A Tale of Two Developers

It was interesting to hear about how the Key Bank building is going to be converted into a mixed use building. From the Recorder:

The former KeyBank building at 29 East Main St. is proposed to be renovated by Cranesville Properties, LLC. Joseph Tesiero, property manager, said the company’s plan is to have four upscale one- to two-bedroom apartments per floor from the third to eighth floors. The second floor could be used to develop a townhouse. The first floor, Tesiero said is planned to house a microbrewery that would serve alcohol on-site.

I thought this was interesting in light of the Chalmers fiasco so let’s take a look at the two projects.

Chalmers versus Key Bank Development

Chalmers versus Key Bank Development

Fascinating, isn’t it?

With Chalmers we get all kinds of political pushback; all kinds of uproar about how such a project will never , ever work in Amsterdam; all kinds of absolute certainty from the local media — newspapers and radio– on how it is a boondoggle and how dare a developer take public money to fund private development to — gasp– make profits. And of course, as it is Amsterdam, rumors, innuendos and blatant lies on the project as a whole to discredit it fueled , again, by our local media and amplified by the abundant naysayers and doubters and do-nothings.

Fascinating that none of the Chalmers demolitionists and sages of economic development are not vocally discrediting this effort, especially our local media pundits who pulled no punches in discrediting such development in the city.

Of course, Chalmers required demolition and as there is no higher or no more noble goal than demolishing stuff, I should be hardly surprised that this might be a factor. You know, better to knock something down than take a chance on a $20 to $30 million residential development. But still, the projects overall have very much in common, yet the community responses differ so wildly.

So come on guys and gals, why so mum on Key Bank repurposing?

22 thoughts on “A Tale of Two Developers

    • Nice try Diane, unquestionably public money via Pilot and abatement (from Recorder):

      Installing the system was partially what led him to seek a payment in lieu of taxes agreement (PILOT) with the county for the property as costs increased.

      “When the costs started escalating we were looking for a way to bring it in budget and keep it moving,” said Tesiero.

      Tesiero is also seeking a sales tax abatement for construction materials associated with renovation and rehabilitation of the building, which means state and county sales tax would be reimbursed to the company.

    • Again public money is public money. Nice try but you’re misinformimg, which is par for the course on Chalmers (note witty golf reference)

  1. And the PILOT is not public money, that is a payment in lieu of taxes that he would still make and he is still a private entity versus a public one, I also do not think we will need to worry about the building being rented to Sec 8 which was a big concern with Kaufman’s project. People felt that Kaufman would be more inclined to just rent to make payments since he does not live here or have a truly vested interest such as the Tesiero Family in our community.

    • Diane,

      A Pilot is a tax subsidy from taxpayers to the developer. Unquestionably it is public money, otherwise why would pilots need legislative and Ida involvement? I know this upsets local talking points but facts matter.

      Speaking of facts, section 8 was part of the smear and misinformation campaign on Chalmers. There is no reputable source that documents any plans to turn into section 8.

      I support the key bank effort and the pilot. You may want to double check the intown versus outside developers given Woodrow Wilson. Looks way better now with outside money.

      • PILOT: Payment in Lieu of Taxes. The former Highland Holland Gardens has a PILOT. They make a payment in lieu of taxes and it goes up for 10 years. It means the city does not get the whole amount until 10 years from the start of the agreement.

        WW does look awesome, they did a great job. That was all planned out by the new owners.

        As for the Sec 8 comment, I was there the night the issue was discussed. He admitted that their studies did not support the high end apartments and lower rents would be accepted as needed. He did not say he would not take them.

      • Yes, you are correct, but he was looking for and needing every grant available to make the project work. He even applied for Historic Status without council approval to get more funds. He may have been private, but he was using other people’s money………..not his own. That is what I meant by public, sorry about that.

  2. “People felt Kaufman would be more inclined to just rent to make payments since he does not live here or have a truly vested interests such as the Tesiero Family…”

    Whiskey Tango Foxtrot?! It would be against his own business interest for Mr. Kaufman to welcome tenants unable to pay rent–which wouldn’t happen anyway despite your section 8-welfare fear mongering. It simply does not make him any money nor provide him the necessary capital to invest in his next project. So stop your arm-chair CPA analysis unless you can actually come back with a coherent argument rooted in fact. It’s so distressing you get a vote on financial and business matters because you have ZERO business acumen about you.

    The creation of downtown luxury living is on the rise across every developing community (and yes, I would include the Chalmers-site loop by virtue of the Mohawk Valley Gateway Overlook to be an extension of Downtown). I, for one, would have been the first to buy-in to a luxury apartment/condo in my hometown. Instead, I ended up investing in a development project in Albany’s Sheridan Hollow neighborhood on which a dilapidated fire house once stood. Prior to 2010, once considered a “poor neighborhood”, the community investment by a developer with tax-abatements from the city (public monies) gave rise to a spur of restaurants, other apartments/loft in adjacent properties, and the steadying of community revival.

    BTW, that project had its share of detractors just like you who decried the developer’s abilities to deliver because “no one would pay good money to live there”. Marc Pacquin had that building filled before the hard-hat zone restrictions on move-in were even lifted. In fact, there was a bidding war for my unit! Thank God Albany’s common council didn’t listen to ill-informed misanthropes like you and instead chose to embrace development, investment and hope in rebuilding an economically devastated neighborhood.

