State and county officials could decide this week which project gets millions in help.
Eli Braha, managing member of Berkley Acquisitions LLC, is framed by the Hotel Syracuse. Berkley estimates a full renovation of the hotel and related properties could cost $67 million. Syracuse, NY -- Two wildly different recipes for developing an Onondaga County convention center hotel are competing for attention from state and county officials, and the action is coming to a boil this week.
As the state Legislature wraps up its business for the year, Rochester developer Thomas C. Wilmot is making a last-minute push for state legislation to authorize a harness track and video gaming facility at the state fairgrounds in Geddes.
Wilmot, the chairman of Wilmorite Inc., has told legislators a local “racino” would generate enough revenue to finance a Westin hotel for the Onondaga County convention center in Syracuse, something county officials have waited years to see.
Wilmorite, which took on the Westin project in 2006, has been unable to secure conventional financing.
Tired of waiting for the Westin, County Executive Joanie Mahoney said late Thursday that she was ready to back an alternative project, a proposed $60 million restoration of the Hotel Syracuse to serve as the convention center hotel.
Mahoney had planned to issue the developers, Berkley Acquisitions LLC, of New York City, a tentative proposal today that would have included $15 million that state officials had set aside years ago for the Westin.
The proposed renovation of the Hotel Syracuse (center) would reduce the number of rooms from 536 to about 450. The developer also wants to buy the hotel parking garage, the former Addis Co. department store, and the modern tower section of the Hotel Syracuse, now called Symphony Place, that was being converted into luxury apartments before the project stalled. But on Friday, Wilmot persuaded Mahoney to hold off. Mahoney said Wilmot may not need the $15 million state grant if he wins approval for the racino, but he expressed concern that moving the grant to another project might create an impression that county officials no longer want a Westin.
Mahoney, who would like to see both a new Westin and a revived Hotel Syracuse, said she agreed Friday to give Wilmot more time to lobby state legislators.
She said she does not plan to give Berkley a written proposal today, but expects to see the matter resolved within days.
“We have gotten to the point where it’s difficult to wait any longer,” she said. “We cannot continue to let the convention center operate without a hotel.”
Unless Wilmot’s racino plan succeeds, Berkley’s proposal for the Hotel Syracuse seems the more likely project to proceed. According to managing member Eli Braha, Berkley has lined up about $30 million in private equity to finance the renovation. The group is looking for roughly $25 million in public incentives. Berkley plans to buy the historic Hotel Syracuse, which was built in 1924 and has been closed to travelers since 2004.
Berkley also hopes to buy three related properties — the hotel parking garage, the former Addis Co. department store, and the modern tower section of the Hotel Syracuse, now called Symphony Place, where a partially completed conversion to luxury apartments stalled.
Berkley estimates the cost of buying and renovating all the properties at roughly $67 million, Braha said. Between $54 million and $60 million of that would pay for renovation of the historic hotel, which would reduce the room count from 536 to about 450, Braha said.
Mahoney supports the Hotel Syracuse project in concept, she said.
Before committing state or local resources, however, county officials would have to negotiate a formal agreement with Berkley Acquisitions detailing the company’s construction plans and a timetable for completion, Mahoney said.
Members of Berkley Acquisitions LLC, of New York City, are (from left): Jack Hazan, director of acquisitions; Allan Heiney, chief investment officer; and Eli Braha, managing member. Assemblyman William Magnarelli, D-Syracuse, who secured $5 million of the $15 million the state has promised for a convention center hotel, said the money can be shifted to the Hotel Syracuse restoration if Onondaga County officials request the change. Mahoney said she has not made that request.
If Berkley Acquisitions and Onondaga County reach an agreement on the project details, the county and the city of Syracuse could offer a variety of other assistance, officials said.
• The city and county have tentatively offered to provide $10 million in Recovery Zone Bond financing, which is their combined allocation from the state, Mahoney said. The bonds are federally subsidized under the government’s stimulus program.
Berkley Acquisitions would be required to repay the bonds.
By comparison, the Westin project had called for a $10 million equity investment by the county, plus $8 million in bond financing. Mahoney said she told Wilmot that the county will not provide those incentives if the Westin is financed with a racino, which would presumably generate plenty of cash.
• The city has agreed to certify Berkley’s project for the state Empire Zone program, which will close to new applicants July 1. Pending final approval from the state, benefits will include state tax credits to offset property taxes and other expenses.
Berkley submitted Empire Zone applications June 15 for each of the four parcels it intends to buy, although it has not yet established the limited liability companies that will own each parcel.
The applications were approved Thursday by the board of Rebuild Syracuse, a not-for-profit corporation the city set up to run its Empire Zone. Ben Walsh, deputy commissioner of the Syracuse Department of Neighborhood and Business Development, said the approvals are contingent on Berkley establishing the companies and acquiring the properties.
If the board had delayed its vote until the companies were established, it might have missed the June 30 deadline to qualify the project for the Empire Zone, he said.
“It’s a little unique because of the time constraints,” Walsh said.
• Syracuse officials also expect to discuss a payment in lieu of taxes for the Hotel Syracuse properties, Walsh said. Any PILOT would have to be approved by the Syracuse Industrial Development Agency and the Common Council.
The Hotel Syracuse properties are under the control of a receiver appointed by an Israeli court to liquidate assets of Ameris Holdings Ltd., an Israeli company that is majority owner of the parcels. Berkley has a tentative agreement with the receiver to buy the properties, Braha said.
Two of the parcels — the Addis building and Symphony Place — also are subject to a foreclosure proceeding in state Supreme Court in Syracuse brought by lenders and construction companies involved in the renovation of Symphony Place. Berkley hopes to reach an agreement with the lien holders, led by Hayner Hoyt Corp., to acquire those properties, Braha said.
Onondaga County’s quest to develop a downtown convention center has dragged on for years. Since the Oncenter convention center complex was built in 1992, the plans have shifted back and forth between renovating the Hotel Syracuse and building a new hotel.
Over the past year, Mahoney has encouraged both ideas in hopes that at least one would bear fruit.
At Wilmot’s request, Mahoney and Syracuse Mayor Stephanie Miner went to Albany in February to meet with Gov. David Paterson about Wilmot’s proposal to open a racino at the state fairgrounds to finance the Westin project. Although neither the governor nor any lawmaker has offered legislation to allow the racino, Wilmot predicted as recently as this month that the plan would succeed, Mahoney said.
Wilmot did not return phone calls seeking comment.
Magnarelli said Wilmot’s proposal to establish a racino on state property without going through a competitive bidding process made the concept untenable in the Assembly. There is no chance the Legislature will authorize the racino during this session, he said.
“There are just too many problems with it,” he said.
Mahoney said Wilmot indicated he would speak to Magnarelli and to Assembly Speaker Sheldon Silver to try to win their support.
A big contributor to Democratic politicians, Wilmot has close ties to Paterson. He and his wife hosted a fund-raiser for the governor at their home in Pittsford in January 2009, according to Paterson’s Web site.
In July 2009, members of the Wilmot family gave $25,000 to Paterson’s re-election campaign, state records show. In January 2010, they gave another $11,000.
Wilmot’s niece, Mary Wilmot, resigned this month as Paterson’s Rochester regional representative to run for state Senate. She is a former limited partner in Wilmorite but now has no financial interest in the corporation, said her campaign spokesman, Tim Cook.
Mahoney said she would like to see both the Hotel Syracuse and the Westin proceed.
“If Tom Wilmot were to get the legislation that he needs to make that happen, he has my full support,” she said.
--Contact Tim Knauss at tknauss@syracuse.com or 470-3023.