Can $400 Million Rescue New York’s Run-Down Capital City?

The blight that pervades downtown Albany is hard to miss. Buildings are boarded up just blocks from the New York State Capitol. Chain-link fencing and other barriers surround the crumbling Capitol staircase.

The city’s lack of appeal even drew national scorn last spring, when Albany hosted a marquee women’s college basketball playoff game featuring Caitlin Clark.

“Good luck finding something to do in Albany,” the ESPN commentator Rebecca Lobo said on the televised broadcast. City leaders responded with a public relations push, but it was clear to the residents — including the occupant of the Executive Mansion — that something more concrete was needed.

Gov. Kathy Hochul last month included in her executive budget proposal a “City of Albany Rescue Plan” that would pump $400 million into downtown Albany. The area has not fully bounced back from a pandemic-triggered exodus of state workers, and pre-existing issues still linger.

Poverty rates in Albany are double the national rate, and a huge gap in homeownership between white and Black residents remains an impediment to the city’s revitalization.

Ms. Hochul, a Democrat and the first governor in a century from western New York, telegraphed her plans to reimagine Albany during a visit to the War Room Tavern — which opened two years ago as others were closing down — on the first day of the 2025 legislative session.

“Albany has been overlooked for too long by too many people who came and went,” she said. “This is my home and I love it here.”

The governor wants to use more than a third of the money — $150 million — to transform the New York State Museum from a punchline to a source of upstate pride. Another $200 million would go toward economic development projects, overseen by a consultant the state plans to hire in the coming days.

The state would also provide $1 million to help the Albany Police Department — hindered by dozens of unfilled officer job openings — temporarily surge the police presence downtown, officials said.

Ms. Hochul, who often wears a baseball cap while walking around New York City and Albany to observe her surroundings incognito, saw from “just walking down the hill from her residence” that Albany needs help, her budget director, Blake Washington, said.

“Her own shoe leather is dictating this investment,” he said.

The center city’s seedy side burst into public view a few months ago when the owner of Hattie’s, a well-regarded restaurant, publicized an incident when he said U.S. marshals chased a gun-and-drug-toting fugitive into his establishment.

“We need help,” the owner, Ed Mitzen, wrote in an email to local officials. “The crime and indecency on Madison Avenue are causing us to rethink being down there due to the risk of safety to our staff and guests.”

Among a laundry list of ills he complained about: public defecation, people “smoking crack” and shooting up drugs daily, a “large gang fight” that spilled into area businesses, an “undressed, drunken” man barging into his restaurant’s kitchen, and public sex acts across the street.

Mr. Mitzen, who donates the profits from Hattie’s to a foundation called Business for Good aimed at helping the community, said the city had responded with increased arrests and patrols.

“We’re starting to see the area come back to life,” he said.

Atop the wish list for Mr. Mitzen and other downtown promoters is a fix for Liberty Park, nine acres of unsightly concrete sprawl on the eastern edge of town that includes the Albany bus terminal, a particularly uninviting gateway to the capital city.

Jeff Buell, a local developer, has assembled a group of investors who want to build a soccer stadium there, along with retail and multifamily housing. He is pitching it to the state but says he is open to other ideas that will pump life into the moribund downtown.

Since 2022, the net number of locally owned retail businesses decreased by 23, and roughly 5,000 fewer state workers are walking the streets of Albany on any given day, according to statistics provided by the Downtown Albany Business Improvement District. The loss of workers has led to a roughly $22 million drop in consumer spending downtown.

Mr. Buell recalled a recent gathering when he said he took some wealthy investors on a tour of downtown. After three hours of walking, they saw fewer than 50 people. He said the investors had loved the historic buildings and infrastructure but wondered why the streets were so deserted.

He recalled being asked, “Where is everybody?”

One simple answer relates to the legislative calendar. Lawmakers hold session from January to June, leaving the city center a bit of a ghost town when they return to their home districts.

To make the city more appealing year-round, Ms. Hochul plans to set aside $25 million in funding to study how to restore access to the city’s waterfront, which has a massive highway running alongside it.

“The Hudson River is our greatest natural resource,” said State Senator Pat Fahy, a Democrat who represents the capital. “And we’re completely cut off from it.”

Related progress has been made. Late last year the federal government, after a long push from Senator Chuck Schumer, announced it had chosen Albany as the location of an $825 million federally funded semiconductor research facility.

Mr. Schumer also secured hundreds of millions of dollars to replace the Livingston Avenue Bridge, which carries the only upstate passenger rail line crossing the Hudson River. And the city has plans, albeit slow-rolling ones, to tear down eyesores like its dilapidated central warehouse and a couple of vacant housing projects.

Another urban planning challenge is how to undo at least some of the damage that former Gov. Nelson Rockefeller inflicted on the state capital in the 1960s when he built the enormous Empire State Plaza, which cut downtown in half and uprooted over 9,000 people from a once-thriving neighborhood that was razed to make way for it. Ms. Hochul’s plan includes $25 million to make the plaza “a more inviting space,” said Mr. Washington, the budget director.

Mr. Buell, the developer, has his own idea. “It’s a scar, it’s an impediment, it’s a bad decision,” he said of the 98-acre concrete expanse built at a cost of $2 billion. “But those are all looking backwards.”

He called for the state to consider converting the Brutalist glass-and-stone office towers rising up from the plaza to residential use.

Demand for affordable downtown living space is high. Mr. Buell and two partners built 1,000 apartments in the last few years, and he said they are now fully occupied.

Mr. Mitzen, the Hattie’s owner, just hopes it won’t take too long for the governor’s plan to put cranes in the sky and work boots on the ground. As with the museum, which was first targeted for a major renovation a quarter century ago, progress in downtown Albany often seems to inch along at a snail’s pace, if it advances at all.

“Let’s go,” he said. “Let’s not spend two years trying to figure it out.”