Democracy In Albany

Now it's time for you to start work and you put out an RFP, request for proposals, to the get bids for completing the necessary work from area contractors.

So what would you say to the contractors when they all come back with nearly half million dolar estimates, considering of course, that you survive the shock of reading their estimates, especially the one that's estimated the job at costing around $750,000?

The Park South Project has acquired eighteen run down three storey brick buildings from Roger Ploof and plans to rehab the buildings to create 47 "affordable" apartments renting from $600 to $800 a month.

Now, reading the Business Review's article they'd have you believe each apartment would be rehabbed at a cost $8,900, because they don't believe you have the capability to think for yourself.

"Doing a gut rehabilitation of a row house built in the 1890s, while trying to preserve as many of its architectural features as possible, isn't cheap. The contract with Keith Construction is $7.5 million, which works out to about $417,000 per building, or $8,900 per apartment."

Don't try to figure the numbers given, they're wrong.

47 apartments, 18 buildings, $7.5 million dollars.

That works out to be $159,574 per unit.

Not $8,900 per unit, as the article states. Not even ten times that, $89,000 per unit.

But I too, haven't been completely truthful with you.

What you have to realize is the project's overall cost is estimated to be $13.5 million.

47 apartments, 18 buildings, $13.5 million dollars.

The actual cost of rehabbing each of the 47 apartments in the 18 buildings is $287,234, or an average of $750,000 per building.

"When other costs are factored in--such as relocating the previous tenants, architectural fees, working capital during the rental phase and reserves for future operating costs--the total hits $13.5 million, Rogers said."

But don't concern yourself with the cost. Look at all the pretty fireplaces!

"Johnson seems to relish his job as the person in charge of coordinating all of the work. He loves old buildings and is awestruck by some of the details that have survived years of abuse, such as the marble fireplace mantels and decorative fireplace covers in about 10 of the units."

The article would have you believe that ten of the $13.5 million is coming from private investment. But is it really?

Of course not!

The ten million is coming from equity in the Federal Housing Tax Credits the developer has purchased.

I wonder how many units Habitat For Humanity could have developed for $13.5 million?

http://albany.bizjournals.com/albany/stories/2007/10/29/story5.html?b=1193630400^1540293&page=1
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