Troy - Empire State Development, in partnership with Redburn Development Partners, announced the groundbreaking on Wednesday at the Marshall Ray building in Troy's North Central neighborhood.

The $16 million renovation of the historic building will feature 77 mostly one- and two-bedroom apartment units, as well as 15,000 square feet of retail space. The apartments are expected to be completed within a year.

Redburn, the Troy-based development firm, also partnered with Jacob Reckess, whose Poughkeepsie-based PAZ Health Care had acquired the 90,000-square-foot building at 701 River St. in December 2015 from Harmony Tech LLC.

The blighted building has been vacant for decades, and Mayor Patrick Madden admitted the building had been making him "nervous."

"North Central has always been a challenged neighborhood, a lot of vacant buildings. A lot overgrown lots, a lot of poverty. And we're beginning to see investment in this area, which is going to put more people in the community. It's going to support more local businesses," Madden said. "I think it creates optimism, for sure."

The 77 apartments will be around 700 to 800 square feet each, renting for $850 to $1,000 a month, according to Redburn principal Tom Rossi. Utilities will be bundled to include heating, air conditioning, water, TV and internet.

The building will also feature Redburn's distinct energy-saving technology, like combined heat and power units that generate electricity by running on natural gas.

"We capture all the waste heat, and we use that to generate our domestic hot water, our heating and our cooling," Rossi said. "It's much more environmentally friendly."

The Marshall Ray building was built in 1899 as the Searle, Gardner & Company Cuff and Collar Factory. Its name comes from when it housed Marshall Ray, a popular clothing maker and retailer, but the new development will be dubbed the "Collar Factory Lofts."

The project is the latest in the revitalization of North Central. In addition to School One, the former Mooradian's Furniture warehouse and a former shirt factory also have been converted into apartments.

Redburn has also converted the former Tilley Ladder building in Watervliet and the upper levels of the former Nelick's Furniture building in downtown Troy into loft apartments.