A Dutch village founded 24 kilometers north of Manhattan on the Hudson River just 400 years ago has the apple of the eye of an ambitious foreign developer who has long dominated the skylines of Tel Aviv and Netanya.
If this sounds surprising, then you don’t know much about Azorim, a major Israeli development company, or the ever-forgotten town of Yonkers in the Empire State Building, as the two probably incompatible partners are better suited in real estate heaven.
Since entering the Yonkers market in 2013, Azorim has slowly earned a reputation in the United States, having spent the last 65 years as a prominent residential developer in Israel. While it might seem counterintuitive for a company that has helped make Tel Si Aviv a foreign enclave to actively choose Yonkers, rather than Manhattan or even Queens, as its base in the U. S. market, there is a way to do it.
“We think we’ve figured out our niche and it’s working for us,” said Jack Klein, chief operating officer of Azorim and director of Azorim Israel. “We’re building something slowly, we’re in it for the long haul and we know an amazing city. That’s a great support for development. ”
With 211,569 residents, Yonkers is the third largest city in New York City, after the Big Apple and Buffalo. And, while Azorim has increased its presence in the U. S. over the past 10 years, Yonkers has ushered in a new leap forward in its own right.
“The city of Yonkers has been a wonderful wife to us,” Klein added. “They had never heard of us and all we said to them was, ‘We’re totally committed to making an investment in this city, we’ve heard of some opportunities, all we ask is to paint with us. ‘”
These opportunities known through Azorim from the beginning have thrived in the form of two projects that have helped the Yonkers skyline and added sumptuous yet affordable housing features to the network as a whole.
On Idge Hill, a city square for living, jogging and entertaining near Grassy Sprain Reservoir and Sprain Ridge Park in Yonkers, Azorim developed Miroza, a four-building residential complex with a total of 520 units. The company built the first two towers between 2013 and 2023 and opened the third for contracting on April 1 of this year.
A fourth tower has recently been in pre-development.
The Miroza buildings are connected through a 25,000-square-foot recreation center with a swimming pool, basketball court, movie theater, and jogging track. This connection transforms the apartments into a self-contained city, just steps away from the famous restaurants and medical center of the Ridge Hill neighborhood.
“This position at Ridge Hill is unique, in that other people interested in the hustle and bustle need the best price for their money,” Klein explained. “It’s a change of way of life: all the department stores are across the street, and for those who paint in New York, we have transportation for the 30-minute exercise into the city. ”
“It’s a way of life where everything is at your fingertips,” he added.
Then Hudson 44, a new $145 million multifamily progression that will rise 27 stories above the Hudson River in downtown Yonkers (the assignment recently came to Lot 14 after 8 months of construction).
Klein thanked AvalonBay and Scott Rechler’s RXR for leading the way for Azorim to expand a new multifamily tower along a previously arid coastal landscape.
“We discovered a small 23,000-square-foot parcel near ShopRite, the Hudson River and the downtown exercise station,” Klein said. “We bought it. Some other people thought we had paid too much. The zoning of 15 stories and 150 units, however, we went to the zoning council and received a variance for 27 stories and 250 units.
Close collaboration with the Yonkers municipal government has been key to Azorim securing excellent opportunities for progress. Klein and his team have worked intensively in combination to foster relationships with Mayor Mike Spano, who has served as City Council President since 2012, as well as Jim Cavanaugh, president and CEO of the Yonkers Office of Economic Development.
“When we joined, there were promises, and a lot of promises on our waterfront, but we didn’t have developers with a lot of money,” Spano told the Commercial Observer. “Jack Klein is someone who is genuinely enthusiastic about projects. When you see projects moving well, that’s all a mayor wants.
Cavanaugh echoed those warm sentiments.
“The challenge with Azorim is that they’re doing more of what they want,” he said. “It’s not a corporate saying, ‘What do we want to build and how can we do it as cheaply as possible?’a site and say, “How can we do something amazing with it?”Is there anything that has a distinctive appearance?
