$10 million to $20 million 'capital fund' sought for downtown Albany

Leaders of Capitalize Albany Corp. want to create a $10 million to $20 million fund to buy properties, underwrite low-interest loans, improve facades and award grants to spur new, private-sector investment in downtown Albany, New York.

While downtown has seen considerable new investment in recent years, particularly with upscale apartments and condos, more options are needed to fill financing gaps for developers and continue the momentum, officials said.

City and school tax abatements, which have been controversial at times, alone are not enough, nor should they be the only tool in the redevelopment arsenal, they said.

There are five potential sources for the $10 million to $20 million:

• A portion of the Albany County hotel/motel tax
• A portion of the county's retail tax, similar to how the Schenectady Metroplex Development Authority economic development agency is funded
• Fees assessed by the Albany Industrial Development Agency
• Corporate/institution/foundation investments
• New York state investments

"We're looking to seed this fund in 2015," said Sarah Reginelli, the newly-appointed CEO of Capitalize Albany Corp. "It's really the region's downtown. We want to be able to show the local economic development organization is working to have skin in the game. We're pooling that now."

The new fund -- recommended by outside consultants who have been working for a year on a plan to guide downtown growth -- would be mirrored after those in Cincinnati, Louisville, Columbus, Ohio, and other cities with local development corporations that coordinate and pay for downtown improvements.

Capitalize Albany Corp., a private, nonprofit whose roots date back to 1979, is the city's version of a local development corporation, but the difference is Capitalize Albany doesn't have a large source of funding.

DeMasi covers real estate, construction, retail and hospitality.