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In Albany Med’s massive Park South plan, how much is too much?

by Erin Pihlaja on October 9, 2013

“These plan changes are to meet the developer’s needs, not necessarily the concerns of the people,” said preservation consultant Kimberly Alvarez, at a public hearing on Monday (Oct. 7) before the Albany Common Council. “It is out of character and contradictory to the original plan.”

At the start of the hearing, engineer Daniel Hershberg presented three amendments to Albany Medical Center’s original $110 million plan to develop areas of the Park South neighborhood, specifically on Robin and Morris Streets; and Dana, New Scotland, and Myrtle Avenues. The Park South Urban Renewal Plan, which will add residential apartments, medical office space, retail space, and parking areas to the neighborhood, is seven years in the making and is still undergoing planning changes, the newest of which sparked some concerns from those in the neighborhood and surrounding areas.

The amendments outlined include an increase to “the height of two buildings along New Scotland Avenue known as 11 New Scotland Avenue and 33 New Scotland Avenue,” Hershberg told the room. The proposed building at this site will displace Valentine’s, a local music venue, and Quintessence, a historic diner car that had functioned for many years as an eatery. The newest changes would increase the height of the proposed property to six stories. Hershberg said that the second change would increase the number of apartments in the total project to “256 apartment units located either on 160 and 163 Morris Street, or on the second through the sixth story on 11 and 33 New Scotland” and an increase in the “building footprint of the parking garage to accommodate 875 cars.”

According to Hershberg, the proposed parking garage’s “entrance will be off Myrtle Avenue and the exit will be onto Robin Street.”

Common Council member Leah Golby asked, “Can you explain the need for the increase in the garage?”

Hershberg responded, “The number of parking spaces is driven by the needs of the applicants.” He then explained that the original plan had called for 0.75 cars per one residential unit and three parking spots per 1,000 square feet of medical office space. After consulting with project partner Tri-City Rentals, he said they decided that the actual needs were 1.5 spots for each of the 256 apartments, and at least five parking spots per 1,000 square feet of medical office space. He added, “In order to meet the needs of the users on the site, we will need the 875 cars.” There are also two proposed surface lots to accommodate those using the proposed retail spaces.

The criticism of this amendment was largely that the original plan had called for less parking spots that were spread out over a few blocks as opposed to more parking spots concentrated in a two-block area. The initial plans had also called for some of the parking to go underground, a component that those in charge of the project said was fiscally unfeasible. It is expected that thousands of cars will utilize the garage daily. One speaker suggested giving the employees of AMC free CDTA commuter passes to cut down on the anticipated traffic.

Other concerns were the “canyon effect” of the high-rise garage, that could create unsafe and unsightly corridors on streets that have traditionally been primarily residential.

In addition to how the Park South project will change the landscape of the neighborhood, many are questioning the economics involved. It is anticipated that those involved with the project will seek tax abatements, and possibly tax-free financing.

Golby asked, “The medical office building, at this time do we know whether this will be owned and operated as part of the nonprofit mission of AMC, or rather will it be taxable?”

Richard Rosen, vice president of Columbia Development Companies, which is another partner of the project, answered, “Currently right now AMC would own and operate both the medical office building and the parking structure. Of the 135,000 square feet, roughly half of it will be occupied by Albany Medical physicians, the people that are actually on the hospital staff, and that portion will be tax-exempt. Currently right now, we are contemplating subleasing some of that medical office space to private physicians in the community, and that portion would be taxable.”

Common Councilman Michael O’Brien inquired, “In fact, don’t members of your hospital staff bill separately, so are they nonprofit in terms of the revenues and incomes that they are getting in the use of those offices?”

Rosen replied that he wasn’t able to answer that, but said that “the occupants on that side are employees of a 501c3.”

O’Brien countered, “It’s nice to know that their employer is a 501c3 company but I don’t feel comfortable with this until I know whether the doctors are privately billing and therefore very profitable. Tri-City Rentals is not a 501c3, are we going to be getting our full measure of taxes for the full measure of services that they provide?”

Rosen answered, “Tri-City Rentals is a for-profit, private company, and they will be the owners through a grounded structure of Albany Medical Center and as far as their tax structure, we are working with the city right now to come up with a mutual agreement with how we go forward.”

Michael McGovern, vice president of the Park South Neighborhood Association, said he had received a lot of feedback from residents and business owners in the neighborhood regarding the project. “What happens if the assessed value of their properties goes up because of this development? How can a small property owner be expected to help finance this development that will increase the property tax burden while suffering increased vacancy rates?”

McGovern said that because the development would be tax-exempt, the apartments could be offered at lower rent and with off-street parking, which would “undercut the market” and negatively affect the people that had already invested in the neighborhood.

The project will raze many vacant buildings that are owned by Albany Medical Center, and McGovern maintained that many homeowners and small-time developers bought into the neglected area without intending to move or sell their homes. “It is their efforts that have transformed the neighborhood,” he said.

Park South Neighborhood Association president Andrew Harvey seemed to support the project as long as “creative construction” was employed to preserve some older buildings but also to “embrace the 21st century.” He added, “Which we are poised to do if we make the right moves.”

But attorney and developer Joseph McGovern didn’t seem to share the positive outlook. “From an economic standpoint, the hardships that would be created by, in essence, having us subsidize the project would be enormous.”

McGovern said that he owns 12 buildings with 30 apartments in Park South, and 22 buildings in the city of Albany. “I can assure you I’ve paid every dime of my taxes, it is all assessed at fair market value. I’ve worked very hard in Park South to turn that area around. I can’t compete with nonprofits and people who get pilots, I can’t. These are large and very profitable organizations. Give us, the small operators, an opportunity to compete on a fair and equal playing field.”