Rural Adirondack communities to gain 60 new apartments

Essex County moves ahead with plan for 40 units in North Hudson and 20 more in yet-to-be determined location

By Tim Rowland

Essex County supervisors on Monday green-lighted the sale of 28 acres of county-owned land in North Hudson to Blue Line Development for construction of 40 affordable one-  and two-bedroom apartments.

The contract includes “a slew of conditions” to protect both parties in the event the project doesn’t move forward, said County Attorney Dan Manning, but allows Blue Line to take the next steps in the permitting and funding processes. 

The $23 million project ($6 million more than it would have been prior to Covid-related price increases) is notable for its location in a sparsely populated Adirondack community, and because, to make the numbers work, it will include 20 other apartments to be built in some other rural Adirondack community.

For institutional investors, who receive a fraction of the tax credits and write-offs for depreciation, 60 units is the magic number that makes it worth their while, said Kevin Kavanaugh, owner of Blue Line.

Since very few Adirondack communities have the population to fill 60 units, this necessitates the project being broken in two. “The IRS wasn’t thinking of North Hudson when they drew up the tax code,” Kavanaugh said. A second complex was considered for Schroon, but the markets were ultimately too close together and sewer was not workable, so now communities such as Newcomb are under consideration.

North Hudson has a population of 236, but it is both in the middle of nowhere and central to everywhere, said North Hudson Supervisor Stephanie DeZalia. “You can be just about anywhere in Essex County in 20 to 30 minutes,” she said. “This is not just a solution for North Hudson, but the surrounding communities as well.”

The apartments will be rented on a sliding scale to people making from 35% to 80% of Area Median Income, or about $25,000 to $80,000 for a family of four.

DeZalia said her town board had two meetings to gather public input on the proposal and approved a resolution of support. Both she and Kavanaugh said it was important to answer community questions and dispel myths.

“There’s a stigma around affordable housing, so we wanted to help people understand that these apartments will be rented to working people who can’t afford the local housing stock,” Kabanaugh said, adding that he expects senior citizens to be among the renters as well.

Supervisors, in their questioning Monday, wanted to be sure the apartments would remain affordable and not flip to market rate housing after a short amount of time. “I’m concerned about gentrification, and I want to be sure the next generation of low to moderate income people are provided for,” said Essex Supervisor Ken Hughes.

Kavanaugh said the income limits typically expire in 15 to 30 years, but he had no problem keeping the property affordable in perpetuity.

The proposed development is a short distance from the Northway’s Exit 29 at the southwest corner of the Route 9 intersection with Blue Ridge Road, in what the state billed as the Adirondack Gateway, which was envisioned as a public-private beehive of economic and recreational activity. 

That dream, in its grandest sense, has largely sputtered, although some improvements have come to pass, including a state campground and a private craft brewery and a restaurant/visitor center in the former Frontier Town theme park A-frame. DeZalia said all these enterprises need employees, and she hopes the apartments will be a draw for workers, which in turn could lure more business.

Kavanaugh said marketing surveys determined the demand for long-term rentals in the area. The land is adjacent to the Frontier Town A-frame, with a mountain panorama looking west. “Folks will have a great view and a real nice place to live,” he said.

Kavanaugh said he left his career on Wall Street and began building affordable housing in New Jersey as vice president of RPM Development. A graduate of Paul Smith’s College and Cornell University, he lives in Philadelphia and has a house in Schroon Lake, where he became schooled in the Adirondack needs for affordable housing.

“I’m excited about the direction of the project,” DeZalia said. “North Hudson is doing our little part to address the housing problem.”

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