New owners vow to reopen Van Dyck

PHOTOGRAPHER: Ana Zangroniz

Roland Faulkner, left, auction referee, and attorney Robert Hoffman go over paperwork at the County Courthouse after the auction of the Van Dyck building on Wednesday.

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An established local family of restaurant operators purchased the landmark Van Dyck for $252,000, plus $147,000 in back taxes, at a foreclosure auction Wednesday, promising to restore and reopen it.

The famed former jazz club on Union Street had once been listed for sale at $1.6 million.

The McDonald family purchased the Van Dyck property at 235 Union St. and a parking lot at 301 Union St. The McDonalds own and operate Pinhead Susan’s, the Stockade Inn and the Park Inn on Michigan Avenue.

Family spokesman Jeffrey McDonald, a Schenectady County legislator, said the family plans to reopen the Van Dyck as a restaurant. He said it was too soon to speculate on the nature of the facility and whether jazz would return there.

“We will do whatever we have to do to make it succeed. We have a long-term commitment to the city and the Stockade. We really believe in it. It is a landmark,” McDonald said.

The sale satisfies most of a $250,000 loan former owner N. Peter Olsen defaulted on with Berkshire Bank but leaves unpaid much of a $200,000 loan and $75,000 line of credit he defaulted on with the Metroplex Development Authority in early 2007. Olsen did business as Electric City Brew Pubs.

Metroplex Chairman Ray Gillen said Metroplex will auction off Van Dyck equipment on Oct. 22 — including everything from the building’s furniture to the brewing equipment — in the hope of satisfying the defaulted loan. Metroplex will also go after assets owned by Olsen, he said.

“We have personal guarantees from the former owner. Metroplex will pursue payment under the guarantee until the debt is satisfied,” Gillen said.

Metroplex retains rights to the name “Van Dyck” but lost its 10-year lease on the parking lot through the auction. Metroplex paid Olsen $100,000 to lease the lot in 2005.

GOOD TRACK RECORD

Gloria Kishton, president of the Schenectady Heritage Foundation, a preservationist group, was pleased the McDonald family purchased the Van Dyck.

“The family has done a tremendous amount of preservation on historic buildings in the community. We are looking forward to them being there and getting the club up and running again. The Van Dyck is important to Schenectady,” she said.

Jack and Dennis McDonald took a dilapidated Civil War era building on the corner of North Broadway and Liberty Street in 2000 and turned into an Irish pub and restaurant called Pinhead Susan’s. In 2003, brothers Jack and Jeff McDonald refurbished the former Mohawk Club, at Union and Church streets, into an elegant restaurant called the Stockade Inn. The McDonalds did both projects on their own, without tapping into Metroplex’s resources.

Gillen said the McDonalds have a proven record of operating successful restaurants and have the financial resources to own and operate the Van Dyck.

“They will do extensive renovations and restore the building to match the name and history of the place and restore the legacy of the Van Dyck,” Gillen said.

Gillen said the country’s ongoing financial crisis hurt Metroplex’s chances of recouping its money through the foreclosure auction. Had the auction gone off as scheduled in July, before the current climate, Gillen said, he is confident the property would have sold in the $400,000 range, satisfying both defaulted loans.

Olsen stopped the July auction through a court order. Metroplex and Berkshire subsequently overturned the order, resulting in Wednesday’s auction.

“We knew in July we had multiple bidders and the price would have come in higher and that would have covered the loans,” Gillen said.

The McDonalds and Berkshire Bank were the only bidders at the foreclosure auction held in the Schenectady County Courthouse.

Berkshire representative Tom Matejek opened bidding at $251,000. McDonald representative Tom Hoffman countered with the second and final bid of $252,000. Under the terms of the auction, the McDonalds must repay $147,000 in back taxes to the city.

Matejek said Berkshire will receive most of the $252,000, less costs associated with the auction. “Metroplex gets nothing,” he said.

Berkshire had first position on the property, Metroplex had second. Metroplex, however, has first position on equipment inside the former Van Dyck. The equipment includes a microbrewery Olsen installed in a bid to make the business viable.

The property at 237 Union St. features a four-story building with dining areas upstairs and downstairs, a kitchen and upstairs offices.

Metroplex and Berkshire foreclosed on Olsen last January. Several months later, Olsen declared personal bankruptcy in federal bankruptcy court. In March, a federal judge dismissed Olsen’s Chapter 11 case. The dismissal allows Metroplex and other creditors to foreclose on his properties in Schenectady, Saratoga and Washington counties.

Olsen shut down the former jazz club in March 2007, saying he planned to close temporarily for repairs. He never reopened and shortly thereafter put the Van Dyck up for sale. He initially listed it at $1.6 million.

Olsen and three partners reopened the Van Dyck on its 50th anniversary in 1997. The jazz club experienced problems almost from the start. The owners defaulted on loans and faced lawsuits over the next several years.