– DestinyUSA planners talked more about how to get tax dollars than how to secure tenants, according to a former insider who spilled his guts to the Syracuse Post-Standard. Robert Congel led a team of executives who thought no idea was too grand and no request of government was too much. They viewed City Hall as an obstruction and thought they could bend politicians to their will. Groupthink was pervasive in their meetings, with everyone required to complement each other’s ideas. Here is an excerpt from the story:
Tapping the state’s Empire Zone tax credit program was a key topic, Malfitano said. He recalled former Destiny executive Michael Lorenz at a whiteboard, laying out how it would work.
Destiny would collect tax money from its tenants, submit its payment-in-lieu-of-taxes (or PILOT), then get the entire amount reimbursed under the Empire Zone program, Malfitano said.
Destiny’s payments aren’t treated like taxes, which pay for city services. Instead, Destiny’s PILOT money gets diverted to pay off its construction debt. It’s like having your taxes pay off your mortgage.
The group talked about how it would be good to have bigger PILOT payments — the more Destiny paid, the more it got back from the state, he said.
Congel has estimated $10 million a year in Empire Zone credits on Carousel Center. The credits could be worth at least $70 million through 2018, when the benefits expire.
Lorenz once drew a diagram on the board: It was a circle, representing a perpetuating process of funding the mall with public money, (Marc) Malfitano said.
All of Pyramid’s previous malls were the result of a common business model, Malfitano said: Make a budget, figure out rents, then see how much financing that could generate and raise enough money to build the project.
Destiny had no such business model, Malfitano said. Instead, it relied on tax breaks, such as Empire Zones, federal environmental bonds and the state brownfields program, he said.
DestinyUSA ultimately failed, but not before the mall was awarded 30 years of no property taxes. This is scary stuff and it shows why we must be vigilant when awarding tax breaks. This article is a must-read for those working with Scott Congel, Robert’s son, on the Medley Centre project.
– The Susan B. Anthony House wants to expand, but faces physical and financial challenges.
– With the expansion of the University of Buffalo Medical Campus, the city is embracing light rail. A columnist in the Buffalo News says building more parking ramps isn’t the answer to accommodating the center’s 17,000 workers. Meanwhile, the University of Rochester employs 20,000 and sees the solution as a highway exit ramp. Talk about different approaches.
– In an article about the cost of being a Rochester sports fan, Red Wings GM Dan Mason admits no one really comes to the ballpark to watch a game.
– This obituary is straight out of a spy novel. Actually, no one could make anything like this up.