BUYER BUCKS MARKET GLUT

JAMES DENN Business writer
Section: BUSINESS,  Page: B9

Date: Saturday, June 28, 1997

For a single buck, Frank Crisafulli, owner of a local food distribution company, is now the proud owner of a 500,000-square-foot warehouse located in the heart of downtown's industrial district.


Crisafulli bought the Central Warehouse building at Colonie and Montgomery streets from Trustco Bank. The bank had more than $1 million invested in the building, which is visible to commuters along Interstate 787. ``It's a sad state of affairs when you can purchase a 500,000-square-foot building for $1,'' said Crisafulli.


James Zasada with Appraisal Resources Inc. in Schenectady said many industrial buildings in downtown areas are suffering a decline in value.


``The problem is there is such a glut on the market of the older multistory buildings,'' said Zasada. ``In some cases, $1 is all they are worth -- and some of them are worth zero.''


Even if a worthless building is torn down, the value of the land underneath might not be enough to recover the demolition cost. Furthermore, there may not be enough scrap metal to sell in the building to make up the difference, he said.


``In the last five years, it's a whole new ballgame,'' said Zasada. ``The older buildings have become functionally obsolete.''


Trustco spokesman William F. Terry declined to say specifically if the sale price of the 11-story Central Warehouse building reflected values of the downturn industrial market.


``It's a special-purpose building,'' he said. ``It's a reflection of the value of the building at that time.''


Crisafulli, president of United Food Services Inc., is hopeful he will be able to make the building work.


As part of the deal, Crisafulli assumed $120,000 in back property taxes.


``We are trying to do something constructive with it,'' he said. ``We are exploring a lot of different options. We are trying to lean towards options that create jobs.''


Last year, the state attorney general blocked an attempt to shut off electricity to the building. State officials were afraid ammonia gas used in refrigeration equipment on site would escape into the surrounding neighborhood if power were cut.


The new owner said the ammonia has been drained out of the refrigeration system and no longer poses a threat.


Trustco took possession of the property at a foreclosure auction last year. The former owners, C.W. Associates, declared bankruptcy in 1995.


The building was valued at $1.6 million when Trustco took possession at a foreclosure auction. The bank foreclosed on a 13-year-old mortgage.


Crisafulli has experience developing commercial real estate. He is one of the owners of the 500,000-square-foot First Prize Center in Colonie.


Crisafulli does not have a timeframe to develop the new property. He said it has taken 10 years to lease 60 percent of the First Prize building.