Wednesday, September 24, 2008

Has the whole world gone crazy?

Sometimes, the aristocracy could benefit from a taste of Walter Sobchack’s brutish logic. Perhaps the region’s uber-elite might gain a moment of clarity from one of the shell-shocked Vietnam veteran’s trademark rants. The kind of mental clarity gleaned while an off-kilter manically vociferating man-beast is waving around a loaded semi-automatic pistol. Perhaps then they would understand the pitfalls created by building eight, three-story multi-million dollar penthouses in downtown Saratoga Springs during a time precipitous economic decline

The housing bubble has officially burst. The nation’s financial markets are reeling from the cavalcade of bogus mortgages dished out by unscrupulous lenders. The economy is clearly headed toward a recession or even worse. Fiscal analysts are suggesting that even the stalwart upscale real estate economy in New York City, the brazen beacon of economic hope, could markedly suffer as the lending institutions cope with the ongoing sub-prime debacle.

Yet the developers of the so-called “Pavilion Grand” on Lake Avenue remain strangely undeterred. Despite the apparent bold-faced writing etched on Wall Street, Dean DeVito and Ken Raymond are moving forward with a bizarrely financed deal that would jump start the estimated $20 million project, according to a real estate ad report published in the Saratogian Tuesday.

The downtown development power-tandem from Coldwell Banker Prime Realties in Cohoes is hoping to get state Attorney General approval for the project, which proposes to sell the resulting commercial and real estate space to recoup their building costs. The condominiums will retail for between $1.7 million and $2.4 million, easily making them the most expensive luxury pads in the Capital Region. And by the sound of it, their real estate agent clearly doesn’t believe the latest economic woes will deter folks from tossing several million dollars worth of loose change at a “second vacation-style homes” for a “weekend getaway” in the Spa City.

“Everybody wants to come here,” she told the paper. “They love Saratoga.”

Maybe so, but there’s no denying the mood swings of the American economy. Lately, the glum financial news has become tantamount to the fictional Sobchack’s outbursts during The Big Lebowski: frequent, increasingly volatile and knowing no boundaries of reason. Eventually, the manic market trends sweeping through the city of lights will creep up the Northway and camp out in downtown Saratoga Springs. In fact, there’s already evidence of this happening in the local market, although the market for upscale condominiums doesn’t seem to be phased quite yet.

Still, the prospect of building a 66,000-square-foot behemoth seems kind of strange considering the number of condominiums set to hit the soon-to-be flooded market of Saratoga Springs. Absent an abrupt about-face by the national economy, there’s a good chance many of these empty-nester nooks could remain empty, especially when they cost more than some of the palatial mansions along North Broadway.

The question remains, what happens to Pavilion Grand if the recession continues after its ground breaking? In May, DeVito said the project wouldn’t begin until they “pre-sell” several of the units, thus giving them enough capital to barter for the overall construction cost. But the deal seems oddly reminiscent of scheme that recently backfired for another builder whose name might ring a bell with the pair from Coldwell.

Some might remember James McGlagan, the unfortunate builder that overextended his stay on the real estate market’s easy street. DeVito and Raymond were apparently among the developers that stand to “take a bath” on deals where he was the builder. The two ultimately bought back two of McLagan’s four properties that went into foreclosure from the debacle. Regrettably, a similar demise is being experienced by other custom builders in the region, including one who helped now-Republican state Assemblyman George Amedore construct a dream house in Colonie during the Extreme Makeover: Home Edition craze last year.

Perhaps this is all trite thinking for this pair of real estate speculators, as they try to erect yet another palace for Saratoga’s burgeoning bedroom community. Or maybe they’re aware of some market trend suggesting the richer-than-thou crowd will remain isolated from storm clouds gathering around the corrupt lending and building industry. But there seems to be enough questions arising from today’s markets to give Andrew Cuomo reason to take a hard look at this development before giving it his blessing.

22 Comments:

Anonymous Anonymous said...

