SCHENECTADY Backstage owners put pub up for sale $675,000 asked for rehabbed building BY MICHAEL LAMENDOLA Gazette Reporter
Four months after opening the Backstage Pub & Grill, owners Bob and Shelly White have put the business up for sale, saying it’s time to realize a profit on their investment. Bob White, who manages Backstage at 501 Smith St., said the business is doing well and that the couple’s intention all along was to fix up the property as an investment. “We built the building to a certain point and we will go on to the next investment,” White said Wednesday. The Whites are asking $675,000 for the property. “The best way to make money is to buy low and sell high,” Bob White said. The Whites purchased the vacant building from the city for $10,000 in 2006 and invested at least $415,000 in it. They gutted the 800-square-foot fi rstfloor former bar, took over the upstairs apartment and extended the building by 12 feet on two sides. They installed a brick facade topped by wood siding, added concrete handicap-access ramps and modernized the kitchen. The Whites have a $50,000 low-interest loan from the Metroplex Development Authority and a $60,000 facade grant from the Downtown Schenectady Improvement Corp. They also have Empire Zone benefits, meaning they pay full property taxes and are reimbursed by the state. Bob White said he believes the business is priced right for the market. “It’s the value of the business and building together,” he said. Backstage is within short walking distance of Proctors and the Hampton Inn, two prime sources of customers, White said. “We are like a neighborhood bar for Hampton Inn residents, and we open the kitchen by request for the cast of Proctors shows after their performances.” Metroplex Chairman Ray Gillen said the Whites are current on their loan and are free to do what they want with the building. In fact, he said, the sale is a good thing for the community, as it indicates the growing value of properties downtown. “They are in great location and business is booming,” Gillen said. “Because business is so good, they, like Tim Trier, are testing the real estate waters.” Trier owns Clinton’s Ditch on Erie Boulevard. He put it up for sale last year after opening the bar two years ago. His asking price is $1.2 million. Like the Whites, he took a derelict building and rehabilitated it, spending $400,000 on the project. Trier obtained a $50,000 loan from Metroplex and a $30,000 facade grant from the Downtown Schenectady Improvement Corp. Trier and the Whites would have to repay their Metroplex loans with any sale, Gillen said.
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Brad Littlefield
May 15, 2008, 6:37am
Guest User
There should be some benchmarks pertaining to the reward and acceptance of Metroplex grants, DSIC grants, and Empire Zone benefits. A minimum term of ownership should be required to retain the benefits of facade grants, tax repayments, etc. Facade grants are public revenues that are being invested in private property. As such, the investor is the benefactor. Those investors who "flip" real estate should be required to repay the amount of the grant if they sell the property within a specified number of years from the receipt of the funding.
If they flip the building only for a quick gain and not to run the business they should have to repay the loan with interest and penalty for early termination. This program is to help business not make people rich by buying a cheap building, fixing it up, and then selling it for a big profit.
The Whites have a $50,000 low-interest loan from the Metroplex Development Authority and a $60,000 facade grant from the Downtown Schenectady Improvement Corp.
You KNOW I'm not a fan of Metroplex, but the loan they have and the facade grant are two different things, IMHO.
The Grant was to improve the exterior of the building to make it look nice ... which improves downtowns "image", and will carry over for years to come. It probably won't get another facade grant for a LONG time. Basically, it stays with the building. The total facade/exterior renovations were > $100,000 on that building, just for the outside.
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In 2005, Shelby J. White and her husband, Robert, purchased an abandoned building from the City through a tax foreclosure. Located at the corner of Smith and Clinton Streets, this abandoned property is located adjacent to the rear entrance of Proctors and the new Hampton Inn. Metroplex identified this blighted property and eyesore in need of clean up, adaptive reuse and significant private investment.
IMHO, this was a good move for downtown - it took a decaying building that looked awful, away from the view of Proctors and the Inn, and made it an attractive corner where it previously was blight. It (the facade grant) was an investment in downtown, not in the business.
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Whites would have to repay their Metroplex loans with any sale, Gillen said.
I'm actually pleased that the White's will be repaying the loan on the sale of the building. Fortunately, it wasn't a Zero interest loan, it was a "low interest" loan, which means a net benefit for Schenectady.
I guess what I'm saying is that of all thebullcr*p that I've seen out of Metroplex, despite the quality of their food/entertainment in this business, I'm pleased that this loan/grant served two purposes - it improved the condition of a blighted downtown corner, and it made it a viable business for sale. The White's put a lot of sweat equity into this business, invested significant personal money into it, and are now ready to move on and sell to a new owner.
The high (?) price tag on the building seems as if they're not in a hurry to sell (not a fire sale), which is another good thing.
For the record, I have no personal knowledge of this business - I don't know the White's and have never been in there.
They also have Empire Zone benefits, meaning they pay full property taxes and are reimbursed by the state.
My concern is with the Empire Zone's policy of the reimbursement, in full, of the property taxes. For example, if Back Stage sells their business within the next few months, that would mean that Back Stage has actually never paid their property taxes. We, the taxpayers actually paid for them. And will the next owner be awarded Empire Zone benefits?
I have some concerns with the Empire Zone Program and it's oversight.
And...it's only a short walk from the Metroplex Mile...
I haven't been by in a while, so I couldn't tell you what it really looks like. I say if the money was used for the facade, and ACTUALLY spent on it, then fine, but I am truly against the Metroplex just handing out free money that isn't theirs, that instead belongs to the county taxpayers.
As far as the "low interest loan," I say hey, at least they were charging them SOME interest, unlike many other projects going on through the Metroplex. I would expect something to be in the contract (ok, I know it isn't, but if I was writing the contract, this would be included) that if someone takes out a loan with the Metroplex and during the time of the loan decides to sell the property, they should have to pay back the loan in full immediately or face penalties. If they do pay back the $50,000 right away, then at least there's $50,000 more that the Metroplex can loan out, hopefully at a higher interest rate and compound on a good thing.
I don't believe it is a flip. I believe it is lack of business. People just don't invest $400K of their own money to hopefully reap a return in 2 YEARS on their investment!! Businesses take at least 5 years to show a decent profit...if ever! Business just isn't as great as Mr.Gillen says it is. It would be really interesting to see the 'real financial books' for the business.
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“They are in great location and business is booming,” Gillen said. “Because business is so good, they, like Tim Trier, are testing the real estate waters.”
To this I say POPPYCOCK.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
I have spent quite a bit of money there.....nice ambience, but very small due to regs on handicap access and the like......sometimes we knit ourselves into a cocoon via laws and regulations....just strangling ourselves......
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
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