In an email sent to common council members and local media on Sunday, Community and Economic Development Director Amanda Bearcroft urged council members to approve an extension to KCG Development’s purchase contract on the former Chalmers Mills property.
She also announced that KCG has agreed to include small Juliet balconies in the design for the proposed 120-unit income-restricted residential apartment building and is studying the possibility of adding in-unit washer and dryer hookups. Balconies and hookups have been among the most requested features to be added by both city officials and residents.
A resolution to extend the contract through the end of 2020 failed to pass at a special meeting held last Tuesday. Another resolution to extend the contract, this time through October 31, is included on tonight’s regular meeting agenda.
According to Bill Teator of DEW Ventures, a partner with KCG in the project, the extension is needed to allow more time to secure low income housing credits from the state which are necessary to fund the project. Teator said their first application was denied earlier in the year due to issues with their market analysis, as well as a hangup with a $1 million grant awarded to the city for the project, which has not yet received an award letter.
According to Teator, Bearcroft, and Mayor Michael Villa, the New York State Division of Housing and Community Renewal (HCR), the government entity which awards the credits, has expressed positive support for the project. The project also enjoys support from Montgomery County leaders such as County Executive Matt Ossenfort and MCBDC CEO Ken Rose.
Underlining HCR’s support, Bearcroft wrote:
HCR leadership has indicated to the mayor and others a strong backing of their efforts to resubmit the project and even have been advocating on the city’s and the developers’ behalf by communicating their strong interest in seeing the project succeed to other state agencies.
In her email Bearcroft warned that the city’s reputation among the property developers in the area is already suffering due to last Tuesday’s decision.
Referring to the past effort by developer Uri Kaufmann back in 2007-2009 to turn the former Chalmers Mills building in a luxury apartment complex before it’s demolition in 2011, she wrote:
Prior to [the KCG] proposal coming to the city, the site has sat vacant for over 10 years. This after a proven market-rate developer spent years trying to leverage historic tax credits to secure the then standing but abandoned Chalmers Knitting mills to redevelop. That developer couldn’t close financing even with historic tax credits when trying to raise capital based on Amsterdam market rental rates. That should tell us something about the ability to raise risk capital to invest in Amsterdam at this scale. Following this failed project, we had a period of silence related to this site despite county and city best efforts to attract notable developers to the site.
Bearcroft wrote that the project proposed by KCG Development, which not only includes the income-restricted apartment building but a restaurant/banquet hall facility and a public boardwalk along the bank of the Mohawk River, “checks all the boxes of what a catalyst project looks like for the city.”
With the strain caused by recent action counter to this project, and the newspaper articles circulating from Tuesday’s meeting, I am beginning to hear push back again. This time from the developers and contractors that weren’t scared off by the last failed re-development of the mill. Developers that I am trying to work on other sites within the city have begun to drop out today, telling me that it is not worth their time to focus efforts on the City of Amsterdam since we clearly don’t want development to happen. Nor do they trust to work with the city when they can pull out at any time with no alternatives.
According to Bearcroft, not extending the contract will also have an impact on the various state agencies working with the city to execute the $10 million Downtown Revitalization Grant which was recently awarded to the city.
The City walking away from a productive partnership and a project that the state is actively funding will send a chilling message to our regional economic development council peers and the state not to take seriously any future projects that the city champions.
If a team like KCG, who have been available, supportive of our efforts for years and committed to a being a long-term community member, has its $250k risk investment squandered by a City action to back out of its purchase agreement at the eleventh hour, it will put up a clear sign that we are not only not open for business, but a high risk to deal with.
In summary, this city council vote next Tuesday to provide a shorter land purchase extension than the one voted on this week is about being a reliable partner to a community development team. But it is now about even more than that; it is a chance to show we are committed to working with serious partners to further the city’s revival and showing that our city remains worthy of continued investment by state agencies and developers. A no vote risks our hard work to revitalize the city in recent years being all for naught.