HomeMy WebLinkAbout08.08.2021 R. Schlank CommentsROSEMARY A. SCHLANK 9 Bayberry Lane Rye Brook, NY 10573 (914) 939-9273 RSchlank@ix.netcom.com
August 8, 2021
Mayor Rosenberg and Honorable Members of the Village Board of Trustees
Village of Rye Brook Offices
938 King Street
Rye Brook, NY 10573
Dear Mayor Rosenberg and Trustees,
Re: Comments on site plan application for the Arbors/900 King Street PUD
This letter adds to the list of questions submitted on July 27th about the financial
consequences for the Village. The new questions arose as I was researching how
other municipalities evaluate PILOT agreements for new assisted living facilities.
As you may know, New Rochelle has been considering a PILOT for a 72-unit
assisted living facility to be located at 11 Mill Road. In addition to a PILOT
agreement, the developer is requesting a mortgage recording tax exemption and a
sales tax exemption. In response to these requests, New Rochelle’s website
indicates a decision was made to provide some basic information to the public and
to hold a public hearing on the subject. (See excerpts attached. The full document
is available at https://www.newrochelleny.com/DocumentCenter/View/13228/December-
22-2020-Draft-IDA-Packet?bidId).
My questions are: Will a similar public hearing be held on the requested PILOT for
the 900 King Street part of our PUD? And will similar information be provided in
advance? If so, at what point in the review process do you expect this will happen?
Yours truly,
Rosemary Schlank
c: Chris Bradbury, Administrator, Village of Rye Brook, NY
Dan Barnett, President, Board of Directors, Arbors Homeowners Association
Regular Meeting of the New Rochelle Industrial Development Agency Adjourned from December 16, 2020 at 7:30 PM to December 22, 2020 at 7:30 PM
515 North Ave. – City Council Conference Room, New Rochelle, New York 10801
*Please note that the NRIDA Meeting and Public Hearing have been adjourned due to the inclement weather from December 16, 2020 to December 22, 2020 at 7:30 PM*
Pursuant to Governor Cuomo's Executive Order 202.1, the meeting will take place remotely via Microsoft
Teams, there will be no in-person meeting. The Meeting will take place via Microsoft Teams and can be
viewed on NRTV Optimum Ch. 75, Verizon Ch. 28 and on line at www.newrochelleny.com/livestream
Monarch Development Company JV LLC Public Hearing Adjourned to January 20, 2021 IDA Meeting- Public Hearing Notice Details to Follow
AGENDA
1. Roll Call/Announcements
2. Minutes
3. Monarch Development Company JV LLC-11 Mill Road- Public Hearing & Authorization –
Adjourned to January Meeting
4. TAC New Rochelle LLC-54 Nardozzi- Inducement & Set Public Hearing
5. Uniform Tax Exemption Policy Revisions- Resolution
6. City Services 2021 Contract- Resolution
7. Other Business/Discussion Items
8. Next Meeting Date –January 20, 2021
9. Adjournment
DRAFT1
DRAFT2
Minutes Summary of the Regular Meeting of the New Rochelle Industrial Development Agency (IDA) held on Wednesday, November 18, 2020 in City Council Conference Room, 515 North Avenue, New Rochelle, New York taking place remotely via Microsoft Teams.
The following members of the Agency were: PRESENT: Charles B. Strome, III, Chair
Ivar Hyden, Vice Chair
Robert Balachandran, Treasurer Howard Greenberg, Secretary Felim O’Malley, Member Jordanna Davis, Member
Amy Moselhi, Member
ABSENT:
ALSO PRESENT: Luiz C. Aragon, IDA Ass. Secretary, Commissioner of Development Adam Salgado, IDA Executive Director, Dpty Commiss. for Econ. Dev. Roisin Ponkshe, IDA Economic Development Manager
Pat Malgieri, Esq., IDA Transaction Counsel, Harris Beach
IDA Meeting was called to order by the Chair, Mr. Strome
Roll Call was taken.
Announcements: None.
Minutes: A motion was made by Mr. Hyden and seconded by Mr. Strome to approve the October 2020 Minutes; and was unanimously approved.
Monarch Development Company JV LLC- 11 Mill Road- Inducement & Set Public Hearing
Mr. Salgado stated that the IDA received an application by Monarch Development Company proposing to convert the property previously known as Cooper’s Corners nursey and garden center at 11 Mill Road into a state-of-the-art 72-unit assisted living residence. The project is proposed to be approximately 61,500 gross square feet, with two floors and a lower level service area. In connection with the project,
the applicant proposes to improve the Mill Road/North Avenue intersection to allow for pedestrian
crossing along all three legs of the intersection, among other improvements. The Property is in the R1-20 single-family residential district with a Senior Citizen District Overlay. The Resolution before the Board tonight is for Inducement & the setting of a public hearing. The
applicant is requesting a mortgage recording tax exemption, sales tax exemption and a PILOT. Both the
National Development Council (“NDC”), the IDA’s financial consultant, and the IDA Finance Subcommittee, will review the incentive request, including the PILOT schedule. This will be posted publicly prior to the public hearing- the public hearing will be scheduled for December 16, 2020. DRAFT3
Max Mahalek & Daniel Richmond of Zarin & Steinmetz and Michael Glynn of Monarch Communities
provided a presentation of the details.
The Board provided question and comment.
A motion to induce and set a public hearing was made by Mr. Strome and seconded by Mr. Balachandran. All in favor, the motion passed.
New Business/Discussion: None. Next Meeting: Wednesday, December 16, 2020.
