|Kawasaki staying in Yonkers, NY; 2 articles (1164945)|
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Kawasaki staying in Yonkers, NY; 2 articles
Posted by Gold_12TH on Wed Jul 4 21:39:24 2012Recommitting to Yonkers
The Kawasaki Rail Car Buys Building, Keeping Hundreds of Jobs in the Area.
A pedestrian bridge made to look like a subway car connects buildings at the i.Park Hudson property in Yonkers.
After months of negotiations, a Japanese manufacturer that builds railcars in Yonkers has agreed to buy its building in a deal that renews its commitment to keeping hundreds of jobs in the area.
Kawasaki Rail Car Inc., which makes many of the new cars for the New York subway system, has agreed to buy the 239,000-square-foot factory space for $25 million. Kawasaki also agreed to roughly double the amount of office space it occupies in a nearby building to about 60,000 square feet for 15 years.
More than one year ago Gov. Andrew Cuomo announced that Kawasaki would get a $500,000 state grant to stay in Yonkers. The company had been mulling plans to move such places as Nebraska or New Jersey.
But that grant has been held up while Kawasaki negotiated a deal to buy its factory from National Resources Inc. A contract was signed in May and the deal is expected to close by the end of the year. Under the terms of the grant, Kawasaki will retain 375 jobs in Yonkers.
Some experts in government incentive programs say it's unusual for a state to announce a grant before a company has purchased or signed a lease for its space. It is unusual for a grant to be announced where a site's control is not locked up, said Jeffrey Finkle, chief executive of the International Economic Development Council in Washington D.C. "In the worst case scenario it can unduly enrich the property holder."
State officials declined to comment on whether or not its announcement was premature. "It's standard procedure for us to make such announcements when both parties agree to and sign the state's incentive proposal," Jason Conwall, a spokesman for the Empire State Development, said in an email. Empire State Development is New York state's chief economic development agency.
Kawasaki is an important anchor of a storied nine-building complex in downtown Yonkers occupied for decades by Otis Elevator Co. until its closing in the early 1980s. In 1999, National Resources purchased the property and renamed it i.Park Hudson which leases space to numerous tenants.
A rare powerhouse in Westchester's shrinking manufacturing sector, Kawasaki started making trains in Yonkers in about 1986, after it got an order for 95 subway cars for the Port Authority Trans-Hudson system. Over the years, Kawasaki's Yonkers plant has built more than 2,000 subway and train cars for the subway system, the Long Island Rail Road, the Washington Metropolitan Area Transit Authority and others, said Hiroji Iwasaki, Kawasaki Rail Car's chief executive, in an interview.
The one-quarter mile long brick building was renovated specifically for Kawasaki and has high ceilings and a stretch of rail track on the grounds where train and subway cars can be tested.
Kawasaki first chose the area to fulfill the terms of a now-expired contract it had with the Port Authority of New York and New Jersey which required the company to locate within 25 miles of the Statue of Liberty, Mr. Iwasaki says. It is recommitting to Yonkers because its plant is in the center of the country's busiest passenger rail corridor.
Mr. Iwasaki said he does not think the state's announcement affected negotiations which took longer than expected because of issues involving Kawasaki's use of other i.Park property. He declined to elaborate.
Joseph Cotter, a principal at National Resources, says the announcement of the state grant was puzzling but it came as a welcome surprise. "It did give us leverage but we did not take advantage of it by demanding a much higher price," Mr. Cotter said.
Ultimately Mr. Cotter said the deal represents a compromise for both sides. There's currently a $28.7 million mortgage on the property and the sale will require National Resources to pay it off three years ahead of schedule, according to Trepp LLC, a real estate research firm.
National will have to cut a check for $3.7 million to make up the difference at the closing of the sale. Mr. Cotter says he would have preferred to put off paying off the mortgage.
But Kawasaki is an important presence in the building which helps draw other tenants to i.Park Hudson, such as suppliers who want to be nearby, Mr. Cotter says. The park has weathered the recession because it offers competitive rents. Mr. Cotter says the park's occupancy is at about 88%.
