Syracuse, NY -- The Syracuse Industrial Development Agency voted 4-0 Tuesday to extend Destiny USA’s sales tax exemption on construction materials, but the agency said it had no word on when, or if, construction will re-start on the mall expansion. Developer Robert Congel’s expansion of the Carousel Center shopping mall has been stalled since Citigroup stopped advancing money on...
View full sizeDeveloper Robert Congel, left, and his business partner, Bruce Kenan, tour the unfinished expansion of the Carousel Center mall last fall. There is no word on when, or if, construction will resume. Syracuse, NY -- The Syracuse Industrial Development Agency voted 4-0 Tuesday to extend Destiny USA’s sales tax exemption on construction materials, but the agency said it had no word on when, or if, construction will re-start on the mall expansion.
Developer Robert Congel’s expansion of the Carousel Center shopping mall has been stalled since Citigroup stopped advancing money on a $155 million construction loan a year ago.
Construction was halted after the shell of the 1.3-million-square-foot, three-story addition was already up. More than $30 million in contractor bills have gone unpaid.
The development agency gave the project an exemption from sales taxes on construction materials when it issued $323 million in bonds to help finance the expansion in February 2007. It extended the exemption twice, the last one until the end of last year.
Three of the developer’s companies — Destiny USA Holdings LLC, Destiny USA Land Holding Co. and Carousel Center Co. — recently requested another extension, this one until the end of this year. The agency’s directors voted Tuesday to grant the request.
Susan Katzoff, an attorney for the agency, said such extensions are routinely given to developers when projects run into delays. She said Congel has not given the city a date for re-starting construction or reported progress in settling his dispute with Citigroup.
The developer may need the extension to cover invoices for materials ordered before construction stopped, or he may simply want the exemption in place if construction restarts later this year, Katzoff said.
“I’m only making assumptions based upon the request and what might makes sense,” she said.
In recent months, Citigroup and Congel have said little publicly about their dispute. The issue remains tied up in court, but there have been indications that the two sides are exploring a possible settlement.
Citigroup says it stopped funding the project because of cost overruns, construction delays and a lack of any signed leases. Congel is suing the bank, alleging that it reneged on a loan agreement.
A judge in Syracuse issued a preliminary injunction last year, ordering the bank to resume lending to the project pending a trial. One appeals court has upheld the decision, but Citigroup is trying to get a second one to hear its appeal.
The $155 million construction loan is part of a complicated financing package for the $540 million addition.
Katzoff said the vote on Tuesday does not affect the extension the agency gave last year of a deadline for Congel to complete the project.
The developer had until Aug. 1, 2009, to complete the first phase of the addition or risk losing a 30-year property tax exemption on it. In July, the agency gave him an 87-day extension because of the funding dispute with the bank. However, the clock does not start ticking on the extension until, and if, Citigroup resumes its funding.
In other business Tuesday, the agency held an executive session, attended by Mayor Stephanie Miner and Corporation Counsel Juanita Perez Williams, to discuss what Chairman Bill Ryan said was potential litigation. He declined afterward to say what the potential litigation was about.
Contact Rick Moriarty at rmoriarty@syracuse.com or (315) 470-3148.