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Three developers eyeing downtown apartment projects

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In recent years, the focus on creating rental housing for Fort Drum has yielded more than a dozen upper-floor apartments along Public Square.

And now as many as 18 more units may be added in the downtown business district, with three different developers committing to projects or expressing interest in developing them.

Plans call for adding seven apartments at 320 State St., another seven units in the third floor of 259 J.B. Wise Place and four more at 81 Public Square.

Officials representing the city of Watertown, Neighbors of Watertown Inc. and the Watertown Local Development Corp. have been working with the three developers to help arrange for federal Community Development Block Grant and other funding for the projects.

It comes at a time when downtown is going through a renaissance, with an emphasis on filling the need for Fort Drum soldiers, said Kenneth A. Mix, the city’s planning and community development coordinator. Both the $15 million Woolworth project and the $65 million to $70 million redevelopment of the former Mercy Hospital complex also will feature a total of 218 apartments.

“There’s a lot more interest in downtown right now,” he said.

Local landlord Charles E. Bates, who owns 32 units in Watertown under CL Property Management of NNY LLC, soon will start work on revamping the three-floor building on State Street. Last month, Mr. Bates bought the long-vacant building through an auction for $170,000.

The project will include seven units on the two upper floors and plans for commercial space on the ground floor, which most recently housed a Korean grocery store, Mr. Mix said.

Mr. Bates will use $210,000 in CDBG funding — half in grant money, the remainder through a loan — and another $210,000 in other Department of Housing and Urban Development funding to complete just the apartments portion of the project, he said.

The federal money originally was earmarked for the J.B. Wise project, but the city stood to lose it when it was apparent it would not be completed by HUD’s deadline at the end of this year, Mr. Mix said.

Building owner Thomas Horning had intended to complete the project but could not obtain all the needed funding, Mr. Mix said.

With the possibility of losing the CDBG funding, Mr. Bates stepped in and obtained it for his project, Mr. Mix said. Neither Mr. Bates nor Mr. Horning would comment about the situation.

But an unidentified Oswego developer and his partners have expressed interest in taking over the J.B. Wise Place project. Donald W. Rutherford, the CEO of the WLDC, and Mr. Mix are looking at ways to salvage the project.

“It gets us out of a tough situation,” Mr. Rutherford said Thursday at the Watertown Trust board meeting.

Mr. Rutherford has met twice with the developers, who recently finished renovating a building in Oswego, to discuss financial packages that would allow the project to proceed. The development group has $280,000 cash in hand and could receive about $330,000 in combined CDBG, Watertown Trust and other federal money, but needs “alternative funding” to proceed, Mr. Rutherford said. That leaves a $90,000 funding gap, Mr. Mix said.

If the project moves forward, several commercial businesses — including Golden Image Sun Center, Evolution Hair Salon, Shortsleeve Screening and AVL Signs — would remain on the first and second floors, Mr. Rutherford said.

The group also has expressed an interest in investing in other Watertown projects. It is looking for rehab projects that would range in cost between $1 million and $2 million, Mr. Rutherford said.

“They like Watertown and want to do more,” Mr. Rutherford said, urging board members to make suggestions on potential projects.

Meanwhile, local restaurateurs Peter J. and Libby S. Dephtereos plan to create four apartments in a building at 81 Public Square, which sits next to the Crystal Restaurant that they own.

The project is receiving $240,000 in CDBG and other HUD funding. Bids are about to go out for the work.

In the past two years, the city’s Planning Department and Neighbors have been concentrating on getting property owners to create more apartments in the downtown business district.

Those projects include creating seven apartments in the Rent-a-Zone building at 101-103 Public Square, four in the Cahill building at 14 Court St. and three in the Wing Wagon building, also on Public Square, that had not been used in years and is being gutted and modernized.

“All of it will be good for downtown,” Mrs. Dephtereos said.

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