May 2015 Cover Story: Growth and Revitalization

Rising from the past for a better future

Mark Pelletier, project manager for COR Development, Fayetteville, stands atop the rubble of the former Mercy Hospital site. COR began an aggressive $65 million to $75 million redevelopment of the site in 2014. The project is on track for completion in 2016 or 2017. The finished product is slated to have 40,000 square feet of retail and office space and 160 to 200 apartments. COR plans to build the apartments first, with the commercial space to follow. Photo by Justin Sorensen, NNY Business.

Mark Pelletier, project manager for COR Development, Fayetteville, stands atop the rubble of the former Mercy Hospital site. COR began an aggressive $65 million to $75 million redevelopment of the site in 2014. The project is on track for completion in 2016 or 2017. The finished product is slated to have 40,000 square feet of retail and office space and 160 to 200 apartments. COR plans to build the apartments first, with the commercial space to follow. Photo by Justin Sorensen, NNY Business.

From Massena to Watertown, Ogdensburg to Lowville, efforts to revitalize urban centers take hold as public and private investment tops $250 million. Those involved say the north country is finally on a much brighter path since the 2008 recession battered the region.

By Lorna Oppedisano, NNY Business

Recession. Brain drain. Economic downturn. They’re all-too-familair words for many in the north country. Domestic manufacturing began a steady decline years ago, and downtowns, a once-bustling hub of retail commerce across the country, fell into disarray. Few cities and towns had the time, energy or money to keep historic buildings once teeming with life from crumbling into disrepair. Small businesses have struggled. For those lucky enough to find a decent apartment, the rent was likely out of sight as the inventory of rental poperties atrophied.

But in the past three years or so, a light has started to shine at the end of a long, dark tunnel. Across the tri-county area, communities and developers have reinvested in downtowns. Buildings are being restored and repurposed. Small businesses and residents alike are being drawn toward a redevelopment that has given birth to a renaissance of sorts.

“What’s starting to happen is that you’re starting to see a shift,” said Donald W. Rutherford, Watertown Local Development Corporation CEO.

He explained that nationally, downtowns are transforming into environments where someone can actually start a business and be able to afford the rent. Residents are now more likely to relocate to these urban areas.

“What a lot of the smaller cities in the state are trying to strive for is creating an environment like that,” he said.

Business owners across many north country downtowns are using money from New York Main Street grants to restore storefronts and reinvest in their communities. Companies like Croghan’s Grand Slam Safety and Ogdensburg’s Sherman Inn are making conscious decisions to open their businesses in vacant buildings rather than build new spaces.

The core of revitalization in the north country is downtown Watertown. Investments of more than $130 million have resulted in numerous rental spaces and some 300,000 square feet of commercial space. On a larger scale, more than 2,000 new rental units have gone on the market within a 30-mile radius of Fort Drum since 2011.

Among these are the Woolworth Building, a $17 million project resulting in 35 one-bedroom and 15 two-bedroom units; the Solar Building, a decaying structure that Washington Street Properties purchased for $1.2 million in 2013 and has since renovated into 73 studio, one- and two-bedroom apartments; Beaver Meadow Apartments, a $38.4 million project yielding 296 units, 60 of which are classified as affordable housing; and the Preserve at Autumn Ridge, a $56 million project resulting in 394 units.

And that’s just the beginning.

Jefferson County

Most activity in Jefferson County is arguably taking place in Watertown. With projects spearheaded by Washington Street Properties, COR Development, Morgan Management and VDI Properties LLC popping up around the city, it’s clear that the cityscape is changing.

“All those added together really help bring a focus to downtown,” Mr. Rutherford said. “Watertown is the largest city in the north country. And downtown Watertown is the financial and governmental hub of the north country, and it’s important.”

After attending conferences around the state, Mr. Rutherford said he’s learned that a strong and vital downtown presence make for a strong local economy. City residents across New York are starting to gravitate toward living and working downtown, and Watertown is no exception.

These developments — many of them revitalizations of older buildings — broke ground in the city just a few years ago, and the area has already seen notable change.

Efforts to breathe new life into the city’s downtown most notably began in 2011 with the historic Franklin Building on Public Square. Once home to the city’s YWCA, the nearly $10 million redevelopment created 16 apartments and a handful of retail and commercial spaces. The North Country Arts Council is a main tenant and plans are underway to compelte a boutique theater on the ground floor.

In 2013, Brian H. Murray, Washington Street Properties founder and CEO spearheaded a makeover of the Top of the Square mini-mall. Since then, more commercial and rental properties have been
put on the map with investments by small property owners and major developers.

