The trek from Peekskill’s waterfront to the eastern edge of the city’s downtown isn’t long — under 30 minutes if you’re a brisk walker. But in that time, you’ll pass by several new or under-construction developments.
By the Hudson River and Metro-North station, Valhalla-based developer Ginsburg Development Companies (GDC) is preparing to build scores of rental apartments, retail spaces, and restaurants. A few blocks uphill, 645 Main Street just opened with 82 affordable housing units. By the time you reach the eastern edge, you’ll also have spotted a major residential project in the works at the corner of Brown and Broad streets, and a recently completed one at South Division Street, across from the beloved Peekskill Coffee House. And that’s not even a comprehensive list.
At the opposite end of the county, in Yonkers, there are also new developments rising on the waterfront. Then there’s the ambitious Ludlow Point project underway at 150 Downing Street. The planned development, also by GDC, has a price tag of about $90 million and includes the rehabilitation of an existing city park, plus the creation of a new one.
“It will activate an area that hasn’t seen any development for the last half century,” says Martin Ginsburg, the founder, principal, and namesake of GDC. Ludlow Point is working its way through city approvals and has secured financial incentives from the Yonkers Industrial Development Agency.
Peekskill and Yonkers aren’t anomalies — many of Westchester’s municipalities are seeing swift development now. “Things have not slowed down in any way,” says Bridget Gibbons, Westchester County’s director of economic development and executive director of the Westchester County Industrial Development Agency (IDA). The Westchester IDA, like the Yonkers IDA, can provide tax exemptions to developers. “We see a new project at least every month, if not every three weeks or so,” Gibbons says of her work at the IDA.
“We see a new project at least every month, if not every three weeks or so.”
— Bridget Gibbons Director of Economic Development, Westchester County; Executive Director, Westchester County Industrial Development Agency
Peekskill, Yonkers, and every other patch of Westchester have nuances and idiosyncrasies when it comes to development. But at this moment in time — as development surges across the county — there are a few trends common to most municipalities: An urgent need for housing, a disillusionment with office space, and a desire for mixed-use, streetscape-conscious projects. Westchester’s towns and cities are also facing common challenges — namely, climbing interest rates that threaten to slow down the development boom.
Housing Scarcity; Office Surplus
One type of development in Westchester is currently facing a supply problem; another, a demand problem.
“There’s a housing crisis in all of Westchester,” Gibbons says. “A lack of housing at all income levels.” She notes that new residential developments are essential to “replenish the housing stock” across the county.
(The problem isn’t limited to Westchester. Earlier this year, Governor Kathy Hochul announced the New York Housing Compact, an initiative to build 800,000 new homes across the state in the next decade.)
Meanwhile, Westchester’s office space doesn’t look like it used to — that is, it’s empty. The pandemic accelerated a work-from-home trend that continues to this day, with many white-collar employees preferring to work remotely and many companies happy to save on expensive rents. As a result, “a lot of banks have bad loans in their portfolio,” especially when it comes to office properties, Ginsburg says. “Since COVID, they’ve completely devalued almost all office buildings.”
Michael Romita, president and CEO of the business advocacy group, Westchester County Association, puts it bluntly: “We’re grossly overbuilt in this county in commercial offices.” He estimates there’s upwards of 5 million square feet of vacant office space within Westchester’s borders.
(Again, the problem isn’t unique to Westchester. A recent New York Magazine cover story had the headline: “Worth Less: Manhattan’s office buildings are dangerously empty and crushed by debt, and their owners are in over their heads.”)
But some developers — Ginsburg included — see a solution to these dual crises: converting vacant office space into residential properties.
This is what’s underway at the former Westchester Financial Center in downtown White Plains, several properties that were acquired by GDC for just over $80 million in 2018. “We have converted one of the office buildings, 1 Martine City Square, to residential,” Ginsburg says. The newly opened building features loft-style apartments and a roof deck with skyline views.
“We’re grossly overbuilt in this county in commercial offices.”
— Michael Romita President and CEO, Westchester County Association
Converting offices into apartments is creative, but it’s also challenging. “It’s not an easy task,” Ginsburg says. “It’s costly. Many buildings are not that adaptable because floor plans for office buildings are different from apartments. There’s a lot of plumbing you have to do.” Indeed, the apartment layouts at 1 Martine are unorthodox, with diagonal or railroad-flat designs.
