2006/06/25
What was actually rejected Thursday: Not Destiny
There have been extreme responses from both sides in regards to the settlement deal the Common Council voted down on Thursday. And considering what the council rejected, the responses are really not-at-all thought out.
This was not an up-or-down vote on Destiny. It was not even an up-or-down vote on the mall expansion.
In 2000, the city and the developer reached a tax-break agreement that would extend the Carousel Center's status of being off the tax rolls by 30 years, after its then-current 15-year deal expired at the end of 2005. In exchange for 30 years of no taxes, Pyramid, the mall's developer, would have to build a large expansion – and it would have to show the city it had the financing to build the expansion. This deal was reaffirmed in 2002.
Sometime between 2002 and 2005, Pyramid lost its primary development loan – a loan that was promised to be about $360 million. In 2005, another bank came up with an offer about half that, and release of the funds was contingent upon the city selling construction bonds.
Mayor Matt Driscoll felt in December of 2005 that the promised construction loan was not enough financing for Pyramid to build the expansion required of the tax deal, and so he ordered the Carousel Center back on the tax rolls on January 1, 2006.
Pyramid believed it had enough financing in place, and so the first Monday of the new year, the company filed suit against the city to (a) take the mall off the tax rolls, and (b) get on with the things it had to do in order for the financing to be released.
On March 9, Judge John Centra ruled that Pyramid had met its requirements, and that the city should proceed selling bonds and taking some mall tenants' leases by eminent domain, so that construction could begin (some tenants had clauses that allowed them to approve or reject expansions; others had parking space requirements that would make construction in the parking lot difficult without first building a new lot to add spaces).
After that ruling, the city had to decide if it would appeal, and lawyers for the city and for Pyramid worked on negotiating a new agreement that would avoid an appeal. The company waited until the last possible day to file the ruling (after the filing, the city was legally required to take some action – including working on an appeal), and negotiations continued.
The mayor, the developer and County Executive Nick Pirro – the county also has a tax stake here, as we work on a county government system in New York – sat down and worked out a settlement agreement. As part of the agreement, the city would not appeal Centra's ruling.
The agreement required the approval of the mayor, the Syracuse Industrial Development Agency (the appointed board that would be in charge of selling bonds and taking the leases), the Common Council, and the County Legislature. The mayor, having negotiated the agreement, quickly approved it. SIDA, having been appointed by the mayor, did the same. The County Legislature said (wisely), "This is really up to the city; if the Common Council approves it, we'll follow."
Thursday night, the Council decided not to approve it.
Rejecting the settlement leaves open the possibility that the city may appeal Centra's ruling. It doesn't mean the mall won't get the expansion, and it doesn't mean Destiny – which is still only a concept with no actual plans – is off the able. It may not even hold up the process at all, because the tenants who would lose their leases are due in court Sept. 14.
There's still a tax break agreement out there that has been activated. Pyramid has some financing, though not as much as the city would like. And for 30 years of tax breaks and city assistance in the eminent domain proceedings, Pyramid is remaining awfully tight-lipped about what it's planning and who may be part of the mall plans.
For those of you in favor of building a gianter mall in Syracuse, don't worry. Pyramid still very much has that option. For those of us who don't want the mall, we have several points we need to keep fighting – for me, it will primarily be the eminent domain taking of both the leases and a number of businesses along Hiawatha. We should not be using a public process for private gain – especially when there's no legal recourse if there happens to be no public gain from the project (and you can say all you want about how it will bring jobs, but if it never gets built, or if it never gets populated, all we've done is kick a bunch of people out of their businesses and taken more land off the tax rolls, and we can't sue Pyramid for it).
This was not an up-or-down vote on Destiny. It was not even an up-or-down vote on the mall expansion.
In 2000, the city and the developer reached a tax-break agreement that would extend the Carousel Center's status of being off the tax rolls by 30 years, after its then-current 15-year deal expired at the end of 2005. In exchange for 30 years of no taxes, Pyramid, the mall's developer, would have to build a large expansion – and it would have to show the city it had the financing to build the expansion. This deal was reaffirmed in 2002.
Sometime between 2002 and 2005, Pyramid lost its primary development loan – a loan that was promised to be about $360 million. In 2005, another bank came up with an offer about half that, and release of the funds was contingent upon the city selling construction bonds.
Mayor Matt Driscoll felt in December of 2005 that the promised construction loan was not enough financing for Pyramid to build the expansion required of the tax deal, and so he ordered the Carousel Center back on the tax rolls on January 1, 2006.
Pyramid believed it had enough financing in place, and so the first Monday of the new year, the company filed suit against the city to (a) take the mall off the tax rolls, and (b) get on with the things it had to do in order for the financing to be released.
On March 9, Judge John Centra ruled that Pyramid had met its requirements, and that the city should proceed selling bonds and taking some mall tenants' leases by eminent domain, so that construction could begin (some tenants had clauses that allowed them to approve or reject expansions; others had parking space requirements that would make construction in the parking lot difficult without first building a new lot to add spaces).
After that ruling, the city had to decide if it would appeal, and lawyers for the city and for Pyramid worked on negotiating a new agreement that would avoid an appeal. The company waited until the last possible day to file the ruling (after the filing, the city was legally required to take some action – including working on an appeal), and negotiations continued.
The mayor, the developer and County Executive Nick Pirro – the county also has a tax stake here, as we work on a county government system in New York – sat down and worked out a settlement agreement. As part of the agreement, the city would not appeal Centra's ruling.
The agreement required the approval of the mayor, the Syracuse Industrial Development Agency (the appointed board that would be in charge of selling bonds and taking the leases), the Common Council, and the County Legislature. The mayor, having negotiated the agreement, quickly approved it. SIDA, having been appointed by the mayor, did the same. The County Legislature said (wisely), "This is really up to the city; if the Common Council approves it, we'll follow."
Thursday night, the Council decided not to approve it.
Rejecting the settlement leaves open the possibility that the city may appeal Centra's ruling. It doesn't mean the mall won't get the expansion, and it doesn't mean Destiny – which is still only a concept with no actual plans – is off the able. It may not even hold up the process at all, because the tenants who would lose their leases are due in court Sept. 14.
There's still a tax break agreement out there that has been activated. Pyramid has some financing, though not as much as the city would like. And for 30 years of tax breaks and city assistance in the eminent domain proceedings, Pyramid is remaining awfully tight-lipped about what it's planning and who may be part of the mall plans.
For those of you in favor of building a gianter mall in Syracuse, don't worry. Pyramid still very much has that option. For those of us who don't want the mall, we have several points we need to keep fighting – for me, it will primarily be the eminent domain taking of both the leases and a number of businesses along Hiawatha. We should not be using a public process for private gain – especially when there's no legal recourse if there happens to be no public gain from the project (and you can say all you want about how it will bring jobs, but if it never gets built, or if it never gets populated, all we've done is kick a bunch of people out of their businesses and taken more land off the tax rolls, and we can't sue Pyramid for it).