“A growing population downtown will make it more feasible for businesses to open and do well in downtown,” Mr. Murray said.

He described this phenomenon as a “snowball effect.” People move downtown, so there’s a large pool of local residents from whom potential employers can hire. Businesses open, so there are more jobs for the potential local residents.

“So we’re on the positive side of momentum and some exciting changes for downtown,” Mr. Murray said.

Among those are Mr. Murray’s Lincoln Building and Arsenal Street Apartments and COR Development’s Mercy project.

“We found there’s a trend of young professionals and retirees who want to move back to the core of the city,” Steven F. Aiello, COR Development president, said.

COR refocused several years ago based on that national trend. When the company completed Towne Center Plaza several years ago, its first Watertown project that brought retail giants Target and Kohl’s to the region, Mr. Aiello developed a positive relationship with town and city representatives, who made the project run smoothly and wanted to see new economic development.

The shortage of new quality housing in downtown urban areas drew COR to explore further options in Watertown.

COR acquired Mercy Hospital in April 2013. The hospital had been active from 1894 to 1991, and mostly lay empty for the two decades following. The last tenant, a nursing home, left in February 2013. Many residents moved to Samaritan Medical Center’s new Summit Village off outer Washington Street.

The $65 million to $75 million project is on track for completion in 2016 or 2017, Mr. Aiello said. The finished product is slated to have 40,000 square feet of retail and office space and 160 to 200 apartments. At this point, COR’s plan is to build the apartments first, with the commercial space to follow.

Mr. Aiello said COR plans lease 80 percent of the units at market value; the other 20 percent will be affordable housing. This way, working people with lower incomes can qualify for the same product. This could include a single mother, student or young professional who’s just starting out.

This will help put Watertown on the map with cities following the downtown trend, and help to sustain the snowball effect Mr. Murray mentioned.

“The young professionals, they want to be able to rent and live in the heart of the city where they can go out for dinner and walk to work,” Mr. Aiello said.

Which type of retailers COR hopes to lure into the space is still to be determined.

“We’ll see who approaches us,” Mr. Aiello said. “Or we’ll go after and target certain things that will fill a void in that area.”

Mr. Murray’s downtown projects have seen success. He purchased the Solar Building in 2013 for $1.2 million. Once a space known for its troubled tenants, police calls and unkempt conditions, it’s now completely revamped and at full capacity with a waiting list. Mr. Murray said he attributes that in part to the easy walk from the building into downtown.

Mr. Murray recently purchased the former Rodeway Inn, 652 Arsenal St., for $1.3 million. He’s since revamped the old motel into 48 studio and one-bedroom apartments. Right now, the building is slated to be ready for move-in May 15. Almost half the rental units are studio apartments starting out at a special rate of $495 a month, including utilities.

“They’re nice, but they’re small,” Mr. Murray said, adding that this type of space would be good for a young single professional or solider.

This follows another trend, Mr. Murray said: smaller apartments.

“It just goes with more of a trend nationally where people want to downsize and simplify their living,” he said.

Further down the road, the Lincoln Building is also slated for studio apartments, along with one- and two-bedroom units. Mr. Murray said construction on the apartments is likely to begin in 2016. The plan this year is to first proceed with façade restorations beginning in May; after that, he plans to start on the ground floor commercial space, with hopes to move tenants in by the end of the year. He plans to spend $1 million on the first phase of the project, which includes façade restoration and the first of five storefronts in six-story building. The original estimated cost of the entire project is $13.7 million.

In terms of those tenants, Mr. Murray said there’s demand for any business that could cater to downtown workers.

“They all need a place to eat for lunch. They’re all hoping to run errands,” he said. “It’s just more convenient if they can take care of it right in downtown instead of having to drive to Arsenal Street.”

Another positive aspect about downtown is its central location, Mr. Murray said. For businesses that hope to attract customers from places like Carthage, Adams, Sackets Harbor and Fort Drum, downtown is right in the middle.

“Whether it’s a dance studio or a fitness center, it’s convenient if you’re centrally located,” Mr. Murray said. “Same thing goes if you need a central hub for service calls around the city.”

Washington Street Properties founder and CEO Brian H. Murray in the historic Lincoln Building, one of his latest acquisitions on Watertown’s Public Square. Photo by Norm Johnston, NNY Business.

Washington Street Properties founder and CEO Brian H. Murray in the historic Lincoln Building, one of his latest acquisitions on Watertown’s Public Square. Photo by Norm Johnston, NNY Business.

