Saratoga Springs-based Bonacio Construction, which over the past few years has developed five mixed-use projects in downtown Troy, has raised concerns about the scope of tax relief extended to a competing real-estate developer by the Rensselaer County Industrial Development Agency, according to a recent letter by Bonacio’s attorney.
The competitor, 255 River Street, LLC, an entity controlled by Judge Development Corp., sought just over $1.6 million in financial assistance from the RCIDA for a $7 million project at the historic McCarthy Building, which faces Monument Square. The upper floors will be converted into 19 upscale apartments, some with balconies, and the lower floors will feature a mix of retail and office space. The company president, Sam Judge, previously told The Alt that he expected to start work this summer.
The amount of prospective tax relief for Judge for each apartment is $85,790, Bonacio’s lawyer, Libby Coreno of Carter Conboy, wrote to RCIDA—“more than two times the tax benefit provided to my client” from a different public authority, the Troy Industrial Development Authority, for the 83 total apartment units in the five projects built in the city by Bonacio since 2013.
Bonacio has received a total of nearly $3.3 million in tax breaks from TIDA, which works out to an average of $39,755 in relief per unit, according to Coreno’s letter, dated June 13.
Coreno, who also spoke at a public hearing related to the project, says in her letter that 255 River Street, LLC’s application to RCIDA for financial assistance lacks “supportive information as to the amount of relief,” which she calls “extensive.”
Nevertheless, the RCIDA board approved the financial assistance package for the project at its regular meeting on June 14. Documents related to the deal have not yet been executed and filed with the county clerk’s office. (Bob Pasinella, RCIDA’s director, declined to comment for this story.)
Coreno’s letter, citing 255 River Street, LLC’s application, also says the applicant paid $1.8 million for the McCarthy Building, “which is approximately $60.00 per square foot for a 30,000 [square foot] building.” By contrast, Bonacio paid $30 per square foot for the Hendrick Hudson building at 200 Broadway—a project that has received TIDA benefits—and a Brooklyn firm paid about $45 per square foot for the Cannon Building last year.
“Therefore, it is notable that the Applicant has a starting investment cost nearly double (or at least 1.5 times) greater than that of its competitors,” Coreno says in the letter. “Perhaps this explains why two times the amount of tax relief has been requested. Regardless, it is important to note that the IDA is tasked with looking at benefits to the community not acquisition costs incurred by the property owner.”
The prospective tax relief might allow Judge Development “to offer rental rates below the market generated by my client’s projects or directly impact the investments made to date,” Coreno says in the letter.
Sonny Bonacio, president of Bonacio Construction, and Coreno did not respond to inquiries from The Alt. Sam Judge declined to comment.
The two real-estate developers also came into conflict last year. In September, Judge sued to block a planned luxury multiplex project at One Monument Square backed by Bonacio Construction and Bow Tie Cinemas. Judge owns properties that abut the long-vacant site. Bow Tie terminated the deal later that month. The city has since embarked on a new effort to redevelop the prominent site.
At the time the lawsuit was filed, Judge said his company recognized “the significant investments that the Bonacio team has made around downtown, too, and, indeed, appreciate their continued commitment to Troy.”
The two IDAs have also tangled in the past. At a regular meeting in May, Troy IDA director Steve Strichman disclosed that “a number” of projects being considered for financial assistance by the city-affiliated entity were “also being claimed by the county IDA.” He declined to identify the mutually coveted projects.
In 2015, the director of the state Authorities Budget Office questioned the need for both entities, with their overlapping jurisdictions, to exist.
Read Coreno’s letter below.