Cappelli Strikes Deals in New Rochelle

NEW ROCHELLE, NY-The city and Valhalla developer Louis Cappelli have reached an agreement for him to purchase Downtown Parcel 1A where he can build as much as 320,000 sf of office/retail space. In exchange, Cappelli has been afforded a change of use that will allow him to build rental apartments instead of office space on top of the New Roc City parking garage.

The 1.88-acre site is directly across the street from Cappelli’s 500,000-sf New Roc City family entertainment center. The city and Cappelli have struck a deal to amend an air rights agreement for rights atop the parking garage next to the New Roc City project. Cappelli had planned to build 110,000 sf of office space on top of the garage. Marketing efforts by the company produced insufficient interest in the space, however, and Cappelli has to date just built the shell of the building. New Rochelle commissioner of development Mike Ritchie says the new air rights agreement allows Cappelli to build rental apartment units at the site. He notes that the developer could build out 92 market-rate rental apartments at the New Roc Parking garage site, which also features a 120-room extended-stay Marriott Residence Inn Hotel.

Commissioner Ritchie says that the Parcel 1A sales agreement mandates that Cappelli develop at least 150,000 sf of office space no matter how large a development he builds there. Any other use at the Parcel 1A property would have to be retail use, Ritchie adds. The Parcel 1A redevelopment project may be eligible for New Rochelle Industrial Development Agency and/or Section 108 Loan Program assistance.

Construction of the rental apartment units could begin within the next 30 to 60 days pending permitting approval. Construction of the commercial/retail venture still must undergo city review and will not break ground until the spring of 2001 at the earliest, Ritchie says.

Joseph Apicella, senior vice president of Cappelli Enterprises, says that the company could have its rental apartment venture completed by March or April of 2001.

Just down the street AvalonBay Communities is building a 24-story high-rise rental apartment building that will feature 412 luxury rental units. Tenants are expected to begin taking occupancy next spring. The project is the first phase of a 1,000-unit planned rental community to be developed by Avalon in Downtown New Rochelle.

Apicella says that Cappelli’s rental building will not have much, if any, impact on the marketing efforts of the Avalon on the Sound project. “The rental apartment market in Westchester is highly under-served especially south of I-287,” he says. “We don’t feel 90 units will have any impact at all.”

He also reveals that Cappelli is devising a plan for Parcel 1A that might involve the construction of an office tower that could go as high as 28 stories. The three development plan scenarios under consideration would either be all office space use or with a small component (30,000-60,000 sf) of retail.