The Galesi Group is moving forward with plans for affordable housing at the old Department of Social Services building on Nott Street.
The Rotterdam developer plans to undertake a $3.2 million project to redevelop the historic building with 15 affordable housing units including studio, one- and two-bedroom apartments.
David Buicko, chief executive officer of Galesi, said he believes the building is an asset and should be developed.
“It’s on an important corridor between Mohawk Harbor, the Golub Corporation and Ellis Hospital,” he said. “We figured let’s step up to the plate and finish it.”
The Capital Region Land Bank approved up to $20,000 per unit, a total of $300,000, in funding from the state Attorney General’s Office for the project during a meeting on Tuesday.
Buicko is looking to start construction in the fall following approval by the city Planning Commission. The building rehab is expected to be completed by sometime next year.
“I’m highly confident we can build this in less than a year because we’re not taking it down, we’re rehabbing it,” he said.
The renovation includes new electrical and mechanical systems, a sprinkler system and windows along with a roof replacement. The facade will also be improved as well as the parking lot and sidewalks.
Buicko said he is planning to pursue historic tax credits to help pay for the project.
“Each project is a challenge,” he said. “It’s going to require us to work with the historic tax people to ensure it conforms to its original design as much as possible. We’ll be staying with the existing windows and facade.”
The Schenectady County Metroplex Development Authority plans to provide a $100,000 facade grant on top of the Land Bank funding. The Metroplex board will vote on the grant in August.
The Land Bank funding comes with income limits for the units for working adults and families with income of $69,600 for a one-person household, $79,400 for two people, $89,400 for three people and $99,200 for four people.
Buicko said it’s too early to comment on approximate monthly rent for the units.
“We have to make these affordable for people that fit into those income levels or it wouldn’t make economic sense,” he said.
Buicko said he believes the demand for the units will be high with thousands of workers between the future Rivers Casino and Resort at Mohawk Harbor along with nearby Ellis Hospital and Union College.
“All of those places are walkable,” he said. “The bike trail is also adjacent to the property.”
Mayor Gary McCarthy said the building has been a challenge and an eyesore and that he’s happy to see development happen there.
“I’m thankful for the perseverance of the Galesi Group along with Metroplex working through the different hurdles and obstacles to put in place a plan to restore the building so it’s adding value to the neighborhood and community rather than being a detraction,” he said. “People always want affordable housing and this will be middle-class housing.”
The plan for the DSS building at 487 Nott St. is not a new one.
Buicko was originally approved by the City Council to receive $500,000 out of a total $3 million in U.S. Dept. of Housing and Urban Development funding to demolish the building and rebuild with affordable apartment units.
The building was left standing for years until McCarthy disclosed in April that the city, Galesi Group and Metroplex were in discussions with Union College for the private school to take it over.
But Union ultimately decided against purchasing the building, citing the high price tag to redevelop it.
McCarthy said at the time that Union expressed concerns with Galesi’s original proposal of having “poor people” there. The building is located across from the college campus.
Union responded saying in a prepared statement that McCarthy mischaracterized what was discussed about the affordable housing plans.
Union spokesman Phillip Wajda released the following statement on Wednesday: “While we are disappointed we were unable to reach an agreement for a suitable and cost-effective use for the site, we wish the developer well with the project.”
Galesi is planning to use a similar design proposed to Union by Re4orm Architecture of Schenectady with a schoolhouse look.
Union owns a warehouse building on a property adjacent to DSS, which the school bought from Ellis for $80,000 last year. Buicko said the building would have blocked development with the original plans to demolish the DSS building but that it’s not in the way to rehab it.
The $500,000 in HUD funding originally allocated to Galesi, which was controversial at the time, will now go to another project in the city.
The city plans to apply with HUD to reallocate the money for the $19.4 million Hillside View apartment project in the area of Craig and Stanley streets.
The project by Community Builders of Albany will add 58 apartments with 25 for seniors and 33 for families. It includes the renovation of the former Horace Mann School and St. Columba’s School on Craig Street.
The project would also renovate three two-family homes, demolish three buildings, redevelop three vacant lots and add three new apartment buildings.
The funding is required by HUD to be used to build affordable housing. The other $2.5 million was used to demolish blighted homes citywide.
The DSS building dates back to 1877 and was the fifth public school built in the city. It was also used as offices in World War II. The Schenectady County Department of Social Services is now located at 797 Broadway, which was also a Galesi Group project.
Galesi entered into a prepaid lease agreement totaling $200,000 with the Schenectady County Industrial Development Agency for the DSS building in 2008. Galesi will now take title to the property before development.
“We ended up buying [the DSS building] because we wanted to consolidate all of the social services functions into one,” Buicko said. “As part of our bid to consolidate social services in 797 Broadway, we offered to buy the building without any idea of what to do with it.”
Galesi has not paid taxes on the property since then but Ray Gillen, chairman of Metroplex, said it would go back on the tax rolls.
“It’s the first time since 1877 the building will pay taxes,” Gillen said.
Reach Gazette reporter Haley Viccaro at 395-3114, [email protected] or @HRViccaro on Twitter.
Reach Gazette reporter Haley Viccaro at 395-3114, [email protected] or @HRViccaro on Twitter.
