Rotterdam to vote on nullifying ViaPort lease agreement

The entrance to the former Kmart at ViaPort Rotterdam
The entrance to the former Kmart at ViaPort Rotterdam

ROTTERDAM — Plans to relocate town offices to the old Kmart at ViaPort may not be moving forward after it was determined the proper procedure laid out in state law was not followed — effectively nullifying a lease agreement approved last year. 

The Town Board will host a special meeting Wednesday — the second in as many weeks — to discuss and vote on a number of resolutions regarding plans to consolidate town offices to the shopping mall, including one to nullify a 10-year agreement signed last year to lease 50,000 square feet of space that once housed Kmart.

At the heart of the issue is a state law requiring towns seeking to “purchase, lease, construct, alter or remodel a town hall, town lockup or any other necessary building for town purposes” to hold a permissive referendum, where a majority of residents must approve the proposal before the town can proceed.

The required referendum, under the law, must be advertised within 10 days of a resolution passing, but the Aug. 21 resolution authorizing the lease agreement never called for a referendum and a vote was never advertised.

“The failure to post and publish a notice of adoption for a resolution subject to permissive referendum as required in Town Law Section 90 has been determined to be a jurisdictional defect that prevents such a resolution from becoming effective and rendering void ab initio any action taken in furtherance,” a resolution nullifying the lease agreement reads.

Town Supervisor Mollie Collins did not return multiple phone calls seeking comment Monday.

In addition to nullifying the current agreement, board members will vote to reauthorize the original lease agreement subject to a permissive referendum and to enter into negotiations with the owners of ViaPort to purchase the 87,000-square-foot Kmart facility, which has been shuttered for a number of years.

It’s unclear if the current Town Board would vote in favor to reauthorize the current agreement, which was approved under the previous administration. A slate of new board members, including Collins, Jack Dodson and Joseph Mastrioni were seated in January following last November’s election.

Plans to relocate town offices have angered residents in recent months, with several blasting the proposal as a waste of taxpayer money and criticizing officials over a lack of transparency.

Several have called for the town to hold a referendum before proceeding with the move.

Plans to relocate town offices have been in the works for a year, when the previous Town Board authorized former supervisor Steven Tommasone to enter into negotiations with the owners of ViaPort to lease the space as a way to save on overhead costs and to avoid costly repairs to the town’s existing facilities.

Tommasone did not return a phone call seeking comment, and the owners of ViaPort could not be reached.

A lease was signed last November, and the Town Board approved using $1 million in American Rescue Plan Act funds to pay a security deposit needed to secure the Kmart space.

But at a special meeting last week, a pair of board members that voted to enter into the agreement voiced concerns about the move after engineers from the Albany-based firm Barton & Loguidice presented site plans and a cost analysis on the move. The town hired the firm to complete the study in January.

The study found it would cost the town just over $14 million to upgrade its current facilities and $9.2 million to retrofit the Kmart space — nearly double than what was originally estimated.

But the study also found the renovated buildings would likely cost the town $34.8 million to maintain over a 30-year period — $20 million less than the $54.7 million the town is projected to pay to lease the ViaPort space over the same period.

It was also estimated that if the town were to purchase the entire 87,000-square-foot Kmart facility rather than just leasing a portion, the maintenance cost would drop to an estimated $37.1 million over 30 years. The estimate does not include the purchase of the building or take into consideration the potential sale of existing town offices.

It’s also unclear if the town would be able to purchase the facility. The current lease agreement does not include an option to buy the Kmart space, but gives the town the first right of refusal should the ViaPort owners decide to sell the property anytime during the life of the lease. 

Board member Samantha Miller-Herrera said the increased costs associated with retrofitting the Kmart facility was a concern and said the town should revisit the plan to save money.

Evan Christou, meanwhile, said he was under the impression that the lease agreement included an option to purchase the facility, and would not have voted in favor of approving the contract is he knew otherwise. He noted he was embarrassed when he found out there was no option to buy, but said other board members at the time were under the same impression and the town’s legal representation was more than competent.

“As far as the legality of the lease I can’t get into it because I’m not an attorney,” Christou said Monday. “Do I think our representation was reputable and competent? Absolutely.”

He said he was unsure if the current agreement is null, but noted that if it is the town should take the opportunity to renegotiate the contract in order to address all concerns before putting the proposal to a referendum. Christou said criticism leveled against mall management in recent weeks has been unfair and that he believes the ViaPort owners would be willing to negotiate with the best interest of the town in mind.

Christou said that he is still in favor of the move, but only if the town has the option to buy the Kmart space, which he believes would be beneficial for the town, residents and the mall. Any lease without an option to buy, Christou said, is not something he will support.

“If the lease agreement is considered void, why would we reauthorize the same lease agreement if we have the opportunity to negotiate something that is more palatable for everybody?” he said.

Wednesday’s meeting will take place at 7 p.m. at the Town Hall located at 1100 Sunrise Blvd.

Contact reporter Chad Arnold at: [email protected] Follow him on Twitter: @ChadGArnold.  

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