History Mauled Again
City Did Dirty Deal Selling Historic Site

Feb./Mar. 95

by Lynne Jackson

I have been reading this book, The Fifth Discipline in which the author, Peter M. Senge, says that it is often the structure of the situation that makes people behave in certain ways. In a given situation, according to his theory, widely different people will do the same thing.

This is obviously what happened when the Albany Common Council, with its supposedly new, non-machine aldermen, voted 15 to 0 to build a strip maul around the site of the last remnant of the embankment of the first passenger railroad in New York. Many aldermen held their noses while voting for it, but, they still voted for the mall. The Common Council has in the past often voted unanimously to destroy historic sites and Pine Bush, and it is continuing its traditions.

Experts agree, the embankment site should be saved.


There is no doubt this railroad embankment is of significant historical significance, worthy of preservation. Phillip Lord, Acting Chief of the New York State Museum, stated in a letter to the Albany Planning Board, "But even greater than its archaeological content, this site provides the only opportunity left in the State to experience this railroad as it was first experienced by travelers in the early 1800's, running on a narrow track through the Pine Bush. The original cut and embankment areas are preserved with native vegetation on both sides so that it is possible to walk along the line and gain a sense of what the passengers saw over 160 years ago. Thus the natural setting, which screens the line from modern visual intrusions and preserves the engineering of the original roadbed, is as important an aspect of historical preservation as the archaeological content or exact bed of the railroad itself." Mr. Lord continues, "But, more important, any destruction of the natural Pine Bush vegetation and the terrain in the immediate vicinity of the [site] would also dramatically reduce its integrity as an historic resource, particularly as one to be experienced as an educational resource."

Numerous objections to this strip mall have been raised by historians, railroad enthusiasts, and members of Save the Pine Bush. At the hearing, I brought a list, compiled by John Wolcott, of many of the historic sites that have been destroyed in Albany since the Historic Commission was formed in the late sixties. I unrolled the twenty-feet long list and it and read it to the Aldermen. Didn't make a bit of difference.

At the same hearing, I pointed out that the environmental impact statement for this strip mall inadequately addressed the issues of pedestrian safety and access by mass transit and was a safety hazard. When I finished my presentation, Alderman Nicholas Coluccio practically yelled at me saying that I did not care about pedestrian safety, that I was just using that issue as an excuse to prevent the mall from being built. I was surprised at the viciousness of his attack, and wondered what could be behind his anger.

Students at SUNYA gathered over 100 signatures of students opposed to the mall, students who are supposed to be the consumers. I presented the signatures to the chair of the zoning committee. Lot of good that did.

Who owns the railroad embankment?

John Wolcott researched the issue of who actually owns the railroad embankment which bisects the site, a strip of land approximately 40-60' wide and 1000' long. It turns out the developers do not own the embankment. In the Environmental Impact Statement (EIS), the developers state one particular deed at Book 112, page 29 recorded on May 6, 1851 proves that they own the embankment. Careful reading of that deed shows exactly the opposite, that the developers do not own the embankment. Actually, the real owners were unaware that the Common Council planned to re-zone their land and allow someone else to build on it. John Wolcott repeatedly raised the issue with the Albany City Corporation Council and at public hearings with the Common Council. No public official has shown the least interest in finding out the truth about who owns the actual Mohawk & Hudson Railroad embankment.

Opponent silenced

During one Common Council meeting on the railroad embankment, John Wolcott and I met Larry Stone, the great-nephew of the late Julian Erway, former State Senator and partner in the Erly land company. (Erly is a holding company formed by Erway and Donald Lynch, thus the name.) Larry Stone inherited a small part of the land where the mall is to be built - less than 1%. Mr. Stone said that the developer does not have clear title to this land, and that he and his family were going to pursue their legal options. He also told the Common Council that his great uncle loved the railroads and would never allow the embankment to be destroyed. But Mr. Stone was silenced when the developer sued him for $1.2 million. A frightened Mr. Stone was forced to settle the lawsuit and agreed not to speak to the members of the Common Council.

Members of Save the Pine Bush invited all of the members of the Common Council to tour the railroad embankment site, five members came. We began the tours at the site of the Hellman Theater, which is a little to the east of the railroad embankment. Have you seen the Hellman Theater recently? It is a perfect example of a throw-away building. Less than 30 years old, this theater is an empty, graffiti-ridden eye-sore. We believe this strip mall proposal, in less than 20 years, will join the list of other failed developments in the Capital Area, including the abandoned Shop & Save on Western Ave., Joy Plaza in Ballston Spa, the Joy Department store in Rensselaer, Heritage Park and the Uncle Sam Atrium, among many other dead and dying malls.
Does Albany need any more ugly, throw-away developments? Our argument, that development should be downtown, was lost on aldermen whose main concern was to balance the budget this year.