Spano’s management courted Azorim by providing him with artistic tax advantages. For example, at Hudson 44, Azorim will get advantages of a $5,768,750 sales tax exemption, a $1,282,286 loan registration tax exemption, and a 20-year pay-as-you-go agreement valued at $12,389,928. In return, Azorim agreed to Spano’s request to reserve 10 percent of all sets in its construction for and below the market.
Klein noted that Azorim chose Yonkers over other municipalities because of its proximity to Midtown and the ability to construct giant multifamily buildings that were less expensive to build in Yonkers than in New York City. His team believed that their product would be temporarily absorbed by providing impressive packages of amenities and rental features that differentiated themselves from other competitors that were also expanding in Westchester. Most importantly, they appreciated that Yonkers made a 35-minute exercise trip from a single seat in Grand Central Terminal, making their apartments attractive to commuters.
“We’re working with the administration to create more jobs for the city, affordable housing and rental housing,” Klein said. Whether they’re local, from the Bronx, Manhattan or Brooklyn, we need to offer them something unique and beautiful.
External relationships
Azorim was not attracted to the U. S. Unidos. La company began operations in 1965, before the optimism generated by Israel’s victory in the 1967 Six-Day War. For decades, the company has specialized in rental housing, mixed-use developments, and often offices. skyscraper.
Among the largest projects the company has developed in Israel are Exchange, two 55-story towers – one and one residential – in Ramat Gan, east of Tel Aviv; Herzliya Hills, a 600-unit apartment complex in Herzliya; Eir HaYam Haifa, an apartment complex consisting of five buildings and 1,200 complexes in northern Israel; a trio of luxury apartment towers consisting of 3 buildings and 24 floors in Netanya; and Azorim East, two luxury apartment buildings in eastern Netanya.
Twelve years ago, Canadian billionaire Hershey Friedman, who made his fortune in the plastic packaging business and gained market weight by packaging soft drinks, Hershey chocolates, doughnuts and sandwich bread, had his appeal set on getting into the real estate business. After years of negotiations, Friedman bought a 67% stake in Azorim in 2011 from Shaya Boymelgreen, the Israeli-American developer who had fallen on hard times in 2008 in the wake of the global currency crisis.
Another that influenced the beloved business: Azorim had overstepped its boundaries by entering the unknown real estate markets of India and Russia, according to Klein.
Today, Azorim is an indexed company on the Tel Aviv Stock Exchange with a net worth of $3 billion and a market share of $5 billion. The company is led by CEO Ron Avidan and has around 130 employees. Klein, Hershey Friedman’s son-in-law, manages corporate affairs in North America.
Under the leadership of the chairman and majority shareholder, Friedman has assembled a team to manage and expand progression opportunities in Israel and Yonkers.
“Our specialization is in Israel. We help build the State of Israel,” Klein said. “From north to south, from east to west, Azorim is a brand known by all locals and known for its quality construction projects. ”
Klein laughed as he recalled the story of his father-in-law, who didn’t like the way cabinets were built on a construction site, even though the task was almost done. The older man asked his team to demolish 3 floors and rebuild the apartments. to your precise specifications.
“The engineers said, ‘Are you serious?’ He said, ‘yes, quality comes first, I don’t care if we lose money because of that,'” Klien recalls. “We will never sacrifice our quality. We will embark on a task even if we have to spend too much. cash on our assets, we will do so until bank financing comes into play. ”
Azorim uses BHI Bank Hapoalim, an Israeli bank, to finance its projects in the United States and has hired Bohemia Realty Group, a local firm with experience in Harlem and the Bronx, to act as a recruiting broker in Yonkers.
“It’s the best game,” Klein said. I think the city benefits as much as we do. We work in harmony. I wish each and every quote was like that.
A Story
Yonkers is one of the oldest municipalities in New York City. Founded in 1640 by Adriaen van der Donck, who remodeled a Dutch East India Company land grant into a thriving sawmill at the junction where Nepperham Creek meets the Hudson River, the township of the city. The call comes from the founder’s prestige as a Dutch nobleman: “Jonkheer” (young nobleman) is how Van der Donck was known by the townspeople.
