KENNETH AARON Business writer
Section: CAPITALAND RPT,  Page: CC25

Date: Sunday, February 23, 2003

ALBANY Behold the W. Averell Harriman State Office Building Campus: 2.8 million square feet of office space; 330 acres; 16 buildings.

And to local builders and developers, a blank slate.

``I've always thought it's probably one of the best pieces of real estate in the Capital District,'' said David Buicko, chief operating officer of the Rotterdam-based Galesi Group, one of the area's biggest property owners.

Gov. George Pataki's plan to convert the midtown hive of state workers into a technology park over the next 20 years, presented last spring, would make for the biggest private development project here in years. And with subsequent announcements that both computer-chip consortium International Sematech and semiconductor toolmaker Tokyo Electron Ltd. will open shop at the neighboring University at Albany, some say Pataki's two-decade blueprint for development might need some speeding up.

``I'm not sure we have to be that pessimistic now,'' said Eileen Lindburg, a vice president at CB Richard Ellis/Albany, the area's largest commercial real estate firm.

State officials in charge of the conversion agree.

``When we announced the campus, people said, `Hmm, that's really interesting,' '' said Kenneth Ringler, commissioner of the state Office of General Services, which is in charge of coming up with a way to move the campus from state to private hands. Now, though, ``my guess is there's going to be interest'' in hitting a faster stride. For all the excitement, though, officials have little concrete to offer about what will happen at Harriman.

About all that's known for sure is that the state expects to move the headquarters of the Department of Transportation off the campus to Wolf Road in Colonie by 2004 and that the Department of Civil Service should be gone by 2005 -- opening up nearly 1 million square feet for developers.

Getting land to those developers will require that the state divest itself of the campus park. New York officials expect to rely on some kind of quasi-public, not-for-profit entity -- they're calling it a ``master developer'' -- to take ownership of the land, handle site-management chores and recruit tenants to fulfill the state's vision for the campus, among other things.

``I think it's a prime example of how a public-private partnership could work,'' said Nancy E. Carey Cassidy, an executive vice president at Picotte Cos. in Colonie, one of the area's larger commercial developers.

Picotte is refurbishing its building at 50 Wolf Road in Colonie for the DOT. But so far, it's too early for her to say whether the company will chase development work at the Harriman campus.

``Right now, we're really trying to understand Sematech and all those issues,'' she said. The state expects most of the construction work at the Harriman campus will be completed by private developers, not its so-called master developer -- which exists in concept only at this point. The state imagines that the entity's board will include representatives from the state, UAlbany and the private sector, but hasn't said how the master developer will be chosen.

The master developer will spend about $64 million in state money on infrastructure improvements and other work. Private developers are expected to spend another $240 million at the site.

That kind of outlay has created a positively Pavlovian reaction among some builders.

``The Capital District has kind of been starved for projects in the private sector,'' said Al Stern, director of construction services for contractor Bast Hatfield Inc. of Clifton Park. ``This is really unique ... and we look forward to participating.''

His firm is so eager, in fact, that it already is boning up on the construction skills needed to build the types of buildings wanted by high-tech companies.

Other firms are more circumspect. Galesi Group's Buicko said only that his company was ``excited'' about the opportunity but offered no specifics. The parcel, he said, ``will be on everybody's radar.''

But even developers who have no immediate demand to do anything at Harriman are pumped up for its build-out.

``The big thing that I noticed from Austin (where Sematech and Tokyo Electron both are based) is the retention rate from the University of Texas with the students,'' said Donald Led Duke, chief executive of BBL Construction Services, an Albany-based contractor and developer. ``That could be a nice little pop in our population.''

And more residents mean more businesses and more offices, which could mean more construction work for BBL.

Even if there aren't more buildings, Led Duke said, vacancy rates should go down -- which means higher lease rates for BBL space.

``This has got to be good for us,'' he said.

The state is convinced that opening Harriman to private interests is the right call. And while talks are ongoing between OGS, Empire State Development Corp. and UAlbany to come up with the structure the managing entity will take, OGS Commissioner Ringler said the state could act quickly if developers start showing up, plans in hand.

``When and if we start getting some specific projects coming in, we'll be ready,'' he said.

VITAL STATISTICS Gov. George Pataki has offered a plan to turn the W. Averell Harriman State Office Building Campus in Albany into a technology park. Here is a rundown of the proposal: Campus size: 330 acres, 16 buildingsWhen built: 1958-1972Length of project: 10-20 yearsNew jobs: 8,000 projectedCost: Approximately $304 million -- $64 million from the state to perform infrastructure upgrades and other initial work and $240 million from private developers.Why developers like the idea: The Harriman campus is located near two major interstate highways and is near the University at Albany, which is becoming a tech destination.Where the plan is today: A final generic environmental impact statement was completed in December. The next task for the state Office of General Services is to establish a ``master developer'' -- a not-for-profit body made up of state, UAlbany and private officials -- to manage the site. There is no timetable to set that up. When concrete development proposals surface, they will undergo further scrutiny by officials before permits are issued.