Councilman warns rising convention center cost threatens state aid
Published on 6/29/2007 by the The Business Review written by by Michael DeMasi
A councilman in Albany, N.Y., warned Friday the rising cost to build a downtown convention center threatens millions of dollars in state aid that's supposed to flow to the city treasury over the next 25 years.
"There is no way the city can afford to lose that money to pay for the bonds," Councilman Dominick Calsolaro said of the borrowing needed to finance the hotels for a project now estimated to cost $300 million.
"The citizens of Albany shouldn't have to pay the cost," Calsolaro told the Albany Convention Center Authority.
But Assemblyman John J. McEneny, an authority board member, said the long-term aid is for two purposes.
One, to make up for the loss of revenue due to the large amount of state-owned, tax exempt property in the city, isn't affected by what happens with the convention center.
The other funding stream would only be tapped if there are shortfalls in repaying the annual debt service on the hotels.
The state aid totals $421 million annually through 2032-2033, of which $233.85 million is meant as a back-stop for the hotel revenue bonds.
"There's some logic there built on a false premise," McEneny responded to Calsolaro.
The testy exchange occurred toward the end of a nearly two-hour meeting in which the authority gave its consultants the green light to move forward with the preliminary site plan for the 244,000-square-foot convention center.
As envisioned by the consulting team led by Clough Harbour & Associates, the facility would be built on land that is now largely parking lots between Hudson Avenue, Liberty Street, Madison Avenue and South Pearl Street. Construction would begin in 2008 and be finished by 2010.
The entrance would face Hudson Avenue and include as a focal point two buildings at 48 and 50 Hudson Ave. One, 48 Hudson Ave., is believed to be one of the oldest, if not the oldest, structures in the city. The history of 50 Hudson Ave. is still being researched.
Other focal points would be Liberty Park, a small patch of grass that would be upgraded with landscaping, and a new public plaza on what is now a privately owned parking lot. Both are meant to encourage pedestrians to venture down to Broadway.
The 900-space municipal parking garage at Green Street and Hudson Avenue would be demolished to accommodate a 250-room, full-service hotel. The hotel would be linked to the convention center and Times Union Center with pedestrian bridges.
Another, 150-room limited-service hotel would also be built where the parking garage now stands.
According to the consultants, the convention center and hotels would generate 800 direct and indirect jobs and $3.42 million in addition hotel occupancy, sales, use, personal income, auto rental and gasoline taxes to the city, county and state by 2013-2014. The new visitors would result in 70,000 additional stays at hotels in the region.
The consultants also predict spin-off benefits such as new demand for retail and office space and residential units downtown.
Several people who spoke at Friday's meeting said it was critical that blacks and other minorities who live near the convention center benefit from the jobs that are created.
"Every day in the news I hear Albany is coming up roses," said Frank Oliver, a city resident. "But not where I am."
The authority on Friday adopted hiring goals for minority and women-owned businesses during the pre-construction (22 percent), construction (30 percent) and operational phases (60 percent) of the convention center.
Deborah Williams-Muhammad, a consultant who recommended the goals based on the city's minority population and surveys of existing businesses, said the goals were achievable.
"By setting lofty goals, we'll hold the consultants' feet to the fire," said attorney John S. Harris, a member of the authority.
Brad Rosenstein, an authority member and owner of Jack's Restaurant, praised Williams-Muhammad for her work, but also said it was important to hire the best person for each job in order to have a "world class" facility.