– A developer wants to open a book store and retail shops on university-owned property near a college campus. The property is tax exempt and city officials are excited about getting it on the tax rolls again. The property is not in a distressed neighborhood. But the developer says it needs a hefty tax break to move forward.
This is what is happening at both the University of Rochester and Syracuse University.
The U of R wants to develop property on Mt. Hope Avenue. Its chosen developer has asked the city for a $20 million loan. But this isn’t just any loan. The city would borrow the money from the federal government and pay back the loan with a yet-to-be-determined portion of the developer’s payment in lieu of taxes. This is a fancy way of simply giving the developer money. Instead of paying a full load of taxes, the developer would be paying off construction costs.
Instead of sitting down with City Council – and the public – to explain what’s going on, the mayor dropped the bomb in the monthly legislation packet. He is postponing the measure to give himself more time to explain why he thinks it’s necessary.
The Syracuse University project is similar, though smaller in scope. A developer wants a 30-year tax break that would amount to an 83 percent reduction of his property tax bill. The project is surrounded by businesses who pay their full share. Officials in Syracuse are debating whether to approve the deal, according to the Post-Standard:
Critics, including former city Assessor John Gamage, say that’s an excessive break for development in an area of the city that is commercially desirable. No other project except the Carousel Center mall has been given a 30-year tax break.
”I feel very strongly that it’s a very bad giveaway,” Gamage said. “It’s just outrageous, in my opinion, and it’s a step in the wrong direction.”
Councilor Pat Hogan said he was skeptical about the need for a lengthy tax exemption on University Hill. PILOTs should be reserved for use on difficult projects, he said.
“How can you not make money on this?” Hogan said.
(Developer Tom) Valenti, a former partner at The Pyramid Cos., agreed that University Hill is attractive to developers.
“But most of that land is owned by tax-exempt institutions,” he said. “If the city’s concern is that so much of its tax base is tied up in tax-exempt land, then isn’t this a great way to unlock that value?”
Developers smell the desperation of cities and have been trained to threaten projects unless they get what they want. They usually do. The rest of us pay.
– A High Falls gorge wall is unstable. This is upsetting and could have consequences for the festival site and the view.
– A political analyst said Kathleen Hochul will have to pull a “Houdini act” if she wants to stay in Congress. The Buffalo News has a great write-up of how redistricting affects Western New York.
– Syracuse and Buffalo are among the top 50 cities for bed bugs.