Louis R. Cappelli, president of Cappelli Enterprises, revealed the funding news at a press conference held at City Hall in White Plains yesterday. The financing, which includes $190 million in construction costs and approximately $7 million for land acquisition and other expenses, will allow the company to move forward with construction. Since Cappelli received final approval from the city for the venture earlier this year, the developer has spent $42 million to date demolishing the former Macy's department store and readying the site for 470,000 sf of leaseable retail space and a 35-story residential tower that will feature 300 rental apartment units and a new 2,370-space parking garage. The total cost of the first phase of the project is estimated to be $240 million.
"This is a huge step forward for our company, for the project and for the City of White Plains," Cappelli says. "Using our own capital we have already been working for nine months to ensure that the project remains on schedule. During that time we have completed demolition of the old Macy's store including removal of an extensive series of foundations that were beneath it, and we have moved rapidly in preparing the site for construction of the new buildings."
The second stage of the project involves the construction of a second 35-story residential tower. That component of the project has yet to be financed. Cappelli says that his firm is studying whether to develop another 300 units of rental apartments or possibly market those units as condominiums. In addition, a hotel might also be incorporated into the second phase, as well.
In January, Cappelli notified the city that he was holding talks with the Ritz Carlton Co. about developing a Ritz Carlton Hotel as part of the second phase of the City Center at White Plains venture. Cappelli now says that if his firm decides to include a hotel in the second phase, the facility would carry the Westin franchise flag. Cappelli reports that his firm has signed an exclusive agreement with Starwood Hotels & Resorts Worldwide Inc., of White Plains, to develop a Westin hotel at his property. Steven Goldman, executive vice president of acquisitions and development for Starwood Hotels and Resorts Worldwide, confirmed the deal with Cappelli and adds, "We would be thrilled to operate a Westin hotel as part of his project." Cappelli adds that if he does include a hotel at his project, the facility would total between 150 to 200 rooms.
Cappelli says his firm will now undertake a study to evaluate the best course to take in terms of how it will develop the second residential tower.
Financing for the retail component of the first phase was provided by Canadian Imperial Bank of Commerce (CIBC), ULILCO, a pension fund and Target Stores, which will be the largest tenant at City Center at White Plains with a 150,000-sf store. Financing for the residential component of the first phase was provided by CIBC and Charter One. The City of White Plains is providing $23 million towards the development of the $40 million parking garage. Union State Bank is providing the remainder or $17 million in financing for the construction of the parking facility.
In addition to Target, other tenants that have signed deals at City Center include National Amusements, which has leased 80,000 sf for a 15-screen movie theater, Circuit City, Legal Sea Foods, Applebee's, Zanzaro's and GreenPoint Bank. A total of 330,000 sf of the 470,000 sf of leasable retail space has been spoken for. Negotiations are ongoing for the remainder of the space at the project, Cappelli notes. The first phase of the project is scheduled to open by October 2003.
Cappelli says that finalizing the financing for this project was one of the most difficult transactions in his nearly 30 years in real estate development. "Obviously this was not a simple transaction," he said. "This is a very large project with multiple elements. To finance it involved a combination of private and public funds. To get everyone on the same page took time, but the net result is that we have the financing in place to let this job move quickly to reality."
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
