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State Sen. John DeFrancisco may be a well-known politician in the city of Syracuse, but that doesn’t mean he’s well-liked. In the 13 years that the soap opera scripted by developer Bob Congel’s Pyramid Companies toyed with citizens’ emotions and encouraged their dreams of economic salvation, DeFrancisco, a 20-year member of the state Senate, never wavered from his skepticism about the tax deal the city extended to the developer of Carousel Center, and its ugly stepsister Destiny USA. And for that he was either held up as a hero or vilified as the leader of a small, but vocal, posse of naysayers (Pyramid PR-speak for those, including this newspaper, who questioned almost everything the company proposed).
For 13 years, taxpayers, politicians and many in the media were mesmerized by the promises of a flood of sales-tax revenue, a Grand Destiny Hotel, a mall expansion that would reach east across Interstate 81 toward Seventh North Street and south to Wolf Street, and an entertainment mecca that would attract more tourists than the Las Vegas strip. DeFrancisco was not one of them.
And when Bob the Builder and his minions finally admitted on June 5 that what we see along Hiawatha Boulevard is what we get, DeFrancisco pounced. In a July 1 commentary published in The Post-Standard, he wrote, “Having lived through this sad part of Central New York’s history, while Pyramid was helping to shape our ‘destiny,’ and having been uniformly criticized by the media for having raised serious issues from the outset, I feel that I should comment. I comment—not to say ‘I told you so’ in having predicted the outcome of this long, sad journey, but rather in hopes to avoid a similar tragedy in the future when others (likely including Pyramid) will be looking for benefits from the taxpayers.”
DeFrancisco invited the Syracuse New Times to his corner digs on the eighth floor of the State Office Building after the editor wrote him a letter, asking why he didn’t mention us in that commentary, and why he didn’t send that very commentary to us. After trading several phone calls, we finally connected, he explained his reasons and still invited us to ask our own questions that hadn’t been answered in the commentary or in the Aug. 7 Post-Standard article headlined “Sen. John DeFrancisco feels vindicated about his opposition to Destiny USA tax deal.”
The Republican senator continues his assault on the tax deal as the first speaker in a new “Conversation Series” at Christ the King Retreat House and Conference Center, 500 Brookford Road. “What Went Wrong With Destiny” is scheduled for Thursday, Sept. 13, at 7 p.m. The series is moderated by Grant Reeher, professor of political science at the Maxwell School at Syracuse University. Individual lecture tickets cost $10; $5 for seniors and students. Reservations are strongly recommended at 446-2680 or ctkretreat@syrdio.org.
Q: Were there some things you said in your interview with the Post that they didn’t include that you’d like to let our readers know?
A: What seems to me to be amazing is, right on the heels of discovering that this manner of financing projects was so questionable, that the Common Council approves another payment-in-lieu-of-taxes {PILOT} agreement {this one for a new Syracuse University bookstore and for an unprecedented 30 years}. I just couldn’t believe it. I think this city is the only one that has ever approved a payment-in-lieu-of-taxes that long. They justified it by saying the university owned the property, the city was getting no taxes anyway. Well, if that’s the case, then close shop to any private industry that wants to make a purchase. You’re not just leaving it up to the market to determine what’s valuable and what’s not; the university area is a very valuable area in the city of Syracuse. They don’t have trouble buying and selling property up there. So that was surprising.
Q: Three days after the story ran in which you were labeled as vindicated, Vito Sciscioli, former economic development commissioner for the city and a big Destiny booster, had his say in the daily newspaper. Is there something you’d like to say about that?
A: What those in the city who endorsed the deal were doing was substituting sales taxes, which is a more substantial amount of revenue and a recurrent and more reliable source of revenue. One of his examples was, there are different facilities that go under all the time, and we don’t get the property taxes. What he failed to mention was if the Carousel Mall doesn’t build out, we won’t get the sales taxes. What if Carousel had gone under? I said at the time, 30 years, $20 million a year. And his comment was, well, $20 million a year. What’s to say that that mall is going to stay open all that time? Well, then there won’t be sales taxes, either. The crux of the whole thing, which keeps getting messed up in this whole discussion, is that if you’re going to enter into a deal, which I thought was a bad deal, don’t you at least make it legally required in the contract that they gotta build it out before they get the total benefits?
