April 18, 2013

NanoCollege moves on old station deal

By: Larry Rulison and Jordan Carleo-Evangelist

Source: Times Union

Goal is to establish high-tech incubator

ALBANY — The UAlbany College of Nanoscale Science and Engineering plans to buy Kiernan Plaza — downtown Albany's historic former train station — through eminent domain so it can more quickly turn the property into a high-tech incubator.

The NanoCollege has been poised to acquire the building on Broadway after being awarded a $4 million grant from the state to fund the project. Clough Harbour & Associates, a Colonie-based engineering firm, agreed to move its headquarters and executive management to Kiernan Plaza to become the anchor tenant of the incubator, which hopes to become a model of urban revitalization through technology. But there are obstacles to acquiring the plaza, which is why eminent domain, a process by which the government acquires private property for the civic good, is being considered.

The building, built in 1899 and assessed by the city at $5.5 million, is collateral in a complex real estate financing deal unrelated to the NanoCollege project. Covenants in that loan prevent Kiernan Plaza's sale until 2019 under normal circumstances.

School officials say the building's owners, who run a large real estate investment fund, do not oppose the school's purchase of the building. The NanoCollege estimates the building's market value is about $3 million.

The NanoCollege has asked the Albany Industrial Development Agency to acquire the property through eminent domain. The investment fund owning the building would be paid a fair market value.

"The idea is that we want to get companies and people working downtown as soon as possible," NanoCollege spokesman Steve Janack said.

Establishing the incubator, known as the Smart Cities Technology Innovation Center, or SCiTI Center, was a centerpiece of Mayor Jerry Jennings' State of the City address and will represent a symbolic expansion of the NanoCollege's footprint from the outskirts of the city into downtown.

The 114-year-old former Union Station — vacant since Bank of America pulled out in 2009 — was the backdrop for Jennings' speech in January.

Documents filed with the IDA say SCiTI would create 150 jobs in the city over five years as it attracts between 10 and 14 tenants. The project would cost a total of $10 million, $6 million of which would come from corporate partners of the NanoCollege who are interested in "smart city" technologies. Albany is expected to be a "test-bed" for these new technologies. Clough Harbour, which now goes by CHA, began as a civil engineering business and has a deep interest in urban engineering and municipal revitalization. The company says it plans to move into Kiernan Plaza by the fall.

Under the proposed Kiernan Plaza deal, the NanoCollege would make payments to the city equal to the amount of real estate taxes that would otherwise be owed on it, meaning there would be no loss to the city, county or schools. That agreement is proposed to last for 15 years.

Michael Yevoli, the city's planning commissioner and IDA's CEO, said that while he could not guarantee there would be no resistance to the eminent domain plan, he did not expect it. Yevoli also said there's no doubt in his mind that putting the downtown landmark back to productive use serves a legitimate public good that would justify using eminent domain — a sometimes controversial government power.

"The good part about it is it's going to be a very public process," Yevoli said. "Having (the building) controlled by somebody that is going to be limited in what they can do with it is not in the best public interest."