The NYS Division of Homes and Community Renewal said the agency expects to invest $4.65 million in an upcoming project to demolish the Estee School on North Main Street and replace it with affordable senior housing.
The agency estimated the project will cost $9 million, and expects the balance to come from private investment in exchange for tax credits. There are also additional funds in the form of a $400,000 community development block grant and $250,000 in state funds secured by Sen. Hugh Farley, R-Niskayuna, that will be put towards the project.
This past summer officials in Gloversville had all but given up on building anything on the Estee School site, and as of August had planned to spend $700,000 to demolish and convert the site into green space. That capitulation came after three years of failed attempts by the city and its partner, Liberty Affordable Housing, to secure state funding for the affordable housing project.
Last Friday, however, Gloversville Mayor Dayton King announced on Facebook that DHCR contacted him and will be funding the project after all. King credited officials at Liberty Affordable Housing, a non-profit builder based in Rome, N.Y., who are still attached to the project, with not giving up on it.
According to the DHCR statement released Thursday to The Daily Gazette, the $9 million project will provide 37 units of quality affordable senior housing and offer amenities such as off-street parking, on-site management and laundry, central air, a community room, fitness facility and a computer lab.
“Congratulations to Gloversville, Liberty Affordable Housing, and future residents of Estee Senior Apartments,” DHCR Commissioner James S. Rubin said in the statement. “By investing in Estee Senior Apartments, we are replacing an aged, blighted building with new apartments for Gloversville seniors so they can stay and live comfortably in the community they call home.”
But questions remain in a deal this complicated that has so many interested parties. Why did the state funding suddenly seem to come through? What are the rules governing the many different funding pieces and how will they work together?
More importantly, what are the terms of DHCR’s investment?
In their statement, the agency said they awarded Liberty $465,000 in low-income federal housing tax credits “that is expected to result in $4.65 million in direct investment and leverage another $4.35 million additional public and private funds…”
“The way it was worded, it didn’t make a whole lot of sense to me,” said Nick Zabawsky, a grant writer who helped Gloversville secure the $400,000 community development block grant from DHCR and has been involved in the disposition of the Estee School site for a decade. A copy of the statement from DHCR was provided to Zabawsky.
DHCR officials did not return repeated requests for comment after sending their initial statement about the project, and officials from Liberty Affordable housing have also been unresponsive. Farley’s office did not return a request for comment.
Zabawsky thinks DHCR’s $4.65 million “direct investment” will come in the form of a low-interest loan, around 1 percent, that will be awarded to Liberty Affordable Housing. The other half – minus the already-secured public funds – will come from investors, such as banks, who front the cash in exchange for offsetting their tax bill.
And there are a lot of moving parts in the project. Officials still have to clear the demolition of the Estee School with the state’s historic preservation office, for example, and the deadline for the $400,000 community development block grant, which expires at the end of this year, must be extended.
There’s also the question of who will oversee the demolition of the school, and understanding the stipulations attached to the state funds secured by Farley, as well as any private investor that may sign onto the deal.
“They don’t just give you $4 million,” said Farley of the private investors. “They have all sort of demands, partner agreements – there’s a lot involved.”
He added that the next step is to bring all the partners to the same table and determine everyone’s role and the way forward. Those partners include, at a minimum, the City of Gloversville, Liberty Affordable Housing, DHCR, Fulton County Center for Regional Growth (who own Estee School), Farley’s office, the state’s historic preservation office and any private investors.
“Once we get the formal award letter [from DHCR] and we see all the terms and conditions, we can get all the players in the same room we can figure out what’s next,” said Zabawsky.
CRM Rental Management, a for-profit property management company, also based in Rome, N.Y., was signed on to manage the property for Liberty Affordable Housing before the deal fell through this past summer, but it’s unclear if they’re still part of the project.
John Varecka, an official with CRM Rental Management, said the company is still interested in managing the property and he believes they’re still involved.
“We appear to be; we haven’t signed on with them yet because we’re waiting for the award letter to come in,” said Varecka.
Regardless of the particulars of the deal, both Mayor King and Zabawsky believe the funding will materialize and the project will move forward.
“I’m very confident,” said Zabawsky. “Nothing in this world is guaranteed except death and taxes, but from everything I’ve heard it sounds to me like it’s going to happen.”
King said the project is great news for Gloversville, especially after it appeared to be a dead-end earlier this year.
“It’s going to create at least temporary jobs with the construction, and then full-time jobs with the janitorial and management staff at the development,” he said, adding that the development will also be an economic generator as families of those who live there will inevitably visit and patronize local shops.
As for those future tenants, King said the city and Liberty should have no problem filling the units. He compared the development to Overlook Ridge, a 48-unit affordable housing development geared towards families that opened in Gloversville three years ago.
“They went fast and I think there’s a waiting list there so I don’t think we’ll have any issues filling apartments there [at Estee Senior Apartments],” said King.
He hopes construction of the project will start next spring and estimated it will take about 15 months. The development could possibly be opened sometime in 2018, he said.
Reach Gazette reporter Dan Fitzsimmons at 852-9605, [email protected] or @DanFitzsimmons on Twitter.
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