The Gloversville Economic Development Corp. has purchased the former Schine building for $26,983.
The closing ends more than a month of negotiations among EDC, former owners Bud and Shelly Johnston, and NBT Bank, which held the mortgage.
The purchase price for the downtown mainstay was reduced considerably from the original price EDC bid for it during an auction in November. EDC won the right to buy the property with a high bid of $48,000 and would have paid $52,800 with added auction fees, if not for water damage that occurred when frozen pipes caused a sprinkler head on the third floor to burst.
EDC Treasurer Wally Hart, who is also president of the Fulton County Chamber of Commerce and Industry, said water leaked through all three floors of the main part of the building, damaging light fixtures, heating ducts and ceiling tiles. He said there may be additional water pipe damage throughout the building because it wasn’t being heated and the sinks and toilets weren’t properly winterized.
“We told the owners yes, when we bought the building we were buying it as-is, but that was when it was in the condition it was in when we agreed to buy it. We said either fix it or we want to renegotiate the cost of the building,” he said.
The bulk of the purchase price, $21,950, will go to toward unpaid property taxes, water bills and county recording fees. Collar City Auctions discounted its fee and will get $4,300 instead of $4,800. The Johnstons will get $1.
Hart said prior to the closing the Schine building also had liens on it based on $210,000 loaned to the Johnstons in 2006. The debt was from $70,000 loans from NBT Bank, the Fulton County Economic Development Corporation and the Gloversville Economic Development Corporation. The Fulton County EDC and NBT Bank released the liens before the closing.
Hart said Gloversville EDC decided to purchase the building at the auction to avoid the possibility that it would be foreclosed on by the city, a process that could have left a large storefront in the heart of downtown empty for at least two years.
He said EDC hopes to get a tenant into the abandoned space that was formerly the Open Window Cafe and Gift Shop operated by the Johnstons. The large building still has three active businesses as tenants: Daniel Storto Gloves, Double Eagle Coins and D’Errico & Farhart Insurance.
“Ideally, we’d like to sell it,” Hart said. “We think if we could secure the building and do what’s proper for it we could find potential buyers for it. In such case we would add to the purchase price any of the repairs we make to the building. We’d also like to recoup our $70,000 investment in it.”