OK, so we presented the facts in the case as to why the site around the railroad embankment should be preserved. The Common Council voted for immediate tax revenues instead of sound planning. OK, I understand why. Former Mayor Whalen left the city in a fiscal mess, and our new Council members have to clean it up. The prospect of an additional $458,400 in tax money for 1995 was too attractive for the aldermen, despite the historic significance or long-term consequences of allowing yet another strip mall on the outskirts of the City.

This proposal can't stand the light of day

I can see their reasoning. But this is what really stinks about this project:
The development proposal, called Washington Center, is for a strip mall, an office building and a residential hotel. The total area is 13.4 acres of land. The proposed development is to be built on two parcels of land -1455 Washington Ave. and 1375 Washington Ave. Going away from Albany on Washington Ave., on the right, first you see the Hellman Theater, then the Holiday Inn Hotel (formerly the Thruway House), then 1375 Washington Ave. and adjacent to it, 1455 Washington Ave. The 1455 Washington Ave. property ends at the entrance to I-90.

The City owned 1455 Washington Ave. until 1991. Donald Lynch owned the adjacent property, 1375 Washington Ave. The developer for this project is Gullo Companies.

On the first page of the draft environmental Impact Statement written by Gullo Companies, it says, "The City of Albany sold 6.2 acres [1455 Washington Ave.] to the developer, Gullo Companies." This statement, based on researching the deeds, is false. The City did not sell the land to the developer, Gullo, but rather to Donald Lynch, the adjacent landowner, who, less than one minute later, gave (not sold!) the land to Gullo. And herein lies the tale.

In a memo, dated December 7, 1988 from Albany City Planner Willard Bruce to then-Mayor Whalen, Mr. Bruce notes that 1455 Washington Ave. was scheduled to be sold at public auction in accordance with City law. Mr. Bruce suggests that the information about the railroad embankment should be told to any potential purchaser. The memo also mentions that "a Mr. Lynch" owns the adjacent property and "is apparently interested in acquiring the City parcel and consolidating the two for future development."

(One reason Mr. Bruce knew about the historic site on 1455 Washington Ave. was because SPB had been writing to the city about the importance of the parcel since 1984. Former Mayor Whalen even directed City employees to look into the possibility of promoting this land as a historic site.)

Private sale scheduled

The next thing we know is that the public auction to sell 1455 Washington Ave. is canceled. Instead, the parcel is scheduled for private sale to the adjacent landowner, Donald Lynch, co-founder of the Erly holding company. The Common Council must vote to approve private sale of city land. A private sale can supersede a public auction for an adjacent landowner, especially if the land is "landlocked", i.e., has no access to a public road. 1455 Washington Ave. is not landlocked, as it is bordered by Washington Ave. for a hundreds of feet.

At the time the Common Council voted to sell 1455 Washington Ave., the Common Council was told by the Whalen administration that this land was "abandoned for City purposes," meaning the City had no further use for it. Also, one member of the Council informed John Wolcott that the Council was told that 1455 Washington Ave. was landlocked. Thus, the Council voted to sell 1455 Washington Ave. to Donald Lynch.

Same time, same place

According to the deed, filed at 10:35 am on July 3, 1991, the City of Albany sold 1455 Washington Ave. to Donald Lynch for $330,000. It was signed by former Mayor Whalen and notarized by City Counsel Gary Stiglmeier. On the exact same day, at the exact same time (10:35 am), a deed was filed in the County Clerk's office where Donald Lynch gave the same land to Peter Gullo. No money exchanged hands between Gullo and Lynch.

Now, why would Donald Lynch pay the City of Albany $330,000 for a parcel of land and turn around at the very next second (not minute!) and give this same land to Peter Gullo? If this land transaction was totally legitimate, why the middleman? Why did the City sell the land to Lynch, and not directly to Gullo as Gullo stated in his environmental impact statement?

The most probable explanation is that Peter Gullo wanted to side-step the law requiring auction of City land. Gullo knew that the City was planning to sell the land at public auction, where someone might out-bid him. One of Gullo's lawyers is Peter Lynch, Donald Lynch's nephew. It would have been easy for Gullo to approach Donald Lynch about a deal. Perhaps the arrangement was that Gullo would give $330,000 (or more) to Donald Lynch. Then Lynch, as the adjacent landowner, would ask the City to sell him 1455 Washington Ave. at a private sale. Gullo would then be guaranteed his land, not likely someone would out-bid him at a private sale!

