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Pent-Up Demand For Warehousing Replacing Hotels, Pharma Campuses, Undeveloped Land In Suburbia
Real Estate
A mass layoff at the Sheraton Mahwah Hotel over the Rockland border indicates the iconic gleaming edifice that can be seen from miles around will likely meet with a wrecking ball.
Its replacement? Two huge warehouses – a trend dominating Bergen and Rockland counties, and suburban corridors everywhere.
The 22-story hotel will lay off employees by Dec. 15, according to a WARN notice filed last month with New York State’s Department of Labor and Workforce Development. The hotel, built in 1986, sits on 100 acres along Routes 17, 287 and near 202.
The pent-up demand for warehousing is turning former hotels, empty pharmaceutical campuses, and open space into giant, 24-7 warehousing and trucking depots to keep up with consumers’ appetite for everything, all at once, right now. Online shopping and quick delivery has spurred the trend for warehousing – but it appears to have grown exponentially during the pandemic. It does not appear to be slowing down.
“The developer plans to tear down the hotel within the next few years and build two large warehouses on spec,” said Mahwah Mayor Jim Wysocki.
Plans for the warehouses – one 500,000 square feet, the other 1 million square feet – are before the township’s planning board.
Just across the border in the Village of Suffern, the sprawling Novartis campus, once known for manufacturing pharmaceuticals, is slated to become a warehouse hub — though not before the developer completes a rigorous environmental assessment. The Suffern Planning board issued a “positive SEQRA declaration,” meaning that experts will study the potential adverse impacts of the proposed 1.2 million square feet of distribution warehousing that’s proposed on the 162-acre campus once occupied by Novartis Office & Manufacturing Facility.
Last year, despite a torrent of opposition from Valley Cottage residents, business owners, and the Valley Cottage Library, the Clarkstown Planning Board greenlighted a proposal for a 220,000 square-foot warehouse on 20 acres in Executive Park along Route 303. Construction is underway.
And in the Village of West Haverstraw, Applicants Eric Bergstol, a local landowner, and New Jersey developer Efrem Gerszberg are proposing to build a 450,000 square-foot, 76-bay warehouse distribution center that would operate 24/7 on an former construction landfill at the crook of Railroad Avenue and Beach Road. That project is before the Village’s Planning Board, awaiting input from the New York State DEC.
From 1961 to 1980, the property where the Mahwah Sheraton now stands was home to a large assembly plant owned by Ford Motor Company.
While the hotel has been self-sustaining, Wysocki said income generated from guests and corporations isn’t viable for current owner Crossroads Development Corp., which has seen a strong demand for industrial and warehouse uses. He believes the hotel has been operating at around 30 percent capacity in the wake of the pandemic.
“Currently, the corporate end is only at 30% capacity,” the mayor said.
The transition from a hotel property to an industrial warehouse site comes amid the town’s need to use redevelopment sites to meet its state affordable housing obligation. The owners of the Sheraton Hotel initially fought the re-development but have reached an undisclosed settlement with Crossroads Development Corp, according to the mayor.
Under a Fair Share Housing settlement, the town was originally obliged to add 2,000 affordable housing units, which was later reduced to 800, and now 78. The allotment is slated for a location on Ridge Road on the Ramsey border.
Wysocki said the township planning board met last week to consider Crossroads’ plans, along with impacts to the environment associated with demolishing the structure.
“There were about a half dozen residents there with concerns,” said the mayor. “I thought there would be a lot more opposition on this.”
