The rebranding of the long-battered stretch of real estate known as Platinum Mile is finally happening as construction crews convert outdated office buildings into a state-of-the art cancer treatment center, a stem cell laboratory and a fitness facility that will boast three pools, endless tennis courts and a spa.
The three projects are all in Harrison, a town that went out of its way to issue special zoning permits to approve conversions.
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When the converted buildings open their doors in 2014, officials hope that they will be stellar examples of the "adaptive reuse" of obsolete office space. If the new venues perform to expectations, they can become magnets for new jobs, more visitors and pumped-up consumer spending that will bring Westchester County a much-needed economic boost.
"Westchester County has been in a hangover for 20 years," said Chris O'Callaghan, a managing partner for Jones Lang LaSalle and a commercial real estate expert. "It's so nice to see cranes in the air and back-end loaders running around with dirt and big truckloads of steel. It's progress."
O'Callaghan also sees hope for renting out more Platinum Mile office space because prospective tenants that disappeared when the economy tanked in 2008 have restructured their crushing debt with the help of favorable interest rates.
"In 2013, the office market will remain stable and there will be positive signs," O'Callaghan predicted. "Deleveraging and adaptive reuse will lead to a strong recovery by 2014."
Corporate HQs sitting vacant
The Platinum Mile is anchored by Westchester Avenue as it runs in parallel roadways along both sides of Interstate 287, through White Plains, Harrison, Purchase and Rye. From the tail end of the '60s through the early '80s, America's largest corporations built sprawling suburban headquarters in the area, imparting a "Mad Men" era flair with acres of manicured lawns and water fountains. More recently, the downsizing of Fortune 500 companies left Westchester Avenue blighted by "LEASING AVAILABLE" signs and more than a few shabby, boarded-up buildings.
Empty office space still abounds, with vacancy rates running as high as 37 percent in the least desirable buildings, according to the real estate company CBRE. But lumped into an overall Westchester Avenue market consisting of 6 million square feet spread across numerous office park complexes, the rate is holding fairly steady at about 18 percent, according to O'Callaghan.
With mixed-used redevelopment as the key to reviving the area, local officials are thrilled by the return of construction crews.
Next door to the Fordham University Business School, Memorial Sloan-Kettering Cancer Center has purchased the former Verizon headquarters and torn it down to make way for a $200 million cancer facility. Work soon will begin at the Gannett Surburban Newspapers building, where new buyer Life Time Fitness will replace it with a 200,000-square-foot, $64 million recreational complex featuring tennis courts, three swimming pools and a spa.
Also pending is a makeover of 215,000 square feet of space at the former Nokia building and a neighboring property. Histogenics is converting the space into state-of-the-art laboratories for its pharmaceutical and biotechnology research.
"Now we have to rejuvenate even more," said Harrison Mayor Ron Belmont. "While these three things are being developed, we have to be proactive."
From Offices to private homes?
Harrison has scheduled a public hearing for Nov. 14 to review a new municipal master plan that would rezone the Platinum Mile to permit residential construction, restaurants, small stores and medical facilities. The plan also proposes new infrastructure "so that if you want to get to Life Time Fitness after work, you could cut through interconnected roadways," Belmont said.
At stake for Harrison is the chance to finally rebuild its tax base. During Platinum Mile's heyday, corporations provided 60 percent of the town's tax revenues. Today, that percentage is closer to 30, Belmont explained. In the past, the typical corporate taxpayer was easily leasing hundreds of thousands of square feet. But now, the office market is reinventing itself on the strength of new demand from small and medium-sized businesses.
Most are signing leases for an average of 6,000 square feet to 7,000 square feet, according to O'Callaghan. And the new tenants want amenities, prompting complexes such as The Centre at Purchase to upgrade parking lots, lobbies and cafeterias at the 625,000-square-foot, four-building complex. Other features popular with tenants are shuttle bus service to the White Plains Metro-North station, fitness centers and shoe shine stands.
Westchester County Economic Development director Laurence Gottlieb said that he is "hopeful" of a turnaround on the Platinum Mile and views 2013 as a time to "solidify" the market around anchors like the new Memorial Sloan-Kettering Cancer Center.
"That's what happens: A few big players come into the marketplace and others come in behind them," Gottlieb said.
Marissa Brett, executive director for economic development at Westchester County Association -- the business group that is spearheading the push for rezoning throughout the county -- cautions that full realization of the area's new promise requires patience and time.
"It will take several years to make Platinum Mile the project we envision as work-live-play," Brett said. "You need a truly mixed-use development to make that happen. You need housing for young professionals, restaurants and entertainment, and there's tremendous potential for that to happen."