AMSTERDAM -- The Common Council voted on Thursday to give a five-month extension KCG Development's option to purchase the former Chalmers Knitting Mill property from the city due to the discovery of 15-foot-deep oil contamination.
Amsterdam in October 2017 signed a purchase option contract with KCG Development to sell the 3.3-acre property owned by the city for $300,000. KCG was required to deposit $30,000 in escrow as part of the option, which without the extension would run out at the end of October. KCG, along with DEW Ventures of Saratoga Springs, plans to build a $30 million, 130-unit apartment building on the site.
Mayor Michael Villa said engineering firm C.T. Male told city officials in June that it had discovered an "open spill" contamination at the site, which goes 15 feet deep into the soil. He said KCG has agreed to pay for the soil remediation, which he believes can be accomplished before the end of the purchase option extension March 31. Villa said KCG did have a $10,000 option extension fee in its original contract with the city, but the council has decided to waive the fee.
The did so, Villa said, "because of the hard costs that they are incurring now to remediate the site. They've taken it on their own to remediate the site at no cost to the city," Villa said. "When you're dealing with a brownfield, it's not uncommon to run into these issue. We thought it was fair given the developments that have occurred that they be given time to remediate the site. It felt fair to do this."
Deputy Mayor James Martuscello, who represents the 5th Ward, said the remediation cost will not be deducted from the purchase price, which will remain $300,000.
Villa said the oil contamination has been reported to state Department of Environmental Conservation, so KCG is waiting to hear about what the remediation procedures will need to be and how to monitor it.
Villa said KCG also will be applying for payment in lieu of taxes agreement from the Montgomery County Industrial Development Agency in November. He said KCG is waiting until the outcome of the IDA board's decision to grant a PILOT – which typically includes a reduced tax rate for a defined number of years – before obtaining its financing for the project.
KCG development has planned to use low-income housing tax credits, which developers can trade in exchange for private sector financing, in order to fund the construction of the apartment building. To qualify for the credits the project must guarantee about 80 percent of the units in the building would be priced to be affordable for people making 50 percent to 60 percent of the area median income level, defined as $58,000.
Rent prices for the affordable housing units would range from $650 per month for a one-bedroom to $750 for a two-bedroom apartment. The rest of the units would be based on a market rate that will start at $1,100 and fluctuate from there.