Adjournment: Mr. Hyden made a motion to adjourn the meeting, seconded by Mr. Balachandran. All in favor, the motion passed. DRAFT4
DRAFT5
New Rochelle
Industrial Development Agency
City Hall, 515 North Avenue, New Rochelle, NY 10801
(914) 654-2185 fax (914) 632-3626
MEMORANDUM
TO: IDA BOARD OF DIRECTORS
FROM: Adam Salgado, EXECUTIVE DIRECTOR
DATE: December 11, 2020
SUBJECT: Monarch Development Company JV LLC-11 Mill Road
Authorization
PROJECT DESCRIPTION The applicant proposes to convert the property previously known as Cooper’s Corners nursey and garden center at 11 Mill
Road, New Rochelle, NY (the “Property”) into a state-of-the-art 72-unit assisted living residence. The Property consists of approximately 3.47 acres and is located on the outskirts of a residential district at the intersection of Mill Road, North Avenue
and Wilmot Road. The project is proposed to be approximately 61,500 gross square feet, with two floors and a lower level
service area. In connection with the project, the applicant is improving the Mill Road/North Avenue intersection to allow for pedestrian crossing along all three legs of the intersection, among other improvements. The Property is in the R1-20 single-
family residential district with a Senior Citizen District Overlay. PROJECT PROCESS
On November 18, 2020 the IDA issued a preliminary inducement resolution and set a public hearing for December 16, 2020, after which it may take official action towards authorizing a future straight-lease transaction with the development company.
BENEFITS TO CITY
• Approximately $39.7M new project
• Creation of approximately 64 full-time equivalent and approximately 300 construction jobs
• The improvement of the Mill Road/North Avenue intersection to allow for pedestrian crossing along all three legs of the intersection
• Utilization of green building technologies including stormwater planters, a subsurface infiltration system and porous paving within the proposed parking areas and sidewalks to enhance stormwater quality and reduce runoff. The project
proposes LED lighting, use of low emitting materials, and will incorporate selected features of the WELL Building Standard.
INCENTIVE REQUEST As an eligible project under the applicable section of New York State General Municipal Law, the company is seeking an
approximately $198,569.00 mortgage recording tax exemption and an estimated $950,115 sales tax exemption based on DRAFT6
applicable construction and equipment costs at the City’s 83/8 % sales tax rate. Additionally, the applicant is requesting a 10 year PILOT that conforms with the UTEP.
National Development Council (“NDC”), the IDA’s financial consultant, and the IDA Finance Subcommittee
(“Subcommittee”) have reviewed the proposed incentive request, including the proposed PILOT schedule. PROPOSED PILOT SCHEDULE:
Year
Current IDA
Related
Taxes
Assessment Applicable
IDA Tax Rate
Full IDA
Taxes Abatement2 Est. PILOT
Payment3
Est. PILOT
Benefit
2% CAGR
A B C D = B * C E F = Max (1-E
* D or A)G = F - D
1 $68,473 $342,000 1.189051 $406,655 50% $203,328 (203,328)
2 68,473 342,000 1.212832 414,789 45% 228,134 (186,655)
3 68,473 342,000 1.237089 423,084 40% 253,851 (169,234)
4 68,473 342,000 1.261830 431,546 35% 280,505 (151,041)
5 68,473 342,000 1.287067 440,177 30% 308,124 (132,053)
6 68,473 342,000 1.312808 448,980 25% 336,735 (112,245)
7 68,473 342,000 1.339065 457,960 20% 366,368 (91,592)
8 68,473 342,000 1.365846 467,119 15% 397,051 (70,068)
9 68,473 342,000 1.393163 476,462 10% 428,815 (47,646)
10 68,473 342,000 1.421026 485,991 5% 461,691 (24,300)
$684,735 $3,420,000 $4,452,764 $3,264,602 ($1,188,161)
RECOMMENDATION
The Subcommittee in its review determined that the yield to cost margins that were calculated by NDC were not significant enough to make an informed decision on the Project’s ability to meet the “but for” provision, since the Project has not
secured financing at this point. Accordingly, Staff recommends taking no action on the Authorizing Resolution at this time.
Once the details of the financing and project costs are sufficiently finalized, the applicant could then submit the updated information to the Agency and NDC for review and update to analysis. The updated analysis will be reviewed by the
subcommittee and, if the subcommittee so recommends, the Authorizing Resolution could then be taken up by the Agency
for consideration of adoption. DRAFT7
COST BENEFIT ANALYSIS
SUBSTANTIATION OF NEED FOR NEW ROCHELLE IDA FINANCIAL ASSISTANCE
11 Mill Road Rendering
PROJECT APPLICANT AND NAME
Monarch Development Company JV LLC
LOCATION
11 Mill Road
PROJECT DESCRIPTION
New Construction of 72-unit senior care residential facility
REQUESTED FINANCIAL ASSISTANCE
10-Year Payment in Lieu of Taxes (PILOT)
Exemption on Sales Tax of Building Materials
Exemption on Mortgage Recording Sales Tax
December 9, 2020DRAFT8
fl
YEARS
The National Development Council ("NDC") has an on-going engagement with the City of New Rochelle
Industrial Development Authority (the "IDA") to review applications for tax assistance. The purpose of this
memo is to describe NDC's project understanding and findings for the application referenced above.
PROJECT SUMMARY
Monarch Development Company JV LLC (the "developer" or "applicant") submitted a Uniform Application
for tax assistance in November 2020. The application requests a payment in lieu of taxes (PILOT), sales
tax exemption, and a mortgage recording tax exemption for the redevelopment of 11 Mill Road, a seventy-
two (72) unit senior boutique assisted living residence for seniors in need of assistance with activities of
daily living, with a particular focus on those with memory-related challenges. The building's design is
limited to two stories above the basement level and with a pitched roof and stone veneer consistent with
local architecture. The boutique senior assisted living residence will be one of the first specialized memory
care residences of its kind in Westchester County and will generate 64 full-time equivalent jobs within the
local area. The property consists of approximately 3.47 acres located on the outskirts of a residential
district at the intersection of Mill Road, North Avenue and Wilmot Road. The Property is in the Rl-20
single-family residential district with a Senior Citizen District Overlay and was previously used as a
commercial garden center.
