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City blames Union College for stalled DSS project

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City blames Union College for stalled DSS project

What’s the plan for the old Department of Social Services building on Nott Street?
City blames Union College for stalled DSS project
The former DSS building on Nott Street is shown in the foreground. The building behind it on Devine Street is owned by Union College.
Photographer: Marc Schultz

What’s the plan for the old Department of Social Services building on Nott Street?

Short answer: There is none.

The building was supposed to be demolished by Rotterdam developer the Galesi Group using $500,000 of a $3 million U.S. Housing and Urban Development loan granted to the city.

Galesi was then going to build a 14-unit apartment building on the 1.45-acre site, according to the 2014 contract between the city and HUD for federal funding.

But the city is looking to reallocate the HUD funding to another project, possibly the planned Hillside View Apartments by Community Builders on Craig Street in the Hamilton Hill neighborhood.

Why the change in plans? Local officials say Union College is to blame.

“We had a couple of meetings with Union College because they asked to be updated on projects around the campus,” said Ray Gillen, chairman of the Schenectady County Metroplex Development Authority. “We talked about our plans for [the former DSS building]. Union expressed some concerns about the project.”

Mayor Gary McCarthy said he was shocked and offended to hear what Union’s concerns were.

“They expressed that they did not want poor people there and did not want those people there,” McCarthy said.

In response Union said in a prepared statement, “We are disappointed the mayor chose to mischaracterize what was discussed.”

McCarthy said Galesi’s plans for DSS would have included affordable housing with one person making an average of $49,000 a year and two people at a total of about $52,000 a year.

“They are wages that Ellis Medicine pays and Union College pays at that level,” he said. “It would complement the development of that neighborhood.”

McCarthy described Union as a “negative participant” and that he’s disappointed in their overall performance.

“They said they wanted to work with the city and help and then they turned around and stiffed this deal,” he said. “I was not part of the discussions after that. I refused to negotiate.”

Gillen said Union considered purchasing the property, which is located near the campus, from Galesi. The move would have allowed the city to use the $500,000 for other neighborhood projects, he said.

Schenectady architect Re4orm Architecture designed a rendering of a rehabilitated DSS building for Union. The price tag for the project would have totaled about $650,000, Gillen said.

“We asked them to develop it with a developer to pay taxes or a PILOT agreement and looked at a number of different uses,” Gillen said. “We went back and forth with them on a number of plans and in the end they chose not to move forward with that building.”

Union said they worked with the city, county and Galesi for more than a year to find the best possible use for the site. The college estimated the potential cost at more than $1 million.

“There are significant issues that need to be addressed regarding the site, including asbestos removal and parking,” Union said in the statement. “We have explored a number of options and unfortunately could not find a suitable or cost-effective one that meets our goal.”

Union said its goal for the site was a development that would provide culture, art and other educational opportunities.

Union decided not to pursue plans for DSS last month, Gillen said. He added that Union was not bound to purchase and rehab the building.

“After lengthy discussions, Union decided not to move forward with the project at that location. Their focus seems to be on this new science center instead as a higher priority,” he said referring to the Peter Irving Wold Center. “That was disappointing.”

The decision came around the same time Mayor Gary McCarthy sent a letter to Union President Stephen Ainlay asking for tax payments for the college’s off-campus properties and payments for the cost of city police, fire and paramedic services.

When asked if the discussions regarding the DSS building prompted the letter, McCarthy said “yes.”

Ainlay responded to McCarthy’s letter earlier this month saying the private college makes significant economic, cultural and philanthropic contributions to the city. He did not mention the possibility of future payments to the city.

“We remain committed to exploring opportunities that are mutually beneficial to the college and the community and are happy to continue conversations about how we can support the enhancement of the lower Nott Street corridor,” Union said.

McCarthy said Galesi couldn’t move forward with the original plans for the DSS building because Union owns a warehouse building on a property adjacent to DSS.

“We don’t have site control,” he said. “They have taken the building that Ellis owns so we don’t have the footprint.”

Union purchased the building from Ellis Medicine in March 2015 for $80,000, according to Union spokesman Phil Wajda. The warehouse is used by Union for storage.

“That should not be an impediment for any future development on that site,” Wajda said.

Gillen said he is looking for Union to sell the building for the same amount they paid for it.

“It’s a critical part of the site,” Gillen said. “It could block development there. It’s an obstacle to the site.”

Galesi CEO David Buicko declined to comment about the negotiations with Union. He said he is unclear if Galesi would demolish or rehab DSS or sell the building to another developer.

“Right now we still own it and will find a good use for it or find someone else who will find a good use for it,” he said. “It’s not a priority for us and it’s not a big project.”

Gillen said he is exploring alternative options for the DSS building.

“We have some people who are interested in redeveloping it,” he said. “The building has a lot of asbestos that would need to be treated and removed before taking it down or renovating it. It would require some Metroplex assistance because it’s a very difficult building to rehab.”

The city is looking to possibly reallocate the $500,000 to the $20 million Community Builders project, which would include converting the former Horace Mann Elementary School and the former St. Columba’s School and renovating, demolishing and reconstructing nearly a dozen vacant buildings nearby.

Reallocating the funding would require HUD approval and the city would have to hold a public hearing.

The project is awaiting state approval for funding, Gillen said. The city would not formally request to move the $500,000 from HUD until project funding is secured, he said.

“We expect to hear from that soon,” Gillen said. “We’re looking to reprogram that money to make a big impact on another area of the city.”

Galesi purchased the DSS building in 2008 for $200,000 from the Schenectady County Industrial Development Agency. At the time, Galesi was planning commercial office space there. Galesi does not pay taxes on the property.

To sell the building to Galesi, the Schenectady County Legislature had to repeal earlier legislation in 2000 that gave the building to Union. Union had wanted the building for its U-Start business incubator program.

In 2013, the Schenectady City Council recommended demolishing the building. Demolition was estimated at $500,000. Galesi agreed, saying it would be cheaper and easier than rehabilitating it.

During that time, the city was applying for the $3 million HUD loan. The application for the demolition funding required plans for some rebuilding. Galesi wrote a letter committing to an apartment project on the site.

The majority of the HUD loan, $2.5 million, was earmarked to demolish blighted buildings throughout the city. So far 35 have been demolished with four on Summit Avenue left to be torn down.

Reach Gazette reporter Haley Viccaro at 395-3114, [email protected] or @HRViccaro on Twitter.

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