AMSTERDAM — KCG Development and DEW Ventures are preparing to walk away from the $34 million Chalmers Mills Lofts apartment project rather than go through another round of attempting to get federal affordable housing tax credits.
The project developers bought the land where the former knitting mill was located for $297,000 on the last day of a multi-year purchase option with the city of Amsterdam in December. A vote of the Common Council had denied them an extension on their purchase option, forcing them to either buy the land or walk away.
Four months later, they’re ready to walk away, and have approached Montgomery County about possibly selling the 3.3-acre site on the city’s South Side.
Stacy Kaplowitz, the vice president for KCG Development, said she believes the project will not be awarded the $18 million in affordable housing credits it needs to finance the construction of the project unless U.S. Rep. Paul Tonko, D-Amsterdam, and Mayor Michael Cinquanti express support for the project.
The federal tax credits are distributed by the New York State Department of Homes & Community Renewal.
Kaplowitz said the decision regarding who gets the credits is made by committees of officials inside the Department of Homes & Community Renewal. “We don’t know who they are,” she said, but she believes Tonko’s apparent lack of support for the project is the crucial stumbling block.
“I think he is using his influence to stop the project, and if that is the end game, [he should] help his constituents understand why that’s a good thing,” she said.
Tonko on Wednesday sent a statement to The Daily Gazette/Amsterdam Recorder explaining his position on the Chalmers project.
“I think the developer and their team have misrepresented what has happened here. The opposition to this project goes far beyond any single individual,” he said in his statement. “It does not enjoy broad community support. Moreover, at a time when the nation and the state of New York face fiscal crisis and emerging priorities, it is important that tax dollars are applied in a way that maximizes resources and will drive the most effective approach for economic development.”
On Friday Tonko said he would comment further next week.
Kaplowitz said the developers have attempted to address aesthetic objections Tonko and some Amsterdam community members have expressed about the project, which would include a 120-unit apartment building and a 300-person capacity banquet hall to be run by the Lanzi restaurant family. The changes have apparently failed to persuade Tonko, she said.
Mayor Michael Cinquanti said he opposes a large apartment building being built on the Chalmers site, and would prefer to see it developed with an owner-occupied homes. He said he has held the money KCG Development paid the city in reserve and would be open to talking to them about purchasing the site back. He said when he was campaigning for mayor most of the people he talked to were against it, and he believes it is one of the reasons he defeated former mayor Michael Villa. He said he fears the building would suck the best renters out of where they live now and into the South Side apartment building
“I think it’s the prime development piece of property in the city,” Cinquanti said. “Why did they buy it, if they’re just going to walk away from it. I don’t understand why they bought it, but we have held the money in reserve, and I’ll be happy to talk to them if they want to talk about purchasing that property and getting it back in city hands.”
Deputy Mayor James Martuscello, a Democrat who represents Amsterdam’s 5th Ward where the Chalmers site is located, said he does not want to see the city repurchase the property. He said residents on the South Side “don’t need another restaurant,” referencing the banquet hall idea, and he would prefer to see townhouses similar to projects near the Rivers Casino in Schenectady. He said he would look forward to working with county officials if they decide to purchase the land.
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