From left, Redburn Development principal John Blackburn, vice president of development Damien Pinto-Martin and principal Tom Rossi working at School 1 in Troy.

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TECH MEETS REAL ESTATE FOR ‘ALL-IN LIVING’

COVER STORY

BY CHELSEA DIANA cdiana@bizjournals.com

W alking through the former Tilley Ladders Co. in Watervliet is a contrast in

old and new, 20th century industry and 21st century technology.

A little over a year ago, it looked the part of a former ladder factory with large wooden beams splattered with decades of paint, nicks in the wood floors and concrete staircases.

Today, those wooden beams and con-crete staircases coexist with the build-ing’s 62 sleek apartments featuring gran-ite countertops, large windows, loft-like ceilings and smart home technology.

Business partners Tom Rossi and John Blackburn spent $600,000 to buy the property and more than $8 million to transform it into the energy efficient Til-ley Lofts. The project was partially fund-ed from selling their first business BullEx Digital Safety — the fire safety technolo-gy company Rossi and Blackburn started out of Rensselaer Polytechnic Institute.

“We were burnt out and looking for different things and not necessarily to have a business with a bunch of employ-

ees,” Rossi, 35, said of the 2012 sale of BullEx. “We wanted something that could give us freedom.”

The problems and successes that came from repurposing old buildings into apartments drove Rossi and Blackburn to create two companies: Real estate devel-opment firm Redburn Development and wireless internet provider MassiveMesh, as well as a consulting business.

They have picked up on a trend a num-ber of developers in the Albany area are pursuing, renovating abandoned build-ings into apartments, and turned it on its head. Using their engineering exper-tise, Rossi and Blackburn developed and designed their own internet, smart home, and heating and cooling systems.

The strategy puts them in competition with massive utility companies, includ-ing Verizon Fios and Time Warner Cable, which is expected to raise utility, cable and internet prices following its acqui-sition by Charter Communications.

“The transition out of BullEx into the other businesses taught us how to keep our minds open to different opportuni-ties,” Blackburn, 32, said. “At BullEx, our heads were down and we had blinders on. In the real estate development busi-ness and internet business, we’re always looking for new opportunities and new ways to take the business into new areas.”

Rossi and Blackburn co-founded BullEx with Ryan O’Donnell in 2004. The company makes fire extinguisher training systems using propane and dig-ital technology to simulate fires. Products

range from practice fire extinguishers to elaborate training centers that simulate different types of fires.

In the early days of the business, BullEx worked with mentors, includ-ing Rensselaer professor Burt Swersey, Center for Economic Growth’s Jeffrey Lawrence and Mark Smisloff of Gerome Technologies. BullEx rented space in the same building as Gerome Technologies, which makes insulation for power gen-

erating systems in Menands, and looked to Smisloff for help with the infrastruc-ture needs of running a business.

“The biggest pleasant surprise for us was seeing how quickly things took hold for them after very humble, meager beginnings,” Smisloff said. “They got to a point where they were willing to take different risks and borrow money at the right time and made certain moves that made them very successful in a short amount of time.”

Investors took a big interest in the company after BullEx gained interna-tional recognition, establishing custom-ers that included General Electric, oil companies including Shell, government entities and casinos.

BullEx was acquired in January 2012 by LION, an Ohio company. Terms of the deal were not disclosed. BullEx still employs about 80 people in Albany.

“With BullEx, it was a manufacturing company, so we spent a lot of time with our heads down in the business. It was complicated with international offic-es and construction projects across the world,” Rossi said. “With Redburn, our mission has evolved. We like to talk about socially responsible development, his-toric rehabs, sustainable living and how low can we get this rent so it’s affordable and we still get a return.”

Since leaving BullEx, Rossi and Black-burn have brought their tech-focused development to real estate projects in Troy, Watervliet and Hudson.

At the Tilley Lofts in Watervliet, the

“We had just finished this historic renovation and it was beautiful, nice and new, but people just wanted to string wires all over the place and put holes in things. That’s just not what we wanted.”JOHN BLACKBURN, Principal of Redburn Development

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Redburn Development is doing more than just renovating old buildings and turning them into living spaces.