Now I don’t care how much you want to talk around the issue, and one defense is, well, we wouldn’t have Carousel Mall. That’s wrong. The mall was already built. The expansion got 30 more years for the original mall, which made no sense. Do a separate deal on the expansion. Whoever said you get more? It’s already in existence. And the quid pro quo for the city was a 15-year PILOT and the 15 years we’re going to get taxes.
You can try to justify it anyway you want. But the fact of the matter is: 1) there was no justification for giving more PILOT benefits to what’s already there. It was a quid pro quo, the city was entitled, the county was entitled, to the taxes. And 2) if you’re gonna give 30 years instead of 15, put it in the documents. Require it. Not say, “Oh, we didn’t realize it wasn’t in the documents.”
Q: Why do you think this keeps happening?
A: When you get in bad economic times people grab at anything they can grab at, and I don’t know how many times I was asked, “Well, what’s your solution? What do you propose? What’s your economic development proposal?” And my answer always was, “I’m not saying I’m against this expansion of the mall.” In fact, I voted for the first deal {back in 1988 when he was president of the Syracuse Common Council}. But I want to get the benefits of the first deal and then have a second deal worked out that we’re going to get benefits from. Not postpone the community’s benefit.
There’s no question in my mind that the print, the major print, and the electronic media in this community felt this was going to be their savior, that for all the additional advertising {from the mall tenants}, they believed it was worth a shot. They’ve supported it more than they’ve supported any project that I’ve known of for the last 30 years, and betting and hoping that this was going to be their salvation for advertising revenue.
Q: I always found it interesting, and a bit disingenuous, that at first {Post-Standard retail “reporter”} Bob Niedt was all for the expansion and then he started making fun of it, calling it “the Big Empty.” Now he’s all for it again. It’s like they can’t decide.
A: But still, there’s advertising revenues that are coming in. Now, do you kick the person that’s feeding you, or do you just say, “OK, they’re still a big player in town.” I think they were fair in at least finally printing my side of the story. And The New Times, No. 1, was skeptical of this. The New Times asked the same questions I was asking, you did a big cover story, “Big Bad John.” {July 23, 2003}
Most of the elected officials had their doubts, and I spoke with every one of them as I was going through my attempts to discuss their point of view, and it was just too much for many of them to say, hey look, whatever happens in the media, this is my point of view. That’s the difference.
Q: I’d like to show you this letter advising the media that from now on, we are to say “Destiny USA” instead of “Carousel Center,” “Destiny USA Drive,” and not “Carousel Center Drive.” I wonder if you’ve seen it.
A: They have the best PR operation of anybody in this area, and have for years. Look at the $60,000-a-year jobs {when they were initially building Destiny}. This is the ultimate: when they actually got an individual to be on TV and say how wonderful this project is, it was determined that this individual actually had a criminal record, and it came from a charge of assault at the Carousel Mall. Most anybody who got caught in that dilemma would say, “We got caught in a mistake.” Their answer was, “Destiny USA is all about opportunity and he deserves a second chance.”
Now you can’t make this stuff up, but if you hear it over and over again, you start to believe it. “The mall is at no cost to the taxpayers.” Now, you’re giving up 30 years of property taxes of $20 million a year to the city and county that would have been available on the original mall. They should have kept the two deals separate. That’s not a cost to the taxpayer? Their argument was sales tax revenue from this totally complete mall is going to offset any losses, but they hadn’t even agreed to guarantee the complete mall so how can you not say there’s a cost to the taxpayer? And over and over.
