City officials faced persistent criticism from the public Monday for their decision to give a private developer $500,000.
They struggled to defend the decision while also acknowledging that it was something they didn’t want to do.
The money will come from a loan that Schenectady will pay back over the course of the next 20 years.
The City Council had originally considered a gift of $1.3 million, but cut it down to $500,000. The money will be used by Galesi Group to demolish a building it owns, the former Department of Social Services.
City officials have also not asked Galesi to pay taxes on the building. Galesi bought it for $1 two years ago, but the deed was held by the city Industrial Development Agency so that Galesi would not have to take formal ownership, and thus pay taxes.
City Council members said Monday they were uncomfortable with the idea of giving taxpayer funds to a private developer. But they voted 4-2 in favor of the plan a week ago.
Monday was the first chance for residents to publicly complain about the decision, and they were irate.
“That you can’t use some common sense is beyond me,” said resident Harry Brand, after listing in detail the many properties Galesi Group owns and its financial prosperity.
“And you’re giving him $500,000?” he said in disbelief. “I’ll never understand it. You’re spending money like water.”
Resident Joseph Kelleher, a City Council candidate, said the council should never have considered giving money to a wealthy private developer.
He suggested that council members are listening more closely to Galesi than to small business owners.
“Longtime local businesses like Matthew’s Signs on Eastern Avenue can’t get a cover for a city-owned trash receptacle, but we can give half a million to a multimillion-dollar private company, for demolishing their own building which they bought for a dollar,” he said.
Galesi Group wants to build an apartment building on the site, but says it would cost too much money to also demolish the existing building.
Kelleher said that should be Galesi’s problem.
“This is the responsibility of the buyer, who knew full well the condition of the property,” he said.
Galesi bought the building from the county.
Kelleher wasn’t the only one to suggest better ways for the council to spend money. Brand noted that the council could replace the Council Chamber air conditioners, which often drown out speakers during the council meetings — and could do so for far less than $500,000.
Resident Linda Kelleher added that she had never gotten a “tax break” on her home, which she has owned for more than 30 years.
“Why should he?” she asked. “I hope the voters remember this issue in November.”
Councilwoman Leesa Perazzo defended the decision.
“The city is making an investment to remove blight,” she said.
She also acknowledged some of the residents’ complaints.
“Yes, they did buy it for a dollar. It has not been a financially feasible project, so it was off the tax rolls,” she said.
But she disputed Linda Kelleher’s assumption that Galesi would get a “tax break.” Perazzo said there was no guarantee Galesi would be offered anything beyond the $500,000 grant, although Galesi spokesman Gerald Hennigan said last Monday that he would apply for any tax breaks that are available.
“They don’t know what they are. We don’t know what they are. There might not be any,” Perazzo said.
Mayor Gary McCarthy also defended the decision, which he recommended to the council, by saying the critics had offered no other way to get Galesi to do something with the vacant building.
“I don’t mind discussion and debate,” he said. “But people who just criticize and don’t offer any alternatives, that’s what we had in the past, people who would just leave problems. We’re going to continue to deal with these problems.”