As saw generators became taverns and taverns became main streets with small businesses, the town became a popular outpost for inventors. Elisha Otis invented the first commercially viable protective elevator in Yonkers in 1854, and Edwin H. Armstrong evolved FM radio while living in Yonkers. In 1912. La city also gained a reputation as a trading outpost. Its factories and generators built elevators and Otis carpets for much of the 20th century.
The city’s population reached 204,000 in 1970, but fell to 188,000 two decades later. It’s a familiar story: Once the trusted industries disappeared, the remaining citizens and their concerned leaders took it upon themselves to reimagine what Yonkers could be in the 21st century. century.
“Like most northern cities, the industry has moved south or overseas, so we had to pivot, and we did,” Cavanaugh said. “The waterfront has become a residential neighborhood because other people need to live along the Hudson River. . »
And the abandoned commercial plants that once produced elevators and carpets have been remodeled into the headquarters of Kawasaki (which makes subway and commuter cars for New York City’s public transit formula) and an East Coast outpost for Lions Gate Studios. That’s right: he shoots videos and TV shows in Yonkers, New York.
By an exclusion in a union agreement from the film industry, Yonkers became the beneficiary of a loophole that allows studios to pay the same rate to actors and writers for paintings in Yonkers as they did in New York City, saving studios thousands of dollars in production costs.
“The film industry is taking off. It started ten years ago, but it’s become very vital and continues to grow,” Cavanaugh said. “In the end, we’ll have 22 soundstages in the city of Yonkers, which is probably the largest collection [of soundstages] in the Northeast. ”
What’s more, low crime, smart schools, and new citizens have helped increase the population by 8% over the past decade, as an increasing number of New Yorkers have learned that they can stay in the big city without all the hustle and bustle (some would say chaos) and confusion) of living on the banks of the Hudson in a once-forgotten village.
“For a long time we were a hidden secret, but we are a real gem,” said Mayor Spano.
“Yonkers is a city where, if you’re downtown, you’re 20 minutes from Midtown Manhattan, 20 minutes from White Plains, and less than 40 minutes from each and every airport,” he continued. “It’s right in this middle of 20 million people and, for some, it just hasn’t gotten the attention it got years ago, but I like to think we’ve replaced that. ”
Bright future
As more and more people have moved to Yonkers since 2010, Azorim has noticed that his gamble on this once-abandoned market town paid off.
The company spent $55 million to build its second tower on Ridge Hill (refinancing it with TPG Insurance for $72 million) and spent $61 million to build the third tower. Today, Miroza apartments in Ridge Hill offer rents between 13 and 15 percent higher than average. rents on the market in Westchester County, according to Kelin.
The good fortune of Azorim’s advancements in Yonkers has given the company the opportunity to expand into the local market: New Rochelle, a 40-minute drive across the Cross County Parkway.
The company has a contract in New Rochelle on a zoned lot for 351 housing units. The timeline and plans for that assignment have yet to be determined, according to Klein, who added that Azorim is focusing more on Yonkers and how to get through the past four years. of the Spano administration, which is in favour of development.
Friedman d’Azorim has established relationships with city officials and aligned himself with the vision of Spano, with whom he maintains a close relationship.
Under Spano’s administration, the city government legalized the structuring of some 12,000 new housing units, largely on former abandoned land that they razed (along with old factories) and replaced with mixed-use housing and Hudson River frontages. Azorim, Avalon Bay, Extell, Rose Construction, Medera and RXR have all entered Yonkers to build new breakthroughs or repurpose old buildings since Spano took over 12 years ago.
The update is evident to the mayor. Spano grew up in southwest Yonkers and said he had no access to the Hudson River in the 1970s and 1980s. For him, the fact that all this redevelopment in his city has prioritized the river for citizens makes all the difference.
