Open Letter to the Town Board: Chappaqua Crossing: The Stick, Carrot & Gavel
Tuesday, November 30, 2010
by Rob Greenstein
Dear Members of the Town Board,
It seems as though the whole town is opposed to residential rezoning at Chappaqua Crossing. With so many negative social, economic and environmental impacts tied to a project doomed to fail, many residents are astounded that town board members actually seem receptive to the idea. Residents are left wondering why board members are considering such a risky partnership with this developer.
The only conceivable explanations are these: 1) The town board members are “hopeful” that the developer will use the proceeds of a successful residential development to revitalize the vacated Reader’s Digest space, thereby increasing commercial tax revenues; 2) Town board members are strongly tempted by the developer’s promise to include 20 affordable housing units, also dependent on the success of the residential development; and 3) Town board members may be anxious to avoid a lawsuit by the developer.
But none of these explanations withstands scrutiny.
1. Commercial tax revenues: The Stick
Town Supervisor Barbara Gerrard has acknowledged that presently only 3% of tax revenues come from commercial properties and that she wants to relieve residential taxpayers by increasing these revenues. The developer, an important commercial taxpayer, has seized upon this as a reason his residential rezoning proposal should be approved. The developer’s reasoning goes like this:
Left with an outdated facility on his hands by the departure of Reader’s Digest, he needs the proceeds from the proposed residential development to finance renovations to the commercial space. Until then, he threatens to continue to file grievances to reduce his taxes and thereby deprive the town of needed commercial revenue. That’s the stick.
This amounts to pressure for a bailout on the basis of being “too big to fail.” Even if this weren’t a repugnant notion, it deserves rejection on purely practical grounds.
First, the stick is actually a twig. At its peak, the property contributed only about 1% to town and school district taxes, an amount easily controllable from a budgetary point of view. And an amount that could very well be dwarfed by the multi-million dollar shortfall in school revenues that the School Board projects will result from the residential project. See Baffled by parents’ lack of awareness and concern over rezoning of Chappaqua Crossing.
Second, there is no assurance when, if ever, the hoped-for residential sales bonanza will be applied to renovate the Reader’s Digest office space. Supervisor Gerrard stated “if we’re really lucky, the first thing the developer will do is spend a lot of money, making the investment in leasing the business space.” Do we really want to rely on luck to generate the increased commercial revenues that our town desperately wants and needs?
Commercial revenues will have to wait until residential properties are financial success
At a minimum, any increased commercial revenues are standing in line behind several years of residential construction and are dependent on a successful marketing effort for the residential units. That will be followed by a period of time spent renovating and leasing up the commercial space.
But who in today’s market is prepared to assure profits from residential construction anytime soon? If the developer finds it difficult to lease the commercial office space at Chappaqua Crossing, can he reasonably expect that it will be any easier to sell high-end housing (he estimates $700,000 to $1 million per unit) that shares roadways that crisscross with commercial traffic and parking?
When the developer’s profit hurdle is not met because he can’t sell the units at premium $700,000 to $1 million prices, wouldn’t we be more than naïve not to expect that he will engage us in another zoning battle and seek to cash in on density bonuses that his lawyers are careful to repeatedly state on the record he is entitled to? These density bonuses total 556 units! And once residential zoning is in place the developer will be in a stronger position to claim these density bonuses.
Not only will the renovation of the commercial operation be put on hold during this time, but also with every addition of housing to the property, the commercial operation loses viability. Residential will crowd out commercial, a result that has the potential to benefit the developer enormously at the profound expense of town and school district taxpayers.
Already, for example, the developer is proposing a parking management plan that offers from the outset fewer parking spaces for the office space square footage than our town code requires, demonstrating his willingness to jeopardize the commercial side of his operation in order to load up on the residential use for which he has shown a persistent preference. This dense residential development will be an impediment to the commercial revenues that our town desperately needs.
2. Affordable housing: The Carrot
Realizing that the Town Board has expressed the desire for additional affordable housing, Summit Greenfield has dangled 20 affordable units as a carrot in the rezoning proposal.
Our own town code requires that multi-family housing – which includes the 20 affordable units – be located near shopping, community facilities and public transportation, not in an office park two miles from downtown, unconnected by sidewalks. In addition, the apartment-building structure Summit Greenfield is proposing is not compliant with New Castle’s zoning, which requires that every dwelling have its own entrance/egress to the outside. Town Board members seem ready to change these features of our town code to accommodate the developer’s affordable housing offer, and have opened public hearings on changes to both the multi-family and “individual unit access” sections of the town code.