At one time the Common Council had a public meeting at Henninger High School {in 2006} and the auditorium was packed and the Council sat on the stage, and everybody got three or four minutes to speak, so I signed up to speak. As I’m walking into Henninger High School, I run into {Pyramid partner} Bruce Kenan, and the commercials had just come out. I say, “Bruce, how can you honestly, in good faith, say that there’s no cost to the taxpayer? How can you say that?” He looked at me, with these wide open eyes, and said, “There isn’t a cost.” OK. They called my name, I walked down from the back; I was booed by the whole auditorium. It was packed with UAW people, especially Mike Allen was leading the charge; he was the head of Magna, I think it was still New Venture Gear then. As I was speaking the boos would come.
Channel 5 News had a forum {in 2003}, and the forum looked like the U.S.S.R., there were enough chairs for the whole Politburo and we were all there. Every single one of them was promoting the project. I was the only one against it. Mike Allen and his crew were like an audience. It was amazing and I’ve kidded Matt Mulcahy about it since. He smiles; he understands. It was about as balanced—I get to speak, and 14 other people say how wonderful it is.
Channel 9 News—that was gonna be their savior. {Station head} Steve Kimatian, host of With Steve on Sundays, I would go head to head with him. I enjoyed it: I had an opportunity to go head to head and debunk some of the things he was saying but he was totally behind it. David Cordeau, at the time the head of the Chamber of Commerce, it was like the Chamber was an arm of their publicity. Anything that Congel wanted with respect to the promotion of that mall came out of the Chamber. It was just amazing, and then ironically Cordeau goes and works for Pyramid. He goes to Pyramid, becomes one of these cheap executives, within a year they can him {incredulous laughter}.
That was right in the middle of the $60,000-a-year jobs. That was right in the middle of the 2009 campaign for mayor, and just about every single one of those employees was from the city, and I said then, they were training people to be engineers! Do you remember that stuff? “This is exciting for me, I’ve got a high school degree and I’m going to be an engineer!” Talk about publicity! And it just kept getting more and more bizarre, and sure enough, within an hour after the election, they’re all gone. And not an explanation, not anything. It was amazing.
Q: You’ve had a lot of detractors over the years about this. But what about your supporters? Who do you hear from?
A: I understand politics and when you’re in the public light people like you or they don’t like you, and they’re going to find that you’re doing exactly right, even when you’re doing wrong because they like you for some reason. And vice-versa. As far as detractors, the most difficult part for me was friends, people that I’ve known forever, questioning why I would be against the biggest economic development project that ever hit the city of Syracuse. “How can you be against it? There’s no cost to the taxpayer. And you’re trying to stop it; why would you try to stop this thing? I don’t understand.”
That was tough because I would to try to explain to people and when I would say the deal has to be in the documents, they would say to me, “Well, they’ll do it. They said they’ll do it.” And after this whole thing turned out almost identical to what I suggested was going to happen from day one, they finally understood and that’s the part that I feel best about. People that doubted me that were close to me who now see the other side for the first time. I would have been much happier if people saw the right side early enough to protect us from all this.
Then some would say, “Well, look at what we got there.” That’s fine, I’d think; God bless them. But at what price? The city’s near bankruptcy. Property tax revenue of $20 million a year for the city and county to split up, and the city got a better deal; that’s huge to the city of Syracuse. At what price to get some more restaurants and whatever else they’re doing out there? The virtual this, virtual that; the go-karts. So, at what price?
Then other things that many people don’t focus on. Three weeks ago, I was in Dick’s Sporting Goods in Fairmount. I didn’t know if they were just opening or just closing. I asked the clerk, who said, “We’re going to Destiny.” Now, the value-added is questionable at best when you’ve got stores going from one location to another because that just leaves holes. Shoppingtown is on the verge; now, is it fair to provide these benefits to one company and put pressure on other companies? Shuffling stores around is not value-added. I’m not against companies making money and succeeding but at what price?
