Letter to TB: The only question is whether to allow retail at Chappaqua Crossing or not

“The Board will not have the ability to pick and choose tenants in the future.”
Saturday, December 13, 2014
by Jeff Blockinger

Editor’s Note: On Monday, December 8, Jeff Blockinger sent the following comments to Town Board members. Blockinger has spoken at previous public hearings, telling Town Board members should concern themselves with fixing the existing problems of downtown Chappaqua before creating a “third hamlet’ at Chappaqua Crossing.

Soleil Property LLC
65 King Street
Chappaqua, New York 10514

December 8, 2014

Rob Greenstein
Town Supervisor
Town of New Castle
200 South Greely Avenue
Chappaqua, New York 10514

Dear Rob,

I had the opportunity to review the comments of the Board of the Town of New Castle (the “Board”) at the last public hearing regarding Chappaqua Crossing’s Revised Preliminary Development Concept Plan (the “PDCP”) and am concerned that there seems to be a view that the retail and restaurant mix at Chappaqua Crossing will be determined by a collective effort among Summit Greenfield (“SG”), the Board and the community at large. 

If my observations are correct, that reflects a fundamental misunderstanding about the legal authority of the Board to influence tenant selection in privately owned commercial real estate developments.  Because I cannot make all of the public hearings, I am making my comments available to Christine Yeres. 

As I am sure you are aware, both the New York Senate and Assembly introduced bills in 2012 to regulate “formula retail” (chain stores and restaurants) because, as described in the justification statement of the Senate Bill, formula retail establishments have “invaded village and hamlet downtowns, eroding historic character, aesthetics, and unique community character and identity, replacing it with the sameness of Anywhere, USA.”  See NY Senate Bill S1771-2013 (the “Bill”). 

The Bill further states that there is a lack of “express statutory authority” for this type of zoning in New York and there is concern about whether enacting such restrictions would be “an impermissible regulation of economic competition.”  The purpose of the Bill is to permit these restrictions if they are enacted “pursuant to a comprehensive plan and for a legitimate purpose such as protecting historic character or community identity.”  Importantly, the Bill has twice been referred to the Local Governments committee with no further action.  Accordingly, the Board does not have a current right to enact this type of zoning restriction.  I have not engaged in any case research but am assuming that no clear authority exists to protect the historic character or community identity of a newly built strip mall development.

Without this authority (and even if the Bill ultimately becomes law) the Board will be taking significant risk by attempting to impose formula retail restrictions at Chappaqua Crossing.  I believe it will fail for many reasons. 

First, there is no obvious interest that warrants protection.  The Board will need to argue that the restrictions are for the purpose of protecting the historic character of a newly built strip mall that is located on a large parcel that was just rezoned to permit 111 newly constructed housing units and 120,000 square feet of retail space in a traditional strip mall design.  I cannot imagine any judge being persuaded by that argument. 

Second, in approving the PDCP, the Board will have relied on two case studies set forth in the AKRF Report when it considered the viability of the retail development at Chappaqua Crossing.  Each of those strip malls are predominantly occupied by formula retail establishments.  In this regard, the Board will need to defend its use of two case studies that would be impermissible as a basis for the rezoning.  The internal inconsistency is obvious. 

Finally, we all observed Howard Stahl’s sabre rattling at the October 28 public hearing and are well aware that SG is standing ready to unleash Fried Frank on the town if the Board acts in an arbitrary manner.  In this case, any such restrictions would lack any legitimate purpose and will severely impact the commercial viability of this development, including SG’s ability to obtain financing.  Even if SG agreed to contractual restrictions today, they certainly will be challenged in the future if such restrictions cause low rents or high vacancies.  This litigation will be costly and ultimately the town will lose because Mr. Stahl will be correct.

I feel strongly that the Board should move on from this conversation and acknowledge that the only question on the table is whether to permit retail at Chappaqua Crossing or not.  If the board should find the PDCP to be an appropriate usage, it will not have the ability to pick and choose tenants in the future.

Occupancy will be determined by market forces

as you have advocated.  The Board needs to be comfortable with this reality.  I also feel strongly, as we have discussed many times before, that the Board should be prioritizing the well-documented, existing problems within the downtown hamlet and address those problems before it moves to create a third hamlet.  Feel free to reach out if you would like to discuss.

Best regards,

Jeff Blockinger

cc: Lisa Katz
Adam Brodsky
Elise Mottel
Jason Chapin
Jill Simon-Shapiro
Christine Yeres

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