Chalmers & Bridge Street Public Session

I attended the public session on Chalmers’ tonight. What follows are some notes and observations along with some commentary.
Overall, the City has two distinct projects underway: the Waterfront Heritage Area (WHA) and the Chalmers project. The WHA project encompasses Riverlink phase 2, Bridge Street reconstruction, Downtown Revitalization, Via Ponte, Pedestrian Bridge and possible relocation of the train station. Chalmers refers to the rehabilitation of Chalmers as proposed by Uri Kaufman or the demolition of Chalmers.
I have to say that I struggled at the beginning of the meeting to digest the various components of the WHA project. The scope of the project is quite large involving multiple stakeholders, multiple funding sources and multiple projects each separate but related in the sense of falling under the WHA umbrella. I think the packaging and marketing of the WHA initiative need some refinement to make it more readily grasped by the public.
To make explaining simpler, I’ll tackle each piece of the WHA separately with some key points from the meeting. Here goes:
Pedestrian Bridge: the funding for this project shows positive signs but this project does not expect to have a signed contract from the state until the summer. This project has no design and no plan in place and is purely in the conceptual phase. This caused some consternation from some members of the public who were seeking the physical start and end points from the South Side to the North Side but as it is strictly conceptual, no answer can be provided as to the physical structure or location of the bridge. The design process alone for the bridge will take 24 months from date of contract signing; as no design is available, no discussion of construction followed naturally. At best, a bridge would exist in 2012 assuming 24 months design  + 12 months construction.
Riverlink Phase 2: funding in place within a few months.
Bridge Street Reconstruction: a 2 phase project with first phase involving infrastructure (road to curbs) and a second phase involving street lights, sidewalks and ‘greenery’. Based upon some questions, the belief that the second phase would involve redoing part of the first phase work is not true. Currently finalizing design with DOT which is expected in 2-6 months. Apparently some ofthe twists and turns with the project involve navigating the funding streams for these projects.
Chalmers
The key driver for the viability of the Chalmers project depends upon the environmental investigation and assessment of the site. According to Saratoga Associates, a key part of this is termed a “Focus Site Investigation” (FSI). According to Saratoga Associates, the expectation is that the remediation will likely be moderate given current findings at the site. However as Chalmers is now slated for rehab versus demolition the environmental standards are higher as the FSI must demonstrate that no contaminants can enter the air stream within the residential footprint of the building.
Saratoga Associates confirmed presence of lead, asbestos, PCB and underground tanks at the site. On the spectrum of remediation, these are quite remediable.
The FSI becomes crucial on several levels. First, the property cannot be transferred  unless the remediation is complete. Second, the city under terms of its grants must be the entity performing the remediation so until the FSI is complete and the remediation is complete, Uri Kaufman cannot proceed. Finally, if the FSI were to surprisingly present severe contamination and remediation costs, the FSI may make the financial case impossible for redevelopment as the costs would be excessive. Again this does not seem likely but it is still a possibility. Finally finally, the granting of the option does not put state moneys at risk as the grant money does not have a sunset date although it is not clear if it is a grant in perpetuity either.
The plan for Chalmers includes 180 apartment units to be rented at $1100-$1800 per month for a period of 5 possibly 7 years with each unit approximately 1000 to 1800 square feet. At the end of the 5 to 7 year term, Kaufman would convert from rental units to condo units. It is the conversion to condos that gives Kaufman the investor an exit strategy and the financial return for the project.
The structure of the deal as rental to condo allows Kaufman to leverage the HUD Section 221 d(4) financing. (Please google to find out more). This HUD  section is not Section 8 and are, from my research, distinct programs. As an investor, Kaufman gains nothing , or more aptly loses a lot, by going toward a Section 8 route.
As to a Chalmers timeline, Kaufman projects starting construction in 18 months, completing construction 14 months thereafter. As a baseline, Harmony Mills in Cohoes is entering Kaufman’s 9th year.
In terms of tax revenues, the picture is not clear for the first 5 years of the project as Chalmers would be subject to several Empire Zone programs for reduced assessment and tax rates. However once converted to condos the assessments would be full value.
Commentary
The meeting should erase two memes concerning Chalmers: no one on the South Side supports redevelopment and the South Side should exclusively decide the fate of Chalmers.
First, the “no one on the South Side supports Chalmers” meme. Just because you repeat something on the radio over and over does not make it true. I think the highlight of the night was Chet Watroba conflating the C&D landfill with the Chalmers project and then expressing the meme of the utter lack of support for Chalmers from the South Side. Immediately a number of hands from South Side residents supporting Chalmers rose to the air thereby rendering Mr. Watroba’s meme moot and a blatant falsehood.  Mayor Thane then challenged the veracity of Mr. Watroba’s statement given the immediate rejection of his statement.  Recognizing that he’d been totally pwned Mr. Watroba replied (paraphrasing) that people raised their hands just to be nice to Mayor Thane as she’s just a one-term mayor anyway.  Nice. When you have no cogent argument or analysis, you just take the cheap shot (and you get a radio show). Well done. I will say most of the audience winced and groaned at such pettiness.
The second meme would have us accept that no one but the South Side should have a say in the fate of Chalmers. This is pure rubbish on many levels. It may prove useful as a polarizing strategy but it is indefensible.
I thought the for and against was fairly balanced perhaps with a slight edge to the pro-Chalmers side.
I have to say that I have some cognitive dissonance in trying to understand the anti-Chalmers crowd. I don’t know where knocking Chalmers down gets us in terms of economic growth or development. How does an empty lot move us forward? I heard nothing that monetizes the city by having an empty albeit remediated lot.
I must voice one criticism of an otherwise good presentation from Mr. Kaufman. Mr. Kaufman compared the difficulty of revitalizing demolished sites such as Chalmers to Ground Zero. As someone supporting Chalmers and Mr. Kaufman’s efforts, I found this a poor choice of words and metaphors and cringe inducing.
Finally, I’d like to recognize the strawman strategy on Chalmers which goes something like this: Kaufman knows this project won’t work as high end apartments so it’s a red herring to convert to low income section 8 housing. Or a similar meme is that Kaufman will fold and then HUD will take over and convert to Section 8. Again, the economic incentives for Mr. Kaufman to compromise flipping rentals to high paid condos just so he can fool the city does not stand any critical analysis. I just don’t get it.
Long post and time for Colbert.
Cheers.

