The Schenectady County Metroplex Development Authority approved a three-story office and retail building at Mohawk Harbor with a payment in lieu of taxes agreement during a meeting Wednesday evening.
The $25 million, 65,800-square-foot building will include ground-floor retail space with office space on the top two floors. Construction could start on the building as early as next month, according to David Buicko, CEO of Galesi Group.
“Underground parking takes a little longer,” he said. “But we would like to start in May and hope to be done within a year maximum.”
The building will have nearly 500 parking spaces with underground parking and a surface lot next to the building.
The building will be located toward the northern end of the site off Erie Boulevard adjacent to the Courtyard by Marriott hotel, which is currently under construction and expected to open this fall.
The Metroplex board approved a 485-B PILOT agreement for the building, which will start taxes at 50 percent the first year and increase 5 percent each year until reaching full value in 10 years.
The amount the developer will pay in taxes cannot yet be determined because the office building has to be built before it is assessed by the city assessor.
“This is basically the standard for development in the city and most cities upstate,” Metroplex Chairman Ray Gillen said. “It’s actually in the real property law. The city assessor will determine the value.”
Buicko said he is in discussions with two or three potential tenants for the building.
“We may end up doing more office space based on people’s desire to work and live in the same place,” he said. “We’re considering doing another building right after that one.”
The building is being developed by the Galesi Group with LeChase Construction Services of Schenectady as the contractor and Rifenburg Construction of Troy doing site work.
Development of the 60-acre old Alco site is ongoing with the construction of the Rivers Casino and Resort at Mohawk Harbor, which is expected to open next March, and a 204-unit apartment building.
The Metroplex board also approved a one-year PILOT for the old YMCA building at 13 State St., which is being developed by Norstar Development of Buffalo with 61 senior housing units.
The interim PILOT is needed because Norstar will not take the title to the building until after the tax status date of March 1, Gillen said. It will be a payment of $50,000 for one year while construction is ongoing.
“They will close on the property in June,” Gillen said. “We need to put in an interim PILOT in order to get through the tax status date. It will be in place for a year.”
Gillen said after a year the PILOT will increase by 2 percent each year. He said it marks the first time the building will pay taxes. The four-story, 104,000-square-foot building was built in 1926.
In addition to senior apartment units, the $18 million project will also include common space, a gym, library and offices. The developer also plans to renovate the building’s historic facade.
“Proctors was built around the time the Y was built,” Gillen said. “Like a lot of our projects, we’re putting it on the tax role for the first time.”
During its meeting on Wednesday, the Metroplex board also approved a contract to install LED lighting at the Metroplex-owned parking garage on Broadway. The contract was awarded to Amaha Electric of Cohoes for $209,660. Work is expected to be completed later this year.
Metroplex approved a contract with Callanan Industries for $106,500 to mill and pave the intersection and upgrade crosswalks at Broadway and Liberty Street. The project also includes crosswalk upgrades near City Hall at Jay and Franklin streets and at Franklin and Broadway along with sidewalk work on Broadway in front of the parking garage.
The board agreed to sell a vacant lot at 803 Eastern Ave. to the Capital Region Land Bank. The former Kilgore’s Tavern was demolished there as part of improvements for the area.
Metroplex also awarded a $75,000 grant to the Downtown Ambassador Program. The program pays City Mission Ambassadors to greet visitors in downtown, particularly during events and shows at Proctors.
Reach Gazette reporter Haley Viccaro at 395-3114, [email protected] or @HRViccaro on Twitter.