Section: CAPITAL REGION,  Page: F1

Date: Wednesday, November 24, 1999

Between the handful of state offices either recently completed, under construction or soon to be built and the Progressive Insurance company headquarters that opened last year, there isn't a lot of room left downtown for new development. With that in mind, the Common Council recently approved an ordinance extending the Central Business District into North Albany. The change applies to roughly 100 acres between Erie Boulevard and Interstate 787 bordered on the south by Livingston Avenue and on the north by Interstate 90, which was up until now zoned for industrial use only.

``We have a downtown that's very high-density and an area just to the north that's zoned for heavy manufacturing, of which there is very little going on any more,'' said city Planning Director Michael Morelli. ``Over the years, there's been interest in doing things there that the existing zoning didn't accommodate. So, we proposed a change.''

Central Business District, or C-3, zoning increases the number of allowed uses of property that had been reserved for warehouses, gas stations, manufacturers and garages. Acceptable developments in C-3 zones include sports stadiums, hotels, museums, health clubs and apartment buildings. Businesses operating in the area under the old zoning will be allowed to remain, Morelli said.

But the fact that property owners can no longer lease to heavy manufacturing tenants has angered some owners who said their buildings are not suited to anything else.

``We've got high ceilings and a pitched floor -- it looks like an airplane hanger,'' said Joseph DiNovo, owner of a building at 164 Montgomery St. that was designed to accommodate storage and repair of large trucks. ``That does not lend itself to general business uses.''

DiNovo and several other North Albany property owners voiced their concerns at a public hearing held before the Common Council on Oct. 18 -- the same night the council approved the zoning change.

The building owners told the council it's already difficult for them to find tenants for their properties that have become obsolete with the advancement of technology and the relocation of much heavy manufacturing to other states and countries outside the United States. If they do find a buyer for their old buildings, the owners said, the new zoning restrictions will make it harder to sell.

``Basically, my property is now worth only the value of the land it's sitting on,'' said Mark Lerner, owners of the former McKinney Steel building on Broadway.

But city officials are convinced the current revitalization efforts will make the newly rezoned North Albany land more attractive to potential developers. Other cities have had success in converting warehouse districts into vibrant neighborhoods with residential lofts, restaurants and shopping.

``The worst-case scenario is that someone comes to us with a desired industrial use, ... proves the history of the area and demonstrates that a variance to the new zoning is justified,'' Morelli said. ``But the long-term development trend has been moving away from that kind of use.''