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Hotel tax deal, continuing downtown Syracuse revitalization, needs Common Council approval

Tom Magnarelli
Syracuse Mayor Stephanie Miner, Ed Riley and Syracuse Common Councilors.

The next piece to the revitalization of the downtown Syracuse area home to the former Hotel Syracuse will soon be in place. Developers and the city of Syracuse have struck a tax deal that will lead to a Hyatt Hotel, across the street from the Marriott Downtown Syracuse.

Developer Ed Riley expects construction to begin next month, on the renovation of the long-vacant Symphony Tower, that once was served as an annex to the former Hotel Syracuse. He said the $20 million project will build on renovations that started in 2007, and create a 120-room extended stay hotel with a pool. The deal with the city, that forgives over half a million dollars in back tax penalties, was key.

"Having this agreement in place right now enables us to move forward both with our pilot agreement with the city, getting the taxes cleaned up, getting all the stuff off the table that was really a roadblock to getting the project financed, finalized, and signing all the documents with Hyatt,” Riley said.

"That hotel will cater more to extended stay. Families. We expect a very robust business because of the amount of families that come into Syracuse for health care treatment, and they’re here for three or four days. They don’t want the bells and whistles of a hotel like this, they just want a place to sleep and they’ll buy there own food, which at an extended stay hotel they can do."

On the city side of things, this deal, that includes developers paying over $1 million in back taxes, ends a long chapter of finagling over the future of the 15-story building, that involved lengthy litigation with the former building owner.

For Syracuse Mayor Stephanie Miner, a key part of the deal is the promise that at least 20 percent of hires will be from the city of Syracuse, as well as hiring some women and minority owned subcontractors.

"We don’t want to have this inequality between a few who get all the breaks, and the multitude of our residents get nothing," Miner said. " So we negotiated an agreement that is unprecedented and will benefit the community directly.”

Miner admitted it is a different way of doing things, that could turn off some developers.

"Our community has seen that model," Miner said. "It doesn’t work.  It never worked. We’re going to change that model. Does that mean that some people say, well, I’ll go someplace else to try to get a better deal where I don’t have to employ people? That may be. But we represent the city of Syracuse and we’re going to continue to represent their interests and that means making sure they have a piece of this property as well."
The renovation  is expected to be done by next fall.

Tax deal must be approved by Common Council

The Syracuse Common Council must first approve the tax deal for the new hotel before it goes through. Some councilors have reservations about some of the details, which they say could be unprecedented.

Credit Tom Magnarelli / WRVO News
The Syracuse Common Council.

When the city of Syracuse enters into a tax trust with a commercial property over delinquent taxes, it can be repaid over a five-year period. But Riley and his limited liability company that owns the Symphony Tower property want to repay back taxes over 15 years. That and waiving off the tax penalties requires Common Council approval.

Councilor Nader Maroun and other councilors are questioning if that is fair to other businesses and city residents who are behind on their taxes.

“My ultimate concern is can the city that is facing a major deficit and is spending its reserves offer these types of arrangements?” Maroun asked. “I’m not saying that the project is not a good one. I’m not saying it’s not worthy of what is happening. I’m just looking at it from our fiduciary responsibility on the Council. We're dismissing potentially $530,000 of fees. Is that precedent setting for our community? Somebody else could come and say we have this deal, we knew about these taxes and penalties, but will you dismiss those so we can move forward on a project? It says to taxpayers, if I come up with the right deal, maybe I can get my penalties forgiven.”

Maroun requested more information on the city’s deficit, and promised to wait on the legislation until he receives it.

Riley and the chairman and CEO of the construction company Hayner Hoyt formed the LLC that became the owners of the Symphony Tower property last year. Hayner Hoyt owned the property, and the delinquent taxes and penalties, before entering into the LLC.

Ellen produces news reports and features related to events that occur in the greater Syracuse area and throughout Onondaga County. Her reports are heard regularly in regional updates in Morning Edition and All Things Considered.
Tom Magnarelli is a reporter covering the central New York and Syracuse area. He joined WRVO as a freelance reporter in 2012 while a student at Syracuse University and was hired full time in 2015. He has reported extensively on politics, education, arts and culture and other issues around central New York.