The Albany Hilton Hotel Redevelopment

The concept of redeveloping what was known as the Ten Eyck Hotel site was launched in 1972 and was hailed as a collaboration between the public and private sectors in an effort to revitalize a stagnant business district. It was championed by public officials such as Mayor Erastus Corning and Gov. Nelson Rockefeller, and was part of a larger urban renewal plan that sought not only to develop Albany’s downtown but also provide jobs for local working class residents.

When completed in 1980, the Albany Hilton became the city’s only major hotel in the neighborhood. The $18 million, 400-room hotel completed the redevelopment of Ten Eyck Plaza, a $45 million project that included a bank, a parking garage, an office tower, a commercial arcade and a public park. The project was spearheaded by Rockefeller, who wanted to provide guests with acceptable accommodations, and Corning, who pushed for the demolition of the Ten Eyck Hotel and convinced the governor to include office and retail space as part of the complex. It was financed in part by a federal Urban Development Action Grant to the City of Albany, which was then loaned to the developers of the Hotel as a second mortgage. Built on property owned by a subsidiary of the State’s Urban Development Corp, the project benefited from an agreed-upon schedule of tax abatements and exemptions.

Subsequently known as the Omni Albany when Servico declared bankruptcy in 1990, the hotel was turned into the Crowne Plaza Albany nine years later as part of a $10 million renovation project by Lodgian Inc., an Atlanta-based company that specializes in upgrades and renovations.

Today, the hotel is known as the Hilton Albany, changing its name once again after the completion of a $14 million renovation earlier this year. Improvements to the 34-year old building included newly decorated rooms, wireless Internet, updated in-room entertainment systems and a new lobby restaurant, lounge and check-in.

As a new associate at Herrick, Feinstein in 1978, Leonard Grunstein represented the developers of the project, a partnership between a public hotel company and private development firm. Within this role, he negotiated the financeable ground lease with the UDC, helped craft and negotiate the leasehold financing structure for the first mortgage and the UDAG second mortgage, and dealt with the many problems that had to be solved associated with a project of this scale. This included such arcane matters as navigating the City’s and State’s laws in order to obtain a liquor license at the Hotel. Grunstein also helped obtain and negotiate the terms of the Urban Development Action Grant, which enabled the project’s fruition.

UDC/ Hotel St. George & Subway Improvement Project

Built in 1885 at the former site of an inn with the same name, the Hotel St. George in Brooklyn Heights was transformed from a 130-room, 10-story building to a sprawling, multi-building complex by the 1930s. William Tumbridge, an English-born sailor who made his fortune on Wall Street as an advertising executive, originally owned the hotel.

Under Tumbridge’s tenure, which ended with his death in 1921, the hotel underwent several expansions – from the modest 130 rooms on Pineapple Street to more than 1,000 rooms by the turn of the century. Determined to compete with his counterparts across the East River, Tumbridge did not invest solely in property; he made his hotel one of the first to have electricity and an air-conditioned dining room. It also featured an indoor swimming pool.

In 1922, Tumbridge’s family sold the hotel to Bing & Bing, a luxury real estate developer known for its “stately, spacious apartments” and “elegantly detailed buildings.” Much like Tumbridge, the new owners quickly expanded, completing a new 31-story tower in 1930 that added another 1,400 rooms to the St. George and made it the largest hotel in New York.

In order to accommodate the ever-growing number of guests, the Bings needed more room and hired architect Emery Roth to design an addition over the subway stop at Clark Street in 1924. Despite the hotel’s expansion, the Bings sold the hotel in 1953.

In the 1960s, the Kennard Hospitality Hotel Group, which had purchased the St. George from Bing & Bing, was accused of neglecting the property. Over the next decade, the hotel fell further into disrepair as the rest of the city struggled in the midst of a deep financial crisis.

No longer operating as a hotel, the building’s lobby was redeveloped by the Urban Development Corp. in the early 1980s into the Clark Street station of the IRT Broadway – Seventh Avenue line. As a state agency, the UDC was exempt from paying taxes. Nonetheless, the agency required private developers involved in the project to pay an amount in lieu of sales taxes to then be used to fund public benefit projects in the community.

As an Assistant Corporation Counsel, Leonard Grunstein negotiated the financeable ground lease and structure that enabled redevelopment and conversion of the Hotel into residential apartment units, employing an analogue to J-51 tax abatement and exemption as the model for the in lieu of real estate tax payments.