A rendering of the planned apartments.

The proposed redevelopment of the Playdium site in Albany is set to move forward after the Albany IDA approved a PILOT agreement and tax breaks for the project at a special meeting Thursday.

The project -- backed by the Jankow Companies -- involves demolishing the bowling alley to make way for the construction of three new apartment buildings. The proposal has gotten a lot of attention because it's set to replace a neighborhood landmark. And it's become a high-profile example of the simmering discussion in Albany about the density and height of new development around the city's neighborhoods.

The developers have a tentative closing date in early April, according to real estate agent David Phaff, who's been representing the project. Construction would start immediately after.

Here are a few more bits...



Quick info and little bit of background

Here are the basic details of the plan:

+ Demolishing the Playdium bowling alley building at 363 Ontario St.

+ Building three new residential buildings with a total of 109 apartments.

+ The Ontario St-facing building would also include a cafe/shop on the first floor with a laundromat.

+ Roughly 150 parking spaces. The three buildings would include parking underneath, and the site would also have some outdoor parking.

+ Rents ranging from $1,200 for a 1BR apartment up to $1,600 for a 2BR.

+ Estimated project cost: about $16 million

There's a set of renderings at the top in large format -- click or scroll all the way up.

The project has faced pushback from Common Council member Judy Doesschate, whose ward includes the site, and some residents of of the surrounding neighborhood in large part because of the apartment buildings' four-story height, which required a variance from the city's board of zoning appeals. Doesschate and others argued before the BZA and city planning board that the height was out of scale with the surrounding neighborhood. Here's a recap of the back and forth, which included support for the project from the Pine Hills Neighborhood Association.

The planning board approved the development plan for the project in February.

The IDA package



The PILOT schedule for the project. (Yep, there's no way you can read it at that size -- click the image for a larger version).

That left working out an arrangement with the Albany Industrial Development Agency as the last step before the project would move forward.

The centerpiece of the package of incentives from the IDA is a payment in lieu of taxes arrangement -- a PILOT -- that ramps up the tax payments over 20 years, at first slowly and then more quickly in the last 10 years. (The PILOT also has a clause for years 13-20 that requires the owner to pay the greater of either the scheduled payment or 11.5 percent of gross project revenue.)

The PILOT includes an estimated $4.8 million in payments from the property owners over the term of the agreement. That's estimated to be about $3.6 million more than if the Playdium site continued as is. And it represents an abatement of $6.9 million from the estimate of what the new project would pay at the full rate from the start.

The package of incentives also includes exemptions for an estimated $696,000 in sales and mortgage recording taxes.

Fair or not?

As with the design of the building, there has been some pushback on the package of incentives, again primarily from Judy Doesschate. She has argued the projected rents for the apartments -- ranging from $1200 to $1600 per month -- are too low (she points to higher rents at the new Park South apartments) and, in her view, the PILOT arrangement is essentially undercounting what the revenue from the project will actually be and as a result the incentive is sweeter than it needs to be and the city will be missing out on its fair share.

At Thursday's IDA meeting, Capitalize Albany's Joe Landy told the board the numbers for the project didn't appear to be outliers. He said the Playdium project's average rent per square foot for units is $1.35. And he pointed to an analysis of rent data covering more than 300 units across 11 projects in the city that indicated the average rent per square foot for those projects is $1.47, with the most direct comparison to the Playdium project being the Elefteria on South Allen Street near St. Peter's. Landy said rents there started out at $1.25 per square foot and have since risen to $1.35.

The estimated rate of return on the investment for the project over the first 10 years is 12.42 percent, Landy told the board, which falls within the 12-14 percent range he said the IDA usually uses as a guideline.

Albany city treasurer Darius Shahinfar, who sits on the IDA board, spoke briefly ahead of the vote on the incentive package. He pointed to the estimate that the PILOT will result in the city getting more than $3.5 million in additional tax revenue than it would if the Playdium continued as is (and possibly even more than that if the Playdium became vacant). And he said the new development would be up for assessment after it opened, providing another opportunity for the city to get a read on its actual value.

Shahinfar also noted that the current owners of the Playdium have said they plan to close the business regardless of what happens with the proposed development, and he said he feared what would happen to the site if it became vacant.

"Given that those are our choices here," he said, referring to the new development versus the planned closure of the bowling alley, "to me I think the choice is clear."

The board unanimously approved the package of incentives in a voice vote.

History of the Playdium

If you're interested in the history of the Playdium -- and bowling generally in Albany -- check out this interesting backstory over at the Friends of Albany History.