However, apart from the obvious inappropriateness of the site, the underlying problem with the carrot of the proposed 20 affordable housing units is that the developer has bundled it with a dense residential development (179 more units – 60 fee simple townhouses, 119 condos), making it dependent on the success of those market rate units.
Since the town board has no power to ensure that the affordable units will be built first, town board members have no power to ensure that they will ever be built, since Summit Greenfield’s profit hurdle that might trigger construction of the affordable units will remain a moving target. The developer can continue to claim that his bottom line on sales of the market rate units still won’t permit him to provide the affordable component, giving him yet another basis on which to ask for still greater residential density.
While affordable housing is a commendable goal, we can’t afford this dangling carrot when it’s bundled with a dense residential development.
3. A lawsuit: The gavel
Perhaps the town board is looking over its shoulder, concerned that the developer will sue if his proposal is not approved. But avoidance of a lawsuit is no basis on which to decide this issue.
First, from the start it has been no secret to the developer that residents and town board members prefer to maintain the commercial viability of the Reader’s Digest property. Residents have spoken out resoundingly in opposition to the proposal to compromise the commercial potential of the site by adding dense residential development. Residents are in favor of preserving the town’s last large business-zoned property in order to ease their tax burden and support the town’s most important business and greatest asset, our schools. Those who oppose the proposal to rezone seem to outnumber supporters by at least 100 to one. With all due respect to the competence and dedication of you town board members, knowing full well that the proposal would never survive any sort of referendum, how can you to ignore the collective wisdom of residents?
Second, it doesn’t pass the common-sense smell test that we should need to be concerned with a lawsuit over a proposal with so many negative social, economic and environmental impacts on our town. And it doesn’t pass the legal precedent test either.
The developer’s lawyers have alluded to a 1975 state court case called
Berenson v. Town of New Castle, 38 N.Y.2d 102 (1975). In that case, New Castle’s zoning laws were found to be unconstitutional because they prohibited the building of multi-family structures. But the present laws of New Castle do not prevent multi-family dwellings from being created. In fact, there are already multiple districts in New Castle zoned for multi-family construction. Since Berenson, over 600 condo units have been built in this town and our zoning ordinances have been judicially examined applying the test developed in Berenson and were found to be legally sufficient. See Blitz v. New Castle, 94 A.D.2d 92 (2d Dept. 1983).
Although this proposal threatens our biggest industry and most important asset, our school system, Supervisor Gerrard has stated publicly that the school board lacks standing to challenge a final environmental impact finding solely on the basis of financial burden. See: Dueling demographers? Town board hires demographer to review Chappaqua Crossing school data.
Legally speaking, the supervisor may be correct in telling the community that the town board’s decision to deny the developer’s rezoning request cannot be based solely on the potential financial burden to the schools. But she is 100% wrong when she says the “financial burden created by having to educate more children is not relevant.” In fact, in the case relied upon by Supervisor Gerrard, Matter of Valhalla Union Free School District v. Board of Legislators of the County of Westchester, consideration was given to the projected impacts of the project upon the school district. Indeed, it is the intention of SEQRA that “a suitable balance of social, economic and environmental factors be incorporated into the planning and decision-making processes of state, regional and local agencies. It is not the intention of SEQR that environmental factors be the sole consideration in decision-making.” (SEQRA 617.1 Authority, intent, and purpose.).
Potential financial burden on school district unknown
Whether this project will result in 198 school-age children as the school board consultant says, 166 children as BOCES predicts or 48 children as the town board claims, one thing is clear, no one knows with certainty the financial burden on our schools. Are we supposed to rely on luck again when we agree to a zoning change in the face of a potentially devastating impact to our biggest industry and most important asset, our cherished school system? With increased enrollment come bigger class sizes leading to a decline in the quality of educational services. With increased enrollment come additional staffing requirements, infrastructure and busing costs.
With the estimated additional annual cost to the district of multi-millions per year beyond the tax contribution from Chappaqua Crossing, school board members have told the town board that a substantial financial burden will be borne by all other Chappaqua Central School District taxpayers – the same taxpayers who make up the Town of New Castle. A negative impact to our schools will be felt by all New Castle homeowners as home values depreciate. We should thank the school board for looking out for the interests of their constituents, not cavalierly dismissing their concerns.
