Today, in the Bellevue neighborhood of Schenectady, U.S. Senator Charles E. Schumer joined with officials from the City of Schenectady, including Schenectady Mayor Gary McCarthy, to demolish the first of approximately 80 vacant and blighted properties around the city, clearing the path for redevelopment. The demolition of these properties is being made possible by a $3 million loan from the federal Department of Housing & Urban Development (HUD) that Schumer pushed for and secured, successfully making the case to then-Secretary of HUD Shaun Donovan that Schenectady’s vision for the vacant properties fit squarely with HUD’s Section 108 Loan program and convincing HUD to expedite approval of Schenectady’s application. After securing the loan, Schumer worked with officials from Schenectady and HUD to cut through bureaucratic red tape that was temporarily preventing demolition from getting underway. Schumer explained that Schenectady is plagued with excess housing stock that has fallen into disrepair and abandonment, and these properties have become a blight on local communities and reduced property values for families living in the neighborhoods where these properties are located. Schumer said that by demolishing these buildings, Schenectady can redevelop the sites for new use and begin a new chapter in the City’s development.
“Vacant and run-down properties are a drag on every community where they exist, devaluing nearby homes, stifling development and endangering first responders. That is why I have been a supporter of Mayor Gary McCarthy’s efforts to remove blighted homes, breathe new life into these spaces, and provide a boost to local communities. Last year, I stood in this exact spot and pushed for HUD to approve the $3 million loan needed to make this revitalization project a reality, and I am proud to stand here today as we turn over a new leaf and kick start the redevelopment of these sites and this neighborhood,” said Schumer. “Eleven months ago we stood at this very spot and promised to begin taking blighted buildings like 2033 Broadway down, and here we are today turning this into reality. Mayor McCarthy has been dogged in pursuit of this and I know that today is just the first in a long series of similar demolitions across the city that will make Schenectady safer and more beautiful for residents, and more attractive for people and businesses to locate here.”
Schumer explained that, 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 that 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 had either completely deteriorated or required so much work that the cost of rehab outweighed the potential value. This excess housing stock has devalued nearby properties and discouraged investment in the community for years, underscoring the need to demolish and revitalize the space where these 80 properties are located.
Schumer also explained that these often-crumbling properties have posed a danger to police and firemen since they are at greater risk for arson. Because these properties are structurally deficient to begin with, they put emergency personnel at greater risk of injury. In July of 2013, the City of Schenectady submitted an application for a $3 million Section 108 Loan to HUD’s Buffalo regional office – with the expressed purpose of using funds to raze derelict buildings for redevelopment and sale. With this loan, the city estimated it could raze approximately 80 of these buildings that have been identified as beyond the point of repair. The effort is a piece of the Mayor’s Home Ownership Made Easy in Schenectady (HOMES) program, designed to eliminate blight and encourage more home ownership in the City.
In November of 2013, Schumer stood at 2033 Broadway in Schenectady’s Bellevue neighborhood, where he was joined by Mayor Gary McCarthy and other community leaders, to push for this HUD loan. During his visit, Schumer explained that this $3 million loan would allow the City of Schenectady to raze vacant properties and clear the path for redevelopment. In March of 2014, Schumer announced that, after his push, HUD had approved this $3 million loan for the City of Schenectady. Schumer said that this federally-backed HUD loan gives Schenectady the necessary capital to pursue its large-scale renovation of vacant and neglected properties. Schumer noted that the Section 108 Loan program requires at least 70 percent of the sites being demolished to be used for a new building or in a way that improves adjacent properties, which will help revitalize these neighborhoods and further the City’s efforts to expand access to home ownership through their HOMES Program.
After Schumer secured the loan from HUD, he also worked with officials from both the City of Schenectady and HUD to cut through bureaucratic red tape that was temporarily preventing demolition from getting underway. Schumer’s office worked directly with HUD Regional Director Holly Leicht to ensure Schenectady was eligible to receive this loan.
Schumer explained that this HUD loan guarantee will come from the Community Development Block Grant (CDBG) Program’s Section 108 loan guarantee component. Section 108 provides communities with a source of financing for economic development, housing rehabilitation, public facilities, and large-scale physical development projects. Activities eligible for Section 108 financing include: economic development activities under CDBG; the acquisition of real property; rehabilitation of publicly owned real property construction, reconstruction, or installation of public facilities (including street, sidewalk, and other site improvements); related relocation, clearance, and site improvements; payment of interest on the guaranteed loan and issuance costs of public offerings; debt service reserves; public works and site improvements in colonias; and, in limited circumstances, housing construction as part of community economic development, Housing Development Grant, or Nehemiah Housing Opportunity Grant programs. Schumer noted that all projects and activities must either principally benefit low- and moderate-income persons, aid in the elimination of blight, or meet urgent needs of the community.
Schumer was joined by Schenectady Mayor Gary McCarthy and other city officials for the demolition.
“Thank you to Senator Schumer for his strong leadership and unfailing efforts to ensure the residents of Schenectady received this vital program. These distressed vacant properties are magnets for crime and discourage investment and removing them will open the door to rejuvenation in our neighborhoods,” said Schenectady Mayor Gary McCarthy. “ Estimates have shown that a single structure slated for demolition can cost in excess of $65,000 per year in direct and indirect costs. This loan will allow us to remove blight from our community and put these properties back to beneficial use for the residents of our community.”
“This is a wonderful day for the City of Schenectady, and especially for Senator Chuck Schumer and Mayor Gary McCarthy, both of whom worked tirelessly in seeking funding to improve neighborhoods by demolishing some of the city’s most distressed or dilapidated properties,” said HUD Regional Administrator Holly Leicht. “Our Department has no higher priority than revitalizing and strengthening neighborhoods. By utilizing one of our community-based programs, the City will be able to eliminate nearly eighty blighted and distressed properties and return them to beneficial community uses for its hard-working residents. I congratulate both Senator Schumer and Mayor McCarthy for their hard work and efforts on behalf of the residents of the City of Schenectady.”
Out of the $3 million loan request, the City of Schenectady is receiving the following breakdown of funds:
- $2,500,000 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.
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. Schumer made the case to Secretary Donovan that Schenectady’s application clearly falls within the purview of the Section 108 Loan Guarantee Program’s overriding mission.