Kawasaki to buy site of its rail-car factory in Yonkers, retain jobs
YONKERS — More than a year after the state announced an agreement to keep a key manufacturing hub along the Hudson River, the deal might finally be closed later in the summer.
Kawasaki Rail Car Inc. is set to buy its industrial plant on Wells Avenue in southern Yonkers — a site where the Japanese company has been building railcars for the tristate area since 1985 — for about $25 million, including a $500,000 grant from the Empire State Development Corp.
The deal is expected to close by September, according to a mortgage review conducted by the Trepp real estate research firm.
“This is really great news for Yonkers, to have a mainstay company in the downtown area,” City Councilman Michael Sabatino said. “Even though Kawasaki has been here for so many years, it’s the fact that they’re buying the building that sends a strong message to other businesses thinking of coming to the area.”
The 239,000-square-foot facility, built in 1900, has been a key staple in the region’s once-robust manufacturing base, which has since contracted greatly.
Before Kawasaki moved in, the facility was the manufacturing center for Otis Elevator Co.
“It’s been a great job generator for the city of Yonkers and we really appreciate it,” Yonkers City Council President Chuck Lesnick said.
Under the terms of the grant, Kawasaki will have to maintain an employment level of 375 workers at the site through 2016 — a target the company is on track to hit with well more than 400 employees at the site now.
“The company has a strong presence as a job creator and source of economic activity in New York and we look forward to helping them stay and grow here in New York,” said Austin Shafran, a spokesman for Empire State Development.
There have been reports that Kawasaki might leave Yonkers and consolidate its American manufacturing operations with its Lincoln, Neb., facility; however, its rail-car production would not have been able to make the trip west.
“I’m not sure if Kawasaki would have left because some of the requirements with the MTA and other government agencies requires that they stay in New York state,” said Lesnick, who worked on Gov. Mario Cuomo’s staff in the 1980s when the guidelines were written.
Because of the pending sale, the owner, National Resources of Greenwich, Conn., has been granted a grace period where it is allowed to skip mortgage payments without going into default.
The property is part of the larger i.Park Hudson corporate campus, which was financed in 2005 with a loan from Barclays for just under $32 million. The loan was then securitized with other commercial mortgages by Bank of America and sold as an investment.
There is still $28,787,490 left on the loan, but the campus has been generating steady revenue, including rents totaling more than $7 million in 2010, Trepp said.
National Resources also plans to open a five-level, 300-space parking garage near Wells and Warburton avenues later in the summer, the firm’s president, Joseph Cotter, said in a recent interview.
Construction began in January on the $10 million parking structure, which should be ready to open in July or August, Cotter said.
The garage, which will be open to the public, is meant to replace hundreds of parking spaces that were wiped out at nearby Larkin Plaza with the Saw Mill River daylighting project. The new garage will also accommodate i.Park office tenants and residents of several high-rise developments planned for the area.
Officials from National Resources and Kawasaki did not respond to requests for comment.
Yonkers has lost a few big industrial companies over the years. Some recent transactions include:
» Precision Valve Corp., a global provider of packaging dispensing systems that has been headquartered in the city on Nepperhan Avenue since 1952, moved to South Carolina and sold its 207,000-square-foot property to Mile Square Transportation in 2010. The bus transportation company now occupies about 40 percent of the industrial building, including a portion of the property that is leased to a biomass processing plant called Golden Renewable Energy, but it’s been having problems getting a certificate of occupancy from the city for the remaining 60 percent, said Michael Rao, president of New York Commercial Realty Group.
» Stewart Stamping, an auto parts manufacturer on Central Park Avenue, had employed about 600 workers in its heyday before going out of business in 2008 and sitting idle until late last year when the factory was bought by Newark, NJ-based Express Cabinets for $7.6 million.
» AH & Sons, a construction materials supplier to many New York City contractors, will be leaving its warehouse on Saw Mill River Road this summer because it has outgrown its Yonkers space. The company will be move up the road a bit into Greenburgh.