AMSTERDAM -- The developers of a proposed 120-unit apartment building in the city are hoping a new year and a new Common Council might yield an old result: continued support for their proposed $34 million project.
"There's still a lot of support in the community for this," DEW Ventures managing partner Bill Teator. "Yes, there's clearly a loud group of folks that seem to be opposed, then there's a group that seems to have changed their view, and there are a couple of folks who are coming onto the council who we believe are inclined to support it." The other developer involved in the project is KCG Development.
The developers have stated they need $18 million in federal housing tax credits issued through the state Department of Homes & Community Renewal in order to finance the project, but were rejected in their application in May.
Teator said the state agency is planning another round of tax credit awards in March, but the Chalmers Mill Lofts apartment project will only be considered in its second application if the developers can demonstrate they still have the right to purchase the land, which is owned by the city.
On Dec. 17 the Common Council reversed course after several years of unanimous support for the proposal, rejecting by a 3-1 vote Mayor Michael Villa's resolution to extend the developer's option to purchase the 3.3 acre-site of the former Chalmers Knitting Mill for $300,000. The mill was torn down nearly a decade ago. No property taxes have been paid on the property since 1985.
The developers have made a $30,000 deposit for the purchase option, currently held in escrow, plus several thousand dollars more in extension fees. They say they have spent over $300,000 on preliminary work for the project.
Teator said he can't comment on whether KCG and DEW, the two developers, might exercise their right to buy the land by the end of the month, but said it was not uncommon that developers proposing to build on high-risk brownfield sites would prefer to secure purchase options until financing for the construction and closing costs is secured. He said he intends to keep working on the project into 2020.
"We've invested so much in this project we feel it's worth continuing to have this conversation," he said.
Democratic council members Irene Collins, 3rd Ward, Dave Dybas, 4th Ward, and James Martuscello, 5th Ward and deputy mayor, all voted against a proposal to extend the developers' purchase option another eight months.
Martuscello, who represents the ward where the apartment building would be built, dropped his support for the project during a Dec. 10 emergency meeting, signaling the collapse of the needed 3-vote council majority to extend the purchase option.
Martuscello has grown frustrated with KCG Development, saying they have not paid $10,000 in extension fees for their purchase option and failed in the final months of 2019 to communicate to the council their strategy for obtaining the tax credits in a second round.
Dybas, a departing alderman who was defeated in the November elections, was critical of the 30-year payment in lieu of taxes agreement approved the city, Montgomery County and Greater Amsterdam School District. He said the building owners will pay about $600,000 in property taxes over the course of the PILOT, which he said was difficult to explain to city residents for a project so large.
Collins, who had publicly praised the project in the past, voted no without comment at the meeting.
Second Ward Alderman Republican Paul Ochal, also defeated in November, maintained his support, saying he wants to see something built on the site before he dies. First Ward Alderman Republican Patrick Russo was absent.
Russo voted yes to extend the purchase option at the Dec. 10 meeting, but issued a statement to The Daily Gazette after the Dec. 17 meeting saying he would have voted no had he been there. He said he's dropped his support for the project after people in the community told him they were against it; he doesn't perceive state and federal legislators helping the project; and because the project would be in the 5th Ward and Martuscello is now against it.
"I would expect my colleagues to support me if there was a project in the 1st Ward that was not wanted," Russo said.
The two aldermen-elect set to take office in January, David Gomula, D-2nd Ward, and Stephen Gomula, R-4th Ward, have both indicated likely support for a purchase extension. The two Gomulas are not related.
"I'm inclined to vote yes, but I'm not completely sure yet," David Gomula said.
Stephen Gomula spoke during the public comment portion of the Dec. 17 meeting and said some of the opposition to the project appears to be an anti-working class mentality.
The affordable housing tax credits sought by KCG and DEW require the proposed building to contain 80 percent rent-reduced apartments. The plan calls for marking down what would otherwise be $1,500 per month rental units to prices in the range of $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 would start at $1,100 and fluctuate from there.
Teator said the only way to finance large-scale construction for a site as large as the Chalmers Mill Lofts apartment building for a housing market like Amsterdam's is through the federal tax credit program. He said one reason his company's first application for the tax credits was rejected was state officials were skeptical the incomes in Amsterdam are high-enough to sustain the building's proposed rents. He said his project will prove the existence of the "middle of the market."
KCG Development and DEW Ventures say they have spent $301,286 on the project so far, including: $110,481 for design; $38,000 for a deposit payment and extension payments; $72,158 for Environmental and Engineering costs including a surface soil remediation; $21,150 for a rental market study; $51,451 for financing applications; and $8,046 for city and county permit fees.
Stephen Gomula said he and many other full-time professionals would qualify to live in the rent-reduced units, and he believes opposition to the project is rooted in elitism.
Mayor-elect Michael Cinquanti said during the Dec. 17 meeting that he doesn't support "workforce housing" going on the Chalmers lot because he believes the property, located near the banks of the Mohawk River, has the most potential for offering the city a better deal. Martuscello also said he believes a private developer can be located who will provide the city with a better deal for the property.
Another aspect of the project is a proposed 300-person capacity banquet facility to be operated by the Lanzi restaurant family. Economic development officials have estimated the facility would fill a need in Montgomery County and generate $186,000 in sales tax per year.
Luigi Lanzi said there's no truth to any rumors suggesting his family's company is no longer interested in the Chalmers project.
"It's a great project. We're all-in," Lanzi said.
Teator said he's confident that difficulties with construction on the parcel — including the need to built one foot off the ground due to state Department of Environmental Conservation brownfield requirements — will deter other commercial developers, and his company's proposal will remain the most viable and "transformative" option for the land.