The applicant is a fully integrated senior care development and operations company based in New
Hampshire which develops forward-thinking products for older adults including senior apartments,
independent living, assisted living and memory care with concierge services. The principals of the
applicant have been involved in the development of scores of other senior facilities in the northeast.
Rendering of proposed senior care facility at 11 Mill Road
The boutique residence facility will be approximately 61,500 gross square feet, with two floors and a
lower level service area. The applicant reports that this 72-unit facility is smaller than its typical product
(90 -130 units). Its "cost per unit" is higher for this development than the applicant's typical project as
the land acquisition costs and extensive site work capital are spread over a fewer number of units. The
facility proposes to be a WELL certified building and will include stormwater planters, a subsurface
infiltration system and porous paving within the proposed parking area and sidewalks to enhance
stormwater quality. The Applicant has obtained all required land use and zoning approvals forthe Project
and estimates that the Project will be completed in 14 to 18 months after a Building Permit is issued.DRAFT9
Aerial view w development site outlined in yellow
SOURCES & USES
The statement of sources and uses below is summarized from the development costs and capital
structure reported in the IDA application. The +/- $39.7 million development budget is high at $551K per
unit and $646 per square foot. The developer reports that the budget is high due to land costs ($65,000
per unit), extensive site work, high end finishesand amenities, and a fully equipped commercial kitchen
to support the food services available to the residents. The approximately $3.5 million in site work
includes groundwork to allow for a basement, extensive gardening, landscaped buffering, intersection
improvements, and a storm water management upgrade. The applicant also needs to capitalize a
considerable reserve ($2.2 million) due to a long stabilization period (up to 3 years), the time that is
required to reach targeted occupancy levels.
[Acquisition Related Costs
iSiteWork
IConstruction
JFF&E
iSoftCosts
SOURCES & USES SUMMARY
USES OF FUNDS
Cost % of Total per Unit I per SF
12% | $64,583 I $76
9% | $48,776 | $57
$4,650,000
$3,511,898
$19,177,425
$1,500,000 4%
$266,353
$20,833
$312
$24
TOTAL
l.$8'674'574.-.L.i2% -.L$120'^O.J-.i141-
'$i20o])00~T"~6% ~ |'$io,i56~ |~"$36~"T
$39,713,897 | 100% | $551,582 $646 j
I Loan
ITOTAL
l i
I...
jLP Equity
! Monarch Equity
lOther
ITQTAL
SOURCES OF FUNDS
Amount
$19,856,949
$19,856,949
; $39,713,898
Equity Summary
$15,885,559
$3,971,390
$0
1 $19,856,949
The development is expected to be funded with a conventional debt (@> 50%) and equity (@50%) capital
structure. The higher equity percentage at 50% is required because this type of development is regarded
with a higher risk profile than a standard residential facility that typically has a 65/35% debt and equityDRAFT10
a
capital structure. The applicant's willingness to undertake the project with such a heavy equity
investment speaks to its commitment to the project.
FINANCIAL BENEFITS PACKAGE
The next table details the proposed IDA benefits package. It includes exemptions on mortgage recording
tax and sales tax. The applicant requested a 10-year PILOT schedule in its application. It has proposed its
own abatement schedule. A 10-year PILOT schedule that is consistent with the Uniform Tax Exemption
Policy (UTEP) is proposed. This involves an abatement consistent with the schedule of abatements set out
in New York Real Property Tax Law Section 485-b. This schedule involves a 50% abatement in the first year
that the project is placed into service, followed by a 5% abatement reduction in years 2 - 10, and
converting to full taxes in year 11. This results in $1,188,161 is savings over the ten year, equivalent to a
27% savings form full taxes.
The 10-year term per the 485-b is shorter than
developments in the downtown overlay zone.
20-year schedules typically seen in residential
TAX ESTIMATE SUMMARY
DA RELATED PROPERTV TAXES
'CurrentAnnual Taxes . $65,693 'Construction Cost
Beginning As Complete Annual Taxes__ _ ;_ $427,786 Value of_Building Materials
Multiplj^r j _6.51^jipeiLlJnrtAnnual.ly_.-l'^-....- ." --L. ..^5'941]
jFuM Taxes Over 10-yearTerm I $4,452,764_|
[PLL.9T-saYmis-°Yer .lP:yea.r Term,..__ ($1,188,161)!
[PILOT Payment over 10-yea r Term $3,264^02 i
SALES TAX EXEMPTION
50%
SSa I es Tax
'Value of Exemption
$22,689,323 |
$11,344,662 J
8.375%!
$950,115
}
--1 .-
MORTGAGE RECORDING TAX
[Mortgage
[Mortgage^ecpj-djngTax
[Transit District Exclusion
[Mortgage Recording Tax Savings
I Value of Exemption
NDC ANALYSIS
$19,856,949 i
1.30%j
-0.30%!
1.00%!
$198,569
The applicant requests the PILOT and an exemption from the mortgage recording tax and sales tax to
offset the high land acquisition, infrastructure, and construction costs.
NDC based its analysis on the revenue, expense and cost assumptions provided by the Developer in the
IDA application. For consistency with other IDA reviews, NDC adjusted the pro forma provided by the
developer with the following assumptions:
. Permanent loan assumptions that are in line with the current market for similar projects
o 30-year amortization
o Interest rate of 5.00%
. Adjusting revenue growth to 3% annually
. Adjusting expense growth to 3% annuallyDRAFT 11
. Projecting terminal value of project using a 7% cap rate. This is higher than what is used for
standard residential developments and confirmed by the Practice Leader of a Senior Care Group
of national real estate consulting company.
