Resolution extending KCG Development contract fails to pass

With only three council members attending the special meeting held yesterday at 12:30pm, a resolution that would have extended the purchase contract between the City of Amsterdam and KCG Development for the former Chalmers Mills property for up to another full year failed to pass. Alderman Jim Martuscello voted against the resolution while Aldermen Pat Russo and Paul Ochal voted for it. With Martuscello’s no vote, a majority vote of the five council members was not reached.

The original purchase contract specified a price for the property of $300,000 and was approved unanimously by the council and signed by Mayor Michael Villa in 2017. The contract outlined an approximately $30 million residential apartment project with 130 income-restricted units as well as a restaurant/banquet hall facility and walking path along the Mohawk River with other outdoor amenities. An initial deposit of $30,000 was paid by KCG into an escrow account. 

The original contract specified a target closing date of October 2018. However, the contract also allowed two 90-day extensions which would require additional $10,000 deposits each. The council approved a five-month extension for KCG in 2018 in order for them to deal with unexpected oil contamination found at the site.

Earlier this year, KCG learned that they were not approved to receive low income housing tax credits from New York State. The credits are required by KCG to sell to investors in order to fund the project. According to Bill Teator of DEW Ventures, a partner with KCG on the project, they are working to submit another application for the credits and expect to hear a decision around June of 2020.

To date, KCG has not paid any additional fees. However, according to Corporation Counsel Bill Lorman, the firm now wants to pay for the past extensions as well as a third extension that would span through the end of December 2020.

During discussion on the issue during Tuesday’s meeting, Villa argued for the extension.

Referring to the city’s financial difficulties, he said, “You’re going into deficit financing with the [NY State] reconstruction board, you’re millions of dollars in debt, and you’re going to say to the public that we don’t need a $30 million project because somehow there’s this vision by some that believe that the housing project as proposed doesn’t fit whatever we are supposed to be as a city.”

Referencing the idea expressed by residents at past public hearings that the city should be looking for a luxury apartment project for the property, he continued, “We are by no means an affluent community. We have people complaining about taxes paying $5,000 to $7,000 a year. And now somehow, somewhere, somebody thinks we can pay $17,000 to $24,000 per year to rent an upscale apartment.”

“You have thousands of employees from Target [Distribution Center] to Dollar General [Distribution Center] to Hill and Markes, to Liberty ARC, St Mary’s Hospital, making minimum wage…What we are saying is that we’d rather keep an empty lot, that’s been empty 13 years instead of providing a banquet facility that the county does not [currently] have, and housing so that people who work here can live here and spend here.”

Addressing the council members, he said, “The process is long. This is not an easy process. So at the eleventh hour, if you want to say ‘no’, that’s your prerogative…What are you saying to other investment groups out there is you’re going to spend two and a half years, invest your money, invest your time, and then at the eleventh hour, the city is going to say ‘see you later.’ That’s the message you are sending.”

Villa also pointed out several factors that make the site difficult for developers to work with such as the environmental issues, dilapidated buildings near the property, and the requirement for the Army Corp of Engineers to access the retaining wall on the bank of the river that spans the north side of the property.

Referring to the last project proposed for the site by developer Uri Kaufman to rehabilitate the former Chalmers Mills building into luxury apartments that was cancelled in 2009 and later demolished in 2011, Villa recalled, “Mayor Ann Thane said it – when they killed the other project – she said this will sit here empty for another ten years. Well here we are.”

According to Lorman, Stacy Kaplowitz, a vice president at KCG Development who has been overseeing the project, was on standby via speakerphone to discuss the project with council members. Martuscello, however, declined to speak with her.

Speaking to Villa and referring to his past votes in favor of the project, Martuscello said, “We’ve been through this together for three years, you and I and I’ve supported it every step of the way.”

“I’ve stuck my neck out, I’ve been patient for three years with these people,” said Martuscello. “This should have been passed a long time ago.”

After the meeting, Teator released a statement in which he wrote “KCG’s Development team has worked in the spirit of goodwill and collaboration with the City of Amsterdam to deliver a dynamic mixed-use $34 million waterfront community redevelopment plan that would generate over $8 million in new local taxes. To hear a limited vote with two members in favor and only one opposed held at a midday city council meeting possibly unwind all of these positive impacts is distressing.”

In the statement, Teator proposed a shorter nine-month extension and called for a full vote by the entire council. The next scheduled regular meeting for the council is December 17.

“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. 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,” he wrote.

Read the full statement here (.pdf)

Mayor-elect Michael Cinquanti, who attended the meeting, said afterwards that he understood the frustration on both sides of the issue. However, he took exception to the idea that Amsterdam could not attract a developer who could build higher-end apartments.

“I think of all the naysayers who almost torpedoed the pedestrian bridge because they thought it wouldn’t help. These same people are now admitting that it was the pedestrian bridge that served as the impetus for the [downtown revitalization initiative grant],” he said.

“I don’t think vision’s a bad thing, I think vision’s a good thing, and I think aspiring is a good thing,” he said.

Cinquanti said that he would be happy to discuss finding a different site in the area for the project.

“I know there’s a need for workforce housing,” he said. “My biggest problem is where they were putting it, and the value of the property in terms of  the vision of Amsterdam for its waterfront – it just didn’t seem to fit there.”

Tim Becker

Tim Becker is the owner of Anthem Websites Inc. which publishes The Compass. He serves as both editor and a writer.