A rare undertaking in downtown Rochester: Affordable condos

A planned redevelopment in the heart of downtown Rochester would fulfill the proverbial two-birds-with-one-stone idiom.

The soon-to-be vacant, timeworn former Rochester Club at 120 East Ave. is slated to be repurposed into 33 for-sale, workforce condominiums, an element of housing stock that is rarely created downtown.

While market-rate apartments have been the development flavor of the month in the city for the past two decades, Syracuse-based Redev CNY believes there is significant demand for condominiums.

And the well-off segment of the population is not the target audience for this $12.55 million project. Buyer eligibility requirements include a cap on earnings. The typical buyer will earn between $60,000 and $100,000 annually, Redev managing partner Ryan Benz said.

“These homes are designed for the people that make Rochester run, the workforce that is too often priced out of new housing but doesn’t qualify for subsidized rental programs,” Benz said.

“This is a real opportunity for them to own a home in the community they support.”

In the past, building condos downtown, especially anything below the luxury level, has been cost prohibitive.

“We know the market is there; getting them to pencil out is the challenge,” said Eric Frisch, deputy commissioner of neighborhood and business development for the city.

Redev, a development firm specializing in historic and market redevelopments, will tap into a recently launched New York State program in order to make repurposing 120 East Ave. financially feasible.

The Affordable Homeownership Opportunity Program (AHOP) will provide substantial construction subsidies to cover the costs of converting the building’s current unused office, retail and ballroom space into residential units.

Benz said the project “transforms an underutilized downtown property into high-quality, attainable homeownership opportunities, supports the city’s pro housing and revitalization plans and ensures that people who make Rochester thrive can afford to call it home.”

Indeed, city officials are eager to see the project commence. Over the past 20 years, there have been just two condominium development projects downtown: The Sagamore on East, which features 23 luxury homes next door at 130 East Ave., and Capron Lofts, where 19 high-end condos were created in a former canalside warehouse at 1 Capron St. There also have been two townhome projects (on Charlotte Street and North Plymouth Avenue).

The Redev project, which was approved for $435,751 in tax incentives from the County of Monroe Industrial Development Agency on Tuesday, fits perfectly into Mayor Malik Evans’ vision of increased owner-occupied households in downtown.

“It is certainly a market segment we very much want to see more of,” Frisch said. “We hear all the time that people love their downtown apartments and would like to own it, but it’s just not possible now.”

The AHOP initiative, administered by the state’s Homes and Community Renewal (HRC) agency, makes it possible for the developer to sell the condos for far less than the cost to build them. Construction costs are anticipated to be between $375,000 to $380,000 per unit, Benz said. Thanks to $7.26 million in HRC funding, the condos will sell for between $140,000 and $160,000.

The AHOP program launched in 2023 to help increase housing availability and affordability in New York and provide more homeownership opportunities for first-time buyers. The need for homes remains acute.

“I think there is a demand for anything that has four walls and roof,” said Mark Siwiec, CEO of Pittsford-based Elysian Homes by Mark Siwiec & Associates. “There is a ton of need within all price points.”

Redev will hit the affordable segment by converting 36,000 square feet within 12o East Ave. into the 33 condos. There will be four studio units, 19 one-bedroom homes and 10 two-bedroom homes. The current first-floor restaurant space will remain but Wilder Room will be converted into four two-bedroom units, with the second bedroom in each being a loft.

Monthly costs for the condo owner — including mortgage, taxes, HOA fees and interest — will not exceed 30 percent of household income.

Benz said he envisions the condos will appeal to workers in a variety of professions, including county case workers, paralegals, LPNs, public health staff, electricians, HVAC technicians, CDL drivers, and early career engineers.

“These are the men and women who serve, build and sustain our communities every day and they deserve real opportunities to own a home in the cities they support,” he said.

Because of the AHOP funding, there are resale contingencies. The resale of a condo will be permitted in the first 10 years, but only to buyers that meet the project’s original income eligibility requirements.

Starting in Year 11 and for the next 20 years thereafter, there are no resale restrictions but HRC will recapture 20 percent of the buyers’ premium under terms of the AHOP program. So, if the original $150,000 condo sells for $300,000, 20 percent of the appreciated value, or $30,000, goes to HRC.

One reason condominiums haven’t been part of the downtown development landscape: necessary financing streams come with restrictions.

When older buildings undergo adaptive reuse, historic tax credits are often necessary in order to pay for the project. But those tax credits prohibit the sale of units or the building within the first five years. That’s a big deterrent; who is buying a condo if they can’t sell it when they want to do so.

Redev is using no historic tax credits for this project but will work with historic preservation agencies to ensure the character of the building is maintained, Benz said.

The developer is involved in two other similar projects in Onondaga County, including one that was completed in September. The firm transformed St. Matthews Elementary School at 214 Kinne St. in East Syracuse into St. Matthews Condos, using the AHOP program to create 21 homes. It was the first condo project in the state to utilize AHOP funding. Benz anticipates all units will be under contract by month’s end.

So far, AHOP has invested more than $200 million into 32 projects that will create more than 1,000 affordable housing units across the state. That includes five other projects in the city of Rochester that will use $11.3 million in funding to bring 54 units into the market, the HRC office said.

Redev’s East Avenue project won’t make much of a dent in satisfying product demand. Benz said a Newmark market analysis showed the vast majority of Rochesterians in the $60,000 to $100,000 income level are renters, and not necessarily by choice.

The market study determined a project similar to 120 East Ave. could be completed 20 times before the market reached saturation, Benz said. Which is why Frisch said the city is having discussions with other developers regarding for-sale condos.

“The AHOP program doesn’t just have to be for single-family developments,” Frisch said.

Documents submitted to COMIDA show Redev intends to acquire the property for $1.7 million, with construction to begin next year and expected to be completed in 2027.

“It’s a beautiful building and we’re excited to bring new life to it,” Benz said.

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