The Schenectady City Council believes it has avoided a fiscal misstep by holding off on co-funding an expensive project headed by Galesi Group, a leading developer in the Capital Region, which would renovate the old Department of Social Services building on Nott Street to create 14 new apartments.
Unfortunately for the residents of Schenectady, the council has taken the position of trading one misstep for another, albeit a less costly one.
At a cost of $1.3 million to the city, Councilwoman Leesa Perazzo deemed the DSS project too expensive and proposed spending $500,000 just to demolish the former public building. Her committee approved the proposal and the measure could be voted on as soon as tomorrow.
Furthermore, the council plans to apply for a $3 million federal loan through the U.S. Department of Housing and Urban Development to fund the revised plan plus the much needed demolition of roughly 120 dilapidated buildings throughout the city. But grouping the two projects together is not the right move, even if it is necessary in order to obtain the federal loan.
Because the city will no longer invest in the renovation of the DSS building, the council must now obtain a written promise from Galesi stating that if the city demolishes the building, they will go through with the construction of an apartment complex. In addition, HUD requires 51 percent of the new apartments to be made available to middle and low-income residents.
It is vexing that city officials believe a half-a-million dollar demolition is money well spent. Do they really think building apartments with such requirements will appeal to local employees and effectively combat blight? Think again.
Dubious project
What would the cost-benefit of a new apartment complex be? If the building is put back on the tax roll once Galesi is finished with the construction, I don’t anticipate it leading to a substantial growth in property tax revenue for the city.
Given that it could still be a multimillion dollar project and the size of the lot is quite large, one would assume that the city’s property assessment of the building would be considerable.
However, we don’t know how much Galesi will now put towards the project, since the DSS building will be knocked down, not renovated, and the city is no longer investing any money towards construction. Councilman Vince Riggi was right when he said that the entire project should be scrapped.
Try again
What the city needs is to take a more reasonable approach towards improving residential neighborhoods.
That’s where the Amsterdam-Schenectady land bank comes into play. The purpose of the land bank is to resuscitate vacant, abandoned or foreclosed properties in a community. This could be one of the most powerful tools for revitalizing Schenectady.
Last year, Schenectady officials highly sought the creation of a land bank, but despite having more than a year under its belt, its 2013 adopted budget has only $100,000 in total revenues and operations are progressing slowly.
And although the land bank is competing for a share of a $20 million state grant just recently announced by Attorney General Eric Schneiderman, there are no assurances when it comes to state aid. What the land bank really needs is a guaranteed influx of money to jump-start the entire process.
Logical step
If the council wants to combat blight, it should financially empower the land bank, demolish the most rundown buildings in the city, continue to advance its own Key to the City program and put even more effort towards tax collection.
Homeowners can help revive a hapless city and Schenectady could sure use more of them. And if the council is really looking to help energize the Walk to Work initiative, which continues to be one of the main arguments behind the building of an apartment complex, it should restore and sell homes to employees of local employers in the Goose Hill neighborhood. Perhaps the council could even offer seller concessions or certain subsidies to such employees to promote the initiative even more.
Just this past month, the city began selling the houses they foreclosed on, due to unpaid property taxes, to new owners looking to invest their time and money into Schenectady.
The progress the city has made in finding homeowners who want to live, not rent out, in Schenectady is more important than what the houses were sold for, because building up the homeownership rate helps everyone.
With more properties entering back onto the tax roll, taxpayers can expect lower taxes. Lower taxes will encourage more families to move to Schenectady, which will of course help raise the homeownership rate even more. The process is cyclical, but not to be mistaken for easy, as this is a long-term solution that requires patience and persistence.
In addition, the city needs more private investors like the father and daughter from Niskayuna who are spending a half-a-million dollars on renovating a vacant State Street building into residential and commercial space. This is nothing but good news for Schenectady.
The council must understand that private investors and homeowners are vital to Schenectady’s future and it should be doing everything it can and more to attract them.
Trading one misstep for another is not the way to go. Schenectady can’t afford any more costly mistakes.
Robert Caracciolo lives in Schenectady and is a regular contributor to the Sunday Opinion section.
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