Five multi-family housing developers and the City of Peekskill teamed up to make a winning pitch to New York state, and the prize they won is $10 million in grant money to build new municipal parking that could help bring 1,000 new residential units to Peekskill.

Gov. Kathy Hochul included Peekskill as one of the 13 projects in the first round of $67 million in grants from the state’s Mid-Hudson Momentum Fund. The announcement was made on Wednesday, May 29 at a news conference held at the Franklin D. Roosevelt Presidential Library and Museum in Hyde Park.

“Communities all over the Mid-Hudson region are stepping up in extraordinary ways to address the housing crisis, and with these awards, New York is making good on our commitment to supporting them,” Gov. Hochul said.

“As the first state program to reward our Pro-Housing Communities, the Mid-Hudson Momentum Fund is not just helping them build more housing – it’s helping them chart a path toward a more affordable New York. My administration remains laser-focused on building the homes we need to bring down housing costs, and I am ready to work with any community that wants to join us.”

The Fund is focused on mixed-use housing and essential infrastructure projects that directly support housing growth in the Mid-Hudson Region. Winning projects were selected based on alignment with the Mid-Hudson Regional Economic Development Council’s strategic plan, public support, the number of affordable housing units being created and, for infrastructure projects, their ability to either create or upgrade systems with a demonstrated connection to increasing housing density.

Aggressive timetable of two years, $20 million in construction

In a video presentation to the state, Peekskill Mayor Vivian McKenzie said that developers have expressed a keen interest in Peekskill but a major constraint is a lack of land for parking. The Mayor said one primary use of the funds would be for the renovation and expansion of the city’s two downtown parking garages.

The Mid-Hudson Momentum Fund grant program requires that the winning bidders provide a 50 percent match to the state money. Peekskill plans on raising another $10 million through the city’s capital account, bonding, remediation funds, parking revenue and developer fees and set an aggressive target date of two years to complete the projects.

The $20 million spending plan calls for $12.76 million to build new garage parking space, $2.2 million to renovate the Nelson Avenue Garage and $350,000 at the James Street garage.

Another $1.75 million is targeted for streetscape improvements along with $1.3 million in park improvements. McKenzie said developers are interested inproviding housing along Railroad Avenue but the roadway must be elevated to FEMA standards and the sewer line upgraded, so $1.64 million is budgeted for those improvements.

In Year One of the project, design work is projected to cost $1.685 million with an additional $1.6 million for site work. Site work would continue in Year Two costing $1.1 million followed by the actual construction with a budget of $15.615 million.

City Manager taking a fresh look at all options

City Manager Matt Alexander said $2.55 million will be committed to repairing the Nelson Avenue and James Street municipal garages and the city will take a fresh look on how to spend the rest of the money.

“We’re starting with a blank slate now,” Alexander said. “We had information in September 2023 at the time of the state Momentum Fund application and now we know a lot more about parking needs of new developments in the downtown area. Now that we have the money we will explore the options quickly.”

Alexander said there are 10 or 11 potential new development opportunities in a five-block area downtown that could require more parking spaces. “We want to determine their parking shortfall and see how can work with them so they don’t build little garages all over the city. We want to create good development strategies and bring the plans to a closure.”

The city is also exploring if there is interest in building housing at the ground level parking sites next to the two city garages and the city-owned lots at the riverfront.

Some of the funds will go toward infrastructure needs involving streetscape, water and sewer projects, including work to relocate a main sewer line that runs through proposed SOLO project on Lower South Street being developed by Ken Kearney.

Peekskill makes its pitch

The winning bid by the city featured an extraordinary collective statement by five major developers who see that Peekskill offers an amazing opportunity for new housing.

Martin Ginsburg, the principal of Ginsburg Development said “We think Peekskill is at a critical junction right now. We would be willing to invest a lot more if Peekskill gets substantial financial support.”

Ginsburg owns the property along Railroad Avenue and after being rebuffed by the Common Council last year is expected to come back with a new proposal.

Bill Balter, who built the 82-unit affordable housing project at 645 Main, said that without getting infrastructure dollars to subsidize the parking and other infrastructure, projects today are unfeasible.

Chuck Lesnick, who is proposing new residential construction at Broad and Howard streets, said his buildings will be “…in close proximity to municipal parking facilities that need some help. Residents walking from development to parking lots will by necessity walk down Main Street and shop in the stores.”

Louie Lanza, who heads a group that wants to redevelop the former Worker’s Compensation building at 41 N. Division St., said “All sorts of plans are ready to go for a mixed use building, but the parking has always been an issue. This grant could definitely ease that problem.”

And developer James Guerriero, who plans to build a five-story, 125-unit mixed-use building at the corner of Howard and North Division streets, said the city’s “… available lots are undersized for the future needs of the city.”

Guerriero and Lesnick also sought state funding through the “Restore NY” program for their projects. At a May 13 meeting, the Common Council decided to submit Guerriero’s 201 N. Division Street project for the $2 million grant.

Using state dollars to spur housing development

State Assemblywoman Dana Levenberg congratulated Peekskill on winning the $10 million grant and welcomed the new development it can bring to the city.

“The area around Railroad Avenue has so much promise, but faces an increasing risk of flooding due to climate change. The proposed infrastructure improvements will make development in this area of the City more feasible and sustainable, and enable more people to become part of this vibrant community,” Levenberg said.

“I was proud to support Peekskill’s application to the Mid-Hudson Momentum Fund, and look forward to seeing this project come to fruition. I am grateful to Governor Hochul and Empire State Development for recognizing the need to support the Hudson Valley with dedicated funds that will help us capitalize on our post-pandemic opportunities without overburdening our local taxpayers.”

The Mid-Hudson Momentum Fund builds on Governor Hochul’s commitment to increasing the housing supply across New York State. As part of the FY 2025 budget, Gov. Hochul secured creation of a $500 million fund to build up to 15,000 new homes on state land and more than $600 million in capital funding to support housing statewide.

The last time Peekskill was awarded $10 million in state funding was in 2019 through a Downtown Revitalization Initiative grant. The pandemic the following year slowed down the progress of the grant but this summer residents are seeing the first signs of implementation with the opening of a redesigned Pugsley Park and installation of art in the downtown.