AMSTERDAM -- KCG Development said it will exercise its purchase option for the 3.3-acre site of the former Chalmers Knitting Mill, paying the city a total of $300,000, to build an apartment building and banquet hall.
The purchase announcement was released late Monday with the transfer of funds expected to take place Tuesday.
“This is a culmination of efforts to show our own citizens and the region that Amsterdam is on the right path,” said outgoing Mayor Michael Villa, whose administration worked for years to finalize the sale of the property.
The purchase comes after the Common Council on Dec. 17 voted 3-1 against granting another purchase option extension to the developers. The proposed project -- called the Chalmers Mills Lofts -- could be the largest in the city since the construction of the Amsterdam Mall in the late 1970s.
KCG Development and its local development partner, DEW Ventures of Saratoga Springs, have had a purchase agreement with the city since 2017, but until now have used a series of purchase option extensions to maintain control of the parcel as the developers applied for $18 million worth of federal affordable housing tax credits. The developers said the tax credits are needed to help finance the proposed $34 million, 120-unit apartment complex and banquet hall.
They were rejected in their first application for the tax credits in May by the state Department of Homes & Community Renewal, which distributes the credits through a competitive process. The developers said they were more hopeful of receiving the credits during a second round expected to be announced in March.
DEW Ventures managing partner Bill Teator said now that KCG Development owns the parcel it will have the ability to apply for the tax credits as many times as necessary and pursue other funding.
Just prior to Christmas, Teator said the developers might seek another vote for a purchase extension with the new Common Council in January. Two incoming members, 2nd Ward Democrat David Gomula and 4th Ward Republican Stephen Gomula have both indicated support for the project, but the pathway to the needed 3-vote majority would have been uncertain.
Past supporters of the project -- Democrats Irene Collins, 3rd Ward, and James Martuscello, 5th Ward and deputy mayor -- both voted against another purchase extension at the Dec. 17 meeting. First Ward Republican Alderman Patrick Russo was absent from the meeting, but has stated he would have voted against it had he been there. Mayor-elect Michael Cinquanti has also made statements saying he doesn't favor the project as envisioned by the developers, preferring an owner-occupied model for developing the riverfront property.
Teator said RJ Pasquesi, president and founder of KCG Development, made the decision to purchase the property "over the last several days" in part due to statements made by outgoing 4th Ward Alderman Dave Dybas. Teator credited members of the council like Dybas for applying "tough love" to motivate the developers to pay for the property.
"Alderman Dybas more or less challenged us and said 'If you believe in the project that much, why don't you just exercise the right under your contract', so that's what happened," Teator said. "KCG owns it, as of [Tuesday]."
Dybas, who was defeated by Stephen Gomula in the November election, laughed when he heard the developers took his advice.
"That might get me my job back," he quipped.
Dybas said he believes KCG Development will have a much stronger application for the federal tax credits now that it actually owns the property. He said the city will benefit from getting the $300,000 and having the property put back on the tax rolls. He said the worst case scenario would be if KCG can't develop the parcel, in which case it would likely return to the city through foreclosure. He said he thinks the project will likely be a great success for all parties.
"It's a win, win for everybody," he said.
Teator said he is unsure how much the annual taxes will be on the vacant parcel, indicating he doesn't think it will be assessed at the value of the $300,000 purchase price. He said the apartment project has a PILOT tax agreement, but that only kicks in when the building is built.
The Chalmers project has been approved for a 30-year tax Payment in Lieu of Taxes agreement by the city, Montgomery County and the Greater Amsterdam School District. The PILOT agreement would pay the three taxing jurisdictions a combined $2.97 million over the course of the PILOT.
The PILOT collects $30,655 in the first year, with about 44 percent going to the school district and the rest split between the city and county, and then increases to $59,963 in the second year. It would then increase gradually every year until ending at approximately $149,912 at the end of the 30-year deal.
City officials estimate the total tax base impact of the project will be about $8 million over 30 years, with about $5.3 million coming from the estimated $186,000 in annual sales tax generated by the 300-person restaurant and banquet facility to be run by the Lanzi restaurant family.
Luigi Lanzi said in a news release that he is glad the project is moving forward.
“We are thrilled our friends at KCG purchased the site and our family is excited to work alongside them to feature good food, family and the history of the city, Erie Canal and Mohawk River just a block from where my grandfather, Lorenzo, settled upon arriving to the country from Italy,” he said.
City officials have credited KCG Development and its apartment project as being one of the cornerstones of the city's successful application for the New York state $10 million Downtown Revitalization Initiative. One of the projects funded by the DRI is a $312,785 grant toward a $1 million project for public improvements to encourage pedestrian activity along Bridge Street. Envisioned are the creation of a boardwalk, improvements to the sidewalks, streetscape, and civic spaces adjacent to the proposed Chalmers Mills Lofts apartment project.
KCG Development President RJ Pasquesi issued a statement explaining his company's long-term commitment to operate in Amsterdam.
"With nearly $600,000 invested in the project, our team has taken care to ensure Chalmers Mill Lofts aligns with and advances the city’s award-winning DRI vision," he said. "We are excited to offer high-quality, modern housing in a vibrant, mixed-use setting for professionals and empty nesters on the waterfront in Amsterdam. The public boardwalk, event hall
and restaurant will be a new destination and offer unique jobs in hospitality, food service, property management and maintenance. We want Chalmers Mill Lofts to help spark additional investment and economic growth in the city and throughout the Mohawk Valley region.”