The Cliffside Restaurant, the financial troubles of which have plagued the city for nearly two years, is being put up for auction next week.
The restaurant was supposed to spur economic revitalization in the city because of its proximity to the city’s redeveloping waterfront, but instead nearly cost the city over $500,000.
The property at 360 E. Main St., is still owned by Michael Hastings of Mill Town Development Corp.
The city was awarded a federal Housing and Urban Development loan for $585,000 in 2002 so Hastings could renovate the restaurant. He was given the money in a lump sum and was to make monthly payments to the city, which in turn would pay HUD.
The renovated Cliffside Restaurant opened in 2003, but by 2005 Hastings was defaulting on loan payments. The restaurant closed in February 2006.
Officials from HUD chastised the city’s management of the loan after an audit by a federal inspector general. Hastings scrambled last year to show proof of how the money was spent so the city wouldn’t be responsible for repaying the loan to HUD.
The amount owed on the property from loans, interest and back taxes currently amounts to about $555,000, but Corporation Counsel Gerard DeCusatis said he doesn’t expect the city to necessarily receive an offer that large.
“The person who wants [the property] will be bidding at an auction, so whoever is the highest bidder will get the title,” DeCusatis said. “The city may bid in a certain amount to prevent someone buying it for a $1.”
DeCusatis said the structure has deteriorated a bit from when the business closed because vandals and exposure to the elements. But it had received substantial improvements from the loan money given to Mill Town Development Co.
The structure is considered unique. It was built against a rock wall and sits on a creek that practically runs through the building.
“There are some interesting features. It is a fairly adventurous and artistic bit of architecture,” DeCusatis said.
A few people have expressed interest in the property. DeCusatis said no one has booked time to see it, but he has received “a lot of inquiries.”
The auction is scheduled for 10 a.m. Thursday on the steps of the Montgomery County Courthouse in Fonda. DeCusatis said any proceeds from the sale over what is owed the city will go to HUD. He said regardless of the auction’s outcome the Cliffside Restaurant property will have a new owner, moving the saga one step forward.
“This will be a step toward ending this,” DeCusatis said, “but someone still needs to come in and rehabilitate the property.”
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Categories: Schenectady County