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June 19, 2013

Klugo: Ex-Bresee's work 'on pace'

By Denise Richardson Staff Writer
The Daily Star

---- — The shriek of a saw and other construction noises echoed through the former Bresee’s building on Main Street on Tuesday morning.

But the sounds didn’t drown out the enthusiasm of Charles “Chip” Klugo, owner and real estate developer, as he gave a tour of the $6 million project site to a visiting business group and city officials.

The project includes renovations of two buildings — 1 Dietz St. and 155-165 Main St., the site of the former Bresee’s Oneonta Department Store, which is being converted into 12 apartments and three or four commercial spaces.

“We are on pace, on schedule,” Klugo said.

Two retail tenants have been secured for the first floor of the Main Street building, Klugo said, but he withheld names until arrangements were complete and he had permission to reveal their identities. A search continues for an anchor retailer for the building, he said, perhaps in the vein of clothing retailer Tommy Hilfiger.

“We’re trying to get the right tenants,” Klugo said. Later this year marketing of the apartments will begin and include open-house events.

Klugo said at least half of the first-floor retail space in the Main Street building would be available Oct. 1, Klugo said, with other space availability to follow, and apartments would be ready in the first quarter of 2014. Commercial rents will be at “market rates,” he said.

The Dietz Street building, which will have five one-to-three bedroom apartments on three floors, will be ready for occupancy Oct. 1, he said.

The family-owned and operated Bresee’s Oneonta Department Store, a retail anchor on Main Street, opened in 1899 and closed in 1994.

Klugo Oneonta LLC has been working at the site more than a year, and the developer purchased the property from the Otsego County Development Corp. earlier this year.

The former Bresee’s building is being designed for foot traffic that can enter and exit from the Main Street front doors or the back entrances to the 50-space parking lot on Wall Street, Klugo said.

About 15 guests wandered through the apartments in the Main Street building’s apartments, which are divided by beams running from floor to ceiling but have yet to be enclosed by installing drywalling.

“It’s another exciting phase of the project,” Klugo told guests. “I have a passion to do this.”

Some of the original brickwork, ceiling beams and wooden floors were visible, and Klugo, who has a hands-on approach to work at the site, said some windows will have original window sashes.

Klugo estimated apartment rents would be from $750 to $1,800. The design includes environmentally efficient lighting, he said, and renters will have access to storage space in the basement.

The tour group included members of the New York State Urban Council, a statewide nonprofit organization to founded to facilitate the revitalization and development of central business districts, Oneonta Mayor Dick Miller, City Manager Michael Long, Otsego County Economic Developer Carolyn Lewis and Seventh Ward Common Council Member Robert Brzozowski, among others.

“It’s beautiful project — this will be a showpiece,” Gary Ferguson, Urban Council president and executive director of the Downtown Ithaca Alliance, said. The hope with such a project is that it spurs economic development downtown, he said.

At the Common Council meeting in City Hall on Tuesday night, Long mentioned the tour and update on the project.

“It will be a very big addition to our downtown revitalization process,” Long told the council. 

The city of Oneonta purchased the former Bresee’s complex between Main and Wall streets in 2007 and transferred the title to the Otsego County Development Corp., a nonprofit economic development group with ties to county and city governments.

A firm hired in 2008 to develop the property didn’t meet OCDC’s expectations, and its contract wasn’t renewed. Klugo Enterprises, which committed $800,000 in capital, signed an agreement with OCDC in 2011. The bulk of funding for the project was from several state grants.

The former Bresee’s complex was about 75,000 square-feet, Lewis said. But much of the structure was “severely dilapidated” and after demolition the site has a building of about 30,000 square-feet, she said.

Under the Otsego County Industrial Development Agency payment-in-lieu-of-taxes agreement, the assessment for the project is set at $1 million for 15 years, with a 90 percent tax abatement for the first and second years, then an adjustment by 10 percent annually, Lewis said previously. The abatement, which applies to city, county and school district taxes, is zero percent in years 11 through 15, she said.

Klugo, who plans to have an office on site and live in one of the apartments, said Oneonta residents have regaled him with stories about shopping at Bresee’s, and the city has welcomed and supported the project, which has preserved some historic characteristics of the building.

“I have never worked with a community so close,” Klugo said. “It’s awesome.”