By Jim Rowley
Second District County Legislator
It is difficult sometimes to make lemonade out of lemons. As a new legislator, I am saddled with decisions made by previous legislatures. The topic at hand is whether the county should buy out a lease in the downtown Galleries complex, where our library is housed.
The county spent millions to renovate five floors within the Galleries, move our library from the upper floors to the lower floors and prepare the upper floors for lease to SUNY Upstate Medical Center (yes, the county is in the commercial real estate business). While the county owns the upper floors, the lower floors are leased, and the administration wants to buy out the lease on the lower floors. The current lease is a fixed 23-year lease at $8 per foot.
While operationally it makes sense to have the library on the lower floors, purchasing these floors, as opposed to remaining in the lease, has a number of pitfalls. First is the question of price. A purchase price $83 per foot seems unreasonably expensive given market comparables for downtown office space.
Second is the budget aspect of the project. The administration purports to cover expenses with rental income from SUNY Upstate. Unfortunately, rental income from the 10-year SUNY Upstate lease won’t cover project expenses incurred to date plus a $2.3 million lease buyout. SUNY Upstate has an option to renew their lease after 10 years, which, if exercised, will close the project gap, but there is no guarantee they will (an inherent risk of being in the commercial real estate business).
Finally, there is the legal aspect of the issue. The administration is only asking for money to buy out the lease and claim they have the authority to enter into a purchase agreement based on poorly written local laws in previous years. This claim is in direct conflict with language in the County Code. This aspect of the deal is a moot point because only a judge can determine whose has the authority to enter into a contract for the purchase of real estate in this case. It does highlight though the inherent conflict of interest within the county law department attempting to serve two masters — the Legislature and the County Executive… but this is a topic for another time.
