as “beautiful” and in fine shape. Summit Greenfield invited architects KG&D to work up a plan showing its renovation which Greenstein says he has seen. He has spoken to Summit Greenfield, he says, about buying, leasing, getting-for-free, or swapping the cupola building for the downtown town hall property (which he would then redevelop).]
At present, Chappaqua Crossing’s tenants take up only 140,000 square feet of its total 662,000 square feet of office space. Although there is no actual commercial retail there now, with medical offices and play space in the leasing mix, already the tenants don’t fall neatly into the BRO—business, office, research—category. Most are certainly “commercial” operations – just not “retail.”
So at the moment, not only is the property not fully leased, but every year that Chappaqua Crossing files taxes based on its current assessed value and that value does not correspond to the assessment of around $11 million, it has a case to make for a tax certiorari and a possible refund in taxes. [UPDATE May 19, 2014: There has been no Town Board announcement on the tax certioraris being currently negotiated.]
Residential properties fluctuate in value based on what similar properties might sell for on the market, while commercial properties fluctuate in value based on the revenues they generate. Condominium developments, which calculate their value based on what rent their units could theoretically command, operate in the same way. Both commercial properties and condominium developments are permitted to challenge their assessments every three years. The condo development Riverwoods is the most recent example of a successful certiorari. The town and school district returned $219,996 and $935,005, respectively, last summer to Riverwoods residents.
Superintendent for Business John Chow has set aside several million dollars in reserves to settle pending certioraris, mainly Chappaqua Crossing’s. The last tax refund the school district made to Chappaqua Crossing was in 2005: $1,376,470 for the three tax years of the claim.
Figuring out how the approved plan fits with the proposed plan
Chappaqua Crossing recently extended the time within which it must act on the permission to build its 111 units of multi-family housing for second six-month interval, to April 2013 [UPDATE: 3/4/13— See end of this paragraph.]. That puts some pressure on the town board to change the zoning to allow the proposed retail use at Chappaqua Crossing in time for owner Summit Greenfield to rearrange a site plan to integrate the retail shopping center portion into the multi-family housing portion by April 2013. To take longer could risk losing the interest of Chappaqua Crossing in the retail use and the interest of its potential grocery anchor-tenant in leasing. [*UPDATE: 3/4/13—The deadline has been extended further. And last week Chappaqua Crossing submitted newly drawn plans to fit the grocery-retail along with the residential].
So as the Town Board sees it, a grocery at Chappaqua Crossing answers several related problems: Chappaqua Crossing will make a greater return on its investment, the Town Board will benefit from increased tax revenue, residents will have the grocery store that Town Board members believe they want, and the antiquated iconic Reader’s Digest rotunda building will have found a use as a grocery of between 36,000 and 66,000 square feet (the other 80,000 or so square feet of accompanying retail would appear in the form of several buildings placed in front of the rotunda building, anchored by it.)
[UPDATE: May 19, 2014: Toward the end of 2012 Summit Greenfield informed the Town Board that Whole Foods was no longer interested in renovating and inhabiting the cupola building as a Whole Foods Market, but preferred new, free-standing footprint.]
What kinds of retail stores would accompany a grocery anchor?
[In a presentation to the Planning Board on November 27, Summit Greenfield’s engineer and planning consultant, Andy Tung, described the types of stores the developer hoped to attract. ” Depending on the nature of the pharmacy or drug department within the grocery there would likely be a pharmacy. The town local law has a formula for the number of restaurants for the square footage of retail proposed. We’d like that increased , so there would likely be a sit-down restaurant, probably two. Most likely national chains in the 5,000-SF-plus category. A Chipotle’s or a Five-Guys. There could be what we call a “junior anchor” a store of 15,000 SF that might e a Petco or Staples. Not a department store, but a store you might go to for daily or weekly needs. Then a smaller store something like a Sylvan Learning Center. As I’ve learned, each grocery store has a group of smaller tenants that kind of follow it around. Either they work well together operationally or they balance each other functionally or product-wise. So it’s difficult to say who they’ll be until the grocery tenant is identified and signed up.”]