But, if all of this were above board, why did no money change hands when Gullo bought the land from Lynch?

What was in this deal for Lynch? Why did he go to all of this trouble to contact the city and arrange this sale? We may never learn Lynch's story because he died last spring. It is very likely that before he went into the ground, Lynch agreed to sell the adjacent land to Gullo. And indeed, on July 19, 1994, the Erly holding company agreed to sell Gullo 1375 Washington Ave. for $510,000 . This contract of sale was scheduled to close in January, 1995.

It is also interesting to note that Gullo paid the Erly holding company $71,000 an acre for 1375 Washington Ave. and the City only received $53,000 an acre for its next door neighbor. Not only did Gullo's deal guarantee that he could buy 1455 Washington Ave., but that he could get it for 1/3 less.

Who pays the tax?

There is a little tax question to raise here. When land is sold, the seller pays for the deed stamps which are calculated on the basis of the cost of the land. The City, when selling the land to Lynch, paid $1320 in deed stamps. Lynch paid nothing when giving the land to Gullo.

A rational businessman like Donald Lynch would not give away land that he just bought for $330,000 out of the goodness of his heart. Therefore, we must assume that Gullo gave Lynch $330,000 to buy the land from the City. No deed tax stamps were paid on this transaction.

Dirty Deal

At this point, you may be thinking, yeah, well, these politicians and developers, always involved in dirty deals, why should I care about this?

First, the land was removed from being sold at public auction. If the land had been auctioned, it is quite possible that the City would have gotten more money for it, especially since Gullo did eventually pay much more to buy 1375 Washington Ave. from Lynch. Also, why should Gullo receive special treatment? He had no more right to buy the land than anyone else.

Most important, if the land had been sold at public auction, the truth about its historical significance would have come out and maybe the City would have decided to create a park instead of selling it.

Facts hidden from Common Council

It seems that many facts about 1455 Washington Ave. were not told to the Common Council when it voted to sell the land. The City Administration must have known that Donald Lynch was going to turn around and give the land to Gullo. They had to have known, otherwise how could these two land transactions have happened at the same time on the same day? Lynch would hardly have had time to sign his name to the deed between buying the land and giving it away let alone go through the rigmarole of closing on the sale!

Worst of all, Albany is losing yet another opportunity to create a beautiful historic park around this last remnant of the Mohawk and Hudson railroad embankment. A well-executed historic site could bring tourist dollars to Albany for 100's of years. A historic park would enhance the public realm of Albany and make Albany an even nicer place to live and work.

Instead, Albany may get another strip mall that looks just like strip malls in New Jersey and Colonie. This strip mall will cause traffic congestion and air pollution, cause increased pedestrian injuries, and will probably look just like the Hellman Theater within 20 years or less. It will destroy acres of beautiful sand dunes and pitch pine trees, not mention the site surrounding the historic railroad embankment.
As with any messy land deal involving developers and politicians there are pieces I cannot find a place for yet. Such as the fact that Donald Lynch was the former County Clerk and investigated by the State Investigation Committee for his land deals with tax delinquent property in the Pine Bush in the early 1960's.

Is it possible that 15th Ward Alderman Coluccio has a personal interest in the development of this mall? Currently, the mall is not in his ward, but before the 1992 re-districting, it was part of his domaine. A very credible source has told me that Mr. Coluccio has been very actively promoting this development in the Common Council. On the other hand, Mr. Coluccio has been speaking out against other developments on Washington Avenue, citing traffic problems. The NYS Department of Transportation has stated its concerns about the increased traffic in front of 1455 Washington Ave., so why isn't Mr. Coluccio concerned? A visibly agitated Mr. Coluccio has verbally attacked members of SPB at public hearings about this issue.

There are many serious problems with the strip mall proposal, from historic site issues to who really owns the land. Mr. Stone has stated that many shares of the Erly Company, which his great-uncle owned, seem to have disappeared or are, for unexplained reasons, no longer in control by his family who should have inherited them. There is no public record available in which to review who owns shares of a company such as Erly. So, the average citizen cannot look up the shareholders of the Erly Company.

I don't know about you, but something really stinks here. What conclusions do you draw? Do you think this should be investigated by a law enforcement agency?


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