(Credit: Steve Thurston, 2022)
About nine acres of undeveloped land near the corner of Sun Valley Drive and Route 9L in Lake George will be used for a workforce housing development.
The developers of a new $5.98 million apartment complex in the town of Lake George are close to beginning construction after approval delays and rising costs threatened the project. The five-building, 39-unit Sun Valley Apartments will be built on nine acres of land located at the corner of Route 9L and Sun Valley Drive.
Co-developers Rich Askew, president of Rondack Building Inspections, and Mike Grasso, Vice President of Cool Insuring Agency, purchased the land for $450,000 in April 2021.
Grasso tells FoothillsBusinessDaily.com that he "expects to break ground soon" and foresees rents "in area of $1,350 per month." He added that the Town of Lake George has issued an approval of the engineering, but they are still awaiting DEC approval for the sewer connection.
The apartments were conceived as “workforce housing,” which is specifically for households who earn 60%-120% of the Area Median Income, as defined by HUD. The median income in the town of Lake George is $67,907, meaning that prospective renters must have a household income between $40,674 and $81,348 to be eligible.
As developers have worked to secure the necessary engineering approvals for the project, interest rates have nearly doubled, and Grasso estimated that construction costs have increased by more than a million dollars.
Askew and Grasso subsequently turned to the Warren-Washington Industrial Development Agency (IDA) for help. A public hearing was held on May 2 to review their request for tax abatements.
“If we don’t get assistance from the IDA, we’ll build apartments, but they won’t be workforce,” Grasso stated at the hearing. “They’ll have rents in the $1,600-$1,700 range.”
Despite the IDA support, projected rents for the apartments have increased by $250 from the original estimate of $1,100 per month.
Officials from the Town of Lake George told IDA chair Dave O’Brien that there was a “high level of need” for such housing. Local employers including Hudson Headwaters and Fort William Henry echoed those sentiments, expressing frustration at the lack of quality, affordable housing for employees, according to Grasso.
The key sticking point for the IDA was the fear that renters would try to sublet the apartments during the summer season, creating a carousel of tourists moving through the complex. Developers reassured them that’s not their intention.
“We’re going to sign these leases for a year and hopefully renew them year after year,” Grasso told the IDA. “We wouldn’t want to jeopardize that with Airbnb weekend rentals. We don’t want weekenders terrorizing our year-round people.”
It was agreed that language would be written into the lease agreements prohibiting the subletting of apartments and the execution of short term leases, defined as leases less than 30 days. With that understanding in place, the IDA agreed to unanimously support the project with sales tax exemptions totaling $153,000, elimination of the $59,532 mortgage recording tax, and an additional payment-in-lieu-of-taxes estimated at $176,000 over ten years.
In addition to the availability of more affordable housing, there will be other economic benefits of the project.
“We calculate about 57 construction jobs will be created,” Grasso said. “There will be close to $3 million spent on labor, machinery rentals, and other related costs. The primary framing packages are coming from a distributor in Queensbury, and a lot of the sourced materials will be local.”
Galusha & Sons of Queensbury will be the site contractor.