City votes ZEN funds
Capital Resource Corp. panel also lowers its fee for financing project
Published on 7/18/2014 by the Times Union written by Brian Nearing
Albany - A city panel moved forward Thursday with up to $191 million in financing for the new ZEN building at the burgeoning SUNY College of Nanoscale Science and Engineering.
The finance committee of Capital Resource Corp. also set the stage at the last minute to lop a half-million dollars off its financing fee to be charged on the project, from $1.9 million to $1.4 million. That is on top of a $2.3 million mortgage recording tax break for the project that was already on the table.
That had city Industrial Development Agency member Dominick Calsolaro raising doubts about such generosity, but IDA Chairwoman Tracy Metzger said the proposed fee changes would only apply to projects of $100 million or more, which are rare. She said lowering fees for such projects would make the agency more competitive in attracting large-scale development.
The IDA and the CRC are the city's financing arms for low-interest, tax-exempt and taxable development loans. The IDA controls tax breaks, while the CRC controls financing.
Metzger said the proposed half-million dollar fee reduction — which was already part of a financing resolution approved Thursday by the panel — would be considered next week by the full IDA when it votes on the project. If members have concerns about the reduced fee, the agency could delay action until questions are answered, she said. The proposed fee reductions were revealed for the first time Thursday, but were not available in writing, something also criticized by Calsolaro.
Metzger and agency members Darius Shahinfar, Susan Pedo, Lee Eck and C. Anthony Owens voted for the project.
Construction on the building has already begun, which, at 356,000 square feet of space, will be the largest on the rapidly growing campus off Fuller Road near the University at Albany. It is expected to house much of the NanoCollege's renewable energy and clean-tech research operations. Construction is expected to be completed during the third quarter of 2015.
The NanoCollege is run by a private nonprofit called Fuller Road Management Corp. If the IDA approves the bonds, the financing would initially be issued as taxable, meaning that interest paid to investors would be subject to taxation and rates would have to be higher to attract buyers. Later, some of the bonds could be converted to non-taxable at lower rates to reflect the blend of profit and not-for-profit businesses that are expected to occupy the ZEN building.
Some expected tenants are a state agency data center; Tech Valley High School; a center aimed at helping women- and minority-owned businesses master emerging technology; and affiliated nanoscience firms.
"As being owned by a not-for-profit, the building won't be paying any property taxes," said Calsolaro. He also questioned why city financing is not tied to at least some of the jobs being targeted toward city residents. "We need something to hold these people accountable a year or two down the road," he said.
NanoCollege officials are promising the new building will house nearly 700 jobs within the first two years and 1,150 jobs within five years. Jobs would include "information technology professional, financial, business administration and related support staff. The company is unable to provide further details on specific jobs at this time," according to the project application to the IDA.