The developers of a proposed luxury golf course community in Armonk have petitioned the North Castle Town Board to eliminate the originally agreed upon fee-simple designation for the units and have them taxed as condominiums.
Brynwood Partners LLC submitted its petition Jan. 4 after failing to secure financing since the Town Board agreed to rezone much of the 156-acre former Canyon Club property on Bedford Road in June 2015 to a Golf Course Community Floating Overlay (GCCFO) district, said attorney Mark Weingarten, representing the petitioner. The project would see the construction of 73 high-end condominium units and a redesign of the golf course.
Weingarten said the partners have met with 38 lenders and have been told repeatedly that they will not be extended the capital needed to build the project because there’s “a mismatch” between the condos and the required form of ownership.
“The concept of the single-family home ownership taxation, the fee-simple taxation, for these essentially villas or condos that would typically be used, is not something they believe would sell, it’s not something they’d be able to explain to people coming in to buy and they think it impacts the marketability and the ability to sell these units,” Weingarten said.
“Frankly, until we get a lender willing to come up with construction dollars to do it, we’re stuck and that’s where we’ve been for the last three-and-a-half years.”
Although condominium taxation yields roughly half the taxes of a comparably priced single-family home, the applicant is prepared to build an “ultraluxury” product that would yield at least as much tax revenue. Weingarten said the anticipated price per square foot would range from $700 to as much as $950. As a result, that would in bring at least as much as the projected $2.2 million in annual tax revenue under the fee-simple plan and possibly in excess of $2.8 million, he said.
Currently, the projected sale price for the units would range from $2.6 million to $3.3 million each.
If Brynwood is unable to at least meet the $700 per square foot threshold for the first 36 units, it would agree to make the other 37 units be age-restricted housing, requiring at least one resident be at least 55 years old. That would further limit the possibility of school-age children.
Additional benefits that Brynwood would provide in addition to the previously approved Community Benefits Agreement is to deposit $190,000 with the town in escrow to immediately pay for the restoration of the windmills and stone wall at nearby Windmill Farm. The developer would also accelerate the remaining installments that reach $1,050,000 in the agreement, Weingarten said.
He said the demand for high-end housing for older adults in Westchester would support the project.
“The market or empty-nester housing just continues to increase,” Weingarten said. “The demographics here in Westchester County just continue to have more people looking to sell their homes and looking to move into some quality project. So we think the market is going to be there for this very high-end product.”
Town Board members, who agreed to re-establish themselves as lead agency and refer the petition to the town and county planning boards at the Jan. 9 meeting, will have to decide whether they want to grant the zoning text amendment or potentially risk seeing the project never get off the ground. Having Brynwood agree to fee-simple taxation was one of the key reasons why the town granted the zoning.
Supervisor Michael Schiliro said he would like to see the property developed as a golf course with a residential community but the pros and cons need to be weighed.
“The reality is this project as is is not getting built,” Schiliro said. “There’s a reality there. So we need to listen to the developer. Is there some way we can consider, not approve, but consider some revision?”
Councilman Jose Berra, who has been reluctant to agree to condo taxation for developments in town, said the matter is problematic, although he did commend the applicant for attempting to bring in at least as much tax revenue as under the fee-simple arrangement.
“I understand the dilemma that you’re in. (But) people are paying higher taxes on comparably priced units,” he said. “So that’s something I have to deal with.”
Weingarten responded that the units would attract the older adult and therefore not be in competition with single-family housing stock.
One Windmill Farm resident, Jan Bernstein, said relinquishing fee-simple taxation would be a major concession.
“I think that this puts the town at tremendous risk and I’m not sure what the town is getting for it. That you’re going to restrict 37 units?” Bernstein said. “That’s what you’re doing for damage control for the town? That doesn’t make sense to me.”
But another Windmill resident, Bob Greer, said it is unrealistic to expect anyone to pay twice the taxes for an expensive condo, plus carrying costs and no longer being able to deduct state and local property taxes over $10,000.
“I can’t for the life of me imagine how the people in Windmill wouldn’t love to have multimillion-dollar condos across the street, which will impact the value of their house,” Greer said.
In addition to the zoning text change, Brynwood needs a special use permit from the Town Board and site plan approval from the Planning Board.