The projected market residential rents are higher to other senior care facilities that the development team
has placed into service and slightly higher than comparable in the Westchester County market. The initial
average monthly rent is projected to be $10,500 plus fees for an assisted living room and $12,500 rent
plus fees for a memory care room. While the higher rents raise the development's risk profile, the
applicant reports the rates as necessary to offset the higher development costs attributable to lower unit
count and high acquisition and site work costs.
I
ISmall Studio
IStudio Deluxe
^Bedroom
!l Bedrom Large
|Memory Studio
|Memory Studio Deluxe
I Memory 1 BR
I
Units
9
16
7
4
17
17
2
72
RENT ROLL
Mo Rent
$7,842
$8,274
$9,680
! $9,697
$11,195
i $11,844
$14,602
Monthly Rent
$70,578
$132,384
$67,760
$38,788
$190,315
$201,348
i $29,204
$730,377
Gross Income
$846,936
$1,588,608
$813,120
i $465,456
I $2,283,780
$2,416,176
j $350,448
I $8,764,524
The operating expenses are substantial, above $82,000 per unit annually (exclusive of real estate taxes),
due to the personal services provided and the personnel costs of 64 full-time equivalent positions. The
residence will provide a wide array of services and support programs, including a full service commercial
kitchen providing three meals per day, housekeeping services, laundry services, social and cultural
activities and a personalized programming and care plan for each of its residents. These high costs,
provided in the "boutique assisted living environment," contribute to the applicant's stated need for the
requested benefits to make the project "financially viable." The beginning as-complete, non-abated real
estate taxes are estimated at $427,886, equivalent to $5,941 per unit. Paying full taxes after the project
is placed into service would impose financial stress to the project in the early years as the it will take
upwards to three years for the project to be fully stabilized and reaching its targeted occupancy levels.
The stabilized operating pro forma represented on the following page.DRAFT12
STABILIZED OPERATING PRO FORMA (Assumed to be 3rd year of operations after new construction)
iGross Income
iCommunityFees
! Community Fees
[Residential Vacancy Rate
Effective Gross Income
]0perating Expenses Exclusive of Taxes' 72
[RETaxes/PllOT ! 72
I Reserves
|Total Expenses
INetOperating Income i
j Debt Service ;
ICash Flow |
I
^DebtCoyerage Ratio "_.!__._
|CashonCash
iYieldtoCost
IPre-tax Leveraged Internal Rate of Return (IRR)
WITHOUT PILOT
PER UNIT
$9,577,232 | $11,085 per month
A5?7^1''.?L°-"!?_.L
$275peimonth '
] 6.00% j
WITH PILOT 3rd Year
PER UNIT
WITH PILOT Avg Over Term
PER UNIT
$515,436
$237,528
($619,812)
$9,710,384
($5,934,000)
_(?42L786).
(37,080)
($6,398,866)
.
^311-518
($1,279,157)
$2,032,361
2.59
ils2.'w.perwjl. '
7,786) ! J5,941permit
$515iie{unit
$88,873
I
10.24%
8.34%
9.26%
$9,710,384 I
($5,934,000) I $S2,417 per unit |
($295,707) !^,107in3refyeorj
(37,080) }515perunit I
($6,266,787) $87.939 \
$3,443,597 |
($1,279,157)
$2,164,440
2.69
10.90%
8.67%
$9,710,384
($5,934,000)$82,417 per unit
($326,460) i $4,S34(ii/g over term
(37,080) I $515perwit i
($6,297,540) | ^87,466 i
$3,412,844 '
($1,279,157)
$2,133,687
10.75%
8.59%
9.74%
NDC reviewed three different metrics (yield to cost, unlevered internal rate of return, and levered internal
rate of return) for analysis. While the project may meet return thresholds to what the market typically
expects for specialized senior care residential development, the returns are marginal. The absence of the
proposed financial assistance package could put the development at risk of assembling the requisite
capital in order for the project to proceed. The risk is exacerbated by the fact that development costs may
very well be subject upward adjustments on account of steep increases in construction material in the
last year.
While the proposed development is a residential project, the applicant considers an assisted living
residence to be more of a niche operating enterprise with a higher level of risk. The risk profile is higher
due to the longer anticipated stabilization period and the high operating and personnel expenses the
project needs to support.
The applicant considers the "yield on cost" to be most important of the return metrics. It reports that it
seeks to achieve at least a 8.5% yield on cost, defined as the stabilized net operating income (N01) divided
by the project cost. This target return threshold was confirmed by the senior housing practice leader of a
major real estate consulting company. With the proposed financial incentive package, the project just
barely meets this return metric.
A 10-year pro forma is presented in Exhibit 2. Based upon an assumed 10-year holding period and a sale
of the property after the tenth year, the projected internal rates of return (IRR), unlevered and levered,
fall just below 10%. These IRR metrics are marginal Reducing the stabilization period would help improve
the returns and the applicant is hoping that the facility will lease quicker than projected.
Market Experts
> 1.25
>8%
> 8.5%
>12%DRAFT13
YEARS
COST/BENEFIT ANALYSIS
The analysis summary below demonstrates a considerable positive net public financial benefit. The private
investment to public investment ratio exceeds 17:1. The PILOT paid over the term, $3,264,602 (average
of $4,500 per unit annually) is more than 1.4x than the proposed IDA financial benefit (real estate tax
savings, and exemptions on sales and mortgage recording taxes). Furthermore, given that this is a
proposed senior living facility, there will be no financial impact to the New Rochelle public schools.
