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Friday, May 1, 2009
Developers eye potential tenants as State Street renovations unfold
The Business Review (Albany) - by Michael DeMasi

The other half of the Proctors Block transformation is almost finished in downtown Schenectady.

The row of buildings on State Street between Broadway and Clinton Street across from the historic theater have been cleaned up, restored, or demolished and replaced with something new.

Millions of dollars in public and private money have removed layers of grime, garish colors, corrugated metal, torn awnings, battered signs and other evidence of decay in the center of downtown.

Up to now, the improvements have been largely overshadowed by the changes on the Proctor’s side of the street, including a new hotel, upscale restaurant and six-screen movie theater.

Many of the investments have been made by the Galesi Group, a Rotterdam-based developer that has spent more than $100 million in Schenectady in recent years, including projects outside of downtown such as the new Golub Corp. headquarters being built nearby on Nott Street.

Chief Operating Officer David Buicko said both sides of State Street downtown feed off each other and create the momentum that has fueled redevelopment.

The Schenectady Metroplex Development Authority has subsidized many of the facade improvements with matching grants worth $30,000 to $60,000. State grants totaling $3.4 million from the Restore NY program have also primed the pump on two projects.

Buicko and Metroplex Chairman Ray Gillen said they weren’t concerned about an excess supply of office and retail space outstripping demand.

According to CB Richard Ellis/Albany, the vacancy rate in Schenectady during the fourth quarter, 5.9 percent, was the lowest among the five largest downtowns in the region.

A flurry of recent activity has focused attention on the south side of State Street, including:

• Bombers Burrito Bar is gearing up for an opening the first week of May.

• Construction of the four-story Clinton Square office/retail building has wrapped up at State and Clinton streets.

John Roth, president of Highbridge Development, has no signed tenants yet, but said he’s working on some potential deals.

“The economy definitely slowed down the progression of prospective tenants,” Roth said. “People kind of hunkered down. Maybe they had considered moving to bigger and better space but had put it on hold. But there are still some people out there that are looking.”

The bottom three floors are about 7,000 square feet and rent for $18 per square foot, plus taxes, maintenance and insurance; the top floor is roughly 2,200 square feet and rents for $15.50 per square foot, triple net.

The opening of Bombers next door could help lure tenants, he said. His construction company, Plank LLC, did the renovations.

“That type of end-user draws a lot of people into Schenectady,” Roth said. “I think it will help with leasing the retail space on the first floor.”

• MVP Health Care has moved the first wave of an anticipated 250 workers into the third floor of the Center City Sportsplex. Office space on the second floor has been renovated to accommodate the remaining workers, who are expected to move in May.

The offices are above CVS Pharmacy, which is part of Center City, a combination indoor athletic field/retail/office complex that is being renovated by the Galesi Group.

The developer is spending more than $10 million on the project, and is negotiating with the Capital District YMCA to possibly open a branch there.

The Center City facade will be radically altered by a 50,000-square-foot addition that features a five story high, glass-encased tower.

Demolition to prepare for the construction could begin within a month and take about a year to finish, Buicko said.

The Galesi Group also owns 401 and 409 State St., where a state agency, the Commission on Quality of Care and Advocacy for Persons with Disabilities, fills most of the space. Only the second floor of 409 State St. is empty, Buicko said.

Wedged in between the Galesi Group properties is 411 State St., where attorney Stephen Waite was supposed to open The Big House bar and restaurant a couple of years ago. The much-delayed project has been a source of frustration for city leaders.

Waite, who got a $1 million loan from Metroplex to do the gut rehab, has moved his law office and related businesses to the top floor. Metroplex is working on a deal for the other two floors, Gillen said.

http://albany.bizjournals.com/albany/stories/2009/05/04/story11.html?b=1241409600^1821482

Death Ray's Clintons Ditch has signed no tenants. Can the Pizza King move back? lol.