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| 6/25/2009 1:35:00 AM | Email this article • Print this article | | A closer look at the project | In a five-page opinion distributed to the Common Council last week from attorney Neil Rivchin of the Albany law firm O'Connell and Aronowitz, Rivchin evaluates the option agreement between the city and developer Uri Kaufman, operating as Albany Tech Center LLC (AT). Below are some highlights of that opinion, which Rivchin states he crafted after reviewing documents associated with the project and evaluating the contractual compliance of the May 2008 agreement.
• The option agreement does not clearly and definitively define under what circumstances the city may terminate AT's purchase option. According to the agreement, the city has the right to terminate AT's agreement if AT has not "substantially" met the specified milestones. However, Rivchin wrote, "unfortunately, the term 'substantially,' is subject to interpretation and not, otherwise, objectively defined."
• The agreement appears to support that if the milestones haven't been completely met within one year, AT has the right to extend the agreement for an additional year and is required to pay the city $50,000 "which will serve as a credit against the eventual purchase price."
• While the agreement states that the option may not be exercisable within 12 months of signing the option due to environmental remediation not being completed, Rivchin said that while "subject to interpretation," it could be argued that AT would have had to pay the $50,000 for the extension even if the environmental remediation had not been completed.
• According to documents provided by the Common Council, Rivchin believes AT has satisfied all milestones with the possible exception of obtaining construction and permanent financing commitments for the project.
• Evidence of a strong interest in financing of the proposed project is "a matter of interpretation," since the agreement doesn't define what would constitute a strong interest.
• Seeking to have the building designated as an historic site will not prevent future demolition, but will require obtaining consent from the New York State Historic Preservation Office and the U.S. Advisory Council on Historic Preservation.
• AT's undertaking of the project under the HUD 221(d)(4) mortgage insurance program and historic preservation tax credits may impose a requirement that apartments in the project be made available for moderate or low-income tenants.
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Source: letter from Neil Rivchin, dated June 10
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Aldermen back termination of Chalmers' deal
Jessica Maher
Reporter
Four aldermen submitted a resolution on Wednesday to terminate the option agreement between the city and developer Uri Kaufman, to be considered at the next Common Council meeting.
The decision was based on the opinion of attorney Neil Rivchin from the Albany law firm O'Connell and Aronowitz. The opinion was obtained by the Common Council for $2,500 in order to review the city's May 2008 agreement with Kaufman, operating as Albany Tech Center LLC (AT). On Tuesday, the Recorder obtained a copy of the opinion, which was distributed to city officials last week but not released to the public.
Fifth Ward Alderman Richard Leggiero, who sponsored the resolution along with aldermen Joseph Isabel, William Wills and Daniel Roth, said the Common Council spent a week reviewing the opinion and discussing it amongst themselves, never in an official meeting setting.
"After reviewing the report, we felt we did have a case to follow through on termination," said Leggiero.
An adamant supporter of Kaufman's vision of transforming the former Chalmers Knitting Factory into high-end apartments, Mayor Ann Thane expressed disappointment in the resolution on Wednesday, and said that after reviewing Rivchin's opinion, her stance that Kaufman has met the conditions outlined in the agreement remains unchanged.
"The actions that are taken by the council to lampoon this project are very disappointing," said Thane. "We need this project in the city."
Thane called the opinion "noncommittal," and 3rd Ward Alderman Kim Brumley agreed. Unlike the rest of the council, Brumley is not committed to terminating the agreement. She has requested that before the next regular Common Council meeting, Rivchin be available to answer questions about his opinion from both the council and the public.
"I would like to be able to base my vote on a well-informed decision," said Brumley.
Rivchin's opinion appears to indicate that much of the original agreement is subject to interpretation, based on the language of the agreement, including the term "substantially" meeting the milestones as opposed to "completely" meeting them. While Thane said that such phrasing builds flexibility into the contract for the developer to bring his project to fruition, Isabel sees the language of the agreement, which he was alone in voting against last year, as putting the city at a disadvantage.
"My opinion is that the contract was written so loosely ... and not in the interest of the city by any means," said Isabel.
Roth agreed, saying that he now regrets his vote to approve the agreement last year, and said recommending the Chalmers building go to demolition committee is in the best interest of the city.
"So far I think the city of Amsterdam, the taxpayers, have put more up for this than [Kaufman] has," said Roth.
The resolution to terminate the agreement, which was drafted by former Corporation Counsel Robert Going, cites milestones that have not been met, including the stipulation that within six months of signing the agreement, the developer was to have presented evidence of strong interest in the project by construction and permanent lenders.
"We're not doing this deliberately," said Wills. "We did agree to [the contract,] things just didn't turn out the way we intended them to work out."
Aldermen also cite the failure of AT to renew the option agreement by a payment of $50,000 to the city as justification to terminate the agreement. While the agreement states that the option "may not be exercisable within 12 months ... due to the fact that the environmental remediation may not be complete," Rivchin's opinion states that it could be argued that the $50,000 was due regardless of the environmental remediation, stating again that the agreement is "subject to interpretation."
"It tells you how much AT was committed to the project," said Wills. "I'm in agreement that we should just end this, knock it down and go on with life."
Calling Rivchin's opinion "vague," Brumley said she doesn't know how her colleagues came to the conclusion that the $50,000 extension is a requirement.
"I would like them to point that out to me," said Brumley. "I'm not reading that."
Brumley also disagreed with the assertion in the resolution that one milestone that has not been met is AT making presentations to the Waterfront Commission and Planning Board, because the minutes of those meetings have been provided by City Hall.
Kaufman on Wednesday confirmed his interest in the project, saying through various studies and drawings, over $100,000 has been spent on the Chalmers project.
"We still believe in the project and we're still moving forward," said Kaufman. "We've lived up to our end of the bargain and we believe Amsterdam will do the same."
Though Corporation Counsel Gerard DeCusatis said he will issue an opinion about the resolution, he declined to comment on the opinion, saying that any discussion that could lead to potential litigation should be discussed in executive session among the council.
Kaufman said that if the contract is terminated, "litigation would be a real possibility."
While the Common Council said litigation is a concern, Wills said the council is prepared for any consequences of the resolution, which was submitted to be considered for the July 7 meeting.
"[The vote] will be an overwhelming majority as far as I'm concerned," said Wills.
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Contact Jessica Maher at jessica.maher@recordernews.com.
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