COR Development dropped Carthage apartment plan due to poor market study

General manager of COR Development Co., Steven F. Aiello, at the construction site for Beaver Meadows Apartments, Watertown. Photo by Norm Johnston/NNY Business.

Plans for a 364-unit apartment complex in West Carthage were scrapped in January because a market study commissioned by COR Development Co. created serious concerns for financiers, according to COR General Manager Steven F. Aiello.

“We would have been pleased to have done the project there, but the market study didn’t support it. There were financial challenges getting the project built there,” Mr. Aiello said. “We have an obligation to the state to make sure the project had the best opportunity to be successful.”

In December, the project was awarded a $2 million grant through the state’s Regional Economic Development Council awards as part of a $90.2 million initiative to stimulate the economy and create jobs in the north country.

COR had been under contract to develop the site with Carthage-based Lunco Corp., owned by Michael E. Lundy, beginning last July 20, according to Joseph B. Gerardi, legal counsel for COR.

COR would have built the housing portion at the back of the Johnson property southwest of North Broad and Franklin streets. Lunco Corp. was to develop the 16-acre retail portion at the front of the site.

That contract was an agreement based on several contingencies, including the suitability of the site as determined by independent due diligence.

Upon completion of the proprietary market study commissioned by COR, Mr. Aiello sent a letter to Mr. Lundy stating, in part, “we have determined that the Contingencies in our Purchase Agreement cannot be satisfied and the agreement is therefore terminated as of this date.”

The letter is dated Jan. 3.

Last week, COR announced that it would be demolishing the former Mercy Hospital in Watertown to redevelop the site into a mixed-use complex combining residential, retail and business development.

The change in plans “had nothing to do with somebody luring us away,” Mr. Aiello said Tuesday.

Mr. Aiello said the urban revitalization and mixed-use opportunities presented by the Mercy site were a better fit for the criteria set forth in the market study and had a higher likelihood of success.

“Our lenders are very encouraged by the site and are prepared to move forward once we get the approvals in place,” Mr. Aiello said.

The $2 million grant likely will follow the project.

While the move to the Mercy site has been characterized as a victory by city and county representatives, it came as a disappointment for West Carthage officials.

“We knew when COR moved on Mercy their interest was out of West Carthage,” said West Carthage Mayor Scott M. Burto.

Although Mr. Lundy could not be reached for comment, Mr. Burto said he believes Mr. Lundy is “still pursuing additional investors,” although the scope of the project may change.

“It was great news for the city of Watertown and a good reuse of Mercy,” Mr. Burto said. “Unfortunately for us, our Planning Board and the village spent a lot of time in filing plans to move the (Broad Street) project forward.”

Village Planning Board Chairman Ronald J. Blinebry had no comment about COR pulling out except to say, “That’s what a planning board does, review the plans brought to us. It doesn’t matter if a plan doesn’t go through.”

-Daniel Flatley, Watertown Daily Times staff writer. Johnson Newspapers writer Elaine M. Avallone contributed to this report.