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October 31, 2010: Here's the thing. When you talk about Albany to people outside the
Capital Region most think you mean New York State government. In
election years the reality of Albany as a specific place, not a
symbol of pols-gone-wild, becomes even more difficult to convey. A
shame, because the city of Albany has all sorts of exciting stuff
going on. Particularly on its downtown real estate scene.
On October 22, fire broke out in an enormous (11 stories, 500,000
square feet) abandoned warehouse on the Albany waterfront. Smoke
blanketed a large section of downtown, an adjacent highway, and a
railroad bridge that carries Amtrak over the Hudson River to points
west. Central
Warehouse aka 143 Montgomery Street burned steadily for three
days and continued to flare for six, with firemen hosing it down from
the outside due to fear of possible combustibles and hazards within.
Nearby neighborhoods inhaling the smoke had no need to be concerned--
the New York State Departments of Health and of Environmental
Conservation issued words of reassurance. Saying the smoke wasn't
packed with too many particulates and that the thousands of pounds of
ammonia gas that once graced Central Warehouse (a former
refrigeration and dry storage facility) had been drained by its circa
2000 owners.
What-to-do-with-Central-Warehouse has been a downtown Albany
development question for decades. Abandoned since the late 1980's,
Central Warehouse (CW) reached rock bottom in '97 when it was sold
for a dollar and back taxes. Since then it's passed (some might say
flipped) through a number of hands with the price steadily
rising along the way. The last
sale took place in 2007 for $1.4 mil. The buyers were a team
composed of Axiom Capital Corp., an Albany-based commercial real
estate financing firm and CW Montgomery LLC (also CW Montgomery
Street LLC), a group of undisclosed partners. The New York State
Department's Division of Corporations shows CW Montgomery and an
entity named Axiom Realty Management LLC registered at the same
address on State Street in downtown Albany.
When Axiom bought Central Warehouse they expressed belief the
state might kick in a $5 million rehab grant from the Restore New
York Communities Initiative. Restore New York is administered by
Empire State Development (ESD), a quasi-public corporation. Though
not an actual government agency, ESD has the power to dispense
massive amounts of taxpayer cash. Restore New York grants are
intended to favor projects in Empire Zones (a
tax-breaks-for-job-creation program recently scrapped due to
corruption and ineffectiveness) and in "Brownfield Opportunity
Areas¨.
The post-industrial area in which Central Warehouse sits is
nothing if not brown.
Among the hands through which Central Warehouse passed are
those of Brooklyn developer Joshua
Guttman, doing business as Albany Assets LLC. It was Guttman who
in 2007, allegedly sold CW to Axiom and the undisclosed partners of
CW Montgomery. Apparently Guttman had tried to market the building on
eBay for more than $3 million. Joshua Guttman (no relation to Caspar
Gutman, the morbidly obese, obsessive seeker of the Maltese Falcon)
has a history of troubled development projects turned smoky. Most
dramatic example: the 10 alarm Greenpoint
Terminal Market fire of May, 2006. The fire was one of the worst
in New York City history. The immense and historic Brooklyn
waterfront property was left in total ruins. Declared arson, the fire
was ultimately laid at the door (shopping cart?) of a vagrant
stealing metal fixtures.
Joshua Guttman is currently embroiled with the city of Hartford,
Connecticut (the state capital) over a property he and his son own
as Myrtle Realty LLC. The property,Capital West, is a highway
visible office complex with a Myrtle Street address. According
to the Hartford Courant, Capital West is ¨regarded as one of the
city's worst blighted properties¨.
Central Warehouse is one of Albany's worst blighted properties.
Despite all the hands that handled CW, no rehabs happened. But over
the years talk was talked by its buyers and sellers, local
development officials, and Albany Mayor Jerry Jennings. (Jennings has
been mayor since before CW was sold for a dollar.) Central Warehouse
was repeatedly said to be on the brink of becoming a condo and/or
commercial palace. Sure, the highway overpass and railway bridge
right outside the non-existent windows on the upper floors were a tad
problematical. As were the non-existent windows themselves and
assorted environmental hazards within the structure. CW is a
veritable concrete fortress. Chock full of no-longer acceptable
materials. Punching out windows and removing the bads would be
difficult and monumentally expensive. Not impossible tho. As for the
highway overpass, if the projected young professional residents of
the warehouse looked past the stream of cars flowing by their
windows, they'd have a glorious view of the Hudson River. The railway
bridge? Mooning Amtrak from
the comfort of your loft-style condo is a great way to cap bar
crawls.
Yep-- the plans to revitalize Central Warehouse were grand. (Even
if nobody really touted the mooning thing.) Alas. As the real estate
bubble deflated, so did the plans. The asking price for the
warehouse went the other way.
By September 2010, Central Warehouse (aka 143 Montgomery Street)
was on the market for $4.9 million. Offered
by Carrow Real Estate Services of Albany, described as a prime
development opportunity with ¨possible grants available for rehab¨.
Carrow is headed by Charles M. Carrow. On the company's website
Charles Carrow is described
as a board member and treasurer of the Downtown Albany Business
Improvement District (BID). The BID knows good grants. (Like other
BIDs, they also have the power to levy special taxes within their
borders.) However, Mr. Carrow isn't listed as board member or
treasurer on the BID's current
site.
But back to the blaze. The fire at Central Warehouse was
immediately considered suspicious.
Vagrants had been spotted on
the premises. As were mysterious workers who seemed to be removing
fixtures. On October 28th, the alleged culprits behind the
fire were identified. The mysterious
workers done it. A local contractor and crew, who were engaged
until last June in legit fixture removal at the behest of the warehouse
owners, had allegedly snuck back in. Folks at
neighboring businesses had seen them going to and fro for weeks,
lugging out truck loads. Those responsible for property management at
Central Warehouse apparently didn't notice the action-- or the tons
of missing fixtures. While popping pipes, the thieves' tools had
sparked, thereby igniting the highly flammable
cork-lined walls at the warehouse.
Despite the fire damage Central Warehouse isn't in total ruins. As
said, it's a concrete fortress. The property is probably good for
several more rounds of real estate games. In the
immediate future will the damage mean "New Price" for CW?
If so, will it move down-- or up? And if a buyer bites will the
possible rehab grants materialize? Stay tuned...
By the buy, don't expect New York's new governor, be it Andrew
Cuomo (shoe-in) or Carl Paladino (snowball in hell) to cancel the
capital city's real estate games. Paladino, a Buffalo developer who
leases miles of office space to state government agencies, was
instrumental
in getting the Empire Zone program expanded from Buffalo's inner city
to its office tower downtown. Collecting more than $300 mil in tax
bennies along the way. Ex HUD head Andrew Cuomo? The lion's share of
his political contributions come from real estate industries,
including some of New York's most powerful developers.
Game on.
Carola Von Hoffmannstahl-Solomonoff
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