Analysis of Amsterdam’s Chalmers Mill Lofts Project. Part One – Why Not Luxury Housing?

by Daniel T. Weaver

In 2008 the City of Amsterdam made its first serious attempt to redevelop the Chalmers Mill site on the city’s south side. Since then, two city administrations have made at least four major attempts to develop the site during an eight year period. Two guiding principles emerge from interviews, numerous published studies and other documents concerning attempts to redevelop this site. The first principle is—is the proposed project viable or can it succeed. The second principle is—will the proposed project stimulate additional economic growth.

These principles guided the administration of former Mayor Ann Thane and continued to guide Mayor Mike Villa during the first two and a half years of his administration in searching for the right proposal for redeveloping the 3.29 acre site next to Amsterdam’s MVGO bridge. The principles were also emphasized by County Administrator Matt Ossenfort in an interview on Tuesday, July 17. According to Ossenfort, viability by itself is not enough. We also need “the right catalyst project to make a change in the quality of life and create additional economic development.”

The Chalmers Mill closed for good in 1985, according to historian Bob Cudmore. For the next 25 years, the six story concrete building and its smaller brick addition loomed over the south side, a crumbling memorial to Amsterdam’s former industrial might. Talk about redeveloping Chalmers began as early as 1993. The city’s 2003 Comprehensive Plan discussed the possibility of rehabbing the Chalmers Mill to create 50-75 market rate housing units along with a possible 40,000 square foot office and or cultural facility. The first serious attempt to redevelop the site, however, began five months after Ann Thane was sworn in for her first term as mayor in 2008.

In May 2008, the common council authorized the city to sign an agreement with developer Uri Kaufman to purchase the abandoned mill. Kaufman planned to invest 25 million dollars in turning it into luxury apartments which would rent for $1,100 to $1,800 a month. Kaufman commissioned a study of the local rental market. In a series of emails between the former mayor and Kaufman, given to Amsterdam resident Diane Hatzenbuhler via a FOIL request and subsequently published on former Corporation Counsel Bob Going’s blog, it appears the figures the market analyst came up with concerning potential rental rates were not as good as had been hoped. Writing on August 29, 2008 to Kaufman, former Mayor Thane said, “I talked with Nick today and he said you are pressing your marketing guy for better figures.” Kaufman writing to Thane on September 4, 2008 said, “I have authorized the marketing study consultant, Bob Lefenfeld, to go back and do an updated study measuring the effect of a 15 minute drive on rents.” In what appeared to be an attempt to increase the available pool of high end tenants for the Amsterdam project, Kaufman also spoke “with Ray Gillen of Schenectady Metroplex and Jim Cartin of CDTA about getting a commuter rail line in Amsterdam and Schenectady.” Nick Zabawsky, of the Amsterdam Urban Renewal Agency, confirmed in a phone interview that the market study’s “numbers were in the ballpark but not quite what Kaufman wanted.”

By the Fall of 2009, the Common Council determined Kaufman had not met the benchmarks of the agreement he signed with the city. They voted to terminate the agreement, and then overrode Mayor Thane’s veto. The failure of the project, which was controversial from the beginning, meant the demolition of the Chalmers Mill was inevitable.

According to Amsterdam Mayor Michael Villa; Ken Rose, CEO of the Montgomery County Business Development Center, and Montgomery County Executive, Matt Ossenfort, no other luxury housing developers have approached the city or responded to Requests for Proposals (RFPs) since the demise of the Uri Kaufman project. Nick Zabawsky confirmed what Villa, Rose and Ossenfort said.

Zabawsky also said during her administration, “Ann [Thane] talked to BBL and other key developers in the Capital Region” about redeveloping the Chalmers site. “Get back to us in a few years,” they said. “Developers wanted to see more activity in Amsterdam before committing to development,” Zabawsky stated. To many of them Amsterdam was an unknown. Zabawsky also stated that the downturn in the economy and the fact that the MVGO bridge was not yet built hindered development of the site at that time.

According to Rose, Dave Buicko, formerly the COO and now the President and CEO of the Galesi Group, the company that developed the 60 acre Mohawk Harbor site in Schenectady which contains luxurious housing, offices, retail space and a casino, toured the Chalmers site twice with Rose. It was Buicko’s opinion that luxury housing was not viable at the Chalmers site.