Those wealthy enough to invest in condos in Saratoga Springs when the market is this sketchy should also be throwing a couple of million into investing in Saratoga County so that they will end up with a long term attraction -- to maintain Saratoga Springs. It's the economy stupid!
http://www.youtube.com/watch?v=QKMFGMOiKwk

4:26 PM  
Anonymous val said...

ummm

what is this topic about?

uhhhhh

i don't understand what you're discussing.

ummmmmmmm

when i was in charge, we, uhhhhh, would, uhhhhhhmmmm, make a motion to table it for another time.

uhhhhh

can someone please tell me what you mean by all this?

7:31 AM  
Anonymous Anonymous said...

There are several Hampton mansions in foreclosure - which is a real indication of the failing economy in New York state.

What makes Saratoga feel that it is protected from the real world out there? To quote a line from Gossip Girl... "Where did you summer? The Adirondacks? Next."

As much as Saratoga wants to believe it is the place to be for the rich and famous, does anyone really believe that it actually is?
Our own Saratoga Socialites don't spend their money here. Why would we expect that NYC's finest would?

Has anyone taken a walk downtown lately? Empty store fronts, vacant spaces, businesses closing. Building owners need to realize that they are asking too much for rent in this economy. Local people need to start spending their money locally, or there will be nothing much left to Broadway but chain stores, and why bother to come to Saratoga to walk and shop when you can see the same shit in your local mall? And these multi-million dollar condos do nothing to sustain a town that makes people want to come here. Ask 20 random people on the street what makes them want to come here or live here. What makes Saratoga different from other towns. They will tell you that it is the quaint shops and eateries, it's a vacation destination, a relaxing experience, etc. Why not focus on marketing this town again. Not outpricing it for the normal American.

8:49 AM  
Anonymous real deal said...

It's called a lack of leadership and foresight.

Look who we're dealing with in this city; those that hold the political "juice": Nolan, Roohan, Keehn, Johnson, Kim, Raniere, and on and on.

Does anyone reallyn think this band of misfits is capable of doing the right thing for Saratoga's future?

I didn't think so

6:35 AM  
Anonymous Anonymous said...

It's the public apapthy.

or

The local attitude of, "I'll let someone else be concern about what's going on...and let them fix it."

Meanwhile, we'll wait for the "Condos in the Sky" sink into the Pavilion and United States Springs...It will be almost as much fun as watching Ruin/Bonacio team pumping out the stream that flows under their condo project.

8:10 PM  
Anonymous Anonymous said...

I know this doesn't have anything to do with the price of beans in Saratoga Springs but it is a really wothwhile video from John Kerry. I would be grateful if you can post it.
http://www.youtube.com/watch?v=aH5R1s5_w5E&eurl=http://www.huffingtonpost.com/2008/09/28/john-kerry-takes-it-to-mc_n_130021.html

3:14 PM  
Anonymous Anonymous said...

Anon 8:10:

Equating Ruin with Roohan = brlliant.

4:46 PM  
Anonymous Anonymous said...

Ain't America great...Tom and Sonny can make a bunch of money by filling a need a need then donate a bunch of it back to the community and morons like 8:10 and 4:46 can enjoy the freedom of speech. What a country!

8:25 AM  
Blogger shotinthedark said...

Horatio,

It looks like it's a little too late for that “abrupt about-face by the national economy" that you mentioned.

It appears something big is going on in the economy that many of the political and economic wonks didn't see coming and don't appear to understand which is in itself amazing since it has been crystal clear to others for so long.

The shit is finally hitting the fan.

There is about to be a massive realignment of wealth. The rich are no longer necessarily going to get richer.

There are two groups of people in this country: the Haves and the Have Nots.

The Haves have all the money and benefits that lead to an easy life. This group consist of the well born (like George Bush), the well educated (like doctors), the well connected (like most government workers), and the occasional self made talented entrepreneurs (like Bill Gates and the late Paul Newman).