 

This revitalization has the potential to keep young entrepreneurs in the area. These soon-to-be-available retail spaces create opportunity for small businesses to set up shop in a place that won’t charge an exorbitant rent, Mr. Rutherford said. While a new downtown scene won’t attract those itching for a high-tech environment, it could help cork the “brain drain.”

“More so for entrepreneurs,” Mr. Rutherford said. “This is a decent place to start a business because the cost of living is relatively low.”

Looking ahead, Mr. Rutherford said he sees downtown continuing to grow.

“We have pretty much identified and addressed the buildings in the downtown area that were in drastic need of rehabilitation. The majority of the high profile buildings have been or are being addressed,” he said, citing the Lincoln Building as an example.

These buildings will be put back into service, he said. The key, as Mr. Rutherford sees it, is to determine what type of businesses, restaurants and entertainment are needed to make downtown a destination point.

Mr. Murray agreed that people would like to see more entertainment venues and nightlife in downtown, with more restaurant and bar activity.

He sees Watertown continuing to grow and become less dependent on Fort Drum in the future. He believes it’s unlikely that the military base will go anywhere, but there’s potential for some restructure.

“If the area continues to grow and downtown revitalization takes place, we will be able to diminish the risk of being overly dependent on Fort Drum,” he said.

Mr. Aiello also sees brighter days ahead for Watertown.

“I think Watertown, like many areas in the northeast, has suffered losses because a lot of manufacturing moved out,” he said. “But I see more and more service-related businesses coming back in.”

He stressed that an area needs viable housing and retail and cooperation between state and local officials and agencies to move the process forward.

“It wouldn’t be possible without all these parties participating,” he said.

While downtown revitalization is in the forefront of development, it’s not the only change to the cityscape.

In the past few years, apartment complexes have popped up on the edges of the city. Before COR Development took on the Mercy project, it began the Beaver Meadow Apartments behind Towne Center Plaza. COR is now finishing construction of the second phase, which should be completed by August, Mr. Aiello said.

“We should be fully leased by the end of this year,” he said.

Morgan Management, Pittsford, also plans to add more rental properties to the scene. The company plans to finish its $56 million, 394-unit Autumn Ridge complex north of Sam’s Club by summer. Morgan intends to expand the development on land east of County Route 202 and just north of Walmart, on a parcel it bought from developer P.J. Simao in January 2014 for $1.25 million. The new 359-unit townhouse complex is slated to be built in two phases and finished by fall of 2017. The two- and -three-bedroom units will have the same layout as Autumn Ridge. The Watertown Daily Times reported in November that site work is scheduled to start in early spring, with construction of the first phase beginning three months later. Morgan Management could not be reached for further update at this time.

Another developer involved with revitalizing Watertown is Patrick M. Donegan of VDI Properties LLC. Mr. Donegan’s most notable contribution to Watertown is Watertown City Center, a plaza home to various hotels and restaurants. He hopes to eventually attract a big-box retailer to the center, but that plan hinges on whether the city will build a connector road through the neighboring Stateway Plaza parking lot to Gaffney Drive at the northern end. Closer on the horizon is development of the former Blockbuster Video property at 1240 Arsenal St., which Mr. Donegan bought from Aerco LLC, Vista Valley, Calif., for $1.3 in January. While it’s hard to attract a big-box retailer to the space in Watertown City Center, convincing a business to open on Arsenal Street is less of a challenge.

“I don’t have any definite plans I can release yet,” he said. “I’ll either remodel it and use the existing building or tear is down and build a new building.”

Watertown Edited Map Enlarged 2013

St. Lawrence County

With no singular “hub,” like Jefferson County’s Watertown, St. Lawrence County is a “collection of connected but unique communities,” said Patrick J. Kelly, St. Lawrence County Industrial Development Agency CEO. Due to the massive size and scope of St. Lawrence County, the area’s growth and revitalization is of a different sort.

“St. Lawrence County is so big and so diverse and there’s so much going on,” he said. “For us, it’s the number of different activities. All these different things are going on to try to continue to create an environment where job and investment opportunity can occur.”

The county’s resources are numerous. Mr. Kelly cited low-cost and reliable power, available land, water, minerals and the area’s colleges, the last of which play a supportive role in the economic development process, he said.
The vastness of St. Lawrence County might seem daunting, Mr. Kelly said, but it provides more room for opportunity.

“This is the kind of county where you can spend a lot of time and focus on one issue in one part of the county, and then turn around and be dealing with something completely different still in the county,” he said. “It’s interesting and enjoyable to try and get things done.”

Potsdam & Canton

The theme of downtown revitalization extends north into St. Lawrence County.

