Differing Opinions Clash Regarding Destiny USA Hotel Tax Break

By Alex Hallmark and Nick Fathergill SYRACUSE (NCC News) – Facing some opposition at City Hall, Destiny USA executives are now seeking approval from the Onondaga County Industrial Development Agency for a 20-year property tax exemption for a 225 room hotel they want to build next to the mall.

An artist's depiction of the proposed 225 room Destiny USA hotel. (Destiny USA)

An artist’s depiction of the proposed 225 room Destiny USA hotel. (Destiny USA)

With Mayor Stephanie Miner openly opposing the tax break, the Destiny executives are sidestepping the Syracuse Industrial Development Agency.  Normally, economic development projects in the city of Syracuse apply to SIDA for tax breaks.  In a recent report, NPR affiliate WRVO noted this move will make Miner’s opinion on the matter moot, as she will not be able to stop the tax break if OCIDA passes it.

However, Syracuse Common Council at-large member Kathleen Joy says Destiny is justified in approaching OCIDA.  According to Joy, last year SIDA told Destiny’s developers to stop requesting incentives,

“Destiny did not have any choice but to go to the county and ask for [the tax exemption],” said Joy.

Many individuals and groups interested in the outcome of the proposal have differing viewpoints.  From the school board to the Common Council to other members of City Hall, different people have different reasons for either supporting or opposing the plan.

Mayor Miner Strongly Opposes Tax Break

It has long been known that Syracuse Mayor Stephanie Miner is not in favor of a tax exemption for a Destiny USA hotel.  While not being opposed to the idea of a Destiny hotel, Miner told the Post Standard a tax exemption would  cost the city at least $20 million in revenue.

Stephanie Miner opposed the tax exemption for the proposed Destiny USA hotel.

Stephanie Miner opposed the tax exemption for the proposed Destiny USA hotel.

“There is a successful mall there that has already been given 30 years of benefits,” Miner told WRVO.  “And to give a mall developer additional benefits to incent [sic] a hotel would be a disservice to the community.”

Miner also told Post Standard that the people and city of Syracuse would lose money if this deal were passed.  “It’s our school children, who are the single largest constituency for which money is going to be taken away,” said Miner.

Miner told the newspaper of the $20 million lost in taxes, $9 million is potential revenue for the Syracuse City School District.

School Board Passes Resolution Opposing Hotel Tax Exemption

On March 13th, the Syracuse City School Board unanimously approved a resolution that strongly opposed the tax break.  The resolution stated that “students of the Syracuse City School District are among the neediest in the state and the district cannot afford to have its potential sources of revenue reduced.”

City auditor Martin Masterpole requested that OCIDA allow the Syracuse school board to vote on whether or not the proposed tax exemption is a good idea for the city.  “There’s precedent in allowing the school board to weigh in,” said Masterpole.

School board Vice President Maxwell Ruckdeschel agreed with Mayor Miner, stating that the overall cost in lost revenue to the Syracuse City School District could add up to about $10 million over 20 years.  “The district could use that additional money to add more teachers, lowering class sizes throughout the district,” said Ruckdeschel.

While the school board resolution has no direct effect whether the tax break will be approved or denied, school board members are expected to actively speak out against the plan.

The school board has no position on Destiny’s decision to appeal straight to OCIDA.  However, Ruckdeschel personally sees it as “a recognition that the exemption is harmful to the city of Syracuse and its residents.”

Destiny Executive: Why Tax Break Will Be Beneficial

In making a case for the tax break, Destiny USA executive David Aitken told CNY Central that it would be “impossible” for the mall to receive necessary funding for the hotel without it.

The tax break would allow Destiny to build the hotel that Aitken says would “directly generate $1.3 million in sales and occupancy tax” in the first year of operation.  All other costs of the hotel, according to Aitken, will be borne by Destiny USA.

Aitken claims the hotel, if built, will create 83 permanent jobs and provide construction employment for about 300 people.  “It will further drive the tourism economy of Onondaga County,” said Aitken.

Similar tax exemptions have been granted by OCIDA to hotel developers in the area.

Some Common Councilors Support Tax Exemption Proposal

Both Kathleen Joy and Khalid Bey, members of the Syracuse Common Council, support Destiny’s request for a tax exemption.

Common Council at-large member Kathleen Joy, who sees the tax break as a possible necessary step in furthering economic development.

Common Council at-large member Kathleen Joy, who sees the tax break as a possible necessary step in furthering economic development.

Fourth District Common Councilor Khalid Bey, who strongly approves of a tax break for Destiny USA.

Fourth District Common Councilor Khalid Bey, who strongly approves of a tax break for Destiny USA.

“One of the smartest things you can do with public money is empower people with jobs to be self-sufficient and take care of their families,” said Bey, who represents the Fourth District.  “Whatever we can do to create more jobs in the city [is a good idea]”.

While Joy believes that the tax break isn’t completely necessary, she says the demand for the hotel exists regardless.  She also says that people from all over, including Canada, visit the mall, increasing the demand for a nearby hotel.

Aitken also believes that the hotel will increase Canadian tourism.  According to Post Standard, Destiny executives estimate that somewhere between 20 and 25 percent of annual visits to the mall are by Canadians.

What’s Next

OCIDA has ordered a feasibility test of the project, according to Post Standard.  The test will assess the potential economic benefits of the hotel, how it will affect the region, and whether it is commercially viable without tax exemptions.

OCIDA board member Julie Cerio said that the board has not yet decided to take on the Destiny tax proposal project, and is still gathering information.  According to Cerio, OCIDA told Destiny it must pay for independent counsel, the feasibility study, and a economic impact assessment.

Aitken claims that Destiny has received an updated State Environmental Quality Review stating that the project will not have an “adverse of negative impact on the community”.

Cerio says there is no deadline for a decision regarding whether OCIDA will agree to the tax exemption.  “When and if the board receives the information it has asked for, [it] will decide if it is a project that falls within OCIDA’s mission statement,” said Cerio.

 

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