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New war of words over Destiny USA, focusing on a proposed hotel development

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CNY/NNY/S. Tier: New war of words over Destiny USA, focusing on a proposed hotel development
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It's a new war of words over Destiny USA, this time focusing on a proposed hotel development. The developer is turning to the county for financial incentives, avoiding any new work with the city. That's because Mayor Stephanie Miner remains a critic of the project, claiming any new help for Destiny would be a mistake and that Destiny's original deal was a bad one for the city. Bill Carey did some fact checking on the mayor's version of the Destiny deal and its level of success, starting with the number one dispute.

SYRACUSE, N.Y. -- Assuming its very high assessment of the mall held up under court challenges, the city claims it gave up about $195 million, as its share of property taxes over 30 years.

"We were supposed to receive much more money in sales tax than we were giving up in property taxes and that has not happened," said Stephanie Miner, Syracuse Mayor.

But project backers say it has. Sales with the expansion of Carousel Center into Destiny USA have risen from roughly $400 million a year to $600 million. That has raised the local share of sales tax produced by the mall from $16 million a year to about $24 million. Over 30 years, $720 million, the city's share of that money is $180 million.

In its most recent review of the city's credit rating, Fitch Ratings service said the city had produced a moderate surplus in 2012 and a strong surplus in 2013. Among the factors involved in the good news, "sales taxes exceeding budget by $3.3 million or 4.4 percent.

Dispute number two: the mayor says Destiny pays no property tax. But, in fact it does.

Not all the land at the mall site is tax exempt, and the owners still pay the equivalent of what used to be paid in property tax when the mall site was nothing more than a junkyard. All of those payments total about a million dollars a year.

Dispute number three: payments being made by Destiny under its Payment In Lieu of Taxes or PILOT deal.

"No government receives money out of that. The money goes back toward paying the bonds. So, Destiny is currently not paying any money, zero dollars," said Miner.

Technically that is correct. The money is paid, not to the city, but to the Syracuse Industrial Development Agency, which uses the money to help spur economic development.

In the first two years of the deal, the city and county shared $22 million in fees. Since then, the annual payments have dropped to around $3.8 million a year. The city industrial development agency's share is $3.3 million.

The money is used to aid various projects.

The city offered 500 thousand dollars of the money to aid in the construction of hotels recently at Armory Square. Hotels that were granted a PILOT deal of their own for 18 years.
Destiny is looking for a similar deal for its hotel.

Which leads to dispute number four: the mayor says such a deal will cost the city $20 million over the next two decades.

"Twenty million dollars will hire a lot of police officers, firefighters and code enforcement, and help fix water mains and roads," Miner added.

The city's share of the annual tax bill, though, would be just over half a million dollars.

Destiny claims its hotel would generate more than that in sales and room occupancy taxes, an argument similar to the one put forth by the mayor's own economic development team for the tax deal given the Armory Square hotels. Hotels they claimed would generate $2 million a year in tax money.

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