Ossenfort said he reached out to state senator, George Amedore, who is also part of Amedore Homes, a company started by his father that builds luxury as well as other kinds of condos and houses. According to Ossenfort, “His (Amedore’s) thoughts were you are starting with the right project. Luxury apartments are too risky.”

In a July 17 interview, Villa said, “There is a big misconception as to what can go on this piece of land.” “You can’t expect people to pay $1200 a month” in rent for luxury apartments. Ossenfort, Rose and Villa all emphasized also that you cannot compare Amsterdam with Schenectady. All three believe that Schenectady’s casino cannot be separated from the luxury apartments built next to it. Without the casino, the rest of the development would not have taken place. Instead of a casino, Amsterdam has Riverlink Park and the MVGO to build around.

Chalmers 02

The mayor and county executive both said they have had informal conversations about the Chalmers Mill Lofts project with Congressman Paul Tonko. Tonko, whose vision and political position were the driving force behind both Riverlink Park and the MVGO, expressed some concerns about the project in a meeting with county officials at City Hall during the Winter. Some of Tonko’s concerns were shared with the community in a letter to the editor of the Recorder on June 23.

Chalmers 03

According to the letter, Tonko had three concerns. Two of his concerns involved design. First, wrote Tonko, “A banquet hall or ballroom facility needs to incorporate an uninterrupted view of the bridge.” Tonko also stated he believed “porches and verandas should be considered an essential feature” of the apartment complex. Tonko also wrote that “the design should include a culinary incubator.”

Of Tonko’s concerns, Villa said they would work in a perfect world but “Amsterdam is not there yet.” “I don’t think we are selling the project short,” he said in reference to building moderate income housing as opposed to luxury housing. Bill Teator of DEW Ventures, a partner of KGC Development, the developers of the Chalmers Mill Lofts project said the developers and Tonko “are planning to meet” to discuss the project.

The mayor and county officials both also mentioned perception as another reason why developers of luxury housing might not want to build on the Chalmers site. “The first thing they see when they exit Route 30 to Bridge Street are rows of junked cars along the river,” explained Mayor Villa. Ken Rose also brought up the subject of aesthetics, and the perception of outsiders looking to develop luxury housing “is it is not an up and coming area.” He also said outsiders have a perception that the south side is not safe, even though it is a safe neighborhood. Nick Zabawsky also mentioned that perceptions of the south side were a problem, and that it needed a more upscale entrance.

But neither the developers nor city and county officials have discounted luxury housing in the future. Bill Teator believes that Chalmers Mill Lofts will be the stepping stone to luxury housing in the future. Some units in the project already meet that designation. According to Teator, “The 26 units reserved for upper income earners at these initial rents ($950/1BR & $1100/2BR) will already help advance the market rental rates in the City. These rents can float on the market rate as high as $1,500 over time as lessees come up for renewal.”

In the Fall of 2012, the Thane administration made another attempt to find a developer for the Chalmers site. Requests for Proposals (RFPs) along with an invitation to lunch with Mayor Thane and officials from AIDA, Amsterdam Urban Renewal Agency and the Montgomery County Business Development Center at La Cucina Di Parillo on Sept 6 were emailed to the county’s established list of developers, some 20-30 companies. According to Rose, About a dozen developers showed up for the luncheon, presentation and optional site tour.

The 21 page invitation to qualified bidders stated, “The City of Amsterdam is issuing this RFP to identify an experienced developer with the proven skills, resources and commitment needed to successfully redevelop, market, and manage a site in a manor (sic) that will act as a catalyst for improvements to its surrounding neighborhood and the entire City of Amsterdam.” Only one developer responded with a proposal. According to Rose, the proposal was for a senior housing complex, which the city did not believe would serve as a catalyst for economic development, so the project was turned down.

Following the 2012 attempt to develop the site, the city continued to focus on developing the Chalmers site. It was discussed in meetings of the steering committee for the Waterfront Heritage Brownfields Opportunity Area. (Disclosure: I was a member of that committee.) Community input was received during public meetings and a 73 page report was published in April 2015. Similarly, the Amsterdam Area-Wide and Montgomery County Opportunity Analysis produced by Vandewalle & Associates in 2015 included the Chalmers site in its 23 page report.

In January 2016, Michael Villa became mayor of the City of Amsterdam and a new phase in the attempt to redevelop the Chalmers site began.

Part two of this article can be found here.

Note: This article first appeared in the Recorder in the Fall of 2018.

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