The transformation of Destiny USA has been a major headline in the region over the last decade. In honor of the 10 year anniversary of YNN, Bill Carey looks back at the major commercial project.
SYRACUSE, N.Y. -- For years, the developers of Carousel Center have been talking about Destiny USA. Th expanded project combines retail, entertainment space, hotels, and other features.
The cost was anticipated to be hundreds of millions of dollars. The developers turned to the city of Syracuse for tax breaks, and help in producing the finances.
In 2002, the developers struck a deal. It was called a PILOT, and was a payment in lieu of taxes. It was an agreement to make substantial payments to the city, instead of taxes, to help pay off bonding used to finance the expansion. The payoff for the city would be seen in the thousands of jobs and a big boost in sales tax revenue.
The deadline was set for 2005 to have all of those finances in place. By than, the city said it wasn't receiving enough from the deal. Syracuse worked to find a way to pull developer Robert Congel back to the table.
In late 2005, Congel decided he would drop a bank financing deal from Duetche Bank in favor of a new agreement he worked out with Citibank. At that point, Syracuse saw its opening, stepped in to claim the deal was unacceptable, and breached the PILOT agreement.
"They were not able to meet the terms of the 2002 legislation," said Terry Bright.
However, Congel decided to fight. They won a decision in State Supreme Court and ordered the city to sign the necessary papers and proceed with the deal. A city appeal failed and Mayor Matt Driscoll entered talks with Destiny that eventually produced a new side agreement that offered the city more money up front.
Driscoll asked for common council approval, but a majority of members denied the approval. Driscoll then found a way to approve the deal without needing approval from the council.
The lawmakers went on the warpath.
"He is not an imperial executive. He needs permission of the council," said Stephanie Miner.
Miner and other councilors hired their own attorney and went to court, but lost. The deal went on, but the delays were not over yet.
Work was progressing towards finishing a major expansion that would launch the Destiny project when the great Recession of 2008 hit. Major banks retreated from many financing deals and Citibank suddenly declared it was halting the funding for the mall work.
Destiny again went to court, where the banks said the project was a bad idea.
"They’re asking you to order us to fund a failure," said an attorney for Citibank.
Citibank eventually found out what the city already knew: that it was near impossible to beat Destiny in court. The state supreme court justice and an appeals court found Citibank had broken its deal and needed to provide funding.
The bank finally got out of its deal by dropping any mortgage claim it had for hundreds of millions of dollars on the original Carousel Center, and allowed Destiny to gain new financing from another bank.
By 2012, the expansion was complete and tenants began moving in. But a deadline approached for the start of a new phase and, by now, one of the common councilors who led the battle against the Destiny deal, had become mayor.
The only way for the developer to avoid new problems was to declare the expansion project complete, ending the city’s involvement. Mayor Stephanie Miner and other critics said that a simple expansion was all that Robert Congel had ever planned.
But by 2013, with business in the expansion booming, Congel and Company were again discussing expansion and started working with Onondaga County instead of the city. They are still holding out hope that after ten years of economic hard times, the project could provide a pathway to a new prosperity.