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Arcade Building Wish List

(20 posts)
  • Started 4 years ago by Catherine
  • Latest reply from Catherine
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  1. Elisa
    Member

    I am not in real estate, but it seems to me that with single family houses going for $1.5 M + in this town that the Arcade building was not overpriced at $3.1 M. I know that it needs a lot of work, and I'm sure that was no surprise to the buyers, but I keep hearing that they paid too much (I'm not referring to today's comments, but ones I have heard before). Did they really? I can't imagine that it wasn't a good investment for a developer. It actually seems like a bargain!

    Anyway, after reading that "wish list", I was a bit confused. Who came up with the numbers - the Village or the Wexford? Do they really want to demolish the building? Can they even if they wanted to? Did they "map" out two possible situations (the condo conversion and the retail upgrades) because some of the numbers are identical. If they convert to condos, they aren't eligible for as much percentage of TIF $$$ as if they go retail, although the bottom line is about the same. I wish we knew the whole story.

    Posted Thursday Mar 22, 2007 13:42 #

  2. KimJ
    Member

    The village would know better.
    This document was obtained by a foia request.
    It is from Wexford and part of the Resolution 62 meeting as referenced in this forum entry.
    http://www.riversideinfo.org/forum/topic.php?id=65&page=4&replies=137

    It seems that there are two separate lists.
    One is the wish list with the condo addition.
    One without condo addition.
    I understand that Wexford has decided not to build the condos.
    So that part of the wish list is not really applicable any longer, but interesting to see how much they are asking from our proposed TIF in funds in total, and the fact that Resolution 62 exists allows them to come asking for TIF funds any time they wish, whether or not their construction has already gone forward.

    Posted Thursday Mar 22, 2007 14:05 #

  3. spatny
    Member

    That was why they rushed the meeting. The larger number is just for the Arcade. The smaller was in addition, for the condo development. If it wasn't meant to be binding, why do it?

    Posted Thursday Mar 22, 2007 14:12 #

  4. Catherine
    Member

    The Village is a local landmark, someone here should know what kind of protection that gives it from teardown. It would preserve its edifice perhaps.

    I understand that the former owner and seller is now part of Wexford group. If so, he would be on both sides of the deal. If he was formerly the sole owner - and I think he was - it would of course be better to sell high and get it all even if he had to share but a portion of buying high. But it is impossible, I think, that the former owner did not know how much it would cost to renovate the building, at least, if not restore it.

    And if TIF is pay as you go, how long does the Arcade sit there waiting for EAV to go up. Well, it doesn't; someone here has said this would come from taxpayer funds already sequestered. EricS, you have observed in another thread that the market is past its high and that any increase in EAV anywhere in town is highly speculative and may be so for years to come. Indeed it may be flat for years to come in all parts of town. Therefore I ask again what rationale the TIF has. And, it follows that any initial outlay would not be forthcoming back from TIF funds since TIF funds are the rise in EAV. The market has topped out. Some home sellers have failed to accept it; how much more so an administration that has already poured perhaps hundreds of thousands of dollars into this proposition.

    By the way, it sounds as if Res62 was not properly noticed per the Open Meetings Act. Why doesn't the village attorney set to scrupling about that.

    Posted Thursday Mar 22, 2007 14:19 #

  5. MikeT
    Member

    Is it possible for the owner of the Arcade to demolish the Arcade and re-build it, or does the local landmark status of the Arcade prevent that?

    Posted Thursday Mar 22, 2007 14:46 #

  6. Tim
    Member

    Demolition is a generic term and does not necessarily mean teardown...it could mean interior demolition and reconstruction.

    Either way, it would be over a decade before there is any extra TIF Fund money for these types of projects if the schools are taken care of appropriately. A $20 million dollar TIF budget with $12 million for schools and $6-7 million for TIF overhead would leave about $1-2 million leftover for development...and with pay as you go, taking care of schools up front, this could be toward the end of a 23 year TIF.

    That number doesn't even compare to the potential Tax Credits that developers and investment groups could realize if they took advantage of our Landmark status when conceiving their redevelopment plans. Wasn't there some town in New York that used their Historic Status to encourage restoration and re-development?I

    Posted Thursday Mar 22, 2007 16:40 #

  7. MikeT
    Member

    That is a good point, Tim, on the tardiness of the availability of TIF funds - assuming a TIF mechanism is used.

    Using other financing schemes such as the Historical Tax credits, it seems that the money would be available for the developer on a more timely basis. Of course, the other nice feature is that there is no impact to the town in general - it is for one property, and is tied to the one engaged in the risk, the developer, and not others.

    Posted Thursday Mar 22, 2007 16:58 #

  8. Aberdeen
    Member

    Catherine and Mike - the showing required to completely demolish Riverside's premier commercial landmark - the Arcade building - is seemingly quite stringent. See Code Section 10-2-6(C). That type of demolition effort would not, in my opinion, be be a fiscally prudent move since: (a) there is enough public interest in the Arcade building to make the threat of an injunctive action very real; (b) the developers would no longer be eligible for the substantial federal tax credits mentioned above; and (c) the resulting project would lose the marketing edge bestowed by the Arcade's historic appeal.