INVESTMENT RATIO
J Private Investment $39,713,897
I Incentive Package $2,336,846
.Private Investment Leverage
COST BENEFIT SUMMARY
j Pl LOT over Term $3,264,602
j I DA Fee $124,285 i
fpublic Benefit" $3,388,887
i
'PILOT Savings
i Sales Tax Exemption
Mortgage Tax Exemption
^ Net Benefit
- ^--)
$1,188,161 .
$950,115
$198,569 |
$2,336,846
Benefits Chart
in $ millions
1 Public Benefit . Project Benefit
COMMUNITY BENEFITS
The fiscal impact to the City will be significant. The redevelopment of the site will result in the annual
real estate tax increasing from its current from approximately $68,000 to an estimated $326,000 annual
average in PILOT payments over the term. This represents an approximate 4.8X multiplier. Once the
property converts to full taxes in the 11th year, the full taxes will be more than a 6x multiplier on the
taxes of the unimproved property.DRAFT14
YFAftS
Due to the extensive memory care and personal services offered to the residences, the project is expected
to create 64 permanent jobs with aggregate annual salaries and benefits exceeding $5 million, an average
of over $75,000 per job. The applicant estimates 300 temporary construction jobs. The applicant also
expects to contract between $150,000 - $200,000 annually in services (food landscaping, media, etc.) from
local vendors.DRAFT15
EXHIBIT 1:10 YEAR PROFORMAYEARS|Value per Unit! Total Units'AssessmentASSESSOR INPUTSAfiC=A*B; Residential' $4,750.^_^_-' $342,000To be provided by AssessorIYear12345678910Current IDARelatedTaxesA$68,47368,47368,47368,47368,47368,47368,47368,47368,47368,473$684,735j! AssessmentijsEI?' $342,000342,000342,000342,000342,000342,000342,000342,000342,000342,000_$3^2p,000Commercial'J $25,00, sq ft!o !$0 ii, Applicable ji IDA Tax Rate!_J, 2%CAGR .-c" T! 1.1890511.2128321.2370891.2618301.2870671.3128081.3390651.3658461.3931631.421026;j_Total$342,000Full IDATaxesD=B*C$406,655414,789423,084431,546440,177448,980457,960467,119476,462485,991$4,452,764rIr[,lAssessment ,iMillage ;As IIDA$342,0001.189051:Full Taxes C=A*S ! $406,655|/£M = Count/, Cit)/, School District, & Library'Non-IDA = County Refuse & SewerPROPERTY TAX PAYMENT SUMMARYI Abatement2I.1--.-:, -._..l E50%45%40%35%30%25%20%15%5%r Abatement cannot result in IDA related taxes less than current payment1 Est. PILOT; Payment3IT7=Max]i-E-*.D^A.i$203,328228,134253,851280,505308,124336,735366,368397,051428,815461,691_$3,264,60273%[Est. PILOTBenefit.(-.--G=F-D(203,328)(186,655)(169,234)(151,041)(132,053)(112,245)(91,592)(70,068)(47,646)(24,300)i ($1,188,161)27%Non-IDATaxRate12%CAGRH I! i0.0617860.0630220.0642820.0655680.0668790.0682170.0695810.0709730.072392 !0.073840Iir" Estimate based on historical increase in tax rate; actual PILOT payment may vary based up actual tax rate over life of PILOTiEst. NonPILOTPayments *;=B*H$21,131r'21,553 r21,984 r22,42422,87323,330 F23,797 F24,273 F24,758 r25,253 rBID(Yes=l;0=No)NoJ0.0000000.0000000.0000000.0000000.0000000.0000000.0000000.0000000.0000000.000000; Non-IDA :1_J342,000_!i 0.061786 i_$21-131.!1cz!z^Ji[BID PaymentK=B*J ,IBID$342,0000.019023$0ResidentialRefuse Fee$276, unitL19,87219,87219,87219,87219,87219,87219,87219,87219,87219,872i Total1.269860$427, 786$5,941.48!Est. Total PILOT,Taxes,& FeesM=F+I+K+L244,331269,559295,707322,801350,869379,937410,037441,196473,446506,817DRAFT16
flEXHIBIT 2:10 YEAR OPERATING PROFORMANDC MODIFIED DEVELOPER PRO FORMA]IRENTAL INCOME' 'Gross IncomeI :Carej ICommunityFeesjRes[dentia[Varanqf_^JResidential Vacancy Rate[jEffective Gross IncomeOPERATING EXPENSESiReal Estate TaxesreservesjTotal ExpensesNet Operating Income-Gro^hlcwperunlt'itabYr-i YearO , Year 1 Year2 Year3 i Year4 ! YearS J _Year6 ^ Year? iYear8,Year9:YearlO3.00% , 9,027,460' 9,298,284 ; 9,577,232 | 9,864,549 ' 10,160,485 ! 10,465,300; 10,779,259 ; 11,102,637 11,435,716 ! 11,778,787,_J.OO% _,_"_"".__.____._158'875.,___3?2'°P0 _515'436.1_._.y0-899 i46-826.'_563'231L._i80-128_L_.5?7'532L ___615'458_- 633,921!~-Too%~ ~-- - -.-^--^^-^^ ^^.^_.-.^^ "^993';2M,553'~'267,34(Ti~--275,36^.~"283,62T;-~-292,lM'^_,_ _!J6,319,222)i_(2,3^571), (619,812)' (638,406)[_ !657,558)[_J677,285)|_ _(697,604)J_ (718,532); ^(740,088)^ _ (762,290)ii 70.00%; 25.00%; 6.00% 6.00%i 6.00% 5.00% 1 6.00%! 6.00% i 6.00% | 6.00%J_J'112i.253.L.7'574!713-'.-9'71()'384 lo'001696J_loj3P1747_ 10,610,799 10,929,1^; 11,256,997 Jl,5?4,707: 11,942,548_j__ ________:_) .3.00% _ $72,m I _ ! (4,200,000)1 (5,200,000) (5,934,000); (^3%464) (6,624,303)1 (6,931,920)1 (7,203,647)1 (7,486,149)^ (7,779,855)i (8,013,251). 2.00% , $3,744^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ ^ (269,559)1 (295,707)1 (322,801)g (350,869)1 (379,937)| (410037)1 (441,196)^ (473,446)^ (506MT~^00%-T--$515-~~T~~(36JDOO) ~(37^«))i~""(38,192)(39,138)? {W^ ^W^{^^ ^^' ''{B^r(61W-$76,481 (4,480,331)j (5,506,639) (6,267,899) (6,690,603)! (7,029,172)1 (7,367,477)1 (7,670972)1 (7,986,352)' (8,314,078)1 (8,582,668)^! i !(1,368,078)1 2,068,074 3,442,485 3,311,093. 3,272,575^ 3,243,3221 3,258,1511 3,270,644; 3,280629, 3,359,880'8%jTerminal value;CFIRR;NOI9.74%iD/S ';Terminal Value.CFUNLEVERED ANALYSIS(39,713,897)! (1,368,078) 2,068,074] 3,442,485 j 3,311,0931 3,272,575! 3,243,3221 3,258,151; 3,2706441 3,2806291 3,359,880j; ' . ; 47,998,282 .J WKW (1<3%078)^ 2,068,0741^,442,48^ ;_3,m^i . ILEVERED ANALYSIS(19,856,949) (l,368,078)i 2,068,074! 3,442,4851 3,311,0933,272,575 ; 3,243,322 ! 3,258,151 : 3,270,644 ; 3,280,629 ; 51,358,1623,272,575| 3,243,322' 3,258,1511 3,270,6441 3,280,629; 3,359,880; (l,279^7)Ul,279457); (l,Z79,157)i (1,279,157)^(1,279,157)! (1,279,^^^ (1^79,157)ijl,279,157)j (1,2^157);i '.':;; 31,742,501._ (19,856,949); (2,647,234)1 788,917 2,163,328; 2,031,936] 1,993,418^ 1,964,165; 1,978,9941 1,991,488 i 2,001,472 ; 33,823,22410DRAFT17