This article appeared in the Albany Business Review’s November 18, 2016 issue. It has been reprinted by the Albany Business Review and further reproduction by any other party is strictly prohibited. Copyright ©2016 Albany Business Review, 40 British American Blvd, Latham NY 12110

PROJECTS COMPLETED

RIVER STREET LOFTSWhere: Downtown TroyProject: In spring 2013, Tom Rossi and John Blackburn bought 172-176 River St., a building constructed in 1889 that is best known as the former Nelick’s Furniture. They paid about $270,000 for the vacant, four-story building. It was converted into 20 one-bedroom apartments and one studio.Completed: January 2014Details: Each apartment includes granite countertops, a dishwasher, in-unit laundry, a self-contained furnace/ air conditioning unit, a parking garage spot and tenant storage. Rents range from $800 to $1,200 a month. The ground floor has 4,100 square feet of commercial space.Tech: The roof of the building is covered with solar panels, generating nearly 40 percent of residential power needs. Residents have access to MassiveMesh internet.Financing: First Niagara provided financing for the $2.4 million project. The Rensselaer County Industrial Development Agency also provided assistance.

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TILLEY LOFTSWhere: WatervlietProject: Rossi and Blackburn bought the former Tilley Ladders Co. property for $600,000 to turn into 62 apartments called the Tilley Lofts. The multi-story, 80,000-square-foot building at 122 2nd St. — whose main section was built in the early 1900s — had been vacant since Tilley Ladders filed for Chapter 11 bankruptcy in 2004.Completed: December 2015Details: Each of the 62 apartments have granite countertops, loft-like ceilings, a washer/dryer, large windows and other amenities. There is a gym, dog-washing room and rooftop deck. Rents range from $865 per month to $1,495 per month for the one- and two-bedrooms. The lofts rent for roughly $1,600 per month.Tech: Blackburn and Rossi designed a building with advanced energy-efficient systems. Underneath the apartment’s parking lot, they installed a geothermal system. The 24 wells, each 500 feet deep, naturally cool water in the summer for the air conditioning and warm it in the winter for the heating system. A combined heat-and-power plant generates all of the building’s electricity and captures waste heat to cut down on energy usage and costs. The building received LEED Platinum certification from the U.S. Green Building Council, the highest designation possible.

Each apartment has a smart lock and smart home technology to control heating, cooling and lighting.Financing: The roughly $8.5 million investment was financed by Pioneer Bank.

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two designed “all-in living” where rent, electricity, heating and cooling, high speed internet, DirectTV and smart home automation are offered for one price. Rents at Tilley Lofts start at $865 and go up to $1,600 for loft apartments. The all-in package is $135 to $168 per month depending on apartment size.

“We always want to maximize profit per customer. In real estate, you have ten-ants in your building who literally have nowhere else to go, so why wouldn’t you sell them everything you could?” Rossi said. “You increase their satisfaction and give them a better experience, especially with some of the big utility companies that don’t always give the best experi-ence. We were just astounded that other people don’t do it.”

The concept sprung from Rossi and Blackburn’s frustrations as developers working with traditional providers to bring internet to their tenants.

“Our first project after selling BullEx was the River Street Lofts in Troy. We learned early on that dealing with some of the utility companies was very diffi-cult,” Blackburn said. “We had just fin-ished this historic renovation and it was beautiful, nice and new, but people just wanted to string wires all over the place and put holes in things. That’s just not what we wanted, so we decided to start our own business and started supplying it ourselves.”

The internet service, designed by Blackburn, has turned into a growing business for the pair called Massive-Mesh. It’s an alternative to Time War-ner Cable, Verizon Fios and others that is sold to residential customers in Troy and at Tilley Lofts.

MassiveMesh uses a mesh network transmitted throughout the city with no cabling. Wireless radio transmitters on top of buildings transmit high speed signals to repeater sites, or antennas on city rooftops. These antennas connect the Wi-Fi from a data center on River Street to radios in homes.

Monthly plans range from $19.95 a month for standard service to $34.95 a month for faster speeds to stream high-definition Netflix or Hulu. Instal-lation is free and there is no contract. A wireless router is required for installa-tion, which MassiveMesh rents for $5.40 a month.

Time Warner Cable costs start at $34.99 per month for standard inter-net and $44.99 per month for standard internet and 20 TV channels.

