UPDATE: LeCount Square Showdown POSTPONED; Major Turning Point in New Rochelle’s Downtown Development

UPDATE: Just got back from City Hall. The City Council voted to postpone the vote. The extension will expire automatically at the end of the month.

In what is shaping up to be one of its most important vote in years, the New Rochelle City Council is scheduled vote tonight on whether to grant the developers of the LeCount Square project an unprecedented 13th extension of their exclusive right to the develop the property. The extension vote will be the first since Louis Capelli suffered a brain aneurysm over the summer and amounts to a confidence vote for the beleaguered company.

The LeCount Square project is a development of the New Rochelle Revitalization, LLC (NRR), part of the Capelli operation in New Rochelle. The project has been stalled for years, long before the current economic downturn. Some on the City Council have expressed concerns that the area has begun to take on the look of a blighted neighborhood and merchants in the area are feeling in the negative impact as shoppers stay away. Capelli supporters including Mayor Bramson and City Manager Charles Strome have argued that New Rochelle has not alternative to Capelli. If the extension is not approved Capelli is not prevented from developing the project but the City could consider other offers, something Capelli is seeking to avoid.

Regardless of the outcome, the vote represents a major turning point in the future of downtown development in New Rochelle and perhaps throughout Westchester. A “yes” vote would be a doubling-down on a developer who has often failed to deliver on projected sales tax revenue resulting from previously completed projects in New Rochelle and which have received large, long-term property tax abatements worth tens of millions of dollars. A “no” vote will raise serious questions about Capelli’s ability to deliver not just in New Rochelle but throughout Westchester. White Plains and Yonkers officials are said to be keeping a way eye on the cash-strapped real estate company.

Hampering Capelli’s efforts is claims by the owners of a key parcel in the LeCount Square project that Cappelli spokesman Joseph Apicella made numerous statements flatly contradicted by legal agreements on the property at 5 Anderson Street. Meanwhile, a supposedly imminent deal with Kohl’s Department store to lease space at New Roc City, another Capelli development, has failed to materialize and rumors continue to swirl about the economic health of a third Capelli development, Trump Tower.

Knowledgeable sources have told Talk of the Sound that Kohl’s has no intention to come to New Rochelle before 2011, if at all.

A key parcel in the LeCount Square project is 5 Anderson Street, located at Block 231, Lot 15 (circled on the map above)

As reported on Talk of the Sound yesterday, Mr. Apicella Apicella stated NRR has exercised its option agreement with the owners of 5 Anderson Street and that they made all payments owed to the owner but that NRR did not “control” the building. The owners of 5 Anderson say Cappelli exercised their option to acquire the property on December 21, 2007, that Cappelli was over a year behind in payments due according to the option agreement and that Cappelli has full control of the property.

Capelli has claimed they are not responsible for maintenance of the building because they do not control the building and require permission from the owner.

Talk of the Sound published the legal documents for 5 Anderson yesterday.