January 23, 2001

Approval of Plan Will Expand Carousel Center

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Following a five-hour deliberation, the Onondaga County legislature voted 14-10 to approve of a tax plan that would allow Syracuse’s Carousel Center Mall to nearly quadruple its size.

The expansion — to be carried out in three phases — will include the erection of hotels, hockey rinks, indoor soccer fields, an aquarium and an indoor water park. The new mall will be a recreational facility of mammoth proportions, eclipsing even the Mall of America in Minn. — the nation’s chief commercial wonder.

After Carousel’s owner Pyramid Cos. struck a deal with the Syracuse Common Council last month, the city agreed to forgo three decades of property taxes so that Pyramid could use the money to pay off $250 million for parking garages and local road renovations needed for the expansion.

Although payment-in-lieu-of taxes (PILOT) arrangements are common practice for large-scale developments, the proposal was unique and controversial because its 30-year tax break extended to the existing Carousel mall rather than being limited to Carousel’s future structures. To taxpayers’ frustrations, this exemption would deprive the county of an annual $5 million.

Independent consultants have estimated that the fully developed mall would give Central New York a long overdue economic boost — an infusion of about $2.2 billion annually — with sales tax revenues more than compensating for the absence of property taxes.

Legislature Chair William E. Sanford (R), who voted in favor of the PILOT, said the facility will transform Syracuse into a more upbeat city and give young people an incentive to stay in the area.

“Right now Central New York is suffering from an exodus of young talent — a ‘brain drain’ — there are few jobs and the atmosphere is unexciting. Carousel can serve both as a recreational and a community center,” he said.

Sanford added that Pyramid would not have chosen Syracuse for its location had the PILOT been defeated. “Many communities — including Rochester — have made bids for this opportunity,” he said.

Those who voted against the proposal, including democratic floor leader Sidney Oglesby and republican floor leader Bernard Kraft, said that the PILOT was not equitable to local homeowners and business people.

“Taxpayers must make up the difference in property taxes that the mall does not pay,” Kraft said.

Onondaga County Executive Nicholas Pirro, a longtime supporter of the Common Council PILOT, said that whatever the degree of its success, the development poses no economic risks for the city or the county.

“The developers and bond-holders are paying the full burden. They are not asking the municipality to build streets, nor borrowing from the city or the county — as often happens with similar projects,” Pirro said.

Despite Pyramid’s efforts to minimize liability for tax payers, some Syracuse natives remain skeptical.

“The money will certainly help the economy, but it is still unfair that a large business does not pay property taxes while a smaller one does,” resident Kush Varshay ’04 said.

Vikram Dahr ’03 said that he and his Syracuse neighbors are weary of the possibility that customer turnout will not meet predictions.

“There are already plenty of malls in Syracuse, and they aren’t so crowded. If many customers don’t show up, we’ll be left with another giant box,” Dahr said.

Archived article by Sana Krasikov