Dispute causes Syracuse to pull tax break for downtown building
Tue, 16 Oct 2012 18:36:06 GMT —
Everything looked good to Syracuse Industrial Development Agency Chairman Bill Ryan just one month ago. SIDA had approved lowering The Galleries of Syracuse's tax assessment from $10 million to $7.5 million for seven years. After that, the assessment would gradually rise back up to full assessment over the next three years. The tax deal was an incentive for owner David Flaum to undertake a massive expansion for the building's largest tenant - Sutherland Global Services. Sutherland currently employs 600 people in their downtown Syracuse location and Flaum told the agency the expansion could bring another 200 jobs. Ryan says Flaum agreed with Syracuse Mayor Stephanie Miner to make yearly payments totally $500,000 to settle a debt he owed the city for tenant parking at the Harrison Street parking garage. That debt is believed to be between $1 million and $2 million according to Ryan.
Ryan, who is also the chief of staff for Mayor Stephanie Miner, said there was a lot of excitement about the deal when it came together. "We think this is good for everybody. There's a pilot agreement about to come forward, there's going to be 200 additional jobs, they're going to put 2.5 million dollars into this building," said Ryan.
Ryan says the rug was pulled out from under the city the very next day when Flaum's company refused to make yearly payments on the $500,000 parking settlement - and would only agree to pay the money at the end of three years. Some of the parking debt dates back to 2003. Ryan says the city has spent years negotiating with Flaum and continued to try and work with flaum but couldn't make progress.
"Even when you think you've made a deal - you haven't. It's very difficult to do business with somebody who is not being honorable in their business dealings," said Ryan.
On Wednesday morning, SIDA rescinded the property tax assessment break. The deal had barely been in place for a month.
CNYCentral left a message for David Flaum on Wednesday but our call was not returned. Sutherland Global Services also did not return a call about the future of their expansion. Ryan said Flaum had numerous chances to revive the deal - but they ended at 8:30am on Wednesday morning.
"I said this morning it would be over my cold dead body before they appear before the SIDA board again to go through this exercise when in less than a month we have a pilot agreement and we have to rescind a pilot. It's unprecedented that this kind of activity occurs. I have absolutely no trust," said Ryan.
Not only is the tax deal dead but Bill Ryan expects the city will have to take Flaum to court to get any money for the outstanding parking garage debt.