ViaPort walks off the table after Rotterdam City Council cancels lease – The Daily Gazette

ROTTERDAM — Plans to relocate the city’s operations to ViaPort are stalling after lawmakers voted on Wednesday to void a lease agreement signed last year due to a procedural issue with the law of the state, the blind management of the shopping center and the preparation for a possible legal battle.

The move comes after months of mounting pressure from residents to break the 10-year agreement, signed last year under the previous administration, that would have moved City Hall, the police department and offices of the court in a space of approximately 50,000 square feet that once housed a Kmart at the cost of millions to taxpayers.

In a 3-0 decision, a slate of new board members serving this year – including supervisor Mollie Collins, Jack Dodson and Joseph Mastroianni – voted to void the deal after it was determined that the city ​​had not properly announced a permissive referendum for the lease as required by state law. The three council members also voted against reauthorizing the lease agreement subject to a referendum and to enter negotiations with ViaPort to purchase the Kmart space, thereby shelving all plans to transfer city services to the shopping center.

Board member Evan Christou was not present due to a previous commitment. Samantha Miller-Herrera, meanwhile, abstained from voting on all resolutions because she “couldn’t in good conscience” potentially involve the city in a “protracted legal battle” with the mall owners.

The decision to cancel the deal was cheered by dozens of residents opposed to the relocation of city services, but raises questions about what steps the city will take next to fix its aging facilities, including the city court, which has grown too large and does not conform. with the Americans with Disabilities Act.

Wednesday’s vote also highlights concerns about a potential legal battle between mall owners and the city, which paid a $1 million deposit last year to secure the Kmart space using federal funds. coronavirus relief.

Collins, who has criticized Kmart’s move since it was first discussed, said it was unclear if the city would be able to recoup the $1million deposit, but hopes that the mall owners will be willing. She added that there was no communication between mall ownership and the city prior to Wednesday’s vote.

“Obviously we don’t want any legal ramifications, but I understand like all of us as adults, you have to weigh one side with the other, and we pray to God that there won’t be any legal issues. extended, but we’ll have to deal with whatever comes,” Collins said.

She added that it’s unclear what direction the city will take now that a decision to cancel ViaPort’s lease has been made, but said many options will be considered, including upgrading current facilities, l purchase and renovation of an existing space or the purchase of land to construct a new building. .

“It’s not that there isn’t a clear way forward, it’s just that we need time to hear from residents, and we need time to explore all options,” said Collins.

Fuat Agsak, ViaPort’s business development manager, said the mall’s management was “blindsided and shocked” by the city council‘s decision to cancel the lease, adding that they were unaware of the issue of proceedings until last week, although they have been in communication with city officials since negotiations began last year to lease the space.

Under state law, cities are required to post a permissive referendum notice within 10 days of approving a resolution “to buy, lease, build, alter, or redevelop.” a town hall, a camera or any other building necessary for municipal purposes”. The permissive referendum would allow residents to collect signatures to hold a referendum on the decision. No permissive referendum notice was ever given before the city entered into the lease last November.

“It has been 15 months since the city contacted us to rent and buy the space in question. Since then, we have patiently worked with staff and board members and responded to all of their requests,” Agask said in an email Thursday. “We have also repeatedly asked them to raise their concerns so that we can work together to address them. We believe the current board members will confirm the same. For this reason, it was shocking to see the vote last night.

Agsak also pushed back on comments made by residents in recent weeks about the mall’s current condition, noting that the owners have been a good community partner since acquiring the property seven years ago. He did not respond to questions about whether the mall owners intended to sue the city or whether they intended to return the security deposit.

“We have been a proud partner of this community for over seven years,” he said. “Despite the fact that this has been an extremely difficult time for malls and the retail industry in general, we have worked tirelessly to find alternative uses to serve our community.”

The city council voted to enter negotiations with ViaPort to lease part of the more than 80,000 square foot Kmart space last August. A lease was signed in November and the $1 million in American Rescue Plan Act funds to secure the property was paid out a month later.

But questions about the cost to taxpayers of the move were never fully resolved until the lease was signed. Preliminary information estimated that it would cost $5 million to upgrade the Kmart space to meet the city’s needs.

Residents criticized what some called a “backdoor deal” and raised questions about how the city would pay for the move as well as the monthly lease payment, which would cost around $33,000. Others said the city shouldn’t pay to keep the ViaPort open and that the city should own its facilities instead of renting them.

“I think we should own our buildings,” said resident Linda Testa. “Moving our offices means keeping the lights on at ViaPort.

Wednesday’s comes a week after engineers from Barton & Loguidice presented a cost analysis study for the ViaPort move. The city hired the firm to complete the study in January, two months after signing the lease.

The study estimated that it would cost the city $9.2 million to upgrade the Kmart space, nearly double the original price of $5 million, and the projected cost of renting the facility would be of $54 million over a 30-year period. The additional cost was caused by inflation and changes to a preliminary site plan, including a police carport and improvements to the exterior of the building.

Upgrading the city’s current facilities would cost about $14.4 million and would cost $34 million to maintain the properties over 30 years, according to the study.

It was also determined that the city would pay $37 million over 30 years to maintain the Kmart facility if it purchased the property, although the estimate did not include a sale price for the building or take into account income associated with the sale of the actual town. buildings or property maintenance costs.

It is also unclear whether the city would be able to purchase the building. The lease contract provided only a first right of refusal and not an option to buy, raising questions about what would happen to the city’s locations if the lease was not renewed after 10 years.

Christou last week admitted he believed the contract included an option to buy and that he would not have backed the move had he known otherwise. He blamed former city attorney Kate McGuirl for misleading him, and said he still supports moving city operations to ViaPort, but only if the city can buy the space Kmart.

Meanwhile, Miller-Herrera called on the city council to put aside “ego and political talk” to find a solution, but criticized the new administration for not having a clear path to deal with the aging facilities of the city and for not fully considering the ramifications of breaking the lease agreement.

She added that she would not be in favor of modernizing the existing town hall and police department.

“Nor can I say that investing between 15 and 20 million dollars in [Town Hall] or the police department is the right decision for our police department, for our courts, or for the public when they enter these buildings,” Miller-Herrera said.

But Mastroianni pushed back, saying after Wednesday’s meeting that the former city council should have been more transparent in its decision-making and considered exactly how much it would cost to upgrade the Kmart space before signing a lease.

“The reason why the cost of construction has doubled is that there has never been a cost construction before,” he said. “We actually did our due diligence to find out what it would cost.”

He added that he hopes there will be no legal ramifications for the decision to cancel the lease. ViaPort, he said, represents a major commercial district in the city that he hopes will attract new business, although he wondered if having city services would be the best move.

“I want to see the best possible result there,” Mastroianni said. “I want people to shop there. I want it to be a great bridge between the city of Schenectady and the city of Rotterdam, and I don’t think continuing the lease will be the best benefit in that regard.

Contact journalist Chad Arnold at: [email protected] Follow him on Twitter: @ChadGArnold.

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