Developers seek to transform a long vacant site between Highland Avenue and North Division Street into an affordable housing project. But what meets affordability requirements in Westchester County may not be considered affordable in the City of Peekskill.

The former White Plains Linen site, an abandoned commercial laundry establishment comprising four buildings, was purchased for $3.65 million by the Stagg Group in November.

On Monday, June 2, the Stagg Group’s development team presented plans to the Common Council on how they would transform the location at 418 North Division Street, which has frontage on Highland Avenue. The group seeks a special permit to make units smaller than the city code requires. It also indicated interest in the payment in lieu of taxes (PILOT) program.

Mark Stagg, the founder and president of Stagg Group, told the Peekskill Herald in a phone interview Tuesday that homeless people were previously living inside the property and it has since been boarded up. The underutilized site was one he said he considers to be a gateway project to the City of Peekskill.

“Our vision is to really… clean up the area significantly with a brand new building,” Stagg said. “What we’re looking to accomplish is to house the working class people. The working class people deserve an affordable, brand new state of the art, energy efficient, place to call home.”

Developers share vision for long-time “eyesore” in neighborhood

Jay Martino, senior vice president for the Stagg Group, told the Herald he believed the project would rejuvenate the area with a new building.

Plans for the mixed-use, multi-residential building include 160 units across six floors with a combination of studios and one to three bedrooms, 200 parking spaces, 39,000 square feet of open space for the project, a required electric vehicle charging station, a special community center or innovative public amenity space, and landscaping and vegetation at the site.

The proposed units would generally be about 100 square feet smaller than the city’s requirement, with 900 square feet on average for three bedrooms, 750 on average for the two bedroom, 650 for the one bedroom, and 500 for the studio.

Martino said they would ensure tenants are safe and officials don’t have to worry about different hazards. The building is proposed to be cast-in-place concrete with metal studs, non-combustible, electric with a minimized carbon footprint, and have a fire alarm system and sprinkler system.

The first floor plan has an entrance leading to a parking area, an entrance on Constant Avenue to the lobby, an entrance on the corner of Constant and Highland Avenues for commercial space of about 4,300 square feet, and a gym and laundry room.

The mezzanine floor has additional parking accessed via a ramp at the back of the building, a community area which has been identified as an office and computer space, but which Martino said could potentially host art shows.

The second to fifth floor plans have outdoor terraces and designated alternate office reading rooms or lounges. Plans for the roof show a large outdoor area for tenants with bocce courts, tables, chairs, and greenery.

Council discuss rent: what’s affordable there may not be here

Rella Fogliano, of the Stagg Group’s development team, told the Herald she believed the site would energize seniors and help seniors who are on a restricted income be integrated with young families and single people rather than segregated.

Developers propose to have 38 senior units, which will be available to those with incomes at 40 and 50 percent of the area median income (AMI). The rest of the units —  with one, two, and three bedrooms — were proposed to be available to households earning at least 60 percent of the AMI. For a household earning 80 percent of the AMI, rent for a two bedroom would be $3,400 and for one at 60 percent AMI the rent would be $2,550.

Fogliano said to the council they have to use Westchester County’s AMI, which is $170,000 for a 4-person household, rather than local AMIs. 

Councilman Ramon Fernandez pointed out the rents for two bedrooms were (closer to) market rate in Peekskill and said the council should consider how it could give preference to the renters in Peekskill.

Research shows housing at a range of price points is needed, including market rate. Creating housing helps alleviate pressure on more affordable units: an increase in supply lowers rents, which keeps low-income families in the neighborhood, rather than displacing them. When Minneapolis focused on creating market rate housing, this resulted in a positive ripple effect across the metropolitan area: lower-priced units became available and stayed affordable.   

Councilman Dwight Douglas explained the Stagg group is using available programs and grants for affordable housing.

“Although in Peekskill those rents seem high, they qualify for some of the tax breaks,” Douglas said. “…There’s programs the county has for grants that can help with the parking garage and that kind of stuff. They [The developers] would qualify for those things because it’s [the proposal] affordable based on the definition of affordable.”

Mayor Vivan McKenzie added that various rent levels could also increase with the direction the economy is heading. She also suggested public input on the project to hear from people who live in the area and will be affected.

“The highest growing part of the population is seniors, so it is important that we have some senior housing,” McKenzie said. “But we have lost our social workers, our firefighters, our teachers, the people who make a good enough living, but not good enough to be able to live here.”

Fogliano said the Stagg Group was flexible when it came to the rents. She added if the council felt they were too high, Stagg could adjust household eligibility levels, setting the maximum income to 70 percent of the AMI, instead of the proposed 80 percent.

“The lower the rents, the easier it is on us to lease them up, because there’s a lot of pressure that is put on us as the developers and managers to have it leased up,” Fogliano said. “So actually, I’m very pleased to hear that you prefer a lower tier of rents.”

Kathleen Bradshaw, the attorney for 418 N. Division Street LLC, noted that apartments would be assigned by lottery system to eligible applicants. She said the Stagg Group has frequently, when introducing housing in areas, done presentations to let residents know in advance when and how people may apply for the housing lottery.

“We think that getting the word out is probably the best way to have residents and people that want to remain here know about the program and about the housing,” Bradshaw said. “So we’re willing to help in any way we can.”

If the project is approved, the president of the Stagg Group said they would like to break ground within the year. Since 2020, the city has never approved a proposed housing development project in less than 12 months. 

While the Stagg Group has expressed interest in the city’s PILOT program, it is premature to determine what kind of PILOT program would be awarded, due to the project’s early stage in development, said Director of Planning Carol Samol.

Samol told the Herald the proposed project is not sufficient to meet the 1,080 units of housing required for the Momentum grant, but could otherwise still contribute to Momentum’s infrastructure goals. The city was authorized last week to issue up to $20 million to finance the cost of projects to fund essential infrastructure for housing, after having been awarded a $10 million Momentum grant last year.

The council was receptive to the project, with one member providing detailed feedback on the design in the conceptual presentation. Councilman Brian Fassett expressed concern with the building’s look, specifically the cornices and moldings, and how they could affect shading in the neighborhood.

Alex Hanson contributed reporting.