TAX BREAK JUMP-STARTS WORK ON YMCA

BRIAN NEARING Staff writer
Section: CAPITAL REGION,  Page: B1

Date: Wednesday, November 17, 2004

ALBANY -- Work on the long-delayed YMCA in North Albany will be starting shortly, thanks to a federal tax break that spurred a $3.6 million bank loan for the project. The new YMCA, to be built next to School 20, is the first in the country to benefit from the New Market Tax Credit, a 4-year-old federal program to encourage development in economically distressed neighborhoods, Capital YMCA President John Flynn said Tuesday.


Citizens Bank will lend $3.6 million of the project's $6.7 million price tag. In return, the bank will get a $1.5 million break on federal income tax over the next seven years.


The city and the public school district are directing millions in state and federal aid to the new Y, the first time the YMCA has used public funding. It will be the first YMCA site built in Albany since the Washington Avenue site opened in the 1960s.


The 40,000-square-foot complex will include a public library branch, child-care and senior centers and a job-training office. It is scheduled to open in September 2005.


Flynn said the tax break will help save the YMCA about $800,000 compared to a conventional loan. ``This was the missing piece of the puzzle,'' Flynn said at the groundbreaking. ``The bottom line is that we wouldn't not be here today were it not for Citizens Bank''


Richard M. Kulbieda, president and CEO of Citizens Bank operations in New York, said: ``We believe this partnership provides a cornerstone for how the public and private sectors can work together to help rebuild and foster growth within our urban neighborhoods.''


The bank will get federal income tax credits worth 39 percent of the loan during the seven-year credit allowance period.


The North Albany YMCA had been delayed for more than a year as officials searched for additional funds to covering a growing budget. The project first hit a snag in the summer of 2003 when engineers found significant bedrock on the site of what was to be a $5.1 million complex. A groundbreaking set for August 2003 was postponed until the following April and then again while the YMCA searched for a way to pay for the added cost.


When the project was first announced, Charter One bank helped support it with a $50,000 donation. In September, Citizens Bank bought Charter One.


The city of Albany is funneling about $700,000 from the state Dormitory Authority to support the day care and senior programs and also pledged $500,000 in city funds to help the YMCA cover the shortfall.


Other support from the city comes from the Albany Housing Authority, which has committed $2 million in federal aid from the Department of Housing and Urban Development.


In exchange for housing authority aid, the YMCA is expected to give free memberships to about 500 residents of new town houses built up the hill on the site of the demolished Corning Homes housing project.


Another key piece of financing comes from the school district, which expects to pay $2 million over 20 years for School 20 students' use of the YMCA athletic facilities. The school is slated to be rebuilt for kindergarten through eighth grade as part of the districtwide construction plan. Brian Nearing can be reached at 454-5094 or by e-mail at bnearing@timesunion.com.