Albany

The city's economic development arm could reap more than $1 million by helping the College of Nanoscale Science and Engineering finance its new $191 million hub for renewable energy and clean-technology research, officials said Friday.

Under the proposed arrangement, neither the city nor its Capital Resource Corp., would fund construction of the six-story Zero Energy Nanotechnology building planned for the college's Fuller Road campus.

But in exchange for a transaction fee estimated between $1.4 million and $1.5 million, the CRC would grant the college access to its borrowing power and an estimated $2.3 million break on mortgage taxes, which are split between the state, county, city and Capital District Transportation Authority.

The mortgage tax is 1.25 percent, with one-fifth going to the city. That means a roughly $465,000 mortgage tax break would net Albany about $1 million if the deal is approved, city officials said.

Though the CRC is providing access to the financing, neither it nor the city would be on hook for the $186 million debt should the college default, Mayor Kathy Sheehan said.

"It's really a win all the way around for taxpayers," Sheehan said, noting such transaction fees are one of the city's main sources of development money. "This is a pretty straightforward transaction that results in a significant fee that the city can use for economic development."

Sheehan, who served on the CRC's board as city treasurer, also noted the college is projecting a "pretty remarkable" 1,150 jobs at the site within five years.

The college's application says it will seek bonds that would be subject to income taxes but notes it "may request conversion" to tax-free status in the future.

NanoCollege spokesman Jerry Gretzinger said whether the bonds are taxable depends on whether any of the space is leased to private companies, as the NanoCollege sometimes does.

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City to get $1M on nano tax deal