TANDARD DISCLOSURE
Standard disclaimer re ardin NDC'scom liance with Section 975 of the Dodd-Frank Wall Street Reform
and Consumer Protection Act "Dodd-Frank" and amended Section 15B of the Securities and Exchan e
Act of 1934 "Exchan e Act" :
The National Development Council is not a Registered Municipal Advisor as defined in Dodd-Frank and
the Exchange Act and therefore cannot provide advice to a municipal entity or obligated person with
respect to municipal financial products or the issuance of municipal securities, including structure, timing,
terms or other similar matters concerning such financial products or issues.
The general information contained in this document is factual in nature and consistent with current
market conditions and does not contain or express subjective assumptions, opinions, or views, or
constitute a recommendation, either express or implied, upon which a municipal entity or obligated
person may rely with respect to municipal products or the issuance of municipal securities.
In connection with these matters, it is expressly understood by all parties that NDC is not acting as your
agent, advisor, municipal advisor, or fiduciary. NDC may have financial and other interests that differ from
yours. You should discuss the information contained herein with your own municipal, financial, legal,
accounting, tax, and/or other advisors, as applicable, to the extent that you deem appropriate.
11DRAFT18
Date: December 16,2020
At a meeting of the New Rochelle Industrial Development Agency (the "Agency") held on
December 16, 2020, at City Hall, 515 North Avenue, New Rochelle, New York, the following
members of the Agency were:
Present:
Absent:
Also Present:
After the meeting had been duly called to order, the Chair announced that among the purposes of
the meeting was to consider and take action on certain matters pertaining to the Monarch
Development Company JV, LLC Project located at located at 1 1 Mill Road, New Rochelle, New
York.
The following resolution was duly moved by , seconded by
, discussed and adopted with the following members voting:
Voting Aye Voting Nay
299523 4816-6664-6402 v1 DRAFT19
RESOLUTION OF THE NEW ROCHELLE INDUSTRIAL DEVELOPMENT
AGENCY (i) APPOINTING MONARCH DEVELOPMENT COMPANY JV,
LLC OR ENTITY FORMED OR TO BE FORMED ON BEHALF OF THE
FOREGOING AS ITS AGENT TO UNDERTAKE THE PROJECT (AS MORE
FULLY DESCRIBED BELOW); (ii) AUTHORIZING THE EXECUTION
AND DELF^ERY OF AN AGENT AND FINANCIAL ASSISTANCE AND
PROJECT AGREEMENT, LEASE AGREEMENT, LEASEBACK
AGREEMENT AND RELATED DOCUMENTS WITH THE COMPANY
WITH RESPECT TO THE PROJECT; (iii) AUTHORIZING FINANCIAL
ASSISTANCE (THE "FINANCIAL ASSISTANCE") TO THE COMPANY IN
THE FORM OF (1) A SALES AND USE TAX EXEMPTION FOR
PURCHASES AND RENTALS RELATED TO THE PROJECT, (2) AN
EXEMPTION FROM MORTGAGE RECORDDSTG TAXES AS PERMITTED
BY NEW YORK STATE LAW, AND (3) A PARTIAL REAL PROPERTY
TAX ABATEMENT STRUCTURED UNDER A PILOT AGREEMENT; AND
(iv) AUTHORIZING THE EXECUTION OF A MORTGAGE AND RELATED
DOCUMENTS
WHEREAS, by Title 1 of Article 18-A of the General Municipal Law of the State of
New York, as amended, and Chapter 785 of the Laws of 1976 of the State of New York, as
amended (collectively, the "Act"), the NEW ROCHELLE INDUSTRIAL DEVELOPMENT
AGENCY (the "Agency") was created with the authority and power to own, lease and sell
property for the purpose of, among other things, acquiring, constructing and equipping industrial,
manufacturing and commercial facilities as authorized by the Act; and
WHEREAS, MONARCH DEVELOPMENT COMPANY JV, LLC, or an entity
formed or to be fanned on behalf of the foregoing (the "Company"), previously submitted an
application (the "Application") to the Agency requesting the Agency's assistance with a certain
project (the "Project") for the benefit of the Company consisting of: (1) the Agency taking title,
possession or conti-ol (by deed, lease, license or otherwise) of an approximately 3.47-acre parcel
of land commonly known as 11 Mill Road, City of New Rochelle, Westchester County, New
York, (the "Land"); (2) the construction on the Land of an approximately 61,500 square-foot
building with two floors and a lower level service area and containing approximately seventy-
two (72) assisted-living residence units for seniors in need of assistance with activities of daily
living - with a particular focus on those with memory related challenges - and containing
common spaces, a mechanical/service area, landscaping and related amenities (the