    P.S. To provide you a comp., a unit in an adjacent bldg. originally built and bought by the inaugural tenant for $300,000 just sold for $850,000. That’s how much the market value soared based on one man’s faith in the neighborhood.

    P.P.S. Have you taken a look at the condition of Tesiero-owned buildings in the city? I’m no structural engineer, nor do I profess to be one, but I wouldn’t park my car in the garage of the Riverfront Ctr, much less enter the building.

    P.P.P.S. How much does the Tesiero family contribute to members of the Council’s campaigns, or in some instances, their salary? That’s why no grumbling exists.

    • Thom Georgia,

      I would not know about the campaign contributions, other than the mayor’s constantly berating him, so I assume she is not on his donation list. There were too many ifs with the Chalmers Project and when “his own studies” showed he would not be able to sell as needed, that is when he said he would rent as needed. I am glad that your investment has soared in ALB, but the markets are way too different……..you are comparing apples and oranges. There is a difference between fear mongering and common sense, and the people of the south side expressed their common sense feelings, like it or not. They did not want that building there and it had already been scheduled for demo prior to the election of Mayor Thane. I dare say, that if she had not tried shoving it down people’s throats and calling the council members names and such, along with the south side residents she might not be so disliked now. With those actions, she cemented her dislike for the cc’s and has failed to work with any of them in 8 years.

  3. “The City should be bending over backward to accommodate [Tesiero] because he’s the only one willing to invest money here… God bless him!” – caller on WCSS 10/12/15.

  4. Where you’re missing the boat on this is the track record of the developers involved … If you remember the reporting I did way back when the Chalmers fiasco started (as well as my blogging), Uri Kaufman will only do what you pay him to do (with public money) and that was proven to be correct both in Amsterdam and elsewhere … Love him or hate him, Tesiero has done a lot to keep the city (especially downtown) more vibrant than it could have become … If Tesiero had taken on Chalmers, I would have been a little less pessimistic, just as I would be more pessimistic if Kaufman were to propose the Key Bank project … Not to say I think Tesiero’s plan is a good one, but I trust his motivation more than I trusted Kaufman’s.

    • Right, Kaufman has no track record on high end development: http://therealdeal.com/blog/2015/09/25/stone-street-buys-union-square-rental-building-for-22m/

      Jeffrey Kaye’s Stone Street Properties is following its acquisition of two Gramercy Park rental buildings with the $21.5 million purchase of another rental property, at 16 East 18th Street near Union Square. Stone Street bought the 10-story building, located between Fifth Avenue and Broadway, from developer Uri Kaufman’s Ariel Associates. The property spans roughly 19,000 square feet and features eight residential units, as well as one commercial unit occupied by sportswear retailer Paragon. – See more at: http://therealdeal.com/blog/2015/09/25/stone-street-buys-union-square-rental-building-for-22m/#sthash.SpFaKmwf.dpuf

      Kaufman has in aggregate likely done $100 to $200 million in development deals.

      As I pointed out, both developers are using public money so why such outrage over Kaufman versus Tesiero? They both use public funds to maximize the viability and profitability of the projects for themselves.

      You don’t have to be on a boat to see that Chalmers is a parking lot. How’s that working out for the city in terms of economic growth and investment?

      • Flip, I highly respect you as a blogger, and you more often than not hit the nail squarely on the head. Chalmers is one area where I disagree, and there is evidence that project would not have worked based on the proposal itself.
        There are two issues you seem to miss each time.
        1. Kaufman’s own market study concluded that, at best, it would be a stretch that his specific plans for this particular project would have ever worked in Amsterdam. It’s not an independent study or opposition research, it was his own study. Which most likely leads to …
        2. He couldn’t secure the financing necessary to get the project off the ground. Therefore, he failed to meet the benchmarks set forth in his purchase agreement with the city of Amsterdam. No bank would touch it.

        I never thought the idea of turning the building into apartments was a bad one. It was this plan specifically. In fact, several supporters of the idea also expressed doubts, publicly and privately, that Kaufman’s plan would work. I also think the right plan for upscale apartments in Amsterdam could fly. Again, it’s this specific project, not his track record in general, although us Broadalbinites are pretty pissed about the former mill there, where he basically stripped the property of valuable material and then walked away. That incident was documented with pictures and words.

        I don’t know enough about the Key Bank plans to comment on those, but there have been several “plans” kicked up for that property over the years. I believe them when I actually see one start to progress.

  5. There were other issues taken into consideration. He owned several properties that he had done nothing with……..in addition he bought the Broadalbin mill and then started stripping it w/o any type of permit. Subsequently he turned it over to his family’s not for profit in Texas. At the moment, I cannot recall if the building is still standing or it burned in Broadalbin. He also had more property that was sitting idle around NY State and LI and I think people were concerned that would happen here.

    • Diane, seriously, you need to start thinking before commenting.

      The Broadalbin building is still standing. It did not burn to the ground. There was a small fire there several years ago, but it was quickly put out and it was contained to one room that building. The Kaufmans don’t even own it any more.

      This is how stupid rumors start. Stop it.

      • Charlie, I did state I could not recall what condition it was in, standing or otherwise. And yes the transfer was to other members of his family in Texas with some Jewish school or foundation. I did read about it when it happened. Ck your tax rolls……unless of course they sold it to someone else

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