Park South waits, worries: Albany (NY) Times-Union, 5/11/05

Fearing eminent domain, residents are hesitant to improve their properties

By Brian Nearing

Dennis Bagley still doesn't have an answer to the question foremost in his mind. Whose homes and businesses in the troubled Park South neighborhood may be demolished under one of the city's most ambitious rebuilding plans since the Empire State Plaza was created in the 1960s.

Bagley, 37, invested more than $70,000 to renovate 94 Morris St., a two-story home he bought two years ago after it was damaged during a fire next door. He's proud of his bright and airy apartment, with skylights, a new kitchen and polished marble shower. He rents two apartments on the first floor to help cover his mortgage.

He was going to replace the building's ugly and faded facade, which still includes the name of a long-gone plumbing supply shop barely visible through a thin coat of whitewash. But he decided against spending the $15,000 it would take. He's going to wait.

"It doesn't make any sense for me to do that before I know what's going on," said Bagley.

Many people like Bagley are waiting to see what the city is going to do in Park South, a nine-block, 26-acre swath between Washington Park and Albany Medical Center that has sagged in recent years under the growing weight of poverty, crime and neglectful landlords.

Uncertainty has hovered over the neighborhood since the city announced nearly two years ago that it was hiring a Baltimore consultant to recommend a rebuilding plan to revitalize Park South.

In March, the city declared the area blighted under state law, which gives the city the power of eminent domain. That means the city can seize private property for public use — or even for private development, if it benefits the public.

Sometime this summer, the city will put either Boston-based Winn Development or a local team headed by BBL Development Group in charge of the multimillion-dollar project. A third group also made an offer but was rejected. That group included State Street Partners LLC, XO Projects and the Albany engineering firm of Hershberg & Hershberg, city Development and Planning Commissioner Lori Harris said.

While the city insists eminent domain will only be used as a last resort, the developers have tiptoed around the issue.

Creation of a mix of new offices, shops, apartments and homes, including housing for up to 400 students, would be one of the largest development projects in the city. However, exact plans that will detail which buildings will stay and which will go will emerge only after the city chooses the developer. Then, it could be 18 months or more for a groundbreaking.

But longtime neighbors who have weathered years of decline fear they could lose their homes and receive little compensation in return, because property values have sagged, said Pat Kelly, coordinator of the Park South Walk and Watch. She has lived in a Dana Avenue apartment for 43 years.

"It wouldn't be fair to people who have stuck it out here for so long," Kelly said. She said the city needs to help residents by tougher enforcement of laws and building codes. "A lot of people want to stay here."

Some residents are looking to a Washington, D.C.-based think tank, Castle Coalition, to assist in their fight.

The not-for-profit group offers legal help and other support to property owners threatened with eminent domain. According to an April 2003 report by the coalition, there were nearly 10,300 cases of eminent domain for private development filed or threatened in 41 states between 1998 and 2002.

"It's an insidious alliance between tax-hungry municipalities and land-hungry developers," said Steven Anderson, the group's coordinator. Eminent domain laws are so vague that they can be applied to any neighborhood, he said.

Peter Rinne, who has lived on Morris Street for decades, said while things can be bad in the neighborhood, they aren't as bleak as the city maintains. He accused the city and the media of orchestrating a "propaganda campaign" at the expense of the neighborhood.

If the city decides to take property, it should give former owners a chance to buy back in, based on how well they've taken care of their property, Rinne said.

Lou Hacker owns 20 apartment units on Morris Street. Since buying the properties starting in 1998, he's invested tens of thousands of dollars in improvements, like new floors and appliances, and worries that he'll take a bath if the city takes his property.

"I'm almost 60 years old. This is my retirement," said Hacker, a former regional sales manager for a Michigan-based publications company. "I've already had tenants decide against taking apartments after they hear where it is. They say, 'That's the place they're going to tear down.'"

He said uncertainty causes many owners to delay improvements. "I should repair the stonework in front of my place over there," he said, pointing to units at 99 and 101 Morris St. "But that work could cost me thousands. Is the city going to give me that if they end up wanting the property, just because it has nice stonework?"

Winn Development Project Director Gilbert Winn said his company, which has developed more than $1.5 billion worth of projects across the country, has never been involved with eminent domain before.

"We don't want to upset the community," he said. "Before we start, we spend a lot of time meeting with residents, getting them on our team."

He said housing for senior citizens is a possibility, but the firm has not begun mapping the Park South area, a process that would identify the key areas for rebuilding.

"Right now, we have no possible way to tell what will be there at the end of the day," Winn said last week at a City Hall meeting with several Common Council members and about a dozen Park South residents and property owners.

The president of BBL Development Group, Peter Cornell, told the meeting, "There are times when eminent domain could have to be embraced," although it is too early to say if that will happen in Park South.

Cornell added that condemnation might be needed in cases of "landlords with unsavory tenants in buildings with ridiculous price tags."

"A scattered site approach will not lead to successful revitalization," said Dan Sitler of Saratoga Associates, which with BBL is teaming up with Conifer Realty LLC, Einhorn Yaffee Prescott and Columbia Development Cos. "We need to aggregate parcels and chunks of land. A house here, a house there, will not be noticed."

Andrew Harvey, president of the Park South Neighborhood Association, said he preferred Winn's philosophy. "It's more of a scalpel approach," he said.

Common Council President Pro Tempore Richard Conti, who heads a council committee that will recommend a developer, urged people not to prejudge the plan. "I don't think this is going to be as big a project as people are afraid of," he said.

The Common Council opened the possibility of eminent domain in March, when it named Park South as an urban renewal area under state laws that target blight.

Meanwhile, a real estate bubble may be forming in Park South as sellers and buyers are trying to benefit before the project starts.

Last year, the average selling price for real estate increased more than 40 percent from the previous year to more than $70,000, according to figures compiled from the state Office of Real Property Services. Compare that to 2003, when the average sale prices were up just 3 percent.

Albany Times-Union: http://timesunion.com