The Have Nots consist of everybody else. This growing group of the population has seen their income slip badly, have virtually no benefits, and understand that they will be scraping to get by till they die.

It's interesting seeing the panic that some of the Haves are starting to feel.

Because the Have Nots don’t have anything to lose they don't experience this type of panic. The loss of value of their 401ks doesn't bother them because they don't have any 401Ks to begin with.

Yes, many of these Haves that have come to expect or already have an easy retirement with full benefits at the age of 55 are in for a rude awakenment.

In another six months, trying to figure out how to pay for the proposed new public safety building is going to be the least of Ron Kim's worries; he will be much more concerned with trying to meet his current payroll and retirement obligations.

12:20 AM  
Anonymous real deal said...

8:25,

We don't object to them making money in an honest manner

We object to the system being being fixed to assist them in doing it

6:41 AM  
Anonymous Anonymous said...

Real deal
Please give solid examples of hte system being fixed, not rumor or orpinion, but solid facts and I'll wholeheartedly agree with you. I can't throw the two to the wolves when all I have heard is political gossip. thanks for your help on this one.

5:47 AM  
Anonymous real deal said...

Well, here's two--just to get the ball rolling:

1. A little something called the County water plan? Taxpayer financing of suburban sprawl and development....

2. How about the absolute joke of a parcel inside of the city of Saratog Springs being designated as an Empire Development Zone for tax credits, sales tax exemtions and other benefits accruing to its onwers -- none other than Mr B nd Mr R? I refer, of course, to the old Van Raalte Mill on HighRock Avenue and the luxury town homes across the street.

This is patent abuse of a program designed to bring in jobs to depressed inner cities throughout NYS. But in this case, we got a political powerpla resulting in the chery picking of an area inside of the not-depressed city of Saratoga.

There are other scandals going on in that buidlng we can get into later (hint: SEDC money). And let's not forget the "Joe Bruno's brother" affair that happened in there.


How am I doing so far? Shall I continue?

9:56 AM  
Anonymous Anonymous said...

So Mr. Roohan and Mr. Bonacio have everyone at New York State overseeing the Empire Zone program in their pocket? Wow that's impressive. And the County water system is only going by property that they wisely bought. The first is rather improbable, the second is a smart business decision.

5:58 AM  
Anonymous real deal said...

Actually, the state's Empire Zone program IS terribly corrupt.

A primer for you, my un-informed friend:

The EDZ is "administered" by local entities. In our local instance, that entity is called the Saratoga Economic Development Corporation.

Hence your theory of local beneficiaries needing to "have everyone at NYS overseeing the Empire Zone program in their pocket" is not the case. They just need to influence the local hacks--who control 90% of the decision-making and will handle the dirty lttle details of the remaining 10.

As for your take on the county water "smart business decision": are you that naive?

Or just an apologist for the
"way things really get done?"

You asked for "solid examples"-- I supplied them.

7:44 AM  
Blogger shotinthedark said...

Try as you may to connect the country water plan to land speculators, I’m afraid the county water system will probably end up being just another dumb Republican fiasco very similar to the Landfill to Nowhere. As the economy continues to slip day by day into a financial black hole the chances of AMD building that chip plant become more and more unlikely.

The old Van Raalte Mill on HighRock Avenue was a blighted area by anyone's standard and its rehab has produced a significant business area in the city which in turn has produced a modest number of jobs.

8:39 AM  
Anonymous real deal said...

If the Van Raalte Mill presented the opportunity to make a buck for someone, let them go at it.

My objection--again--is supplying these individuals with public funding to help make that happen; especially when that funding comes from a program designd to bring jobs into the cities that need them the most.

It is bare faced corrution when a city like Saratoga is suddenly classifieds as one such city, and a spot on a map is drawn to make this cash transfer happen. Even the original authors of the NYS EDZ are out there on the speech circuit, screaming about how this program has become one big pork barrel for favored developers.

Even if you don't buy that argument--how do you justify the townhouses there being part of this dirty little deal? Job creators?

