Syracuse, NY - As Tuesday’s deadline approaches, it appears the city’s proposed $28.2 million lease of the Syracuse Developmental Center for temporary school classrooms is about to die, because developers have not purchased the site. Principals of Health Consortium-USA, the development company, declined to say if they will complete the acquisition by Tuesday — as required under the lease...
An exterior of the former Syracuse Developmental Center, which Syracuse's school district wanted to lease for 15 years at a cost of $28.2 million. The lease deal appears about to die because a developer, Health Consortium-USA, has been unable to complete its purchase of the site. Tuesday is the deadline for Health Consorium-USA to buy the property and pay off about $1 million in delinquent property taxes. Principals of Health Consortium-USA, the development company, declined to say if they will complete the acquisition by Tuesday — as required under the lease — but officials aren’t optimistic the deal will go forward.
“I’m assuming not,” said Superintendent Dan Lowengard. “I haven’t heard one way or the other, but my guess is, this late in the process, it’s not going to happen.”
If the SDC lease is scuttled, school officials will have to revise plans for two long-awaited school makeovers that were scheduled to begin just after the February school vacation, at Dr. Weeks and H.W. Smith schools.
The district no longer plans to move children out of H.W. Smith K-8 School in February, Lowengard said. Renovations are scheduled to begin in April or May, he said, but the earliest the children would move to a new site is next fall.
Lowengard said he is working on plans to move the 800 pupils out of Dr. Weeks Elementary in February to multiple alternative sites if the SDC deal falls through.
Lowengard insists that neither renovation will be delayed. Mayor Stephanie Miner says both the Smith and the Weeks projects will be delayed at least until summer, if only because the city has not arranged bonding for those renovations yet.
The Joint Schools Construction Board on Thursday approved a $34 million bond sale, scheduled for late November, nearly $26 million of which will pay for renovations at Fowler High School. Slightly more than $8 million was designated for engineering “soft costs” on the Weeks and Smith projects, but full funding of those renovations is not expected until March, under the current JSCB schedule. Miner said the city can’t hire a contractor for the work until the full funding is available.
Miner, who has criticized the school district’s handling of the SDC deal for months, blames school officials for the delay.
“Children in Dr. Weeks and H.W. Smith are going to have to wait,” she said. “They are the victims of poor leadership and poor decision-making. This whole process was flawed from the beginning.”
In May, officials from Health Consortium signed a lease deal that called for the city to pay $28.2 million to rent space at the renovated SDC property over the next 15 years. Health Consortium had 90 days to buy the property and pay off back taxes of $1.3 million.
But the developers later approached city officials to seek modifications of the lease, saying they were unable to obtain financing for the $13 million renovation project without changes. The main request, according to e-mails sent last month by the developers, was to change language that would allow the city to terminate the agreement if the landlord committed a “material breach” of its obligations during the first 10 years.
Miner and her corporation counsel, Juanita Perez Williams, have refused to renegotiate any of the lease terms.
Thursday, Chris Davis, managing principal of Davico Realty Group, one of two partners in Health Consortium, declined to say whether he expected the SDC acquisition to close by Tuesday. But he said the mayor’s refusal to alter the lease had prevented the project from moving ahead.
“That was her window to crush it,” he said.
Perez Williams, the city’s lawyer, maintains that Health Consortium defaulted on the lease deal when it failed to close by Aug. 10, 90 days after the contract was signed. The developers have maintained the deadline is Oct. 12, 90 days after the deal was approved by the Common Council.
Contact Tim Knauss at tknauss@syracuse.com or 470-3023.