Glens Falls Mayor seeks firm to run Elm & South St. spaces

By Cathy DeDe, Chronicle Managing Editor

Mayor Diana Palmer is seeking a separate entity to run the city’s first-floor space in the former “Incubator” building and the adjacent Market Center building dubbed The Ed.

Both projects are part of the $10-million state-funded Downtown Revitalization Initiative.

“I’ve said all along that so many parts of the DRI are great, but my concern has been about the part that the City was supposed to own and operate,” Mayor Palmer told The Chronicle.

She said they expect to put out a Request For Proposals this week. “That also allows us to mitigate the ongoing costs the taxpayers would be burdened with,” she said.

The city is obligated to pay $900,000 to Bonacio Development under the 10-year lease it signed to rent the first floor of the former incubator building at 36 Elm.

Last week the Common Council voted to amend its contract with Bonacio, allowing the City to take occupancy of the first floor of 36 Elm “as is,” rather than fitted out for specific multiple uses.

Mayor Bill Collins’ plan was to outfit 36 Elm with indoor bathrooms available to users of The Ed plus provide vendor space, commercial kitchen, a small market and “wayfinding” promoting Glens Falls area businesses and attractions.

Mayor Palmer says, “At the end of my term as a Council member…there was a resolution passed to pay for the fit-up of that space” for $890,000 awarded to the only bidder, Bonacio.

“I had tried really hard to get people to table that, to give me time to find some private partnership, come up with another plan,” says Mayor Palmer.

More recently, she says, the bid for “MEP” — mechanical, electrical and plumbing services, budgeted in the range of $300,000-$400,000 — came in at more than $1.4 million “just for the floor the city is leasing.”

“So I said no to that, clearly,” Mayor Palmer says.

She says she expects to reduce the fit-out cost “by approximately $200,000. Then our hope is with a more limited scope for the MEP and the opportunity for direct solicitation, we can perhaps use that remaining $200,000 for that work.”

Mayor Palmer said that under bidding regulations, once they put the MEP out to bid twice without an acceptable response, the City is allowed to solicit services directly.

“My goal always was to find private partnership anyway,” said Mayor Palmer.

“So, what I requested was, instead of building it out to a specific use…that we ‘white box’ it: Have it ready to go — in terms of electrical hookups and a space that’s usable — but not over-prescribe how it will be used.”

In other words: Leave it blank and hopefully partner with a lessee that will run both that space, and The ED, on behalf of the City but as the entity sees fit.

One guarantee, Mayor Palmer says: “It’s important to me that there’s protections for the Farmers Market in there, so that they stay there.

“But there are a lot of complementary uses, and I think it’s better left to the private sector, who have expertise and hospitality experience, to run that.

She said Bonacio is agreeable to the change.

Meanwhile, such changes also trigger a conversation with New York State — as 36 Elm is part of the DRI.

Mayor Palmer said she and Development Director Jeff Flagg met with the state. “I explained to them the shift in strategy I was proposing. There was a lot of conversation, no firm answer, a lot of let’s figure this out, but willingness to consider it. Somebody even made a comment, it makes sense — these commercial kitchens haven’t been that successful in other areas.”

The mayor says, “We’re not radically changing most of it. We’ve completed almost everything that we said we were going to complete. It’s just that little one piece, the leased space.”

Because the DRI is a reimbursement grant paid out only when the project is completed, Mayor Palmer said the City has yet to receive any payment on this combined $7 million project.

“For a city with our budget, that kind of money makes a big difference,” she said.

They’re now working with the state and hopeful the City will be reimbursed sooner than later for the completed portions of the project, she said.
— With reporting by Ben Westcott

Council okays 333 Glen deal: Bonacio parking

Managing Editor Cathy DeDe writes: The Common Council on Feb. 10 approved an agreement to lease spaces in the 333 Glen Street garage to fulfill its free parking space pledge to Bonacio Development.

Mayor Diana Palmer told The Chronicle in advance of the vote, “The previous mayor signed that agreement, but never put it through the process of having the Council approve it” as is required.

The City’s 2026 budget, which the Council did approve, does include a line item of $72,600 for 110 parking spaces at 333 Glen for Bonacio tenants.

By contract, Glens Falls promised to provide 110 parking spaces at no cost to Bonacio. That’s 35 spaces for Phase I, the former Hotshots Bar, Incubator and Sandy’s Clam Bar on South and Elm Streets, where renovations are mostly completed.

Plus 75 spaces for Phase 2, the five-story, 70-unit building known as “South Street Apartments” under construction.

Mayor Palmer says that after she took office, “333 Glen was asking us why we haven’t paid them. Bonacio (tenants) are asking for their passes. I was never given this information. So, we got the contract and put it on the agenda as soon as possible.” Only Bob Landry voted no, citing back taxes that 333 Glen owes the city.

Glens Falls contract: $900,000 for 10-year lease of 36 Elm St. 1st floor

Glens Falls is set to take occupancy on March 1 of the first floor of 36 Elm Street, the former ‘Incubator’ building.

The City’s contract with Bonacio Development for Phase 1 of the South & Elm Street projects includes the city’s agreeing to lease for 10 years 36 Elm’s first floor, intended to complement the leaf-shaped “Ed” Market Center next-door.

In the first year of the lease, Glens Falls will pay $16.75 per square foot or $78,340 annually. The rent rises every year, for a final year cost of $20.02 per square foot, or $93,623. Total payment is about $900,000 over the 10 years.

The Glens Falls Local Development Corporation is to administer the rental. It will sub-lease from the City, supporting rent payments in part with funds from sales of three LDC-owned properties: $395,000 that came from Bonacio buying this building and the former Hotshots at 45 South Street, plus an expected $270,000 from Kru Coffee, to buy land in the City’s Technical Park off Luzerne Road for a coffee roasting facility now being built.
— Cathy DeDe

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