    The smart move on that property is a carefully planned restoration - which, as Tim observes, would almost certainly require some interior "demolition."

    Fortunately, I think the developers are open to this.

    I presented an overview of the historic rehab and preservation tax incentives to the EDC at its February 1st meeting and at that time suggested that they coordinate with the Preservation Commission to get targeted outreach underway to the Arcade developers. They seemed interested. I later spoke with Charlie Pipal, Chair of the Preservation Commission, who was not only receptive to the idea of targeted outreach, but a short time thereafter, managed to bring these programs to Wexford's attention in an informal context. I don't want to inadvertently misstate anything about their brief discussion, but the door has at least been opened.

    So now is the time to go in with the road map. EDC and Preservation need to coordinate on this. I'm not sure how much more I can do without being invited.

    Posted Thursday Mar 22, 2007 17:13 #

  9. BigYellowTaxi
    Member

    Regarding the four pages obtained through FOIA regarding how TIF money could potentially be used in the Arcade redevelopment project...

    How can Wexford show $139k in demolition costs under their "Building Renovation" scenario and only $36k in demo costs under "Condo Addition" scenario (either of which they'd love to have paid for 100% by TIF funds)?

    How about the small number at bottom left side of the scanned images on p 2 & p4 showing 15,801 sq ft under their "Building Renovation" scenario and 17,789sq ft under "Condo Addition" scenario... You mean the condo project would add under 2,000 sq ft? Huh?

    Above are moot questions... The bottom line is these are big boys who made business decisions and paid $3.1mm for a 135 year old building. If they happened to overpay or find themselves in over their heads I don't believe it is up to us to bail them out.

    Their website shows the following:
    About WexTrust Capital
    WexTrust Capital is a globally diversified private equity and specialty finance company with a proven track record for protecting its clients' assets and delivering a superior return-on-investment through its diverse portfolio of principal investments. WexTrust Capital specializes in unique investment opportunities ranging from real estate to specialty finance and investment banking. Headquartered in Chicago, the company also maintains offices in New York, Norfolk, Va., Atlanta, Boca Raton, Fla., Nashville, Tenn., Tel Aviv, Israel, and Johannesburg, South Africa. More information can be found at www.wextrust.com.

    Look folks, they state it themselves...they have a "diverse portfolio of principal investments". I don't begrudge them personally for trying to line up TIF money. Heck if I overpaid (or even underpaid) for a $3.1mm building and I was facing millions in additional developement costs, I'd certainly want a piece of any TIF money (spelled "D.E.V.E.L.O.P.E.R C.A.N.D.Y")that I could get my hands on. Nice try but please NIMBY, not in my back yard or NATEOMTAS, not at the expense of my taxes and schools. This is America, land of free enterprise. If Wexford is way over their heads on this project, maybe they need to bail out at a loss and make it up on something else from their diverse portfolio. Nothing personal. Nothing against Wexford. I'd love to see their project work and I have some vested interests if it did work out but it's merely a business decision. If they can't make it work financially I don't feel it should be up to my local elected officials to mortgage our business district for Wexford plus other future developers.

    By the way, as of about 120 days ago Wexford is still writing big checks or signing big notes on some wayyyy bigger projects than that little old Arcade Building...
    CHICAGO —” November 20, 2006
    WexTrust Capital, through its affiliate West 82nd Street Holdings, LLC, has acquired a 24-unit residential complex located at 176-182 West 82nd Street in the Upper West Side of New York City for an undisclosed price. The site on which the complex will be developed is approximately 0.16 acres in size and is currently improved with a 20-unit apartment complex. The Company plans to partially demolish the existing improvements and construct a seven-story residential complex containing 24 high-end luxury condominiums.

    Anybody want to sell me a 24 unit building only a couple blocks from another Olmsted legacy, Central Park, for $3.1mm? Wexford's gotta be well into eight figures with that one.

    Posted Thursday Mar 22, 2007 22:39 #

  10. Catherine
    Member

    Aberdeen and all, thanks for this info. As to Wexford LLC being made aware of their opportunities for historical incentives, I worked for a huge multinational for many years. Some customers thought nothing of taking their complaints straight to the top with no intermediate steps. Sure enough, the tablets would come down from the CEO shortly thereafter. Once having made an effort to impart the information to a person below, with no result forthcoming, there is nothing wrong in going to the top without further invitation. I hope whomever is now on point this will make this full presentation happen soon, pointing out to them also the long wait they will almost certainly have for TIF funds, if any. We are their customers when they restore the Arcade, and interested parties as well.

    If these folks are buying on the Upper West Side of Manhattan, there is no reason for boarded up windows in the Arcade. This was their improvement on broken windows.

    Posted Friday Mar 23, 2007 06:52 #

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