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Syracuse bookstore is flash point in debate over development
The make-up of the Syracuse Common Council was different when Thomas Valenti and his firm, Cameron Group, first approached it six years ago, but the opposition to the proposed project is still the same.
Valenti wants to develop a new off-campus bookstore and fitness center for Syracuse University.
In order to do that, he's requesting a 30-year property tax break from the city.
And therein lies the sticking point.
"If you have all of these grand ideas, then you should be able to finance this project," councilor-at-large Helen Hudson says. "We just can't keep excepting all of these entities."
The council's economic development committee held a lengthy, and at times heated, hearing on the project Tuesday.
The proposal is tough for the council to stomach in a city where, according to Syracuse Industrial Development Agency executive director Ben Walsh, more than half of all properties are already tax-exempt (and where the thought of a 30-year tax break brings to mind the stalled Destiny USA mega mall).
The project includes a few steps: Cameron Group would lease a small strip of land in front of an off-campus parking garage from the university for $1. Cameron Group would then spend $20 million to construct a new building that will mostly be filled with a fitness center and bookstore, and offering with some space for private retail.
The university would rent out the space for its fitness center and bookstore. At the end of the 30-year tax break, ownership of the building would be transferred to the university, and only the private retail space would be taxed.
Developer Valenti says the only way his firm can offset the costs of the project, while offering low rent to Syracuse University, is if he's offered a 30-year payment-in-lieu-of-taxes (PILOT).
During those three decades, the developer would pay 17 percent of the assessed taxes - enough to foot the bill for fire, police and public works costs, according to the Syracuse Industrial Development Agency (SIDA).
That works out to about $64,000 a year, the bare minimum needed in order to make the project financially viable, says Valenti.
When asked by the council if he would be willing to again negotiate paying more, or shortening the agreement, Valenti replied, "I don't want to give up, but I don't have a lot to bargain with."
But the subtext of Tuesday's committee meeting was larger than just Valenti's project: Under fire was the city's overall policy for economic development, with the proposed bookstore/fitness center serving as a convenient proxy.
Councilors brought up the lengthy PILOT given to the developer of Destiny USA. Valenti countered with the reward the city reaped when it took a risk in redeveloping the Armory Square section of downtown.
The project didn't exactly sail through the Syracuse Industrial Development Agency. It passed last month in a 3-2 vote. And now its fate hangs in the balance before the Common Council, which has the power to approve or kill the project.
"I simply don't think it's reasonable to provide a huge benefit for one tax-exempt entity, when no others are able to take advantage of that," says SIDA board member and former city property assessor John Gamage.
He was one of the two "no" votes, arguing the PILOT is disproportionate.
"I just think that's a terrible step to be taking, with terrible repercussions throughout the community," says Gamage.
But the argument for the tax break is this: If this land sits undeveloped, the city will collect no taxes, since it's owned by not-for-profit Syracuse University. The same goes if the university were to build the complex itself. Offering the PILOT to a private developer yields the possibility taxing currently untaxable land.
"I hope the council will think about this and reconsider what seems to be the main objection related to a 30-year PILOT, and not look at it as a tax exemption, but look at it has a 30-year assurance of revenue the city would otherwise not get," says Valenti.
Others say the project would get more students off campus, benefiting surrounding businesses and increasing sales tax revenue.
"We need to get a better base of retail and residential uses to go along with the institution, to create a competitive, vibrant university district," says David Mankiewitz, president of the University Hill Corporation, a business association for the university section.
The Common Council is scheduled to vote on the PILOT at its full meeting on Monday. According a whip count by councilor Kahlid Bey, it will be defeated handily.
The Upstate Economy