“It’s about giving access to the Hudson River to young people who live in Yonkers. That’s something I learned: I never had access to the Hudson River and in the end, whatever access you have, it’s pretty complicated,” Spano recalls. We knew that when we were doing those developments, everyone had to have devices that would allow the public to access the Hudson. “
In addition to building several new parks in the city, Spano management recently purchased 3 acres on Ludlow Street, a major thoroughfare, for $15 million, and plans to build a park along the Hudson River.
This support for real estate promotion – specifically, the confidence that progress can improve a community’s lot – is not only what sets the Spano administration apart in Klein’s eyes, but it is the central difference between the Israeli political formula and the American formula when it comes to genuine real estate. Equity progression.
“Israel is obviously very expensive for us, we love it and Israel, but the difference between Israel’s progress and the progress compared to the United States is almost overnight,” Klein said.
Members of the U. S. business network criticize the bureaucracy and regulations inherent in the progression process. Compared to Israel, however, it turns out that the various American approval processes are a Platonic ideal of bureaucratic power conceived by Franklin Roosevelt.
Because available land is so scarce in Israel (a country as giant and populous as New Jersey, but largely dominated by desert), all the giant developers are competing for the same plots. The permitting and zoning procedure is also infinitely more complex. , with multiple layers of bureaucracy that cause delays of a decade or more simply to finalize land purchases, Klein explained.
“My executive director was there for the grand opening [in Yonkers] with the mayor and city officials; For them it’s almost painful to watch: you go in, you have a plan of action, a plan of action, and you execute it. The city is fully engaged,” Klein said. It’s a partnership. I’m not saying that Israel is rarely an association, but you have to go through a lot of red tape.
Yonkers remains committed to cutting red tape and approving all types of developments.
In an effort to address the country’s housing crisis, the city’s planning council recently approved the site for some 2,000 new housing units, 37% of which were classified as (80% or less of the region’s median income). The team sees the center and the coast as prime locations for new structures and opportunities for regression.
“We will continue to advertise affordable [homes] at market rates, and we will continue to pay special attention to advertising corridors like Central Avenue and grocery shopping malls, but you can’t take that for granted,” he said. “We need Yonkers to continue to grow. It’s been a good luck story for 10 years, so let’s keep it up.
A wild card in the game that could potentially increase the fortunes of Yonkers and, through the extension, Azorim – one of 3 available state casino licenses that could be granted to the MGM Empire City Casino. MGM Empire is lately a race track. The “racino” slot hybrid is limited by state regulations to add on-site table games and chance games to its offering. For decades, the MGM Empire City Casino has been an economic powerhouse for the city despite the lack of table games like poker. , blackjack and roulette or sports betting.
Cavanaugh said MGM has already told the city it’s willing to invest $1 billion in the existing facility should Yonkers get one of the three upstate casino licenses, an investment he said would create a lot of jobs and “an untold amount. “” of tax revenue for the state.
“It’s incredibly frustrating for the city of Yonkers that New York State has hesitated about those three licenses,” said Cavanaugh, who noted that the licensing oversight procedure has already been underway for two years. “It’s a wonderful facility, it brings in a lot of cash for New York State and the City of Yonkers, but it could achieve a whole new point if the state were to grant a casino license.
“No one can understand how Albany loses its way on this,” he added.
As for Klein and Azorim, a fair casino in Yonkers would simply be a lucrative bonus for an already successful marriage. Ten years ago, when Azorim was looking for a submarket, the company didn’t really expect its chosen spouse to do so. in an entertainment district and a bustling city committed to its own progress through reinvention.
“We were in favor of an undermarket, not Manhattan, which already has a lot of successful entrepreneurs, so we thought it wasn’t a position that needed new Israeli money,” Klein said. “We searched and searched and discovered Yonkers, New York. ” York, a 35-minute position from the city on Metro-North, and since then it’s been an incredible adventure and we’re going to expand there. ”
Brian Pascus can be reached at bpascus@commercialobserver. com
Read the Commercial Observer edition online!