And even though the planned shopping center shows additional free-standing buildings, there will be no net increase in square footage at Chappaqua Crossing, because the rotunda building will lose floor space when the grocery store breaks through to be two stories in height. [UPDATE: May 19, 2014: All 120,000 square feet of grocery and retail are now all proposed as new footprint apart from the current buildings. No longer is the cupola slated for conversion into grocery space; instead Greenstein is considering a plan to move town hall into it.]
What about the 400,000 square feet of empty office space left over?
With 120,000 square feet of grocery and additional retail, and 140,000 square feet leased by current tenants, that still leaves around 400,000 square feet of vacant office-zoned space for Summit Greenfield to lease. Having a grocery-anchored shopping center at Chappaqua Crossing will, the developer has stated in press releases and in the petition to have the zoning changed, make that office space more marketable.
Summit Greenfield also includes in its Supplemental Environmental Impact Statement a letter from the Westchester County Planning Department commending the “adaptive reuse” and “mixed use” development aspect of its proposed grocery-retail-MFPD-office campus.
The County’s letter does, however, also question whether the “mixed use” proposed by Summit Greenfield is “holistic” enough. “Our concern is that the proposed regulations, while allowing retail, could create an environment where the retail is separated into a “retail zone” while the housing is placed in a “housing zone,” with both potentially being separate from the re-purposed Reader’s Digest building. Such a development would not take advantage of synergies between uses that could be achieved in a true mixed-use community.”
In addition, the County is critical of the “’sameness’ in building materials, forms, colors and scale” for the purpose, the County letter reads, on Summit Greenfield’s part “of achieving visual harmony and unity.” Many developers, according to the County letter, are pursuing an “opposite strategy” – of “planned eclecticism, as they mimic more organic forms of development that would normally occur outside of a master planning process.”
Doesn’t a change in zoning put the cart before the horse?
The Town Board pushed the draft zoning amendment out ahead of the actual application because, according to several residents who are professionals in commercial real estate, interested suitors will not risk committing until they see that the zoning is in place. And if Summit Greenfield is to go forward with its residential development, it must figure out how that portion of the property would be affected by adding the new retail portion.
The order is not so unusual, according to town sources. In Summit Greenfield’s previous application for a zoning change and for approval of its MFPD plan (approved by the Town Board in April 2011) the two were in the works concurrently.
Before Summit Greenfield had even submitted an application the Town Board referred the draft zoning legislation to the Planning Board, for its input. Planning Board members raised concerns that persisted even once Summit Greenfield revealed its proposed plan. Planning Board members repeatedly cited a lack of information they felt they needed to comment intelligently.
Another abiding concern for Planning Board members was the timing: A review of the Town Development Plan (or Master Plan) was supposed begin first in September 2012, then in January 2013. Without a full-blown, Big Picture discussion of the future direction of the town, how, Planning Board members asked, could the Town Board change the zoning at Chappaqua Crossing to allow the retail development proposed in the petition? [UPDATE April 4, 2013: Although the Master Plan review has been set up recently with a Steering Committee and timetable, aiming for a draft by the end of 2013, the Town Board has made clear that it will not suspend its review of the Chappaqua Crossing proposal for grocery-and-retail for Master Plan purposes. The board does, however, intend to engage a consultant of its own to assess the commercial health of the Chappaqua and Millwood hamlets—but as part of its Master Plan review, not for its review of Chappaqua Crossing.]
[UPDATE May 19, 2014: The Master Plan review has only just now started, with community outreach sessions, this month.]
UPDATE April 4, 2013: Last week, Summit Greenfield re-submitted its Supplemental Environmental Review Statement, including a market analysis by the firm of HR&A. The report concluded that a grocery-with-retail would not harm the existing hamlets and may even, because of the increased commercial traffic to New Castle, benefit the hamlets. See “Summit Greenfield submits “Supermarket and Retail Market Analysis” of Chappaqua Crossing,” NCNOW.org, 3/4/13.
What if we change the zoning and there are no suitors?