"Improvements"); and (3) the acquisition and installation by the Company in and around the
Land and the Improvements of items of equipment and other tangible personal property (the
"Equipment"; and, together with the Land and the Improvements, collectively, the "Facility");
and
WHEREAS, pursuant to a resolution adopted by the Agency on November 28, 2018 (the
"Initial Resolution") the Agency (i) accepted the Application of the Company, (ii) authorized a
Page 2DRAFT20
public hearing with respect to the Project, and (iii) described the forms of Financial Assistance
(as heretofore defined) being contemplated for the benefit of the Company by the Agency; and
WHEREAS, pursuant to Section 859-a of the Act, on Wednesday, December 16,2020, at
7:30 p.m., local time, at City Hall, City Council Conference Room, 515 North Avenue, New
Rochelle, New York 10801, the Agency held a public hearing with respect to the Project and the
proposed Financial Assistance being contemplated by the Agency (the "Public Hearing") whereat
interested parties were provided a reasonable opportunity, both orally and in writing, to present
their views. (A copy of the Notice of Public Hearing published and forwarded to the affected
taxing jurisdictions at least ten (10) days prior to said Public Hearing is attached hereto as
Exhibit A); and
WHEREAS, pursuant to the New York State Environmental Quality Review Act, Article
8 of the Environmental Conservation Law and the regulations adopted pursuant thereto at 6
N.Y.C.R.R. Part 617, as amended (collectively referred to as "SEQRA"), the Agency must
satisfy the applicable requirements set forth in SEQRA, as necessary, prior to making a final
determination whether to undertake the Project; and
WHEREAS, the Company made application to the City of New Rochelle Planning Board
(the "Planning Board") for site plan approval in connection with the Project; and
WHEREAS, pursuant to SEQRA, the Planning Board declared itself Lead Agency in
connection with all processing procedures, determinations and findings, to be made or conducted
with respect to the site plan submitted by the Company; and
WHEREAS, by resolution No. 105-2017 duly adopted on September 26, 2017, and
attached hereto as Exhibit B, the Planning Board determined that this action constitutes an
Unlisted Action under 6 NYCRR Part 617 of the SEQRA regulations, which will not have a
significant effect on the environment and therefore does not require the preparation of an
Environmental Impact Statement; and
WHEREAS, the Agent and Financial Assistance and Project Agreement, Lease
Agreement and Leaseback Agreement, each dated as of February 1, 2021 (or such other date
acceptable to Chair or the Executive Director of the Agency) and related documents
(collectively, the "Agency Documents") will be negotiated in tenns and conditions satisfactory to
the Agency and consistent with these resolutions, and the Agency desires to authorize fhe
undertaking of the Project; and
NOW, THEREFORE, BE IT RESOLVED BY THE MEMBERS OF THE NEW
ROCHELLE INDUSTRIAL DEVELOPMENT AGENCY AS FOLLOWS:
Section 1. The Planning Board conducted a review of the Project pursuant to
SEQRA. In addition to classifying the Project as an Unlisted Action pursuant to SEQRA, the
Plaiming Board by resolution No. 105-2017 duly adopted on September 26, 2017, detemiined
that the Project did not present a potential significant adverse environmental impact. The
Agency, having reviewed the materials presented by the Company, including, but not limited to,
Page3DRAFT21
a Full Environmental Assessment Form, further determines that the Project does not pose a
potential significant adverse environmental impact and thus adopts the Negative Declaration
previously issued by the Planning Board pursuant to 6 N.Y.C.R.R. § 617.7.
Section 2. The Agency hereby finds and detemiines that the Facility constih-ites a
commercial facility as defined in the Act and will promote employment opportunities and
prevent economic deterioration in the City. The Agency hereby finds that the Project will create
temporary constmction jobs during the constmction period as well as permanent job
opportunities following completion of construction of the Project, will offer significant
residential rental housing opportunities to, among others, the residents of the City, and also serve
to support area businesses that, with such support, may create additional employment
opportunities in the City.
Section 3. Based upon representations and warranties made by the Company in the
Application, the Agency hereby authorizes and approves the Company, as its agent, to make
purchases of goods and services relating to the Project, that would otherwise be subject to New
York State and local sales and use tax in an amount up to $11 344 662, which result in New
York State and local sales and use tax exemption benefits ("Sales and Use Tax Exemption
Benefits") not to exceed $950 115. The Agency agrees to consider any requests by the Company
for increase to the amount of Sales and Use Tax Exemption Benefits authorized by the Agency
upon being provided with appropriate documentation detailing the additional purchases of
property or services.
