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Council vote puts Amsterdam Chalmers project at risk

Council vote puts Amsterdam Chalmers project at risk

Developer wants extension to get tax credits
Council vote puts Amsterdam Chalmers project at risk
The derelict Chalmers mill complex in Amsterdam is shown in December 2010, several months before its demolition.
Photographer: John Cropley/Gazette Business Editor

AMSTERDAM -- Democrat Fifth Ward Alderman James Martuscello split with the Republicans on the Common Council Tuesday, voting against a purchase option extension needed for the proposed $34 million Chalmers Mill Lofts project. His vote meant the extension was denied.

At a 12:30 p.m. "Emergency meeting" of the Common Council Tuesday, the council considered a resolution to extend the $300,000 purchasing option of DEW Ventures and KCG Development for the vacant tract of land on the city's South Side that overlooks the Mohawk River. 

The resolution would have extended KCG's purchase option for the property until December of 2020. The development company has already received three extensions to its purchase option, and the city has so far agreed to waive all extension fees, instead including them as part of the $300,000 purchase price.

KCG needs $18 million worth of federal low-income housing tax credits to build the 120-unit apartment building and banquet hall it is proposing. In May they announced they had missed out on getting the tax credits during the first round of funding awards from the New York State Division of Housing and Community Renewal. Company officials said they would apply again for a second round in October, and a third round in December, but on Tuesday city officials said the competitive process for the low-income housing tax credits has been pushed into March, thus the need for an additional another extension. 

Martuscello, a Democrat and also deputy mayor, balked at giving another extension, breaking with his support for the project that was advocated by outgoing Republican Mayor Michael Villa. 

City Corporation Counsel William Lorman offered to put Martuscello on the phone with the lawyer for the development firm as a means of persuading him. 

"She's standing by ...," Lorman said.  

"Well I'm sitting here. She could be standing over there if she wanted to," Martuscello said. 

Martuscello said Lorman and KCG Development did not discuss the need for the extension with him prior to the city's Dec. 3 meeting, during which Martuscello tabled the extension resolution when 1st Ward Alderman Patrick Russo, a reliable yes vote for resolution, was absent.

Martuscello said he's done extending options for KCG Development.

"I've been with this project for two years, and with the mayor and with [2nd Ward Alderman Republican] Paul Ochal, we've taken a lot of heat on this. We've been very patient," he said. "We've also waived deadlines, where we've waived $10,000 fees. I'm probably wrong on this, but I've stuck my neck out for three years with these people, $300,000 is the purchase price, and we haven't seen a dime of it." 

Villa and Ochal were defeated for re-election in November, while Martuscello, who was the deciding vote on the city's controversial 2019-20 budget and it's 7 percent tax levy hike, was not opposed by any Republican candidate.

With Martuscello voting against the resolution, and Russo and Ochal voting in favor of it and Democrats 3rd Ward Alderwoman Irene Collins and 4th Ward Alderman Dave Dybas being absent for the meeting, the resolution failed to get a three-vote majority needed for approval.

Lorman said KCG Development has indicated the reason it failed to get the low-income tax credits during the first round involved environmental issues with the property and "political problems." 

In October of 2018 the city waived a $10,000 extension fee for KCG's $30,000 option to purchase the land in exchange for KCG paying the cost of soil remediation on the property.

Villa said extending the purchase option makes sense for the city because KCG Development should know soon if it will get the tax credits. 

"You're going to know by March or April. We haven't had anybody here for 15 years," he said.

Dybas, contacted after the meeting, said he's had unanswered questions about the sale of the property to KCG Development from the beginning. He said he's never been shown the purchase agreement, although he has voted for some of the purchase option extensions. He said it's his inclination to "let the project die," but he said it might be possible for Villa and KCG Development to persuade him if they present him with all of the facts about the project. He said Villa should also hold a town hall meeting so Amsterdam residents can voice their views on the subject before the council considers another extension resolution at its Dec. 17 meeting.

Bill Teator, of DEW Ventures, sent a written message to The Daily Gazette after the meeting. He said he was distressed to discover "a limited vote with two members in favor and only one opposed held at a midday City Council meeting" could derail the work the company has put into the project.

"We are anxiously looking to meet with council members and the mayor-elect to demonstrate our long-term commitment to work in good faith to deliver this project," he wrote. "A shorter nine-month purchase extension could suffice to provide a window for closing project financing. We look forward to a full, favorable council vote being held so all this shared effort to support commercial investment in Amsterdam is not wasted."

Collins said she was called by KCG Development Monday night, but she works during the day and couldn't make the meeting. She said no one from Villa's administration or KCG has talked to her or the council since it was announced they failed to get the tax credits in the first round of funding in May. 

She said Villa needs to communicate with her if he wants her vote to extend the purchase agreement. She said she doesn't understand why the developer is asking for a 13-month extension if all they need is an extension through March or April. 

"The last I heard the project was dead, never heard another word from the developer. No one ever spoke about it again," she said. "There was no conversation on the council since then. If the mayor had it, or the attorney had it, they weren't giving it." 

Mayor-elect Michael Cinquanti, a Democrat, said he would be willing to have a meeting with KCG Development, but he said he was never inclined to support the project. He said he doesn't agree with Villa's assessment that the city can't attract a better project, and he said the Republicans arguing KCG is the best the city can do also argued against the viability of the Mohawk Valley Gateway Overlook pedestrian bridge. 

Cinquanti said he also isn't sure whether KCG really needs an extension. 

"That is unclear to me," he said. "I'd be all for this project, anywhere else in Amsterdam, but on that property. That's our fine property." 

Villa said he disagrees with the "300" vocal people in Amsterdam who believe that upscale apartments costing $17,000 to $24,000 per unit per year could be built in Amsterdam on the Mohawk River. He said he wants the opponents to the Chalmers Mills Lofts apartments to explain why they prefer "a hole in the ground" instead of economic development that could help the city's finances. 

"We are not an affluent community by any means," Villa said. 

Villa said he may attempt to persuade either Dybas or Collins to vote on a reformulated resolution to extend the purchase agreement, but he's not inclined to hold an additional town hall public meeting on the subject because other similar meetings were held at the beginning of the process. 

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