The upcoming development of Freightway Garage could truly be the crown jewel of Scarsdale. All residents stand to benefit from Freightway being turned into apartments, retail shops, restaurants, sports facilities, cultural centers, or whatever else the majority of residents would want. Unfortunately, not only is there much opacity surrounding the Request for Proposal (RFP) process, but Scarsdale Village still does not have either a strategic or long-term financial plan in place, which could support how Freightway should be developed, what its development costs will be, and what the tax implications will be for residents. Moreover, there was never a thorough, well-designed survey conducted to see what type of residential and commercial facilities residents would like in Freightway.
It is too risky for this development to be a ‘build it and they will come’ endeavor. A proper economic analysis of the development should be undertaken and shared with taxpayers so that we can analyze important supply and demand elements in Freightway.
Scarsdale’s mayor has announced that behind closed doors only two proposals from the RFPs will be chosen. Thereafter, we taxpayers will only be allowed to hear about those two proposals. What level of expertise do the mayor, trustees and village personnel have that we residents lack? Just among the people whom I have met here, I have seen that Scarsdale has numerous residents in professional fields relevant to the development of Freightway, such as accounting, finance, economics, financial modeling, banking, retail, construction, engineering, architecture, real estate, municipal finance, taxation, demographics, transportation, the arts and, of course, law. Why wouldn’t the mayor and trustees want to benefit from all of our diverse expertise and views?
All RFPs should be made public. Scarsdale taxpayers should be allowed to hear and read about all of the proposals, and we should weigh in with our professional expertise and personal views about the direction of this important development. There is no reason for the mayor or trustees to prohibit residents from learning about all of the economic details of all the submitted RFPs.
Given how several recent Scarsdale village administrations failed to supervise the botched and costly Ryan property revaluation and failed to deal with its adverse consequences, and given these administrations’ refusal to make it transparent who is funding the extensive library renovation that our local politicians refused to put to a vote, how can this board be trusted to run this process well and with tax benefit to residents? It is imperative that Scarsdale residents be allowed to see what various developers are offering. We stand to gain or lose significantly from what comes out of this process.
Scarsdale’s mayor and board of trustees should look at the incredible retail apocalypse taking place all over the U.S., including Scarsdale where numerous shops have closed in the last three years. According to Moody’s Analytics Chief Economist Mark Zandi, “Brick-and-mortar retailers are already in recession. They’ve been laying off workers coming up on three years.” Importantly, even when consumer spending has been very robust, retailers continue to declare bankruptcy and to default on their outstanding loans. Zandi pointed out “This is a time when consumers are out spending aggressively. If the broader economy is in recession, there is going to be blood in the streets.”
As data from Coresights Research shows, in the first nine months of 2019 retailers have closed 8,200 stores, 22% higher than the previous record of 6,700 for all of 2017. Retail analysts expect this year that number could reach 12,000 closures. It is important to remember that all these retail closures have been in a period of significant economic expansion. Have the trustees and mayors analyzed what could happen when we enter a recession, something numerous analysts, including myself, anticipate could happen as early as 2020? Shouldn’t Scarsdale residents get to hear what type of retail, restaurants and residential units all interested developers are proposing? How will their proposals affect our taxes, especially since State and Local Tax (SALT) deductions are now capped at $10,000? A Manhattan federal district court earlier this week ruled against New York’s case challenging the SALT cap. Hence, tax implications of Freightway are more important than ever, since we are a village where residents, as opposed to commercial businesses, pay the vast amount of the taxes.
Given the numerous macroeconomic and credit signals showing the growth rate of the U.S., including that of New York State and Westchester County, is slowing down, I urge Scarsdale officials to develop a long-term financial plan before they continue to speed ahead with an opaque Freightway Development process.
We need Freightway to help the fiscal sustainability of Scarsdale, especially in light of the significant unfunded pension and other post-employment benefit liabilities Scarsdale has and which remain unaddressed.
Mayra Kirkendall-Rodríguez is a Fox Meadow resident and is a capital markets and bank consultant, trainer and opinion writer.