Section 4. Pursuant to Section 875(3) of the New York General Municipal Law, the
Agency may recover or recaph-ire from the Company, its agents, consultants, subcontractors, or
any other party authorized to make purchases for the benefit of the Project, any Sales and Use
Tax Exemption Benefits taken or purported to be taken by the Company, its agents, consultants,
subcontractors, or any other party authorized to make purchases for the benefit of the Project, if
it is determined that: (i) the Company, its agents, consultants, subcontractors, or any other party
authorized to make purchases for the benefit of the Project, is not entitled to the Sales and Use
Tax Exemption Benefits; (ii) the Sales and Use Tax Exemption Benefits are in excess of the
amounts authorized to be taken by the Company, its agents, consultants, subcontractors, or any
other party authorized to make purchases for the benefit of the Project; (iii) the Sales and Use
Tax Exeinption Benefits are for property or services not authorized by the Agency as part of the
Project; or (iv) the Sales and Use Tax Exemption Benefits are taken in cases where the
Company, its agents, consultants, subcontractors, or any other party authorized to make
purchases for the benefit of the Project, fails to comply with a material term or condition to use
property or services in the manner approved by the Agency in connection with the Project.
As a condition precedent to receiving Sales and Use Tax Exemption Benefits, the
Company, its agents, consultants, subcontractors, or any other party authorized to make
purchases for the benefit of the Project, shall (i) cooperate with the Agency in its efforts to
recover or recapture any sales and use tax exemption benefits, and (ii) promptly pay over any
such amounts to the Agency that the Agency demands.
Page 4DRAFT22
Section5. Subject to the Company executing the Agency Documents and the
delivery to the Agency of a binder, certificate or other evidence of a liability insurance policy for
the Facility satisfactory to the Agency, the Agency hereby authorizes the Company to proceed
with the undertaking of the Project and hereby appoints the Company as the true and lawful
agent of the Agency, pursuant to the provisions of the Agency Documents: (i) to consta^ict,
reconstmct, renovate, refurbish and equip the Facility; (ii) to make, execute, acknowledge and
deliver any contracts, orders, receipts, writings and instructions as the stated agent for the
Agency with the authority to delegate such agency, in whole or in part, to agents, subagents,
confa'actors, and subconti-actors of such agents and subagents and to such other parties as the
Company chooses; and (iii) in general, to do all things which may be requisite or proper for
completing the Project, all with the same powers and the same validity that the Agency could do
if acting in its own behalf; provided, however, the Company's status as agent of the Agency and
related sales tax exemption letter shall expire on Se tember 30 2023 (unless extended for good
cause by the Chair, Executive Director or other authorized representative of the Agency).
Section 6. Based upon representations and warranties made by the Company in the
Application, the Agency hereby authorizes the grant of Financial Assistance in the form of: (1) a
sales and use tax exemption for purchases and rentals related to the Project, (2) a partial real
property tax abatement structured under a PILOT Agreement; and (3) exemptions from mortgage
recording taxes to the extent pennitted by applicable law in connection with any mortgage
necessary to undertake the Facility and/or finance or re-finance acquisition and Project costs,
equipment and other personal property and related transactional costs
Section 7. (a) The Chair or the Executive Director of the Agency are hereby
authorized, on behalf of the Agency, to execute and deliver the Agency Documents (consistent
with the schedule of PILOT payments and corresponding real property tax abatements presented
to and hereby approved by the Agency and attached to and made a part of these Resolutions as
Exhibit C), in the forms acceptable to the Chair or Executive Director of the Agency. The
execution of the Agency Documents by the Agency shall constitute conclusive evidence of such
approval.
(b) The Chair or the Executive Director is further hereby
authorized, on behalf of the Agency, to designate any additional authorized representatives of
the Agency.
Section 8. The Chair and the Executive Director of the Agency are hereby further
authorized, on behalf of the Agency, to execute, deliver and record any mortgage, assignment of
leases and rents, security agreement, UCC-1 Financing Statements and all documents reasonably
contemplated by these resolutions or required by any lender identified by the Company (the
"Lender") up to a maximum principal amount necessary to undertake the Project and/or finance
or re-finance acquisition and Project costs, equipment and other personal property and related
transactional costs (the "Lender Documents"; and, together with the Agency Documents, the
"Project Documents") and, where appropriate, the Secretary or Assistant Secretary of the Agency
is hereby authorized to affix the seal of the Agency to the Project Documents and to attest the
same, all with such changes, variations, omissions and insertions as the Chair or the Executive
Director of the Agency shall approve, the execution thereof by the Chair or the Executive
PageSDRAFT23
Director of the Agency to constitute conclusive evidence of such approval; provided, in all
events, recourse against the Agency is limited to the Agency's interest in the Facility.
Section 9. The officers, employees and agents of the Agency are hereby authorized
and directed for and in the name and on behalf of the Agency to do all acts and things required
and to execute and deliver all such certificates, instruments and documents, to pay all such fees,
charges and expenses and to do all such further acts and things as may be necessary or, in the
opinion of the officer, employee or agent acting, desirable and proper to effect the purposes of
the foregoing resolutions and to cause compliance by the Agency with all of the terms, covenants
and provisions of the documents executed for and on behalf of the Agency.
Section 10. Due to the complex nature of this transaction, the Agency hereby
authorizes its Chair or Executive Director to approve, execute and deliver such further
agreements, documents and certificates as the Agency may be advised by counsel to the Agency
to be necessary or desirable to effechiate the foregoing, such approval to be conclusively
evidenced by the execution of any such agreements, documents or certificates by the Chair or the
Executive Director of the Agency.
Section 11. These Resolutions shall take effect immediately.
Page 6DRAFT24