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16 Responses

  1. I also attended the meeting last night and from what I witnessed, there were more people wanting to take the building down than have Uri Kaufman develop the site. The meeting was carefully crafted by Mayor Thane who personally chose those that were to ask questions. I respectfully raised my hand on two different occasions only to be struck down both times. More time was allowed those who were pro-Chalmers to add personal commentary instead of asking a question. As soon as someone (chose by Mayor Thane) expressed an opinion against the project they were quickly silenced and ordered to ask their question.
    The original Via Ponte (2004) plan developed by Saratoga Associates was based on the demolition of the Chalmers building in order to provide riverfront access, mixed-use commercial and senior housing as well as shops, restaurants and a cultural center.
    How much has the city had to fork out to Saratoga Associates to re-design their finished plan just to accommodate the possible renovation of an underwear factory? We risk loosing the 1.5 Million in State funding for demolition because the city has backed Uri Kaufman in his bid to have the Chalmers building named a national historic site. Once this is accomplished the law would prevent the building from being raised. If nothing else this must be an ethical violation of the city’s charter.

    • flippinamsterdam says:

      I disagree with your characterization of the commentary as the precedent for expressing pro or con resulted from a specific individual’s lack of decorum at the start of the meeting. As a result, subsequent speakers naturally advocated their viewpoints based upon the first speakers outburst. I cannot speak as to why you were not called but it appeared to me that the protocol was to approach the podium and address the session. I did not see anyone restrict or impede access to the podium.
      I also think Mr. Zabawski unequivocally stated that the state provided money for remediation and demolition (the $1.4M figure) has no expiration or sunset so the short to medium term risk to losing the money seems remote.

  2. James95 says:

    How funny. 1100 to 1800 dollars a month for apartments on the southside of amsterdam, when the mortgages for a fresh new 60 thousand dollar rehab house would only cost 400 a month. Give me a break, I moved to amsterdam from clifton park last year so I didnt have to pay 1100 a month for rent. Seriously, If anyone wants to pay 1100 a month for rent it will be in clifton park or somewhere such that is nice, not the rotting corpse of amsterdam. For 900 a month you can get a nice apartment that actually has good roads, shops, and a decent movie theatre within a 10 minute drive. All Mr. Kaufman is doing is sucking some money out of the government to build some new section 8 housing that will fit right in to the run down mess it is part of. tear that place down and build a nice park on the river and an outlet store strip mall, something that will give people a reason to get off the thruway at exit 25, and actaully think that amsterdam is a nice place instead of a corpse of a once thriving city.

    • flippinamsterdam says:

      First off, we’re at Exit 27.
      Second, an outlet store strip mall?! I guess this nicely complements the failed mall on the other side of the river. Now you can travel the dead malls from one side to the other once the bridge gets built. Also I must have missed the river view lofts available in Clifton Park for $1100 per month. And apparently the people who live in Harmony Mills in Cohoes missed the Clifton Park deal as well.

