City of Schenectady Approved for $3 Million Loan from HUD to Clear 80 Vacant Buildings and Make Critical City Upgrades - Following Senator's Push, Loan Will Help Clear the Way for Economic Development in Schenectady

Press Release

Today, U.S. Senator Charles E. Schumer announced that, after his push, the federal Department of Housing and Urban Development (HUD) has approved a $3 million loan for the City of Schenectady to raze vacant properties and clear the path for redevelopment. Schumer said that the HUD loan will allow Schenectady to raze 75 to 80 homes that are a blight on the local community and that reduce property values for families still living in those neighborhoods. Schumer noted that the program requires at least 70% of these sites be used for a new building or in a way to improve adjacent properties, which will help revitalize these neighborhoods and further the City's efforts to expand access to home ownership through their HOMES Program. Schenectady is plagued with excess housing stock that has fallen into disrepair and abandonment; in total, the city has identified over 130 such buildings and has found that the most cost-effective option is to raze them. The HUD loan will fund the demolition of a sizable number of the City's vacant homes.

"This $3 million HUD loan is great news for the City of Schenectady and means that the federal government has as much faith in the City and the Mayor's HOMES initiative as I do," said Schumer. "This federally-backed HUD loan gives Schenectady the necessary capital to pursue a large-scale renovation of vacant and neglected properties. By removing these blighted homes and reintroducing new properties or revamped spaces that boost the value of their surrounding community, the City of Schenectady can turn over a new leaf and kick start the redevelopment of many of its neighborhoods. Sometimes you need to tear down before you build back stronger; and I look forward to watching that process take place here in Schenectady."

Schumer continued, "I want to single out Mayor McCarthy and his team for their vision and determination on this project. Mayor McCarthy wasn't willing to sit by and watch these zombie properties decay entire neighborhoods. So he proactively identified this HUD loan as a cornerstone of his plan to bring Schenectady's neighborhoods back, just as they already have done with their downtown."

"This is a key component in our neighborhood revitalization and it will enable us to remove the worst of our blighted properties. We appreciate Senator Schumer's perseverance in securing this loan," said Schenectady Mayor Gary McCarthy.

Last November, standing at an abandoned home on Broadway in Schenectady's Bellevue neighborhood, Schumer was joined by Mayor Gary McCarthy, former Fire Chief Michael DellaRocco, Police Chief Brian Kilcullen, and other community leaders to push for the HUD loan.

Between the mid-1950's and mid-1970's Schenectady lost an estimated 25,000 jobs as General Electric massively downsized and American Locomotive (Alco) closed. Hundreds of homes which once housed GE and Alco employees gradually became vacant and have fallen into disrepair over the years. The city has identified over 130 buildings that are either completely deteriorated or require so much work that the cost of rehab outweighs the potential value. This excess housing stock devalues nearby properties and discourages investment in the community. What's more, Schumer explained these often-crumbling properties can pose a danger to police and fireman since they are at greater risk for arson. Because the properties are structurally deficient to begin with, they put emergency personnel at greater risk of injury. Now with this loan, the city estimates they could raze 75 to 80 of those buildings they identified as in disrepair. The effort is a piece of the Mayor's Home Ownership Made Easy in Schenectady program, designed to eliminate blight and encourage more home ownership in the City.

The demolition of these properties is the first step in the process for redevelopment. The $3 million HUD loan can be used by the City of Schenectady to demolish buildings and make major upgrade in the City's neighborhoods to complement the work already well underway to improve the downtown area; work being done in partnership with Metroplex. According to the terms of the Section 108 loan application, 30% of the money received can be used to demolish a building and leave the lot vacant, while 70% can be used to demolish, but also requires the city to restore or rebuild on the newly-demolished lot.

Out of the $3 million loan, the City of Schenectady proposes the following breakdown of funds:
· $2,460,000 will be used for the acquisition, demolition, rehab, and redevelopment of abandoned and deteriorated structures citywide.
· $500,000 will be used for the rehabilitation of 487 Nott Street into 14 units of rental housing, 8 of which would be affordable housing units.
· $40,000 will go towards the Community Loan Fund of the Capital District, for economic development technical assistance.

The Section 108 Loan Program allows communities to borrow against future CDBG allocations to complete major economic development programs and initiatives. The Section 108 Loan Guarantee Program is a source of financing allotted for the economic development, housing rehabilitation, public facilities rehab, construction or installation for the benefit of low- to moderate-income persons, or to aid in the prevention of slums.

Source