Schenectady demolition grant comes under fire

Residents oppose giving $500K to Galesi

Monday, July 22, 2013
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— City officials faced persistent criticism from the public Monday for their decision to give a private developer $500,000.

They struggled to defend the decision while also acknowledging that it was something they didn’t want to do.

The money will come from a loan that Schenectady will pay back over the course of the next 20 years.

The City Council had originally considered a gift of $1.3 million, but cut it down to $500,000. The money will be used by Galesi Group to demolish a building it owns, the former Department of Social Services.

City officials have also not asked Galesi to pay taxes on the building. Galesi bought it for $1 two years ago, but the deed was held by the city Industrial Development Agency so that Galesi would not have to take formal ownership, and thus pay taxes.

City Council members said Monday they were uncomfortable with the idea of giving taxpayer funds to a private developer. But they voted 4-2 in favor of the plan a week ago.

Monday was the first chance for residents to publicly complain about the decision, and they were irate.

“That you can’t use some common sense is beyond me,” said resident Harry Brand, after listing in detail the many properties Galesi Group owns and its financial prosperity.

“And you’re giving him $500,000?” he said in disbelief. “I’ll never understand it. You’re spending money like water.”

Resident Joseph Kelleher, a City Council candidate, said the council should never have considered giving money to a wealthy private developer.

He suggested that council members are listening more closely to Galesi than to small business owners.

“Longtime local businesses like Matthew’s Signs on Eastern Avenue can’t get a cover for a city-owned trash receptacle, but we can give half a million to a multimillion-dollar private company, for demolishing their own building which they bought for a dollar,” he said.

Galesi Group wants to build an apartment building on the site, but says it would cost too much money to also demolish the existing building.

Kelleher said that should be Galesi’s problem.

“This is the responsibility of the buyer, who knew full well the condition of the property,” he said.

Galesi bought the building from the county.

Better options

Kelleher wasn’t the only one to suggest better ways for the council to spend money. Brand noted that the council could replace the Council Chamber air conditioners, which often drown out speakers during the council meetings — and could do so for far less than $500,000.

Resident Linda Kelleher added that she had never gotten a “tax break” on her home, which she has owned for more than 30 years.

“Why should he?” she asked. “I hope the voters remember this issue in November.”

Councilwoman Leesa Perazzo defended the decision.

“The city is making an investment to remove blight,” she said.

She also acknowledged some of the residents’ complaints.

“Yes, they did buy it for a dollar. It has not been a financially feasible project, so it was off the tax rolls,” she said.

But she disputed Linda Kelleher’s assumption that Galesi would get a “tax break.” Perazzo said there was no guarantee Galesi would be offered anything beyond the $500,000 grant, although Galesi spokesman Gerald Hennigan said last Monday that he would apply for any tax breaks that are available.

“They don’t know what they are. We don’t know what they are. There might not be any,” Perazzo said.

Mayor Gary McCarthy also defended the decision, which he recommended to the council, by saying the critics had offered no other way to get Galesi to do something with the vacant building.

“I don’t mind discussion and debate,” he said. “But people who just criticize and don’t offer any alternatives, that’s what we had in the past, people who would just leave problems. We’re going to continue to deal with these problems.”

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July 23, 2013
12:43 a.m.
artbarb says...

ha ha look at what your city council is doing to you! They are so brilliant they KNOW EXACTLY WHAT THEY ARE DOING!

All residents will PAY about 1/3 MORE than they should ..

Just open up zillow, put in your zip code .. see what has just sold in your neighborhood and REJOICE! that Gazette published an article that Cap District R/E prices are rising! After looking at the sale price, scroll down to see what the tax assessment is.
I'm going to take this above article to the Tax Appeal Hearing Officer with me next month for a great big laugh!
along with data such as the following .. which is so tedious to compile and so depressing as to make me very ill:
Is this a seller's market? Demolish building for Galesi, what the heck!

street # St Name date sold sale price tax value sold % less than taxed
131 Clayton Rd 7/9/13 72,500 107,500 -33%
252 Bradley Blvd 7/8/13 60,000 139,100 -57%
1173 McClellan 4/21/11 113,500 158,800 -29%
908 McClellan 6/29/11 6,700 97,900 -93%
1252 Keyes Ave 12/16/11 104,500 167,500 -38%
851 Central pkwy 1/11/12 80,000 136,000 -41%
1101 Dean St 2/29/12 48,000 116,400 -59%
1702 Lenox Rd 4/17/12 82,000 129,800 -37%
1801 Grand Blvd 6/22/12 98,000 165,100 -41%
1118 Earl Ave 8/8/12 95,000 124,800 -24%
873 Wright 8/14/12 150,000 184,700 -19%
1471 Lexington Ave 8/20/12 117,500 161,700 -27%
1522 Union St. 9/11/12 55,000 117,800 -53%
1603 Grand Blvd 12/4/12 117,500 161,700 -27%
1560 Grand 12/17/12 90,000 142,500 -37%
1871 Eastern Ave 1/18/13 75,000 161,200 -53%
873 Wright 3/14/13 55,000 163,200 -66%
1155 Phoenix 3/28/13 125,000 150,600 -17%
1101 Ardsley 4/11/13 150,000 185,000 -19%
522 Plymouth Ave 5/13/13 74,500 112,900 -34%
601 Bedford Rd 5/15/13 75,000 96,800 -23%
1230 Baker Ave 5/26/13 86,000 145,800 -41%
1470 Nott St FS 95,900 131,700 -27%
1149 Summer Ave FS 115,000 166,300 -31%
1972 Eastern Ave FS 125,000 140,600 -11%

July 23, 2013
7:11 a.m.
justapto says...

Mayor McCarthy wants critics, (distressed tax payers), to offer solutions for his problems. If these guys can't or won't acknowledge the citizens valid complaints; they should all be voted out.
Why would any elected politician cater to a rich special interest----hmmmm!
Follow the money.

July 23, 2013
7:16 a.m.
birmy says...

The taxes are so high in Schenectady that the homes go for a discount as illustrated above. The problem is the taxes are high everywhere in Capital Region. We can say Latham has low taxes but the reality is it is not that much lower than other municipalities and obviously high compared to other states. And the homes in Latham cost a lot of money on the whole and therefore assessed higher in addition to fact that you are paying upfront for the low taxes in part.

I don't know enough about the $500,000 referred to in article but the company seems like they used leverage making it seem like they would not build apartments unless that got money to demolish the homes. Seems like they would of worked that out prior to buying the properties. There is a price for economic development!

July 23, 2013
7:52 a.m.
gina99 says...

Keep the City implosion going! Aside from Vince Riggi, the biggest collection of fiscal incompetents in history. Re-elect no one in Schenectady. Galesi should fix the new DSS facade on their own dime before getting any more projects. Got high taxes?

July 23, 2013
8:46 a.m.
justapto says...

The city is facing bankruptcy, has a glut of rentals, single family homes are not selling. The basic services are aging, hundreds of houses are being foreclosed upon, there is no money to repair, board up or tear down the dilapidated homes.
Detroit is in the news -going bankrupt and failing due to inept leadership and loss of jobs. Schenectady following the same road to ruin.
They got money to pay Galesi;
Something smell fishy here!!!

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