Syracuse, Destiny USA appear headed to court over parking lots

Sep 25, 2012

The saga of the owner of the Destiny USA megamall and the city of Syracuse continues. The two appear destined to end up back in court as the Syracuse Industrial Development Agency (SIDA) plans to file a lawsuit against developer Robert Congel's Pyramid Group - the mall's owner - over parking lots.

This is the second time in the past few months that there have been threats of lawsuits between the parties. Both standoffs stem from a SIDA meeting back in July in which the development agency voted Pyramid to be in default of its tax break deal with the city.

The mall has a 30 year property tax break, which it was able to keep earlier this summer despite announcing it would not expand the mall as much as it once promised.

SIDA is trying to transfer the land that was once supposed to be part of a much bigger mall - and now auxiliary parking lots - back into the mall's possession so the city can collect property taxes on the lots.

But Pyramid is refusing to resume ownership. It missed SIDA's imposed deadline of Sept. 24 and this week SIDA will sue the mall's owner, according to SIDA Chairman Bill Ryan.

"Why we have to end up in court over this is disturbing, time consuming and doesn’t really make a lot of sense," Ryan says. "But if that’s the route that the Pyramid folks want to take, then that’s the route we’ll take."

But the mall's developer is standing tough. Spokesman David Aitken issued a statement late last night:

Destiny USA has secured legal advice from three separate law firms on this matter. In written and verbal communications, SIDA has been apprised that there is no legal basis to support their current position. That being said, as we continue to create new jobs, welcome new businesses to Syracuse and generate new government revenues, we continue to welcome the opportunity to meet with SIDA to resolve this matter.

The parking lots are worth $685,000 in property taxes annually, if they were taxable. Currently SIDA owns the property as part of the payment-in-lieu-of-taxes (PILOT) deal the mall has with the city. Under that deal, the developer pays about $375,000 a year to the city.

Another chapter

Both SIDA and Pyramid threatened to sue each other in late July over payments SIDA thought it was owed, but Pyramid disagreed. Pyramid eventually paid up, but another payment is due Oct. 31.

The two parties did end up in court back in 2005, but developer Congel's attorneys won that fight.

SIDA Chairman Bill Ryan, who is also a former city councilor and now the mayor's chief of staff, says he thought the continuous battles between the mall's ownership and the city would go away after this summer.

"We thought we were just going to continue along," Ryan says. "But now there are issues that continue to crop up, unfortunately, that we’re going to end up in court [over]. I was hopeful that those days were behind us, but it appears that they are not."

You can follow reporter Ryan Delaney on Twitter @RyanWRVO