Fresh air is coming into the former Schenectady YMCA building on lower State Street.

In a project that balances new plumbing and wiring with preservation of the gym and a lobby area known to generations of Schenectady-area families, a developer is reversing the decline of one of the city’s landmark buildings.

Work is underway on an $18.3 million project to convert the historic building into 61 senior citizen apartments that will be located strategically near the Mohawk River waterfront, the Stockade District and downtown Schenectady.

“We’re on schedule to have our first tenants by late summer or the beginning of the fall,” said Lori Harris, vice president and project manager for Norstar Development USA, the project’s developer.

In addition to apartments, Norstar, based in Buffalo, will create some first-floor commercial space in the building. Plans call for 47 one-bedroom, one-bath units; 12 one-bedroom, one-bath units with dens, and two two-bedroom units. The building’s gym and walking track will remain intact and will be available for residents to use, Harris said.

In addition to the apartments, the building will feature a community room, fitness center, kitchen, library/ computer room and a multipurpose room. Exterior improvements are also planned.

“We’re really taking advantage — using downtown as our amenity: the thing we feel is just going to be a home run,” Harris said.

Norstar has developed properties across upstate, though this is its first Schenectady project. Harris said Norstar has been fielding calls from people looking to get onto the waiting list since the project started.

Renovations are being helped by nearly $6.7 million in federal Community Development Block Grant money awarded through New York state Homes and Community Renewal and the governor’s Office of Storm Recovery. Lower State Street was impacted by flooding from Tropical Storm Irene in 2011.

“It’s a key gateway to the city,” said Ray Gillen, chairman of the Schenectady County Metroplex Development Authority.

The former YMCA is at 13 State St., opposite Schenectady County Community College. The YMCA’s operations moved out of the building in 2010, and it stopped being used as a residence in 2014.

The masonry building was constructed in 1926, with an addition in 1968. Last year, the structure was declared eligible for the State and National Historic Registers. Corridors, doorways, the gym and the now-dusty grand woodwork in the lobby are being preserved.

“It looks like a haunted house now, but it’s going to look like a million bucks,” said Don Tilicki, a Norstar construction coordinator.

City and Metroplex officials have been working on plans for the property for several years. Harris credited Metroplex with thoroughly investigating the property before Norstar came in, so Norstar went into the project aware of the presence of asbestos throughout the building and other potential issues.

Harris said work began in the fall, with exterior site and drainage work, followed by asbestos removal. Interior framing of new apartments began in early January and is ongoing. The work includes all-new electrical, plumbing and heating-cooling systems.

“We went into it knowing we had a really expensive rehabilitation,” Harris said, explaining the need for historic renovation tax credits. “Historic rehabs can be pretty expensive, but they can be so worthwhile.”

Gillen said Metroplex helped Norstar secure critical historic renovation tax credits and is working on other projects to improve lower State Street.

“We are out to bid now for new sidewalks, curbs and street lights on lower State Street between South Church Street and Washington Avenue,” he said. “Bids will be opened on March 1, with work starting in late May and taking about eight weeks to complete.”

In the same area, he said, $10 million will be invested to rehabilitate seven buildings — in the Mill Artisan District, just east of the YMCA. The Gateway Plaza project will also expand Liberty Park onto lots where buildings were damaged by Tropical Storm Irene’s flooding.

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Stephen Williams at 395-3086, swilliams@dailygazette.net or @gazettesteve on Twitter.