COLONIE — Demolition began Thursday on a venue that once brought stars like Diana Ross, Bob Hope and Sammy Davis Jr. to the Capital Region.

The Starlite Theater, vacant since Shaker High School's 1998 graduation, is being removed to make room for a new mixed-use development, with housing at the back of the property and office and retail space up front.

"This is a lot of history, seeing this baby go down," said David Buicko, chief operating officer of The Galesi Group.

The firm is partnering with the property's longtime owner, Eugene Weiss, to redevelop the land. There is room for 300,000 square feet of commercial development, Buicko said. The property is on Route 9R, just off the Northway and Route 9 in Latham.

"It's probably one of the best locations in the Capital Region," Buicko said. "You can get anywhere from here."

Though it had a long history as an entertainment venue, he said, the building contained asbestos in its roof and its long deterioration made it impossible to restore.

"The theater was unsalvageable," he said. "The whole structure was compromised."

Buicko said the firm expected to spend "many millions of dollars" developing the site, but decisions on what to build will be based on what potential tenants want. He said demolition will take about three weeks, and he would like to start construction next year.

"It's all tenant-driven," he said. "We get a tenant, we'll move as fast as we can."

The developer does not yet have specific plans to submit to the town.

"We're developing a master plan. We're doing a market analysis of what retail is out there," he said. "We'll work with the town to come up with a project that meets the demographic needs of the community."

The Galesi Group, one of the Capital Region's largest developers, contacted Weiss about four months ago to suggest a partnership on revitalizing the site.

The firm had worked with Weiss on the Golub Corp. headquarters in Schenectady.

Joseph Lacivita, the town's director of economic development, said efforts to attract retail to the nearby property that now houses Latham Circle Mall — being converted into a shopping plaza — will not conflict with the Galesi Group project.

At the former mall site, he said, "they are attracting a certain type of retail you may not see here."

The Starlite property will include a mix of commercial and retail space, he noted, and that may draw different tenants than the outdoor shopping plaza will.

Supervisor Paula Mahan said the town has identified the property as a priority for redevelopment since she took office in 2008.

"We're very excited about working with the Galesi Group," she said. "This is a prime piece of property. We're very happy this day has come. We'll miss the entertainment, but you have to move on."

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