Not to mention the fact that SEDC tossed money into the hands of the Mill's first major tentant, with the return-promise that it would create several hundred jobs. That particualr compnay got into trouble, did not meet that promise and currently employs but a handful of people.

So, the money should be paid back, right?

Well, it should, but it wasn't.

Instead, a scheme was devised whereby the space was made avaialble to outside companies (sub-leases), with those companies' employees being counted as those 'new jobs' to avoid paying back these funds and to keep 'in compliance' with EDZ terms.

A) they are not 'new' jobs.

B) they are not jobs of the original company


And you're cool with all this?

Of course, SEDC is a "private nonprofit" which means it has limited transprency. But thankfully, there is movement to open them up when it comes to corrupt EDZ practices.

6:13 AM  
Anonymous Anonymous said...

I think Real Deal wins the debate.

He was asked to back up his points and he did; with legitimate ones.

Shot, he called you on this

7:57 AM  
Blogger shotinthedark said...

Here is how I feel.
I don't know the particulars of how this government program works that was supposedly taken advantage of by “a city like Saratoga”.

But I know what I can see with my own two eyes.
And that is, a corridor within the city that was considered a blighted area for many years. It is now been transformed to something quite admirable.
I don't know what it cost the taxpayers but I do know there has been a damn good improvement.

7:56 PM  
Blogger shotinthedark said...

Here is how I feel.

I don't know the particulars of how this government program works that was supposedly taken advantage of by “a city like Saratoga”.

But I know what I can see with my own two eyes.
And that is, a corridor within the city that was considered a blighted area for many years. It is now been transformed to something quite admirable.
I don't know what it cost the taxpayers but I do know there has been a damn good improvement.

8:51 PM  
Anonymous Calling it like it is said...

my garage is "blighted" too --where's my handout to improve it?

gee, i'd like to build five townhouses to re-sell at a profit. where's my handout to do so?

my car is 'blighted'--when will the govt help me get rid of tis public eyesore?

same thing with the siding on my house: it looks like hell. Help me, my fellow taxpayers.

that old gas station on South Broadway is certainly a blighted property. How come the city took an adversarial stance towards thatr owner? Where is the ESZ / SEDC monet got them. Ohh...,thats right--they're not in the local grove. How silly

hey "shot"--your "I dont know the particulars" is a lazy way of bailing out of the debate here.

i have a better idea--why dont you take it upon yourself to look into it a bit more. that way you are answering your own original question.

because what you're saying here is that "as long as there is a property improvement, i dont give a shit what's going on behind the scenes."

is that your definition of American capitalism ?

you must be a Republican, I would guess?

8:58 AM  
Blogger shotinthedark said...

8:58 AM said...

"hey "shot"--your "I dont know the particulars" is a lazy way of bailing out of the debate here."

Well, I can tell you that when this dastardly deed was done many years ago, I am sure I read most of the "particulars" that were reported. At that time, no red flags were raised as far as I was concerned. In fact, if memory serves me correctly I don't remember any groundswell of opposition.

Where were you at that time?

It's kind of like closing the barn doors after all of the animals have run out.

I will be the first to admit that I am more of a big ideas person; I usually pay others to come up with the required details.
And since you seem to be in such a tizzy over this supposedly misuse of public money, I will defer to you.
What was the total cost to taxpayers to straighten out that blighted area of town?

8:20 AM  
Anonymous calling it like it is said...

Shot:

There lies the probelm---getting a look at thr numbers.

We do know of upfront SEDC funding of approx $300K moving over there.

The rest: we dont know, because we dont have access to the financials and tax returns of the developers. They were granted various sales and income tax exemptions and credits for many forward years.

Like you: I am all for 'fixing blighted properties.' I just reject the notion that a very inexpensive piece of real estate in the city of Saratoga Springs' central district could not bneficially serve the profit motivations of the private sector without the aid of significant public / taxpyer contributions.

Plus: where was the 'blighted' apsect of the townhouses across the street?

9:25 AM  

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