The very structure of the building can present issues, too. Many of the county’s office buildings are built using steel cables, pulled tight, buried in concrete — and accidentally disturbing those cables can be dangerous. “If you have to put an opening through [the concrete], it’s almost impossible,” Ginsburg says. “You can do it, but it’s like surgery.”
To Gibbons, new residential developments are welcome news. “Building housing is such a benefit to the economy. It’s a real jolt,” she says, noting that 500 new units in White Plains also mean 500 new households spending money downtown. “Some people may worry we’re overdeveloping, but that’s not the case. There’s more demand.”
Currently, some 20,000 housing units are under development or coming online just between Yonkers, New Rochelle, and White Plains, Gibbons says. “These cities are doing what they can to build housing.”
In Vogue: Mixed-use, Transit-oriented, Walkability
When asked about the breadth of projects she sees, Gibbons says there are some common elements. “They are almost exclusively mixed-use residential, multifamily-apartment rentals.” (The exceptions are a handful of battery-storage projects across the county: Commercial facilities that store renewable energy.)
These mixed-use developments — which feature retail and restaurants on the ground floor — are frequently cropping up near transportation hubs like Metro-North stops. “Transit-oriented development is what’s most popular right now,” Gibbons says, pointing to White Plains, where several new construction projects are unfolding within walking distance to the train station. “That’s what the market is demanding. People want to be able to walk to the train to get to the city.”
The MTA is even playing an active role in some of these projects. August 2023 marked the completion of Avalon Harrison, a development with more than 140 residential units and 27,000 square feet of shops. Avalon Harrison is within walking distance to the Harrison Metro-North stop and is a collaboration between the MTA and developer AvalonBay Communities, Inc.
“The Avalon Harrison project does not only fit seamlessly into the community, it promises to make Harrison more dynamic and walkable, and serve as a model for transit-oriented development everywhere,” Hochul said in an August news release.
In addition to mixed-use and transit trends, many developers and municipalities are also paying close attention to streetscapes — that is, the built environment around the primary structure, like parks and pathways.
In White Plains, streetscapes are core to the work taking place at the former Financial Center. One Martine includes its own park, a private green nestled between buildings that features landscaped pathways, a grand fountain, and small stream. “We have a café right off that park, and a putting green and other attractions,” Ginsburg says. The city’s mayor, Thomas Roach, talks frequently about the importance of making White Plains more pedestrian friendly, and has made that a centerpiece of downtown redevelopment.
The crown jewel of this vision is likely to be the reimagining of the former Galleria mall. Developer Louis Cappelli has said he hopes to transform the shuttered shopping center into a sprawling property with several residential towers, a food hall, and a pedestrian promenade. Dubbed “District Galleria,” the project would cost an estimated $2.5 billion and span 11 acres.
“White Plains is probably the best city in the state of New York for doing artistic and creative things on their streets,” Ginsburg says, even offering a kind word for Cappelli, a rival developer. “Main street has a good future.”
“[WE] SEEK TO STRIKE THE BALANCE OF PRESERVING THE MOST ENVIRONMENTALLY SIGNIFICANT LAND WHILE MEETING THE NEEDS FOR HOUSING AND ECONOMIC VITALITY IN OUR COMMUNITIES.”
— KARA HARTIGAN WHELAN President, Westchester Land Trust
Sensitive Ecosystem
Of course, the merit of any development is in the eye of the beholder.
At Westchester Land Trust, a nonprofit based in Bedford Hills, they have a measured take on construction booms. “We recognize the need for development, such as affordable housing,” says Kara Hartigan Whelan, the organization’s president. “[We] seek to strike the balance of preserving the most environmentally significant land while meeting the needs for housing and economic vitality in our communities.” For more than three decades, the nonprofit has protected more than 9,000 acres of land across the county, and 550 acres since 2020 alone.
Overdevelopment is just one of the challenges Westchester Land Trust confronts. There’s also “climate-change impacts and mitigation, invasive species, evolving land-use practices, and more,” Hartigan Whelan says.