This rezoning request has never been only about its impact on the schools. Serious questions of density, the intent of the town’s development plan, the character of the surrounding neighborhood, traffic, parking and sewers have still not been satisfactorily answered by the developer or by town board members. And with the economics of a real estate venture as risky as this one – a business park mixed with residential units – what town board in its right mind would not consider the package as a whole, and find it fiscally irresponsible to approve it?
Current town residents have an enormous stake in this decision. If the developer sues, the town board has the backing of the residents. The same cannot be said if the town board approves the developer’s rezoning proposal. It would then be residents who would sue the town board. And no one wants that to happen.
The way forward
Disappointed with his gamble on the commercial now that the market has softened and Reader’s Digest has left, with this proposal the developer is, in effect, trying to double down and profit from the addition of a dense residential development. The problem is that the costs and risks of this next gamble fall squarely on the backs of the taxpayers of New Castle. We should not be willing to accept those costs and risks.
What residents want and need is full commercial use, which is exactly how the property is zoned now. And it’s exactly how the property was zoned when purchased by the developer. Town board members, you should deny this residential rezoning request. You should not change the zoning for the developer. If the developer cannot turn a profit with the current zoning, the developer must change for the zoning.
Rob Greenstein
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To find all of NCNOW.org‘s archived articles and letters to the editor on Chappaqua Crossing, listed in chronological order, click HERE.
I for one will contribute to a fund to sue the board if they permit the residential project to go forward in any form.
The fact that we are this far along the process and haven’t heard any explanation of the Chappaqua Crossing project from our town board members is shocking. Do t.b. members have any idea of the state of the fiscal health of the owners of the property, or are we not allowed to know? What kind of deal is this in which the developer gets to propose and propose and propose and the town has to hope New Castle will be lucky?!?!?!?
As a former employee of Reader’s Digest I can tell you that on any given weekday at 5:00 I was not even able to make a right out of the front entrance unless someone let me go, due to severe traffic coming from Mt. Kisco. Trying to leave out the back into the Roaring Brook/Sawmill mess was even worse. I cannot even imagine any more traffic in that area. There has been a serious increase in traffic and over-development in this town over the years. It has made our town an often ugly and frustrating place to be.
There are specimen trees on the property which have plaques and are numbered, they are all in the way of the development, some of these trees are civil war era. Let’s just mow them all down and turn Chappaqua into the ugliest town ever!
And yes I agree with all the other arguments. It’s like those old political ads, bad for us-just bad, bad, bad!
When do we see the developer’s financials? Whose word is our town board taking about the claims the developer is making for the tax benefits of this proposed development?
I know there is a large (not sure what percentage) of citizenry that is silent about Chappaqua Crossing but that supports a reasonable approach to working with the developer. I am one of them, and I have spoken with many others, and I occasionally see expressions of similar views on here. For the most part we don’t want to engage in the hysteria surrounding this project, or the radical and emotional arguments that are often (not always) used by the opposition, especially as expressed on this web site. And we don’t want to subject ourselves to the absolute slam and personal attacks anyone receives if they say the slightest thing in support of negotiations and compromise. So when you say “everyone” is opposed, please don’t include me and don’t assume to include the others who are silent about their position.
We support reasonable negotiations with the developer, find benefits for the town, and make something happen that is a fair and beneficial compromise.
And for those out there who will jump on me and say “you are the developer”, I am not.
Clittle, please point out where I said “everyone” is opposed.
Sorry Clittle,
There are no benefits to the Town for residential development beyond
what is now allowed at The Reader’s Digest property.
Perhaps you should better inform yourself.
You better count your fingers after shaking on a bundled deal. Bundling the carrot makes it inedible.
Thank you to former digester for the information on the trees. The developer has stated how many trees that he will need to take down of the specimen size, but no where has he ever stated that some or all of these trees are plaqued and numbered. Another example of half information.
I moved to Chappaqua about a year ago, and I wish I had examined this issue more closely. I might have chosen another community if I had understood better what might happen at Chappaqua Crossing. Once this is approved new home buyers will not fail to notice, and they may very well go elsewhere. I think I would.
This will have a major impact on property values here. Perhaps that is not important to clittle, but it is very important to me. I’m with Mr.Greenstein, and I suspect many others, silent and vocal, are too.
