ROTTERDAM — When small businesses quickly snapped up the Galesi Group’s flexible space at Island Park in Albany County, Dave Buiko saw the writing on the wall.

The company’s chief operating officer said the market seemed rife with light-industrial tenants searching for space to locate offices, a showroom and storage. In response to this demand, Galesi transformed the cavernous Building 3 in the Rotterdam Corporate Park into what state and local officials are calling a small business hub.

Using $2 million in state funding from a Restore NY grant, Galesi transformed the 270,000-square-foot building in the mammoth complex to accommodate up to two-dozen small to mid-sized businesses. Buiko said the project came after the park received multiple requests for space smaller than 15,000 square feet.

“It really is designed to serve an underserved market,” he remarked during a news conference inside one of the newly created spaces.

In addition to the state funding, Galesi invested $1 million of its own. The project also benefited from a $100,000 industrial redevelopment grant awarded through National Grid.

Building 3 is among 14 that served the former Army depot during World War I and World War II. Like many of the buildings, the sprawling brick structure was once serviced by rail lines and had a configuration unable to accommodate tractor-trailers.

But with state funding, Galesi was able to demolish the old concrete rail loading docks and install diagonal bays that can receive 53-foot-long trailers. In addition, the company had all of the exterior utilities placed underground, allowing the utility poles to be removed and providing greater access for trucks.

Buiko said the state funding allowed Galesi to complete the project while keeping the cost of renting space affordable. Absent this funding, he said the renovation would have made rents at the building cost-prohibitive.

State Assembly Minority Leader James Tedisco credited an ongoing cooperation between state, county and local agencies for the success of the project. He said this partnership should serve as a microcosm for the effort to cultivate business across the state.

“I know it looks empty here,” he said, looking around the newly created 11,000-square-foot space, “but I think you’ll see a fair amount of businesses that are going to want to come here.”