The internet service has the potential to expand to Lansingburgh, Brunswick, Green Island and Albany.

“It was getting people used to a dif-ferent way of doing it. Buying internet from us, or we’re your utility compa-ny, you buy power from us,” Rossi said. “You get the same bill every month that’s

monitored. At Tilley [Lofts], it was the next step with all services where a res-ident writes one check to one person.”

The business partners are investing heavily in energy-saving technology and asked the state’s utility regulator to let them sell electricity to tenants at Til-ley Lofts.

Rossi and Blackburn buy the pow-er from National Grid and resell it to residents. The practice, called sub-me-tering, is encouraged by the state pub-lic service commission to promote efficiency.

Underneath the apartment’s park-ing lot, they installed a geothermal sys-

tem. The 24 wells, each 500 feet deep, naturally cool water in the summer for the air conditioning and warm it in the winter for the heating system. A com-bined heat-and-power plant generates all of the building’s electricity and cap-tures waste heat to cut down on the energy usage.

The success of MassiveMesh and the HVAC systems have attracted the atten-tion of other developers.

Rossi and Blackburn said they are working with several multi-family developments to bring MassiveMesh internet, DirectTV and home automa-tion to buildings. Others are interested in the heating and cooling systems.

To handle that growth, Redburn Development has added 28 employees since 2013 with several jobs open in the construction and internet businesses.

Redburn’s next projects involve ren-ovating a former school in Troy into apartments and rehabbing an aban-doned manufacturing building in Hud-son into a boutique hotel.

“We didn’t expect to grow this fast again, but we are,” Rossi said. “It’s real-ly easy for us, too. We’ll see where we’re outsourcing and we’ll just hire someone to do it. It’ll save money and we’ll be in complete control and it’ll be much eas-ier for us.”

“We didn’t expect to grow this fast again, but here we are.”TOM ROSSI, Principal of Redburn Development

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This article appeared in the Albany Business Review’s November 18, 2016 issue. It has been reprinted by the Albany Business Review and further reproduction by any other party is strictly prohibited. Copyright ©2016 Albany Business Review, 40 British American Blvd, Latham NY 12110

SCHOOL 1Where: North Central Troy, between the village of Lansingburgh and downtown TroyProject: In February 2016, Rossi and Blackburn bought the former School 1, just north of the Collar City Bridge, for $315,000. The school is at 2920 Fifth Ave., across from Bella Napoli Bakery on River Street. It was built in the early 1900s and closed a couple of years ago.Completed: Expected in 2017Details: Rossi and Blackburn are investing upward of $2 million to convert the four-story, 35,366-square-foot building into 28 apartments that will lease for less than $1,000 a month.Tech: Similar to Tilley Lofts, the apartments at School 1 will have an energy-efficient heating and electric system and other measures to cut renovation and rental costs. Most of the units will be 600 to 700 square feet with one bedroom and will lease for $800 to $900.Financing: Berkshire Bank is financing the project. Rossi and Blackburn are also seeking a reduction in taxes from the Troy Industrial Development Agency when the building becomes a taxable property for the first time.

THE WICKWhere: HudsonProject: Construction recently started on The Wick, a boutique hotel at 41 Cross St. in Hudson with 55 rooms.Completed: Expected to open in spring 2017Details: The Wick will be an independent hotel managed by Prestige Hospitality.Tech: The plan is to put in two of the combined heat and power units that are in the Tilley Lofts, as well as a battery storage system. Redburn Development is working with Princeton Power in New Jersey and with Tesla for their grid storage battery packs. Rossi and Blackburn also plan to put in absorption chillers, which take hot water and make cold water out of it for use in the summer. Blackburn said the system shouldn’t use any electricity from the utility companies; all of the power should run all the time.Financing: It is the first project Redburn Development has partially financed with Empire State Development money through the regional economic development competition process. The development team won a $1.5 million grant in last year’s state money competition. The remainder of the $7.8 million historic preservation project is being financed by Pioneer Bank with a $6.75 million construction loan.

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PROJECTS IN THE PIPELINE

This article appeared in the Albany Business Review’s November 18, 2016 issue. It has been reprinted by the Albany Business Review and further reproduction by any other party is strictly prohibited. Copyright ©2016 Albany Business Review, 40 British American Blvd, Latham NY 12110