Forest City withdraws $2M demand

By KATIE HOOS

Forest City Residential—the developer of the failed waterfront revitalization project known as Echo Bay—has withdrawn its letter demanding New Rochelle reimburse the firm for $2 million in expenses, eliminating the prospect of possible litigation between the two parties.

A final decision on the Department of Public Works’ City Yard stands in the way of future development of the New Rochelle waterfront. File photo

A final decision on the Department of Public Works’ City Yard stands in the way of future development of the New Rochelle waterfront. File photo

In a Feb. 26 statement, Forest City wished the city well in its future waterfront
development endeavors and stated it will not pursue further action in regard to seeking reimbursement.

“While the City of New Rochelle and Forest City Residential have different perspectives about the manner in which the Echo Bay waterfront redevelopment concluded, we have agreed the interests of both parties are best served by moving forward,” the statement read. “Accordingly, we are today setting aside our claim for expenses associated with the project.”

The city first entered into an agreement with the developer in 2006, anticipating a sprawling 26-acre site with 150,000 square feet of retail space, 600 luxury residences and public-use space along the waterfront. But due to the recession, development was put on hold until 2010 when it was substantially scaled back to 10.8-acres with 25,000 square feet of retail and 285 apartments.

Following Forest City’s attempts to move forward with the smaller project, community backlash ensued and support from City Council members began to waiver over concern for the financial toll the project would take on city taxpayers. Meanwhile, Democratic Mayor Noam Bramson continued to express his support for the project, citing his belief that it was in the best interest of the community.

Ultimately, a Nov. 26 bipartisan vote in which a near unanimous vote of the City Council—Bramson was the lone dissenting vote—ended the Echo Bay deal, just weeks after the mayor faced defeat on another front losing out on a bid for the county executive seat to incumbent Republican Rob Astorino.

Reflecting on the Echo Bay loss, the mayor said public discussion and dialogue is key for any major development project in the city and it is important to practice this in the future.

“In this instance, advocates of the project, such as myself, clearly could’ve done a better job of linking the development to long-held community goals,” he said. “We let the narrative get away from us.”

On Feb. 5, Forest City’s attorney issued a letter to city officials terminating a 2008 memorandum of understanding—the document that detailed the agreement between Forest City and the City of New Rochelle—and demanding the city reimburse the firm for $2 million out of a total of $3.1 million in out-of-pocket expenses incurred while planning the ill-fated Echo Bay project.

The City of New Rochelle responded to the demand, stating it was not going to pay the $2 million and was ready to defend itself against any legal action Forest City might pursue.

Rather than going to court, Forest City withdrew the demand.

The city acknowledged the effort the developer put in to the doomed project in its own Feb. 26 statement.

“New Rochelle recognizes Forest City’s significant investment in the Echo Bay site and is therefore grateful for Forest City’s decision to set aside its claim for expenses,” the statement read. “New Rochelle and Forest City’s partnership at Echo Bay began in a spirit of mutual respect, and it now concludes in that same spirit.”

With the Forest City cloud no longer looming overhead, talks of future waterfront development can begin within the City Council.

“I’ll continue to fight for the taxpayer and for development that’s responsible for residents and will generate revenue,” Republican Lou Trangucci, District 1, said. He said any development that would take place on the waterfront would have to take into account the relocation of the City Yard, the city’s Department of Public Works facility currently located at 225 E. Main St.

“I feel development has to be something that’s going to be beneficial to residents of the city and not ask the city to carry substantial financial burdens,” Trangucci said. “One problem with the waterfront is that the City Yard is there and would have to be moved at a substantial cost. Any future developer will have to carry that cost.”

Mayor Bramson said it would be “premature to define the net vision for the shoreline” right now, but he hopes in the coming months the City Council can begin to discuss a framework for future development opportunities.

Contact: katie@hometwn.com