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the IKEA proposal


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The IKEA Proposal: A Brief History

Since 1997, Swedish furniture retailer IKEA has publicly pursued plans to build a large, "big box" furniture and home furnishings store in the City Park Redevelopment Area. IKEA had considered several sites in New Rochelle before focusing on City Park but found sizes inadequate to accommodate an IKEA store. The City of New Rochelle then approached the company and suggested that they consider building the store on the City Park site, which had long been targeted by the City for redevelopment.

With 159 stores in 29 countries, IKEA is one of the world's largest furniture retailers. The United States is home to fifteen IKEA stores. Generally located outside of major cities along highways, they range from about 250,000 to 325,000 square feet in size. The New Rochelle project was to be IKEA's third store in the New York metropolitan area, forming a "triangle matrix" with existing stores in Hicksville, NY and Elizabeth, NJ. The New Rochelle store was expected to draw customers from Westchester and areas north, Connecticut, northern New Jersey, the Bronx, and Manhattan. IKEA anticipated that the proposed store would achieve sales of $87 million based on projected 2003 household counts within its trade area. By diverting drawing customers from the trade areas of the existing IKEAs, the presence of a New Rochelle store would have decreased sales at the Elizabeth store by 13% to $132. million and at the Hicksville store by 7% to $78.1 million. Ultimately, IKEA plans to have a store in each of New York City's five boroughs in addition to one in Westchester.

In February of 1999, IKEA obtained an Exclusivity Agreement with the City of New Rochelle, which bound the City to deal exclusively with IKEA in redeveloping the City Park neighborhood. In April of 1999, the City designated the City Park site "blighted" based on a study by Ferrandino & Associates. This designation made the site eligible as an urban renewal area in which the City can assemble parcels of land into a development site using eminent domain.

IKEA subsequently put forth a preliminary plan to build a two-story 308,000 square foot store with approximately 1,572 off-street parking spaces on 14.9 acres of land in the urban renewal area. The plan is described in detail in the Draft Environmental Impact Statement (DEIS), prepared by Tim Miller Associates, Inc. and released in September 2000. As described in the DEIS, the building was to be 300 feet wide, 722 feet long, and 36 feet high, with the main entrance facing south toward the New England Thruway. In conformance with the standardized design concept of IKEA International, the store was to be painted blue with yellow signage. Along the south and west sides of the building would have been a parking deck approximately 11.5 feet in height. Additional grade level parking was to be provided on site underneath and to east, west, and south of the building.

Building the proposed structure would have required the removal of all existing structures on the site, which include 33 commercial or mixed use structures, two churches, and 31 residential buildings. All residents and businesses were to be displaced. Although the City was treating the site as an urban renewal area and intended to use eminent domain to acquire the land if the project was approved, IKEA attempted to purchase the individual properties independently. In April 2000, IKEA began acquiring property at its own risk without having secured project approval from the City. The company's first property acquisition was the purchase of nearly two acres of land from Gerard Daniel & Company, for which IKEA paid $2 million. IKEA intended to relocate each resident and business owner to another home or business space in or near the New Rochelle area.

According to IKEA's estimates, the company would have paid $1.9 million annually in property taxes for the store, of which $245,000 would have gone to Westchester County; $64,000 to the New Rochelle Sewer District; $395,000 to the City of New Rochelle; and $1.2 million to the New Rochelle School District. The present occupants of the area pay a total of $683,000 in property taxes annually. IKEA waived the ten year property tax abatement offered as an incentive by the City of New Rochelle.

IKEA estimated that the proposed store would have generated a total of $7.59 million in sales tax revenue, $3.68 million of which would have gone to New York State; $1.38 million to Westchester County; $2.3 million to the City of New Rochelle; and $230,000 to the Metropolitan Transportation Authority. (these figures come from Gdula's visit)

The proposed store was to employ approximately 350 workers, 180 of which would be part-time. Clearing the site for the store would likely have resulted in a net loss of employment in the area. The DEIS identified 33 businesses and gave employment counts for only 26 of these. According to data from Cushman & Wakefield and a Claritas Business Facts Report, these 26 businesses employ a total of between 327 and 347 people. As an evaluation of the DEIS by Abeles Philips pointed out, these employment figures leave out nearly a quarter of the businesses in the redevelopment area. If all businesses were included, the total numbers of jobs could be 20-25% higher than the number given in the DEIS.

The dramatic increases in traffic volumes that the proposed store would have drawn were a major concern both to IKEA and the community. According to the DEIS, the proposed store would have generated 183 inbound and 172 outbound car trips during the Friday PM peak hour (5:00 - 6:00 pm). On Saturdays, it would have generated 740 inbound and 567 outbound trips during the midday peak hour (2:30 - 3:30 pm) and 638 inbound and 869 outbound trips during the PM peak (4:00 - 5:00 pm). During sale weeks, which occur about 10% of the year, inbound traffic during the Saturday midday peak would have reached nearly 1,000 cars.

In order to mitigate the increased traffic, IKEA had proposed to make numerous off-site transportation improvements at its own expense. Fifth Avenue was to be widened from two lanes and 30 feet in width to three or four lanes at 35 to 45 feet in width between Valley Place and Portman Road, allowing for left turn lanes at three locations. Portman Road and Valley Place were also to be widened in order to accommodate turn lanes. Additionally, the traffic mitigation plan called for the installation of traffic signals at six nearby intersections.

Analyses of the DEIS traffic study by several urban planning consultancies called the document's findings into question. Reviews of the DEIS by Daniel Gutman and by Buckhurst, Fish & Jacquemart, Inc. assert that traffic volumes were underestimated in the DEIS study and that the proposed mitigation measures on the part of IKEA would be inadequate. BFJ argued that the peak hours chosen for the DEIS study were not the hours at which traffic volumes would actually be the highest. Moreover, it was argued that the weeks following the release of the IKEA catalog in late summer would bring more traffic than the January sale week chosen to represent maximum traffic volumes of the year.
(cite Daniel Gutman, "Traffic, Air Quality, and IKEA: A Review of the DEIS of the Proposed IKEA in New Rochelle" 12/14/00; Buckhurst, Fish & Jacquemart, "Comments on the October 2000 DEIS Prepared on Behalf of the Town of Mamaroneck," 12/14/00)

A long and persistent campaign on the part of community groups armed with technical critiques of the proposal and the DEIS ultimately derailed IKEA's effort. In response to the public outcry, Mayor Idoni sent a letter to IKEA officials in December requesting that they investigate the feasibility of reducing the size of the proposed to 260,000 square feet or less and building a south-bound exit ramp off I-95.

IKEA canceled plans on January 31, noting that it was not feasible to adequately address the community's traffic concerns while maintaining the profitability of the proposed store. In order to meet the community's traffic mitigation demands, IKEA would have had to build new exit ramps off Exit 17 of I-95. But in order to compensate for this expense, IKEA would have had to increase the size of its store to generate additional revenue. Thus, according to the mayor, IKEA and the City "jointly and amicably" concluded that the project was not in their mutual best interests.

IKEA continues to purchase properties in the redevelopment area, presumably in order to assemble a large piece of land which it will sell to a developer.

Click here to view a map of properties owned by IKEA.

Some lessons learned...

* community is active, organized, and well-informed
* use of eminent domain is likely to be protested
* traffic is a major concern in the area
* city needs to generate revenue-city is more interested in generating sales and property tax revenue than creating/preserving jobs (per Mike Ritchie)
* impact on neighboring municipalities should be taken into account in future plans