Transfinder in the News: Two tales of one city: Downtown Schenectady reviving, languishing
From The Daily Gazette – July 1, 2021
By John Cropley
SCHENECTADY — State Street in downtown Schenectady sometimes feels like it’s rebounding from the pandemic, as groups of unmasked people stroll to crowded restaurants and bars.
Other times it feels as if pandemic restrictions are still in effect, with throngs of theatergoers and clusters of office workers conspicuously absent from downtown sidewalks.
The contrast is especially vivid for those who remember the cycles the area has gone through, from a peak in the 1950s to a nadir in the 1990s and a rebirth in recent years.
A consensus among those who govern, develop property and run businesses in downtown Schenectady is that its vibrancy depends on large numbers of people wanting to live, work and play there.
Efforts to lure new residents have been successful and continue. Recreation is mixed: Restaurants and bars are reopened and busy, but Proctors is shuttered. And the ranks of people working in downtown offices each day remain greatly reduced.
“You have to get people’s confidence up so they’re not afraid to go out,” Mayor Gary McCarthy said. “They’re starting to come back now and that’s encouraging.”
He threw in a plug for people to get their COVID vaccine if they haven’t already. Schenectady County is tied for the highest adult vaccination rate among the state’s 62 counties, but downtown Schenectady draws visitors from beyond county lines.
Redburn Development Partners principal Jeff Buell, one of the most visible and tireless proponents of downtown revitalization in the past decade, said the summer of 2020 was a discouraging time.
“One of the toughest things about the pandemic from a business sense is that we, everybody, spent the better part of 10 years building up the concept of walkable downtowns, and it was working,” he said.
Schenectady County Metroplex Development Authority Chairman Ray Gillen uses the term “people generators” — institutions that bring people downtown and generate foot traffic.
Proctors, which was drawing more than 600,000 patrons each year, doesn’t expect to be back to normal for nearly a year. MVP Health Care, which had 900 employees on State Street before the pandemic, is gradually bringing workers back to the office but is still deciding what its reimagined workplace model will look like. No reopening date has been set for the once-busy Schenectady YMCA.
“Not having Proctors, not having the foot traffic [from employers], that’s a problem,” Gillen said. “Our parking revenue is way down.”
David Buicko, CEO of Galesi Group, a major downtown developer and manager of office and commercial space, said the biggest hole is the performing arts center that hosted 3,000 events in 2019.
“As Proctors goes, so does downtown,” Buicko said.
CEO Philip Morris said Proctors has survived by cutting expenses to the bone and by having a huge amount of community support.
It takes $330,000 a month to cover utilities, insurance and salaries for a skeleton staff. About 1,900 donors have provided roughly $3 million so far to get Proctors through the crisis.
It recently announced a series of teching residencies — in which theater companies set up shop to work out the technical production details before taking a show on the road.
“I would think it’s fair to say with a year and a half of being closed we have atrophied,” Morris said. “Regaining our muscle is what the rest of 2021 is going to be like.
“We’re not going to be open seven days a week for some time.”
Revenue from the teching will allow Proctors to rebuild its staff, and having a staff will allow it to rebuild its schedule. The gate pulled down on the State Street entrance should be up full-time starting in spring 2022, Morris said.
However, there won’t be 3,000 events in that first year back.
Like millions of other American women, Puzzles Cafe owner Sara Mae Pratt suddenly found herself in an unforeseeable bind in March 2020: The child care she’d been relying on to continue her career after becoming a mother suddenly vanished.
Between that and the governor putting the state on pause, shutting down Puzzles was the inevitable result.
“It’s a balancing act and I don’t think there’s any reason to hide it,” Pratt said of herself and her fellow working mothers. “We’ve been through a lot and I think we should be proud.”
Her decision to shut down and stay shut down was not easy — the cafe was a calling as much as a business for her, offering employment and public acceptance to developmentally disabled people who may have had little experience with either.
Pratt worries about them now.
“These are folks who are already kind of isolated by nature,” she said. “It’s a terribly difficult time. My heart goes out to all of them.”
Tara Kitchen owner Aneesa Waheed kept her Moroccan restaurants in Schenectady and Troy going strong through adaptation. She opened a third location in Guilderland and — on May 11 — opened a fourth location in Wildwood, N.J.
