BlackMountain Partners to Replace Frozen-Food Plant With Self-Storage in New Rochelle, NY

Update 10/8/18 – BlackMountain and New Rochelle Birch Development have been granted an estimated $2.5 million in tax relief for the self-storage project slated for 2 Birch St. The developer intends to demolish the former Rotanelli plant and replace it with a five-story structure. The $25 million project will comprise 152,000 square feet in 1,182 units. Construction is expected to begin this year and take about 14 months to complete, according to the source.

In addition to revitalizing the Rotanelli property, BlackMountain is expected to donate a large vacant lot near the site, which the city intends to convert into parking for a proposed maintenance facility.

The New Rochelle Industrial Development Agency (IDA) authorized a $703,500 sales-tax exemption, a $175,000 mortgage-tax exemption, and 10-year payment in lieu of taxes (PILOT) agreement. “Without the use of such benefits, the development would likely not proceed,” consultant Kevin F. Gremse of the National Development Council told the IDA in a memorandum.

The property is currently taxed at $114,434 annually, but the full tax rate as a developed site over 10 years would be more than $3.5 million. Under the 10-year PILOT agreement, BlackMountain will pay nearly $1.9 million and receive a tax abatement of more than $1.6 million, the source reported.

Once the abatement concludes, the property-tax rate is expected to increase by more than three times, according to Gremse’s analysis. By the 15th year, BlackMountain projects cash flow of $546,759 on estimated revenue of more than $3,2 million, according to the source.

The development will create 185 construction jobs, followed by two full-time and two part-time positions once the self-storage facility opens.


5/29/18 – BlackMountain Partners LLC, a self-storage development and investment firm specializing in conversions, received site-plan approval last month to convert an existing building to self-storage in New Rochelle, N.Y. The company intends to transform a former frozen-food manufacturing plant into a five-story facility comprising 1,182 units. The property at 2 Birch St. will include one level underground, according to the source.

The project will also include the planting of pear trees along Birch Street for beautification. Soft lighting will be used to lessen the impact on nearby houses. New Rochelle will receive a portion of the parcel to use as a parking lot for a proposed maintenance facility on Nardozzi Place. Extra Space Storage Inc., a self-storage real estate investment trust and third-party management firm, will manage the facility.

BlackMountain affiliate New Rochelle Birch Development LLC acquired the former Rotanelli Foods and Specialty Brands facility last fall for $3.35 million. The seller, Parsonage House LLC, has sued BlackMountain for “goods and merchandise” valued at $750,000. The summons didn’t include details for why the suit was filed, the source reported.

Kanika Dewan, a manager with Parsonage, is negotiating with BlackMountain on removing “several tons” of architectural tiles and other material, she told the source.

BlackMountain doesn’t expect the lawsuit to delay the project, said Avi Schwartz, the company’s director of acquisitions.

Based in Albany, N.Y, BlackMountain specializes in adaptive re-use and historic preservation. It’s self-storage conversion projects are designed to preserve the character of original buildings and the aesthetics of the neighborhoods in which they’re located. The firm partners with national self-storage management companies to oversee operation of its properties upon Certificate of Occupancy, according to the company website.

Source:
Westfair Online, New Rochelle IDA Grants $2.5M Tax Benefits to Self-Storage Firm
Westfair Online, Lawsuit Not Expected to Slow Down New Rochelle Self-Storage Project
BlackMountain Partners: Website

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