“Potsdam has a history and tradition of adaptive reuse, taking older buildings and renovating them for new uses,” said Fred J. Hanss, Potsdam Community Development Corporation’s executive director. “We’ve been doing this since the late 1970s.”

Mr. Hanss explained that programs like New York Main Street help to maintain the city’s architectural heritage. He said that keeping Potsdam and Canton vital is important because of the county’s two largest industries: higher education and health care.

“Revitalization is critical to make sure that we have an environment that is attractive to students, their parents, faculty and staff, and people employed in the health care fields,” he said.

Because a portion of the population leaves every year ­— such is the nature of a college town — the process of growth is continuous. This provides opportunity for niche businesses that might not thrive in other areas of the county.

Mr. Hanss noted that St. Lawrence Valley Roasters Jernabi Coffeehouse expanded in April and 3 Bears Gluten-Free Bakery recently opened. The largest example of revitalization in the area is the Regional Arts and Interactive Learning project, he said. The goal of this project is to bring together the St. Lawrence County Arts Council and the North Country Children’s Museum to coexist in Clarkson University’s Old Snell Hall. According to a Times article from last year, the venture is hoping for a July 2016 opening. The estimated cost for the museum’s 10 permanent exhibits is $500,000.

About 10 miles south of Potsdam, the town of Canton is also actively focused on revitalization.

“We will be applying for Main Street grand funds,” Leigh B. Rodriguez, Canton’s Director of Economic Development, said. “For façade improvements, window replacements, some residential apartments and second stories and things like that.”

A number of new businesses have recently opened in Canton in previously vacant storefronts on Main Street. Mrs. Rodriguez cited the Celtic Knot, a yarn and fabric store, The Bagelry and Buster Sports Bar, the last of which is slated to open in May. Luna, a women’s clothing boutique, also opened its doors in the past year in a vacant space that once housed a travel agency.

In the past two years, the Canton Merchants’ Association formed in “a grassroots way,” Mrs. Rodriguez said. The organization is made up primarily of downtown merchants, but plans are in the works for a name change to encourage more participation from other industries, she said.

Looking to the future of downtown Canton, Mrs. Rodriguez mentioned that the village recently received an award from the Local Foods, Local Places program.

“This will help our community in assessing how local agriculture can help with downtown revitalization,” she said.

Ogdensburg

Perched on the bank of the St. Lawrence River, Ogdensburg has also recently seen revitalization efforts pay off.

“We’ve seen expansion or initial investment in the community just over the past two years,” John M. Pinkerton, the city manager, said.

He cited a handful of developments. A woman opened a consignment shop in a vacant building that had been “in bad need of repair,” he said. United Helpers Mosaic renovated a downtown building. Ogdensburg native John P. Wade bought the former Sherman Elementary School from the City School District for $20,000 in 2013 and repurposed the building into a successful bed and breakfast, with plans for a community center and performing arts and events rooms in the works. In the marina district, an old railway station houses the Freight House restaurant. Two local doctors opened their offices in an old printing operation. The list goes on.

Mr. Pinkerton explained that revitalization helps to preserve Ogdensburg’s historic downtown aesthetic.

“You keep the historical structure of the town and some of the architecture,” he said. “The biggest thing is you’ve got local people pulling the city up by their own boot straps. That’s what we’re trying to promote.”

In the next five years the area should see more projects, he said. These further developments should intice people, both retirees and the younger generation, to stay in the area.

“Our greatest asset is the talent of our young people,” Mr. Pinkerton said.

JoAnn Adams, Ogdensburg, left, a Sherman Elementary School teacher from 2003 to 2005, talks with Jennifer Lynch Dashnaw, Lisbon, a former student during a tour of the Sherman Inn in September. John P. Wade, Ogdensburg, purchased the former school and turned it into a bed and breakfast with plans for a community center and performing arts and events rooms. Photo by Jason Hunter, NNY Business.

JoAnn Adams, Ogdensburg, left, a Sherman Elementary School teacher from 2003 to 2005, talks with Jennifer Lynch Dashnaw, Lisbon, a former student during a tour of the Sherman Inn in September. John P. Wade, Ogdensburg, purchased the former school and turned it into a bed and breakfast with plans for a community center and performing arts and events rooms. Photo by Jason Hunter, NNY Business.

Massena 

Meanwhile, on the north end of St. Lawrence County, the town of Massena has seen recent downtown growth.

“Currently, we’re just coming off the conclusion of the New York Main Street grant,” said Thomas G. Sullivan, Business Development Corporation for a Greater Massena executive director.

The grant made it possible for four property owners to update their buildings’ façades, which has encouraged nearby businesses to spruce up their appearance, Mr. Sullivan said.

