The Schenectady Metroplex Development Authority has begun the foreclosure process on the Van Dyck, a landmark music club known for its jazz and blues shows.
Two years ago, Metroplex granted the Van Dyck’s owner Peter Olsen a controversial short-term $275,000 loan to keep his business afloat. At the time, Olsen had just bought out his partners and needed the extra money.
Chairman of Metroplex Ray Gillen said of the loan, We knew there was some risk, but we were in a good position, and even if the business sold at auction, we’d get our money back and more.
The loan is now due and Olsen has yet to come up with an acceptable plan to repay it, said Gillen.
`We have to protect our investment in the club,` Gillen said. `We’re lending the public’s money here.`
Olsen said he is looking at a variety of options to repay Metroplex. He said he has been talking with two banks, a loan broker, three people who want to purchase the place, three people who want to lease it, and two men who are interested in becoming partners.
Gillen said the board originally voted to grant Olsen the loan because the business attracts people from outside Schenectady into the city.
`They just got named one of the top 100 jazz clubs in the country,` Gillen said. `It’s frustrating because you want that to survive.`
Founded in 1947 by Marvin Freidman of Harlem, the Van Dyck was first conceived as a piano bar. The restaurant has played host to up-and-comers alongside many big names in jazz, including Dizzy Gillespie, Mose Allison, Marian McPartland and Coleman Hawkins.
Olsen and his partners bought the restaurant at an auction and reopened it in1997. They put about $1 million in renovations into the building, including a new heating and air-conditioning system, a new roof and all new mahogany finishes. Olsen and his partners also renovated the kitchen and added a brewery. Several upstairs rooms were combined to create one large performance space, which seats 125 people.
Valerie Medieros, a singer in the blues band Sonic Mayhem, which frequently performs at the Van Dyck, said she saw jazz musician Neena Freelon at a recent show there.
`The place was packed, but when she started, you could have heard a pin drop,` Medieros said.
`It’s a venerable old institution,` Medieros said of the venue.
`People may say all sorts of things about Peter, but he knows good music,` she added. `I’d call him more of a music fan than a business man.`
Olsen said he grew up in Manhattan going to clubs like CBGBs and The Bottom Line, which the Van Dyck is modeled after. Both clubs are closed now.
`Those were two of the greatest rooms in western civilization,` Olsen said. `If they can’t make it in Manhattan, what chance do the rest of us have?`
Gillen said it is unclear why the Van Dyck is in trouble when it seems as though all other downtown businesses are doing well.
`Downtown’s progress continues unabated,` Gillen said. `A critical mass is there. Downtown is thriving.`
Olsen has multiple explanations for his financial troubles, including the terrorist attacks of Sept. 11, 2001, the smoking ban and the price of gas.
He also said he is trying to create a destination location in a town that is not usually a first-choice destination.
`People flock to Saratoga; they don’t wait up and say, ‘Let’s take a trip to Schenectady.’ It’s like pushing a big rock up a steep hill.` Olsen said.
Olsen said his other problem is the club doesn’t have a clear identity, and no one knows what it has to offer, and he admits he needs to advertise more. Olsen said he caters to a wide variety of groups, from Union College students to General Electric bigwigs to the Proctor’s crowd.
`We have to dance an awful lot to make the place work,` Olsen said. `As a neighborhood tavern, we are constantly adjusting.`
The Van Dyck does bring people to Schenectady, Olsen said, when they showcase a big-name band. At those times, people come from Syracuse, Kingston, and Bennington and Burlington, Vt., said Olsen.
`We are a destination. We bring people in. To an economic developer, that’s the gold standard,` Olsen said.
According to Gillen, the foreclosure process could take six months, and if Olsen finds an investor or a buyer during that time, the process would stop.
`If he comes in with an investor or a buyer, we can stop the process,` Gillen said.
Chairman of the Schenectady Chamber of Commerce Charles Steiner said,
`We have always viewed the Van Dyck as an attraction for our community. It’s in our historical district and has a longstanding ability to bring world class performers, particularly in blues and jazz, to downtown Schenectady.`
Steiner said that the business has been through the ups and downs of the city and hung on. He said the venue would not disappear even if it changes ownership.
`I have every confidence, no matter which way the process goes, you are going to see the Van Dyck continue to be an integral part of the experience of Schenectady,` Steiner said.
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