To CLittle: there is no one I know of that has refused to talk to Summit Greenfiled about a “reasonable” proposal. From the first days onwards the drumbeat of opposition has been: come up with something reasonable. I was at those meetings. But Summit Greenfield has never evidenced any interest in talking to anyone about “reasonable.” As is, the proposal: (1) would cost us in net taxes (because whatever New Castle taxes are generated would be swamped by the increased school taxes); (2) harm property values—because there is already little market for that many two bedroom units and the market can’t absorb them; (3) harm an already poor traffic situation, etc.,; and (4) open the Town up to new demands down the road to change the approved use to something different. The proposal primarily involves two BR units but there is no market for that many. So, when those don’t sell, SG will come back and say “let us change them to 3 and 4 bedroom because otherwise we are in financially straitened need.” Well, those may sell but the effect on the school system will be a debilitating drain on us all. The Town Boards’ refusal to consider the effect on the entire tax base, including school taxes, is astonishing and legally wrong.
All told, Clittle, the issue is thus not a refusal to “reasonable’ alternatives. The developer refuses to talk about anything reasonable.
What would you then do? Permit him to do the development because he’ll make (literally) tens of millions of dollars and won’t back down to a reasonable return? Well, we’d all like a chance to make money off our property—which for most of us is our largest single investment and asset. But that doesn’t mean I can put an apartment building on my property just because I want to. Like all of us, this developer purchased the property knowing of the zoning rules. He shouldn’t get a pass for being irresponsible any more than you or I should.
Sorry Rob, I thought when you started out your letter “It seems the whole town is opposed to…” that you meant everyone. Sorry for jumping to conclusions! : ) But seriously, I have seen referenced by many on here that no one in the town supports Summit Greenfield and I think that is wrong (witness me, assuming a reasonable compromise). I know there are many others like me. And I also know that there are many thoughtful statements of opposition to the Chappaqua Crossing scenarios, but there are also some that are completely hysterical (e.g. egl above, who is apparently planning to move out of the town).
Other responses that trouble me come from people like SRL above, whose primary concern seems to be that the developer might make “literally tens of millions of dollars”. To that I say, who cares as long as the project works for the town? Since when is profit evil? (maybe since January 2009 ; )
I also categorically disagree with people who think this would be revenue neutral for the town. We see in this very edition that our school budget is going to be a challenge, and that our town budget is austere. Are we not smart enough to figure out how to, realistically and without game playing on our side, generate significant tax benefit from a development of Chappaqua Crossing? Surely we are. The problem is we take such extreme positions, and contrary to comments from some we have never….never…in my mind negotiated with these people in good faith. I’m sure they will try to get the best possible deal, but we are equal to them, and can find a common ground that works for both. To approach this any other way is to shortchange ourselves and the citizens of our town, and for that matter Summit Greenfield.
I agree with Mr. Greenstein. I am a new resident here with two young children on the verge of attending the schools, the primary reason for why we moved here. CC is trying an end-around in order to cash in on what down the road could be a dramatic increase in residential property values. We need to generate tax revenue that meets or is greater than what RD used to generate, and without re-writing the zoning code. There are too many variables involved with residential housing, student population growth, etc. Does the TB truly believe that our town could not attract the right businesses for that property in due time? I am confident that we could. Has anyone made any effort whatsoever to attract commercial tenants? We could have been working on this already.
Clittle, you state that you “categorically disagree with people who think this would be revenue neutral for the town.” Putting aside the propaganda emanating from the developer, everything that I’ve seen shows this development will be revenue NEGATIVE for the town. The town’s own financial consultant has said that while it may be revenue positive in the short-run, it will turn revenue-negative soon after. And aren’t you even curious to see what the school board’s report has to say? The school district commands five times the tax dollars from residents that the town receives from us to operate. I certainly want to hear what the board of ed has to say. Their report has not yet been released.
You also stated that “I’m sure they will try to get the best possible deal, but we are equal to them, and can find a common ground that works for both. To approach this any other way is to shortchange ourselves and the citizens of our town, and for that matter Summit Greenfield.” As I’m sure you are aware, New York State requires completion of an exhaustive environmental review process (“SEQR”) before municipalities may approve substantive development projects that may have significant impacts on the local environment. The developer’s representatives might imply that that process is calculated to work against them, because that’s how they FEEL—that it’s taking them time and money. But the New Castle town board didn’t make up these requirements! We are in the final stages of this process. The citizens of our town are being well served, and certainly not “shortchanged”, as our Town Board has handled this process both diligently & professionally from the beginning. We need to let the SEQR process run its course.
