Auburn, NY — The Auburn Industrial Development Agency today approved a 25-year tax break for the Pioneer Cos. of Syracuse to build an 88-room hotel and conference center in downtown Auburn. The vote was 7-2 , with Matthew Smith and William Graney voting in opposition. Smith said he believes the city is giving too many economic benefits for the...
Michael Falcone's Pioneer Cos. received approval today from the Auburn Industrial Development Agency on a tax deal that will open the door to an $11 million hotel and conference center project in the city. Auburn, NY — The Auburn Industrial Development Agency today approved a 25-year tax break for the Pioneer Cos. of Syracuse to build an 88-room hotel and conference center in downtown Auburn.
The vote was 7-2 , with Matthew Smith and William Graney voting in opposition.
Smith said he believes the city is giving too many economic benefits for the project.
However, Michael Falcone, founder of the Pioneer Cos., said his company could not do the project without the tax break.
“I want to make it clear, we need the economic benefits to make this work,” Falcone said before the board vote.
Pioneer proposes building the $11 million hotel near State and Water streets. Falcone said the anticipated economic benefits of the project to the city would far outweigh the benefits it is receiving from the tax break. The hotel is expected to create about 50 jobs and pump an estimated $5 million a year into the local economy.
Smith said the duration of the tax deal, which would save the company an estimated $7 million in taxes, is too long.
Supporter Ginny Kent said she believes the city stands to gain more than it would lose. “To throw this project under the bus because I’m annoyed with it — I can’t do that,” she said.
Here’s how the tax break will work:
The hotel property’s assessment would be frozen at $882,000 for the first 15 years, with Pioneer paying taxes on that amount.
If Pioneer were to sell the property during the first seven years, it would have to pay the city the difference between the taxes it paid and what it would have paid if the assessment hadn’t been frozen. .
Starting in the 16th year — assuming Pioneer maintains ownership — the property would be assessed at $7.5 million, and Pioneer would begin paying taxes on a graduated scale starting at 12 percent and reaching 100 percent by the 26th year. So far, Pioneer has not had an easy time making its State Street project happen.
Pioneer also has asked the city to build a parking lot, which would cost about $1 million. The city council still must approve that request.