IDA weighs tax breaks for old Victory mill project

PHOTOGRAPHER: Stephen Williams

The Saratoga County Industrial Development Agency will consider whether to help finance a residential development project for the first time in its history as a way of saving a historic former mill building.

Developer Uri Kaufman is seeking $760,000 in IDA tax breaks for his $24 million plan to turn the former Victory Mills building in Victory into luxury apartments, saying the project is impossible without the tax break.

The IDA on Tuesday agreed to hold a public hearing on the idea at 8 a.m. Monday, Nov. 14, at the Saratoga Town Hall in Schuylerville. It would likely make a decision immediately afterward.

The 275,000-square-foot mill is the dominant feature of the tiny village just outside Schuylerville, which has only about 500 residents and no remaining industry.

“This is an opportunity to help the village,” said IDA Chairman Raymond F. Callanan during a discussion at an IDA meeting in Wilton.

It may also be the last chance to save a historic building along Fish Creek that will otherwise be abandoned and would decay or be destroyed by fire, according to Kaufman.

“We cannot do it without this,” he said.

Kaufman, of Nassau County, has been hailed for his transformation a decade ago of the old Harmony Mills complex in Cohoes, but he has also run into opposition in Amsterdam over similar renovation plans with the old Chalmers complex. He floated plans to turn a vacant old mill in Broadalbin into luxury apartments but dropped the idea when he failed to secure a state grant.

In addition to his request to the IDA, Kaufman is asking the town of Saratoga for a tax exemption that would make his $24 million investment in the site exempt from property taxes for eight years. The Saratoga Town Board is currently considering the request, and may make a decision in the next month or two.

“I’m not sure what decision we’re going to make,” said Charles Hanehan, a member of the Saratoga Town Board who is also on the IDA board. “We’d like to support it, but we hope it would happen without giving up too much.”

Kaufman said he needs both tax breaks to be able to afford the project.

The mill complex, parts of which date from the mid-19th century, has been empty since a packaging company closed there in 2000. The county seized it for unpaid back taxes and sold it in 2003 to a man who planned a residential conversion — but the taxes again went unpaid, and the county took it a second time. The county then sold it to Kaufman for $50,000 in 2008.

Since then, Kaufman has developed plans for turning the building into 98 luxury apartments and a preschool for up to 100 children. He says he could start work next year if he gets the requested town and county tax breaks, and could complete the necessary renovations in about 18 months.

Kaufman is asking the IDA for a sales tax exemption on building materials worth $560,000, and a mortgage recording tax exemption worth $200,000.

IDA attorney Michael J. Toohey said the agency has never before given tax breaks to a residential project, but an argument can be made that the renovation of an old mill that will otherwise become dilapidated is a legitimate justification.

Dennis Brobston, president of the Saratoga Economic Development Corp., said there have been efforts made to market the site for industrial use, but they were fruitless.

“Because of its antiquated style, it doesn’t fit into today’s industrial needs,” Brobston said.

But some IDA board members are concerned about extending economic development incentives to a residential project.

“I love the project, but I’m concerned about other [residential] projects coming forward,” said board member Rod Sutton.

Toohey said the IDA’s mission is to help communities with economic development, and there’s an argument for the Victory project.

“This thing is going to stay the way it is forever, unless something unique happens,” Toohey said.

Later, Kaufman said his target demographic for the apartments is wealthy people and young professionals who may be affiliated with companies like GlobalFoundries. He anticipates 2,000-square-foot apartments will rent for about $2,200 a month. “They will be big apartments,” he said.

Kaufman said he will be seeking federal historic renovation tax credits to help finance the project. Those credits require him to own the property for five years after the project is completed, but after that he said he plans to sell the apartments as separate condominium units.

If he can’t afford to do the project, Kaufman said the mill will eventually become abandoned, and likely someday burn.

“This is the only hope for this building,” he said after the meeting.