From The Wall Street Journal:

As New Rochelle pushes forward with the redevelopment of a large swath of land around its train station, city officials are promising that taxpayers won’t have to foot the bill.

Earlier this month, the City Council approved an agreement with a venture of developers—RXR Realty and Renaissance Downtowns LLC—to come up with a master plan for revitalizing 11 acres of city-owned land around New Rochelle’s train station, which serves both a Metro-North train line out of Grand Central and Amtrak trains coming from Penn Station.

The plan—which is expected to include a mixture of office, residential and retail uses—also will recommend zoning changes that would allow owners of private lots in the area to redevelop their properties.

The cost to taxpayers is a big concern because new businesses and residents likely will require upgraded infrastructure like roads and sewers, as well as increased expenses for schools, public-safety and other services. City officials promise the additional tax revenue produced by the development will be more than enough to cover these costs.

“This is not going to be a burden on the taxpayer,” said Luiz Aragon, the city’s commissioner of development. “We have to come out ahead.”

In the past, the city has faced some criticism for granting developers incentives that some people deemed too generous. For example, City Councilman Louis Trangucci pointed out that AvalonBay Communities Inc. received 30-year property tax abatements for constructing two residential rental towers downtown in 2001 and 2008. AvalonBay has since sold the buildings.

At that time, New Rochelle “had to give good incentives” in order to attract developers to build downtown, Mr. Aragon said. “The incentive is a little too good,” he said.

An AvalonBay spokesman said an appropriate person who could comment wasn’t immediately available.

City officials say circumstances are different now thanks to the region’s strengthening economy and changing demographic trends that favor walkable downtowns built around trains to urban centers, with easy access to shops, cafes and entertainment. The process is also different, with developers committed to crafting a proposal with extensive input from the community and city.

Cities that are within an easy train commute to Manhattan are beginning to benefit from these trends especially because they are able to provide less expensive housing than in prime New York neighborhoods. People fleeing New York’s rents are seeing the appeal of walkable neighborhoods in cities like New Rochelle, Stamford, Jersey City and the outer borough.

“We want to make sure we are ahead of those trends,” said Seth Pinsky, RXR executive vice president and a former New York City economic development corporation chief in the Bloomberg administration.

On the south side of Stamford, real estate private-equity and development firm Building & Land Technology has transformed a former industrial area into a residential, shopping and dining village of sorts with some office space.

“If you look at what’s happened in Stamford and what a tremendous success it’s been, you don’t have to squint too hard to see it can be a success in New Rochelle as well,” said Jim Fagan, head of Cushman & Wakefield’s Fairfield County office.

For more than a decade, New Rochelle has been rebuilding its downtown, adding the entertainment retail complex called New Roc City, luxury housing, a vibrant restaurant scene and a burgeoning arts community. Educational institutions such as Monroe College—one of three colleges with facilities in New Rochelle—have been expanding, Mr. Aragon said. Montefiore Health System has put down stakes in the city, acquiring the former Sound Shore Health System hospital facilities and opening Montefiore New Rochelle at the site last year.

“New Rochelle, unlike some other suburban communities, has actually fostered a significant amount of development in the last decade or so,” said Mr. Pinsky. “But because of the economic cycle, it still hasn’t lived up to the potential that many in New Rochelle believe it has.”

The city has an affluent population that retailers want, but many of its residents currently shop elsewhere. “We want to attract the rest of New Rochelle to come down this way to shop instead of going to Scarsdale,” said Beth Acocella, president of the East End Civic Association and a lifelong resident. “And we want to get the people from Pelham to come to us.”

Developers said they don’t have estimates on costs and pricing. However, the project could involve anywhere between 7 million and 9 million square feet of development, including 600,000 square feet of retail, 1 million square feet of office and 5,000 to 7,000 new housing units, said Mr. Aragon.

The master plan proposal is expected to be completed in about six months. For it to move forward, it needs to fit the criteria outlined in the agreement with the City Council, including the goal that the tax revenue generated by redevelopment projects be higher than the new costs to the city.

Zoning changes, which are likely, have to be approved by the City Council, while the city’s Industrial Development Agency will have to approve any incentive package offered. The deal approved earlier this month between the developers and New Rochelle calls for a “net positive tax revenue to the city,” as well as creating jobs and attracting residents.

But that hasn’t eased concerns completely. Councilman Louis Trangucci said he’s “cautiously optimistic.” But he said the development process needs to be closely scrutinized.

“You can have a real blowout of downtown and add a lot more people to city,” Mr. Trangucci said. “So how is this going to impact services to city and residents and can it handle it?”

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