Amsterdam

Amsterdam Common Council approves sale of 20 fixer-uppers to developer

65 Academy Street in Amsterdam recently.
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65 Academy Street in Amsterdam recently.

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AMSTERDAM — The Amsterdam Common Council unanimously approved the sale of 20 city-owned properties to a developer for $5,000 each at a special meeting on Thursday.

The transaction with JAA1 Properties Corp of Ozone Park, Queens, majority-owned by President Ansar Mussaleen, was approved through a single resolution, but individual contracts for each property will be executed with protections to ensure the fixer-uppers do not languish.

“This is something new we’re trying and hopefully it will be something we can do in the future if it works in this case,” Mayor Michael Cinquanti said.

The contracts include reverter clauses allowing the city to seize any of the properties that are not brought up to code and granted certificates of occupancy within set time frames of 18, 24 or 30 months allowing work to be completed in three phases.

The contracts further require the developer to secure a $50,000 performance bond for each property that would be paid to the city if required work is not complete within the allotted time. The city would use the funds to demolish the structure after reclaiming ownership.

The developer will not be entitled to any credit or reimbursement for partial work completed if the reverter clause is exercised. JAA1 will be barred from selling or otherwise transferring ownership of the properties until a certificate of occupancy has been issued by the city.

Mussaleen will sign personal guarantees for each contract, which stipulate that he will remain the majority shareholder of JAA1 until work on the properties is complete or the performance bonds have been paid out to the city.

Corporation Counsel Anthony Casale said the guarantees will provide another layer of protection by identifying an individual the city could take enforcement action against if the terms of the contract are not met, instead of a corporate entity.

“An LLC can be dissolved, a person cannot be dissolved,” Casale said.

Mussaleen, participating in the meeting by speaker phone, assured city officials that he plans to make good on the deal. He has around 13 years of experience renovating and flipping houses in the New York City area before getting into the rental market in the last six years.

“I’m willing to take the risk,” Mussaleen said. “I intend to get the job done.”

The deal involves mostly two-family homes spread across the city that were previously advertised for auction or through the property disposition committee that failed to sell or were placed on the demolition list due to their poor condition.

The developer plans to gut and fully renovate the homes to create quality housing units that will be rented at an affordable price. Mussaleen has estimated the total cost of renovations on all 20 homes at around $2.5 million.

“You want to do it the right way so you don’t have any issues in the next couple of years maintaining these properties,” Mussaleen said. “You don’t want phone calls from tenants all the time.”

A crew of 20 will be contracted to perform renovations in teams of five, according to Mussaleen, who expects work to progress on four homes at a time. He estimates each building can be fully renovated in 45 to 60 days.

Once the homes are placed on the rental market, Mussaleen said a local property manager will be hired to handle on-site maintenance and address tenants’ needs.

Cinquanti lauded the property deal that will either rejuvenate existing housing stock to create needed apartments for working families or help eliminate blight through demolitions paid for through the developer’s bonds.

“It’s an opportunity for our city to accomplish quite a bit,” Cinquanti said. “I’m optimistic that it is a new model we can follow on an ongoing basis to provide the city with protections we need, but more importantly to renovate neighborhood housing instead of knocking it down.”

After seeing the city burned before by property sales and ambitious plans that never materialized, Deputy Mayor and 5th Ward Alderman James Martuscello indicated the protections in the contracts led him to support the deal.

“The key to all of this is the enforcement,” Martuscello said.

The city’s code enforcers will oversee the renovation process and inspect the properties before issuing certificates of occupancy. Fire Chief Anthony Agresta noted baseline photos of the exterior and interior of each home will be taken for comparison against future work.

Still, Martuscello expressed concern over slow progress renovating a building owned by the developer at 38 Division St. and Mussaleen’s rush to close the deal before the end of the year for tax purposes to reinvest profits into the project through a 1030 exchange.

“My biggest fear is he’s stretched out real thin,” Martuscello said.

Complications over parking and other issues at the Division Street site slowed progress, according to Mussaleen, who indicated that work should be complete within about two months. A crumbling rear wall has already been stabilized and the roof and windows replaced.

Extensive renovations are planned at another deteriorating building acquired by the developer at 8 Gardiner St. JAA1 also has a crumbling former industrial building at 10 Leonard St. under contract, where plans are being developed for the structure’s conversion into a storage facility. The Zoning Board of Appeals approved a use variance for the project last month, setting it up for future consideration by the Planning Commission.

Although he is admittedly skeptical, Martuscello said he is trying to be optimistic about the property sale that will serve as a broader signal to contractors that the city is open to new ideas. In the worst case scenario, he said the city would simply seize the properties and demolish them with the guaranteed bonds.

The guarantees attached to the contracts mitigating potential risks from the deal convinced 1st Ward Alderwoman Kelly Quist-Demars to support the property sale.

“The contract is really clear and straightforward. We have a lot of people with eyes on this and this gentleman seems to genuinely want to be successful,” Quist-Demars said.

The move should help rid the city of blight within just a few years either through the restoration of 20 homes or through their demolition funded by the developer, she added.

“In the long run we’re probably better off, even if some of these don’t quite make it then we still get them demolished,” Quist-Demars said.

Reach Ashley Onyon at [email protected] or @AshleyOnyon on Twitter.

PROPERTIES INCLUDED IN THE SALE
65 Academy St.
52 Elizabeth St.
6 Kimball St.
23 Henry St.
25 Henry St.
91-93 Brookside Ave.
58 Milton Ave.
21 Second Ave.
1 Third Ave.
24 Jay St.
16 Bunn St.
312 E. Main St.
52 Reid St.
33 Jay St.
15 Garden St.
99 Grove St.
42 Union St.
30 Kline St.
29 Wilson Ave.
140 Forbes St.

 

 

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