Her plans to open a hammam, or Moroccan-style day spa, are another matter. Conversion of the landmark Weigh Station off Broadway came to an abrupt halt before it really started.
“We’re slowly starting to pick up the pieces and start that project again,” Waheed said. “It’s hard to make a decision on that size of investment not completely knowing how people are going to behave in the next 12 to 24 months. And hammam is such an intimate setting.”
Her experiences in the year of COVID are unique in their details but common in their impact. Many entrepreneurs in the restaurant/hospitality field likely voiced some variation of what she said: “I feel like last year I probably worked the hardest in my whole life for very little return.”
Buicko said Galesi Group had to work with some of its struggling retail tenants, but its office space was leased to companies that paid their rent even as their offices were depopulated.
The important question in the longer-term outlook for downtown is whether those tenants will continue to need as much space and continue to station as many people in it full-time.
That’s the topic of intense speculation and debate in the real estate industry now, and some expect the business world to emerge from the pandemic with a flexible hybrid of remote and in-person workplaces that doesn’t require as much floor space or generate as much life in the surrounding community.
“I’m guessing people are going to use this summer as a way to continue to work remotely,” Buicko said. “Hopefully after this summer you’re going to see a lot more people coming back to the office.”
Buicko can’t guess what the new normal will look like. He’s worked through a few recessions in the past 40 years. They’re not pleasant, but they’re predictable and can be manageable.
Not so with COVID-19.
“It’s one of the most monumental events in our lifetime,” he said. “Hopefully we don’t see anything like it again.”
State Street from Washington Avenue to Lafayette Street is a high-traffic, high-visibility zone that has seen a nine-figure public-private investment in the past two decades.
“Downtown Schenectady” also stretches down side streets in either direction, but this strip is the heart of downtown.
And as of July 1, there are roughly two dozen vacant or idle storefronts along that 0.6-mile strip. Several of them are so new they aren’t even finished; others are old and faded. But the majority are vacant for reasons other than COVID-19.
Even as they sit vacant, a large number of projects are underway downtown, boosted by $10 million in state funds granted in 2019 through the Downtown Revitalization Initiative but not finalized until May 2021.
Gillen at Metroplex placed the combined budgets of downtown projects now underway at $53 million, from a rebuild of South Church Street to construction of a new apartment building at 501 State St.
The greatly increased base of rental housing downtown helps offset the still-weak office and entertainment sectors, Gillen said.
He predicts a large percentage of workers will return to their offices, if only because their company cultures require that sort of in-person interaction.
The Jahnel Group falls squarely within that category. The software developer cultivates a strong team culture and had just finished building an exciting workplace when it had to go remote for the better part of a year.
Now, about 40 to 50 of the 75 local employees are on site each day, CEO Darrin Jahnel said, and “there’s an energy in the building and it really is enjoyable.”
A permanently remote workforce isn’t an option Jahnel wants to pursue, as it would dilute the culture and energy. Downtown would suffer if enough companies take that route, he added.
Instead, the company is likely to mandate at least a partial return to the office, he said.
Buicko at Galesi Group said many employers are in decent shape now, with the possible exception of not being able to hire enough employees.
“The good news is that those businesses that were strong were able to survive, those businesses that were creative were able to survive it,” he said.
Mayor McCarthy said the Zoom and Webex meetings ubiquitous during the pandemic lack the personal interaction needed for problem-solving and networking.
“I think it’s going to come back,” he said of office culture.
With the pandemic on the wane, SUNY Schenectady County Community College is planning to bring its students and staff to three separate locations downtown: the main campus at the foot of State Street; the new Confections Lab in the Mill Lane Artisan District; and the new Gaming Center in Center City.
“We are excited to welcome our students and community back to campus this fall, after having already welcomed our staff back to campus full time this summer,” President Steady Moono said via email. “We will also have a full complement of Workforce Development courses this fall.”
Transfinder CEO Antonio Civitella, who built his company’s headquarters in the heart of downtown, is keeping its workforce remote for now because summer recess is the busiest time for Transfinder’s main business line, school bus routing software.
“We can’t afford even a day’s disruption, so we are going to wait until the summer ends,” he said.