      • southsider says:

        first of let me tell you the mall was a disaster because it ruined downtown and forced business out and they expected the businesses to go into the mall after they were kicked out and they said no. Two a STRIP MALL is no where near what the mall is this will house a small number of businesses that would be succesfull. This whole section 8 housing idea will make the city look worse than a strip mall. and PLUS maybe we can have a park on the RIGHT SIDE OF AMSTERDAM! I mean riverlink was also a disaster in this city the south side is a GREAT spot for a park right on the river and NO TRAINTRACKS! Amazing how screwed up the city is.

  3. James95 says:

    Check out http://www.mohawkterrace.com/ believe it or not, they do have a nice view of the same muddy river that beautiful amsterdam sits on. And as far as the mall on the other side of the river, tear it down, create waterfront access, and raise the traintracks thruout the city so that the waterfront is accesible. And yes, outlet stores. There are none in the capital region and people love them, look at lake george, springfield mass, or manchester vt. And Amsterdam could become a destination rather then a corpse. Especially with its name and the river. I have a freind who lives in haron mills. It is still only half complete 9 years after the project started. At least its in a decent location.

    • flippinamsterdam says:

      You’re killing me dude…
      Please reconsider the economics of retail development as an engine for growth and the feasibility of tearing down a privately owned complex (the Mall). And Mohawk Terrace is not even close to loft space or the river views as to Chalmers. BTW, Mohawk Terrace is an architectural abomination compared to Chalmers.
      If Chalmers were to fly, the odds of a Barnes and Noble would rise considerably compared to an outlet shop. I’d even buy you a coffee and map of Exit 27 😉

  4. James95 says:

    lol..yes I meant harmony mills and exit 27, I appologize for my poor typing skills and lack of propper spelling. I guess thats why theres no barnes and noble or borders in Amsterdam

  5. needpositivechange says:

    I actually lived in Mohawk Terrace in Clifton Park. It is a dump. I would never recommend this place to anyone. It is a shoe box building – no comparison to what Kaufman is proposing. I have been in the Harmony Mills lofts and they are gorgeous. Old charm, open, big windows..just beautiful. There is so much opportunity in this development. It will be a very sad day if that building is torn down. I live on the South Side and have for my entire life. The building has old charm and it is part of our history.

  6. People have raised the issue of where Mr. Kaufman makes his money if the units cannot be rented at high rental rates. First off under HUD financing the developer is allowed to make a 10% profit on the cost of renovation. Secondly having turned the building into a historical landmark the developer is allowed to get a 20% federal renovation tax credit which he can than sell at about 90 cents on the dollar. Thirdly the developer gets a 20% state historic tax credit which he can sell at 50 cents on the dollar. So if the development runs say $20,000,000 the developer makes $2,000,000 on construction. He gets a $4,000,000 federal tax credit which he sells for $3,600,000 and he gets another $4,000,000 state tax credit which he sells for $2,000,000 making a total of a $7,600,000 profit whether he rents one apartment at the bloted rentals projected. If the project works well that is all the better. But in the meantime he walks away with $7,600,000 just for building the thing.

    • flippinamsterdam says:

      Martin,
      I want to confirm my understanding of your comments on “x cents on the dollar”. Does this mean that tax credits on a building such as Chalmers can be transferred to other parties or projects and is not bound to the specific property submitted? That seems like a huge loophole. Please clarify. Thanks

  7. bryan edgar says:

    I think this is the worst idea the city of amsterdam has ever had for anything in the city. This city should not be spending the money for a foot bridge when we already have one. The chalmers buiding should be torn down, the buyilding is really old and falling down. The idea of brand new type of street lights when we already have street lights is silly and we dont need them. The money that is being used for this project should be used for more importent things such as fixing the roads in amsterdam. We also have other very important things thet the money should be spent on, etc.

    • flippinamsterdam says:

      That is a false choice: the moneys are allocated to specific projects so they cannot be repurposed as you describe. If folks in Amsterdam want to replace their infrastructure, they will have to find specific programs or fund it themselves through a bond and resulting tax increase.

    • Robb says:

      “This city should not be spending the money for a foot bridge when we already have one.”
      -The State is paying for this; not the City.

  1. April 26, 2009

    […] April 26, 2009 Oh Irony Posted by flippinamsterdam under Uncategorized | Tags: amsterdam ny | No Comments  A friend dropped off a copy of the Amsterdam Express yesterday which featured a full page print of my post and subsequent exchange on my post on Chalmers and subsequent exchange with James95 and Jerry Skrocki. If you want to view the post, it is here. […]

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