When, finally, in mid-October, an application from Chappaqua Crossing arrived—for 120,000 square feet of retail to include an anchor grocery of between 36,000 and 66,000 square feet—the question then became, “What if the zoning is put into place and there are no suitors?”
Chappaqua Crossing submits preliminary plan for retail development, NCNOW.org, 10/16/12
In that case, the Town Board’s reasoning goes, the developer wouldn’t go forward with the plan. No harm done. The town would be left with the retail zoning and no takers—but that retail zoning would be so specific (an anchor grocery of a certain size, ancillary retail uses not less than a certain size) that even if the property changed hands, any new owner’s proposal would have to meet that same zoning prescription.
Fear of a “third hamlet”
The Town Board’s thinking runs like this: There is no full-service grocery site possible in the Chappaqua hamlet, and in any case the two sets of offerings – the small, specialty retail in the hamlet and the larger retail at Chappaqua Crossing – wouldn’t compete head to head.
In fact, in the original draft zoning for the grocery at Chappaqua Crossing, in order to avoid affecting the two existing business hamlets for the worse, all other retail at Chappaqua Crossing (pharmacy, restaurants, bank, liquor store) would have to occupy a minimum of 5,000 square feet, whereas most shops in downtown Chappaqua are around 1,000 square feet. [UPDATE 3/4/13: Summit Greenfield’s new market study includes and inventory of hamlet stores and their square footages. Of the 84 Chappaqua businesses listed, square footage are given for 45 of them, averaging 1,700 square feet each; of the 24 Millwood businesses listed, square footage is given for 18 of them, averaging around 3,800 each.]
In their discussion of the zoning change, Planning Board members were skeptical that such a grouping of retail stores at Chappaqua Crossing would have no ill effects on the downtown, and pointed out that it was not uncommon for many full-service groceries to include small restaurants or coffee shops that are well under 5,000 square feet in size.
That 5,000 square foot minimum in the Town Board’s draft legislation has since been altered in Summit Greenfield’s re-proposed legislation which suggests that the new zoning allow up to four retail shops of at least 1,500 square feet each.
[UPDATE: May 19, 2014: In its April 2014 application, SG has asked that the smaller-store limit be lifted. See In new site plan SG asks that limit on number of 1,500 to 5,000 s.f. stores be removed, NCNOW.org, 3/12/14.]
Some merchants have flyers on display in their shops titled “Save Downtown Chappaqua – Stop the Strip Mall @ Chappaqua Crossing.” The text is critical of the Town Board’s move to change the zoning to allow retail “with the HOPE that MAYBE” a supermarket “like Whole Foods or Trader Joe’s” will come, as well as likely ANOTHER dry cleaner, another nail salon….” The petition had close to 700 signatures as of yesterday.
Supporters of the plan seem less passionate than those who oppose it. They tend to like the idea of having a grocery store again, though it’s hard to know how many of the 600 residents who signed the petition to keep D’Agostino’s in town would necessarily sign a petition to create a grocery at Chappaqua Crossing. Some residents see no better use for the property than conversion to a low-key, high-class shopping center that provides the east side of town with a grocery and the town and schools with revenue; others think it’s a short-sighted move that the town will regret, and ask “Do we need the money that badly?”
[UPDATE May 19, 2014: A major change has taken place in the layout of the shopping center (also known as a strip center): Planning Board member Tom Curley, an architect, has worked with Summit Greenfield to apply “traditional neighborhood design” principles to the site plan. Although the Whole Foods supermarket has its back to Roaring Brook Road, all other retail is rearranged along the the axis between the current Bedford Road entryway and the cupola building. Also redesigned is the residential area, with the Wallace Auditorium now to remain standing.]
[UPDATE May 19, 2014: Another major change has been the concept introduced by Supervisor Rob Greenstein that the town swap, lease, buy or be given the cupola building as a town hall, and the town hall property be swapped or sold and redeveloped for other purposes.]
Related: Planning Board drills down on Crossing plan for grocery and retail, NCNOW.org, 12/5/12
Traffic Study for Chappaqua Crossing with grocery and other retail, NCNOW.org, 11/25/12
For more related articles from NCNOW’s archives, click HERE.