Also on the horizon is the potential for rehabilitation of an old theater. A nonprofit group is working to have the building designated as a historic building, Mr. Sullivan said. If the group achieves its goal, the members plan to bring the theater back to life.

Mr. Sullivan stressed that revitalization draws people to the community. He said it’s uplifting to see that willingness of local people to invest in the area.

“We often hear that we’re in an economic downturn,” he said. “It’s good to see that people are willing to take risks to improve their properties.”

Another development is the Massena Industrial Park. The park’s largest and most active business is Curran Renewable, Mr. Sullivan said.

“To that point, we also have been working on a rail spur in the industrial park that we’re hoping to have completed sometime in late spring or early summer,” he said.

This would enable Curran to export and import by rail, a benefit that might entice other businesses to move into the park.

Mr. Sullivan said the county’s biggest goal is attracting people to the region.

“We need people to come to the county,” he said. “And if each of us are doing a little bit to improve our community and willing to share the assets in our community, I think we all benefit.”

Lewis County 

Lewis County, an area whose economy is fueled by agriculture, energy and tourism, is going through a period of growth and revitalization, but not of the same sort as its neighboring counties. In the smaller county, the change is about unified growth.

“We have a great strength in community,” Frank J. Pace, county planner, said. “And what we want to do is continue to build upon that and, really, it’s an ever-evolving process.”

Mr. Pace highlighted a few programs on the county’s radar. Last year, the chamber launched a new website and rebranded. Initiatives to build a higher education program in conjunction with Mohawk Valley Community College and SUNY Poly, along with nanotech were recently implemented. The Lewis County Planning Department hopes to expand the public transportation system. The system now runs from various pickup points to the two colleges two days a week. Mr. Pace said that the goal is to get this system running five days a week, to provide affordable transportation for students.

In terms of the larger downtown revitalizations the other counties are seeing, Eric J. Virkler, Lewis County Industrial Development Agency executive director, said that while there aren’t large efforts underway, “it’s all small villages in Lewis County, and downtown revitalization in all those villages is important.”

Most prominent on this list of small villages is Lowville. Mayor Donna M. Smith explained that in the past, downtown was home to vacant storefronts, but small businesses have since filled those spaces.

“It doesn’t seem as ghostly as it has in the past,” she said.

While national businesses such as the Kraft Foods are important to the county’s economy, new small businesses are equally crucial, she said.

“Everything that we spend locally in our Lewis County comes back to our Lewis County,” she explained.

Along with the central hub and county seat of Lowville, other areas are seeing revitalization as well.

Grand Slam Safety, a local company that designs, manufactures and installs sports fencing, recently opened in an old manufacturing building in Croghan.

“The prospect of a company like that growing is exciting and would be a good anchor and reuse of an existing factory in Croghan,” Mr. Virkler said.

The four partners who run the business planned to build a facility, but decided to repurpose an old building after Mr. Virkler suggested it to them, the company’s director of marketing Bob M. Chamberlain said.

“Now we can grow quite a bit and not worry about another building,” he said.

Grand Slam Safety’s operations don’t fill the whole building at the moment. For the time being, the company rents out vacant space to small local businesses.

“Over 60 people worked in this building five years ago and now it’s empty,” Mr. Chamberlain said. “A fun part of this would be if we could employ more local people.”

In March, the firm received a $50,000 grant from National Grid to upgrade the building as part of the Main Street Revitalization Program and $13,000 in rebates.

On the horizon for Lewis County is an industrial park. Mr. Virkler said there’s been talk of this in the past year. If the plan comes to fruition, the park would most likely be in Lowville due to the area’s existing infrastructure, he said.

“We’ve had quite a few discussions. We have a few locations. It’s really not narrowed down yet,” Mrs. Smith said. “It’s something that’s very crucial to our future.”

From left, Grand Slam Safety partners Dave Moore, Bob Lyndaker, Bob Chamberlain and Mickey Lehman, not pictured, recently moved their business to 9793 Bridge St., Crogan, an old manufacturing building. Grand Slam Safety designs, manufactures and installs sports fencing. Photo by Justin Sorensen, NNY Business.

From left, Grand Slam Safety partners Dave Moore, Bob Lyndaker, Bob Chamberlain and Mickey Lehman, not pictured, recently moved their business to 9793 Bridge St., Crogan, an old manufacturing building. Grand Slam Safety designs, manufactures and installs sports fencing. Photo by Justin Sorensen, NNY Business.

Lorna Oppedisano is a staff writer and editorial assistant for NNY Magazines. Contact her at loppedisano@wdt.net or 661-2381.