Developer Joseph Barile stands with a design of the Peaks at Lake Placid project Friday at the future home of the complex. (Enterprise photo — Lauren Yates)

LAKE PLACID — A large-scale housing project that was expected to bring 355 new units to the Lake Placid housing market has now been scaled back — at least for now — as the developer contends with skyrocketing material prices and funding challenges. Officials say the smaller scale of the development, which was intended to be used first as athlete housing for the 2023 World University Games, will mean some athletes will have to now be housed in local hotels.

The town-village Review Board approved local developer Joseph Barile’s Peaks at Lake Placid housing project in March after a more than seven-month-long review process. Barile planned to build 265 rental apartments and 90 condominiums on a piece of land on Old Barn Road, where the former W. Alton Jones Cell Science Center was located. The units were going to be used for athlete housing for the games before being turned over for rent or sale immediately afterward.

Right now, the developer said he only has funding for the first 101 apartments. Barile plans to start pre-leasing those first 101 apartments within the next 30 days, and he hopes those presales will prove the “depth” of the housing market in Lake Placid to lenders. His hope is that lenders will then approve another two phases with 82 new apartments each.

“Although we’re calling this ‘phasing,’ it’s more of from the lender’s standpoint — the phasing of when money is released to us, the builders, to build,” Barile said. “We’re hoping though, that we just continue from here and go right across the whole project.”

Barile said he hopes to start renovating the original cell science center building, which will become 76 condominiums, around mid-winter. The remaining 14 condominiums are expected to be constructed in a new building next to the science center. Barile could not immediately be reached Monday for clarification on the construction timeline of the condominiums, and it’s unclear if he’s using funding from the first phase to start that part of the project.

Barile’s team has already built the entrance road to the complex, started the site grading, and started building the underground infrastructure for water, sewer, electric and fiber optics. Barile said that infrastructure will serve the units built in the first two phases of the project.

Barile said the goal is to have the first 101 units completed by the 2023 games, when they will still serve as athlete housing for some athletes.

“We’re optimistic we can get it done,” Barile said.

ROOST CEO and Adirondack Sports Council Chair Jim McKenna said that since fewer athletes will be housed at the Peaks than planned, the overflow athletes will be accommodated by local hotels and nearby municipalities.

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Costs and cutbacks

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Barile said that he originally applied for a loan for the project through Green Bank, a state-sponsored bank aimed at financing green energy projects, since the complex was originally expected to mainly run off of green energy. But the bank rejected the Peaks project because Lake Placid was deemed too “risky” of an investment, according to Barile. The project ended up getting partial funding from Evans Bank in Buffalo and the local Champlain National Bank for the first phase of 101 units.

Barile said the project is costing about 30% to 35% more than originally planned due to construction material costs, citing construction supply chain disruptions because of the pandemic as major problems. He said the price of construction materials like plastic, copper, steel and aluminum have hit “all-time highs” recently, and even when materials are purchased, there’s no promise of when they’ll arrive on the site. Right now he’s hoping the water lines will be installed before winter, but the materials are back-ordered by around four months.

Barile said he had to scale back on the project’s green energy efforts because lenders are hesitant to fund the high-cost materials. Barile said he expects to reduce the complex’s carbon footprint by 65% instead of the originally estimated 85%, and they won’t be installing energy-saving solar panels and geothermal wells as originally planned. He said he’s still looking into getting some solar panels, but not as many as he wanted to.

“As much as we wanted to be the pioneer (of green energy construction) — and it’s disappointing — we’re still way, way ahead of what the minimum requirements are,” he said.

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Peaks plans

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The Peaks’ apartment prices are aimed at the 120% to 150% Area Median Income. Barile said that rent for three bedroom apartments will probably hover around $2,000, while two bedroom units will be closer to $1,750. The Peaks will have one bedroom apartments, but Barile didn’t specify price points for them.

A housing needs assessment study released last year showed that with a target of 50% of the local workforce living within the community, North Elba and Lake Placid have a need for roughly 1,534 “workforce and affordable level” housing units. Most of that assessed need, 1,013 units, is for people who make less than $35,150 per year. In the study, affordable rent for that income range is defined as less than $879 per month for an apartment and under $123,000 for a house.

The Peaks at Lake Placid project likely wouldn’t address the needs of that demographic, but it would add new units to the market.

Barile said he hopes to start the second phase of 82 apartments towards the end of next year, and he hopes to start the third phase, with the final 82 apartments, the following year. He said the complex will still have parking garages below each building, green spaces, recreational areas, a greenhouse, a daycare center, walking trails and other amenities.

Despite financial and timeline changes, the project’s original occupancy plans remain the same, according to Barile. The units will still be deed-restricted, so short-term rentals will still be forbidden.

Sixty-six percent of the total units will be long-term rentals with a minimum of a six-month lease, and 34% of the units will be sold. Ten percent of those rentals, or 11 units of the first 101 units, will be “affordable” housing, available only to people who make less than 120% of the Area Median Income — that was around $69,500 for Essex County in 2019. Those “affordable” units are expected to be audited and monitored by a town-appointed person to make sure that income-qualified people are renting them. Those renters would also have to be full-time residents or soon-to-be full-time residents.

Barile was set to appear before the review board again on Wednesday with a project update, but North Elba Code Enforcement Officer Mike Orticelle said Barile canceled on Monday and is now expected to appear before the board in November. Orticelle said that Barile won’t need to seek reapproval for the project right now, but the board’s approval has an expiration date of three years. If the Peaks project isn’t completed by then, Orticelle said Barile might have to seek reapproval.