Auburn, NY -- The Auburn Industrial Development Agency on Friday is to vote again on a proposed tax break for a Syracuse company that wants to build an 88-room hotel and conference center in downtown Auburn. The board rejected the plan last month largely because it did not protect the city for loss of taxes if the developer, Pioneer Cos.,...
Auburn, NY -- The Auburn Industrial Development Agency on Friday is to vote again on a proposed tax break for a Syracuse company that wants to build an 88-room hotel and conference center in downtown Auburn.
The board rejected the plan last month largely because it did not protect the city for loss of taxes if the developer, Pioneer Cos., sold the $11 million hotel anytime during the 25-year tax break. The plan to be voted on today offers some protection to the city in the first seven years.
Still, board member Matthew Smith said today he will vote against the tax break because he believes the city is giving too much to Pioneer to make the deal happen. “I’m for the project but I’m against this (tax break). What this is is welfare,’’
Smith said.
Smith’s stance upset IDA Chairman James Dacey who said he doesn’t understand why Smith and William Graney have opposed the tax break. Both Graney and Smith are city councilors. “They’re totally against this. It’s a shame. They should be championing it,’’ Dacey said.
The meeting starts at 11 a.m. at Memorial City Hall. Here’s how the tax break plan would work, according to city officials:
The assessed value of the hotel property would be frozen at $882,000 for the first 15 years. Pioneer would pay taxes on that assessed value.
If Pioneer were to sell the property anytime during the first seven years, the company would have to pay to the city the difference between what it would have paid at full assessed value of the property and the lesser amount it paid at the property’s frozen assessed value.
Starting in the 16th year, the property would be assessed at $7.5 million and Pioneer would have to start paying taxes on an increasing scale, starting at 12 percent. By the 26th year, the company would pay 100 percent of the taxes due.
So far, the IDA has made it difficult for Pioneer to build the hotel and conference center on State Street, which would create about 50 jobs and pump about $5.5 million a year into the local economy. The board recently rejected the company’s request to use eminent domain if Pioneer could not buy the three State Street properties it is trying purchase for the project.
Dacey said the company has since reached agreement to acquire the three properties; Pioneer Cos. President David Murphy did not return a telephone message in time for this story.
The company has also asked the city to build a $1 million parking lot across the street from the proposed hotel, another request opposed by Smith. “As an elected representative I have a responsibility to all Auburnians and not just 30 anonymous investors,’’ Smith said.
You can reach Scott Rapp at srapp@syracuse.com or 289-4839.