When that point comes, Civitella has a different problem: He expanded his Schenectady-based workforce from 70 to 100 during the pandemic, too many to fit on-site.
It’s a good problem to have, as problems go. He plans to expand into the next-door building he bought three years ago, which until recently was home to a Subway shop.
“I’ve invested in Schenectady. I’m going to continue to invest in Schenectady. It’s going to come back,” Civitella said. “It’s not going to come back like it was. It’ll come back different.”
So he needs not just a Plan B but a Plan C. Nonetheless, his optimism is unshaken at this point.
“I have a lot of faith that our region is going to come back stronger than it was before,” Civitella said.
Architect and developer J.T. Pollard was buffeted by the pandemic, which delayed completion of his Mill Lane Artisan District project and closed the taproom at Frog Alley Brewing.
But the $43.5 million Mill Lane project is complete and almost entirely occupied, and Frog Alley is now attracting regular crowds with its live music indoors and summer concerts outdoors.
Pollard doesn’t have a next project just yet — plans need to be thought through in a post-COVID context that isn’t known yet, then financing secured. But there will be a next project. “I see good things happening in the future,” he said.
The live-work-play model is critical to downtown, Pollard said. The Frog Alley taproom, and the restaurants next door and the offices and apartments upstairs, contribute to and benefit from this sort of ecosystem. Conversely, the ecosystem suffers when live or work or play are diminished.
Success, Pollard said, is when people say, “Let’s go to Schenectady” the way he said “Let’s go to Saratoga” when he was younger. Drive there and park, assured that there’ll be something to see and do when they arrive.
“I think we’re all dependent on each other,” Pollard said.
Buell at Redburn Development said downtown Schenectady remains strong as a whole even as individual pieces struggle and the live-work-play strategy has fallen out of balance.
“It’s an incredible combination of things that are down there,” he said. “The ‘work’ is really the unknown. Offices provide the foot traffic. So you need to have the office market to be strong for everything to be healthy.”
The unknown future of in-person office space is not enough to change Buell’s mind about the viability of downtown.
“I’m more bullish on Schenectady now than I was before the pandemic.”
Todd Garofano, executive director of the visitor promotion agency Discover Schenectady County, said activity is ramping up downtown and elsewhere, with everything from hotel bookings to weddings to sports tournaments on the rise.
“Since the restrictions have started to be lifted it’s really gotten busy,” he said.
“We’re definitely seeing a strong comeback. We’ve been out with our marketing campaign focusing on [people living within] three to three and a half hours, trying to get out the message that Schenectady County is a safe place.”
Discover Schenectady is taking a page from the playbook used by Lake George and Lake Placid, highlighting outdoor attractions and events so as to reach those worried about any lingering risk of infection indoors.
And what of the cold-weather months, when activity moves indoors: Can Schenectady keep the momentum alive?
“If everything holds the way it is now with the pandemic, yes,” Garofano said.
Proctors reopened its office about four weeks ago and is advertising to fill vacancies as it comes back to life. Morris said the performing arts center hasn’t been entirely idle — there were blood drives, it was used as a rehearsal space and the broadcast studio was active, among other things.
“The building was closed to its normal use but was not closed, and has been quite busy in fact recently,” he said.
The street beyond Proctors’ door is getting busier as well.
“I’m amazed at the places that are still open and have reopened,” Morris said. “I think our hotel industry is finally coming back a little bit.
“Downtown feels better today than six months ago.”
For those still shuttered, there is time for planning.
Puzzles owner Pratt said she’ll be starting almost from scratch — the cafe doesn’t even have a phone number anymore. Renting out her commercial kitchen has been a welcome source of income but hasn’t brought the cafe any closer to reopening.
“It’s not the kind of situation where you can just flip a switch and come back in a few days,” she said.
Pratt’s 3-year-old son recently resumed attending school. He’s gone only a few hours a day, but it’s enough that she can begin reimagining what she wants Puzzles to be: less factory-farmed goods and single-use plastic, perhaps, or a greater coffee selection, or a smaller menu, or more plant-based food.
“I think there’s a lot of changes moving forward that you can expect from us,” Pratt said.
Her goal is to debut them at an April 2022 reopening.