An excerpt from a post that originally appeared on www.wsj.com on April 14, 2015
By CONSTANCE MITCHELL FORD
April 14, 2015 11:41 a.m. ET
Atlantic Development Group LLC and Kenwood Equities LLC are billing their new apartment tower in a struggling city near New York as “luxury workforce” housing.
That might sound like a contradiction. But when completed early next year, 203 Gramatan Avenue, in Mount Vernon, N.Y., will include a host of amenities often found in luxury buildings, even though it will house families and individuals who qualify for affordable housing, which in this case is defined as households with incomes no more than 60% of the area’s median income.
Apartments in the $60 million, 159-unit development will have large floor plans, wraparound picture windows, oak floors, stone kitchen countertops and washers and dryers—features often missing from affordable housing. Shared amenities will include a gym, cinema room, children’s playroom and rooftop terrace.
“These amenities are not typical for workforce housing, although more city governments are pushing developers to meet higher design standards,” says Maya Brennan, vice president for the Urban Land Institute’s Terwilliger Center for Housing in Washington, D.C. She said that municipalities pushing for higher-qualify affordable housing often are “trying to achieve other goals.”
That is precisely the case in Mount Vernon, a relatively poor city of 67,000 people in otherwise wealthy Westchester County. The city and the developers have positioned 203 Gramatan as the first phase of a multistage redevelopment of the city’s downtown. The city and the developers are hoping the construction of an attractive building in the blighted area will spur additional development, leading to a resurgence.
“We regard this project as an economic catalyst for the city,” says Peter Fine, chief executive of Atlantic Development. “We think it will jump-start a lot of other development.”
Mr. Fine said is so convinced the strategy will work he is already planning a market-rate apartment building that, if approved, will be located adjacent to 203 Gramatan.
There is a business reason for adding luxury amenities to workforce housing, Mr. Fine said. He said his firm owns an affordable apartment building in upper Westchester that has never had a vacancy in the 2 ½ years that it has been open because demand runs so high.
Still, the city had to provide incentives to Atlantic and Kenwood to consider the “luxury affordable” model. The inducements included a $3 million subsidized loan to pay for upgraded streetscapes and public improvements. The development also was awarded funds from state and federal low-income tax credits.
In pricey Westchester County, where the median family income was $104,000 last year, according to Department of Housing and Urban Development calculations, 203 Gramatan will target families with incomes between $50,000 and $70,000.
Mount Vernon is an older New York City suburb bordering the Bronx, and is one of the most diverse cities—racially and economically—in Westchester. The south side of the city has areas with high concentrations of poverty, while the north side is more affluent and filled with large Tudor, Mediterranean and colonial homes. Former residents include prominent actors and scholars, including Humphrey Bogart,Dick Clark and Denzel Washington, according to Mayor Ernest Davis.
Although 203 Gramatan is central to Mount Vernon’s plans for revitalizing downtown, it isn’t the only construction project in the works. The city is in the midst of its biggest construction boom in at least 40 years, according to its department of planning, which says more than a dozen residential and commercial projects—with a dollar value of around $250 million—are under construction or being planned.
Those numbers don’t include an ambitious project, still in the early planning stages, to be located at the Mount Vernon East train station on the Metro-North, the commuter rail that takes passengers south to Manhattan or north to Stamford, Conn. Mr. Davis said the development, which requires a master plan, could eventually include a hotel, conference center, retail outlet mall and apartments.
“We’ve been trying to crack this nut for a while,” Mr. Davis said. If the project finally takes hold, “it changes the reputation of the city, it changes the streets around it. It changes everything.”
Write to Constance Mitchell Ford at email@example.com
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