Center City getting new lease on life

PHOTOGRAPHER: Michael Lamendola

A look inside Center City would amaze the viewer accustomed to its former slow deterioration with its smell of mildew and man-made odors.

Gone are the bleachers that stretched along the wall and the fake green grass of the indoor soccer field. Temporary plaster and plastic walls have sprung up everywhere, and workmen drive about filling huge bins with debris.

Center City is being rebuilt from the inside out.

The new owner of Center City, The Galesi Group, is spending approximately $12 million to renovate the four-story, 180,000-square foot building. The amount is $5 million more than the cost to create Center City in 1979.

Galesi began the work three weeks ago when its newest tenant, MVP, signed a lease for 46,000 square feet at Center City. MVP, a Schenectady health insurer, should be in its new space by the end of the year, said David Buicko, chief operating officer for Galesi.

Earlier this week, the Capital District YMCA said it would begin negotiations with Galesi to lease 30,000 square feet in Center City. The YMCA wants to relocate its lower State Street health facility to the downtown site. The new site would contain basketball courts, recreation rooms and a day care center. It will not include a pool.

Buicko said the YMCA would occupy a wide-open area that contained the former soccer field. The area is 50,000 square feet and four stories high. Galesi will build two steel decks over the space, essentially adding more space inside the structure.

Capital District YMCA President and CEO J. David Brown said the new facility would cost about $4 million — the amount of money raised so far for the project.

In the short time Galesi has owned the building, it installed a new roof and new mechanical systems, which had fallen into disrepair over the years. It also cleaned up and secured the building against unauthorized visitors, mainly street people who used to sleep inside and used the structure as a restroom. It will replace two old elevators and add a third.

Galesi has already gutted the soccer field area and has donated the bleachers and arena safety wall to local youth organizations.

Galesi is lining up commercial tenants for the fourth floor and retail businesses for the first floor, which fronts State Street. CVS and the Electric City Rock Gym will remain as tenants.

Further, Buicko said Galesi may construct a structure measuring approximately 20,000 square feet to replace the entrance to Center City, an elevated area next to Jay Street. The structure would contain a new lobby and commercial space, he said, and would be in keeping with downtown’s late 19th century architectural character.

Work is ongoing to connect Center City to a district energy system operated by Proctors, allowing it to receive low-cost heat and cooling energy. Piles of earth on State Street are the result of digging to reach the pipes, which were extended under State Street from Proctors during the streetscape project years ago.

Galesi is working to make Center City as energy-efficient as possible. It is installing new windows to use as much natural light as possible and placing insulation in areas that never had any. Portions of Center City were constructed more than 100 years ago, and the complex has always been expensive to heat and cool.

The interior work involves restoring architectural features that were masked when Center City was created, Buicko said. The features include ornate fluted columns of solid metal, archways and walls.

FINANCIAL DEAL

The Galesi Group purchased the building earlier this year. Buicko would not reveal how much the company paid for the complex, a series of three buildings, beyond admitting it assumed a $3.5 million mortgage. “We structured it tax-wise for the benefit of everyone,” he said.

As part of the sale, Galesi will pay $100,000 in 2009 and 2010 under a payment-in-lieu of taxes agreement, said Ray Gillen, chairman of the Metroplex Development Authority.

The agreement remains in effect until construction is completed. Then Galesi will pay a different amount based on the building’s final assessment, Gillen said.

Other components of the deal involve the city contributing $2.5 million it received last month from the Restore NY Communities Initiatives Program toward rehabilitation.

Whatever the purchase cost, Buicko said the investment is worth it. “It is a great place if you have the vision,” he said.

Galesi is not short on vision, according to Gillen, chairman of the Metroplex, a publicly financed agency spearheading downtown’s redevelopment. Metroplex has worked with Galesi on other major projects, including Movieland and the MVP headquarters on upper State Street and in finding tenants for its industrial parks in the county.

Buicko wants to change the name of the massive downtown building, hoping to vanquish its image as a failed economic development project. “We want something more focused on the business side,” Buicko said, hoping a large donor will step forward and put its name on the building.

Buicko said the name Center City “is a stigma of a past development and we want to focus on looking forward.”

HISTORY OF FRUSTRATION

When constructed in 1979, Center City was to serve as a linchpin of downtown’s revitalization. It was to serve as a civic center, complete with indoor ice skating rink. Retailers were expected to flock to fill space within.

City officials used a combination of local and federal money to raze two former department stores on the site and build a structure using the facade of the Grant department store. They linked the structure to the adjacent Wallace building, a former department store, to create the Center City Complex. Wallace was gutted and transformed into office and retail space.

From the start, the project floundered. “It has been an albatross around the neck of every public and private agency that ever tried to make it work,” said Vincent DiCerbo, a former City Councilman and current Schenectady County legislator.

Buicko called the building dysfunctional from the start. “There was no retail component,” he said.

The ice skating rink ran up annual deficits, forcing the city to remove the ice and put in artificial grass several years later, and retailers shied away. Through the years, governmental agencies became the prime tenants.

Said DiCerbo, “We were always trying to get someone to buy the building. It has been a black hole since it was built.”

The Wade Lupe Companies owned the commercial parts of Center City, while a nonprofit organization ran the soccer field portion of Center City. The organization dissolved when Galesi bought the building.

During the years it owned Center City, Lupe paid $10,000 annually through a locked-in payment-in-lieu-of-taxes agreement, which expired in 2007.

Lupe retains a 10 percent ownership share in a portion of Center City under a deal with Galesi, Buicko said. It will repay $25,000 annually for 10 years toward a $750,000 federal grant it received years ago but never repaid. Metroplex will cover the remaining $50,000 a year but be reimbursed by Galesi. City officials said this was the best deal possible, as there was no guarantee Lupe would repay the $750,000; language in the original financial agreement suggested the loan was actually a grant.