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All Fired Up: The Downtown Albany Real Estate Game
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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Copyright (c) 2010 by Carola Von Hoffmannstahl-Solomonoff. This material may be freely distributed subject to the terms and conditions set forth in the Open Publication License. This license relieves the author of any liability or implication of warranty, grants others permission to use the Content in whole or in part, and insures that the original author will be properly credited when Content is used. It also grants others permission to modify and redistribute the Content if they clearly mark what changes have been made, when they were made, and who made them. Finally, the license insures that if someone else bases a work on this Content, that the resultant work will be made available under the Open Publication License as well.

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