She notes that the pace of building has hastened since the group’s inception: “Development pressure has increased since our founding in 1988.”
But relationships between the nonprofit and developers needn’t be acrimonious. “There are ways we can generate win-win outcomes, like protecting large forest habitats and farmland in our suburban and rural communities, and creating pocket parks and community gardens in more densely populated areas,” Hartigan Whelan says.
The nonprofit, she says, “often serves as a resource to town planning boards, the real estate community, and developers to protect conservation values.”
One area that’s perpetually on the minds of the environmentally conscious is the Hudson River. The waterway offers gorgeous views but also hosts “a sensitive ecosystem,” says Gibbons of Westchester County. Overdevelopment is one of many difficulties facing the Hudson and the wildlife that call it home — there’s also sewage contamination and the ongoing cleanup of the Indian Point nuclear power plant property.
One development Gibbons approves of is Edge-on-Hudson in Sleepy Hollow, a new and growing enclave composed of hundreds of apartments and condos. The project is a partnership between Biddle Real Estate Ventures and PCD Development. “It’s a spectacular walkway and community development,” Gibbons says, “and it’s the first time residents in that area have had access to the Hudson River in 100 years.” As of press time and in two months since sales launched, 25 percent of Edge-on-Hudson’s The Daymark condos were under contract.
Edge-on-Hudson may be an outlier in that many of Westchester’s smaller municipalities can be development-adverse. There’s often opposition “where development has an outsize impact, like a Bronxville or a Bedford,” says Gibbons. “You feel that development a lot more. You can see why there’d be objections.”
In the bigger cities, though, the opposition is subdued. “It’s not so much in the urban settings, in places like New Rochelle and White Plains,” Gibbons says. Those projects provide coveted tax revenue, and “the businesses love it.”
Soaring Interest Rates
Even when new developments aren’t facing hostility from residents, however, there’s another high hurdle to clear: the economy. Ongoing inflation woes in Westchester (and the rest of the country) have pushed the costs of labor and supplies ever higher. Meanwhile, “financing has been impacted significantly by inflation,” Gibbons says.
Ginsburg of GDC echoes that sentiment. “Anything now is very tough to start — interest rates are high and construction costs are high,” he says, noting rates have recently doubled from about 4 to 8 percent. “Banks are all nervous and gun shy. You have to have a lot of additional liquidity [if you want to build]. The only way we can start these projects is by putting in a huge amount of cash.”
According to Ginsburg, developers in more positive times could expect to get financing based on a percentage of the future value of the project. But “now, it’s the percentage of the cost of the project. The returns become very meager; a lot of projects don’t show a viable return.”
“UNLESS SOMETHING HAPPENS, A LOT OF PROJECTS THAT ARE ON THE BOARDS ARE NOT GOING TO GET OFF THEM,” HE SAYS. “IF THINGS STAY THE WAY THEY ARE, NEXT YEAR WILL BE A VERY BAD YEAR FOR CONSTRUCTION.”
— MARTIN GINSBURG Founder, Ginsburg Development Companies
The upshot of this new calculus is that the current development boom may slow in 2024, or even grind to a halt. “My feeling is everybody is going to be holding and waiting for interest rates to come down,” Ginsburg says. “And the signs are they’re not coming down.
“Unless something happens, a lot of projects that are on the boards are not going to get off them,” he says. “If things stay the way they are, next year will be a very bad year for construction.”
The current boom may be winding down — or not. The pace of development in Westchester can be as fickle as architectural trends.
And while change is a constant in Westchester real estate, there are some fundamentals that remain static, like the attraction of sweeping Hudson views. Indeed, at The Daymark, the newest addition to Edge-on-Hudson in Sleepy Hollow, about a quarter of the new condos were under contract just two months after opening. “Everyone wants to be on the water,” said Karen Stroub in a recent news release. Stroub is the owner of Corcoran Legends Realty, which oversaw several Daymark sales.
The Daymark isn’t likely to be the last of its kind. “I’m focused along the Hudson River,” Ginsburg says, looking ahead.
Kevin Zawacki is a Peekskill-based writer and editor, and frequent contributor to 914INC. His work has also appeared in The Atlantic, Fast Company, and Smithsonian Magazine.
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