Q: I noticed you weren’t at the Aug. 2 rebranding celebration, but it was quite the spectacle. When Bob Congel was introduced, people applauded. But when Bruce Kenan was called up, you should have heard it! You’d think the guy was a movie star, people were going so wild. It was really quite odd. And former City auditor Minch Lewis was there, and Vito Sciscioli was there.
A: Oh, the people that drank the Kool-Aid. As long as I live I’ll remember this because Minch Lewis came up with these calculations as to why it was a good deal for the city. And we actually had a conversation. I was walking here from my law office and he was in back of City Hall and I said, “Minch, you’re making a calculation that this is financially feasible. How can you make a calculation without knowing what is going into the mall and what is going to be generated by whatever is going in—but there are no leases? How can you give a cost-benefit relationship without knowing what the benefits are or what portion?” And he pulls out this financial model, and I say, “I’m sorry, we’re going to have to agree to disagree.” It’s been like that the whole time.
Q: WSYR-AM 570 general manager Joel Delmonico was there.
A: {Laughter.} They used to do editorials on WSYR blasting me, editorial comments. So I went in to speak with {then-WSYR radio host} Jim Reith one of my many times during that time period and I was sitting in the waiting room and saw Joel—I’ve known Joel since high school—and I said, “Those are great editorials. When do I get equal time?” And he just smiled. I said, “That’s all right,” and there were other conversations like that over time but he believed, I think, that WSYR was going to be a major benefactor from all of the advertising. Not benefactor, but recipients of the media center they were talking about running out of the mall. Some communications/convention center. I don’t know; there were so many of those things.
Now, as for the rebranding, who’s the audience? I’m sure there were some employees from Pyramid and those that are beholden to Pyramid. If they’re going to stage the promotion they’re certainly going to stage the event. What about the groundbreaking for the hotel? I didn’t go to that either, if you remember.
I’ll tell you another story that you’ll get a kick out of. I checked to see what permit they pulled for the city for the groundbreaking for the Grand Destiny Hotel. I wasn’t there, and they asked me why I wasn’t there and it’s because Pyramid got a permit to build a parking garage. That’s not a hotel. Remember they had that machine pounding in the pile, that was there for about a month and all of a sudden it’s gone. The one pile driver for the Grand Destiny Hotel that looks like the Emerald City. I understand they gave out hard hats and shovels and this and that, and they had hot dogs and it was like a carnival.
About two months after the carnival that was really not a groundbreaking—and by the way, Gov. Pataki was there—I get a call from the company that supplied the hard hats that said they were not paid for the hard hats and the shovels, so they’re calling me. I asked what they wanted me to do. “Well, we want you to know. Maybe there’s something you can do to help.”
The time when I mentioned earlier when I went to see Jim Reith and Joel Delmonico came in and I wanted my equal time, I said, “Joel, by the way, you might want to know that the wonderful groundbreaking, Destiny hasn’t paid for the hard hats or the shovels and I’ve been getting calls about it. You might want to check with your friend about that.” So I got a call about a week later: They were paid. So maybe that helped. But the point is that it’s ironic that people would call me because they weren’t paid, which is not the first time people have done that and which is why I’ve been involved in many lawsuits with the same situation. So, each time the promotion would not turn out to be true. How many things did they talk about? One of my favorites was a golf course over the sewage treatment plant.
Q: You always liked the goats, too {from an earlier artistic rendering of a proposed Destiny vision}.
A: The goats on the hill was my favorite, my favorite. To re-create the Erie Canal, to re-create a Tuscan village; my comment at the time was, “We have the Erie Canal. What do we have to re-create it for?” {Laughter.} There are so many things that as I talk and think of, they’re just remarkable.
Q: What do you make of Jim Reith’s about-face?
A: I don’t know if it’s an about-face because he called me to be on his new show {on WCNY-Channel 24} on some totally different issue but it just so happened that my commentary got in a day or two before that. It was on live TV, I sat down, and all he said was, “All right. You were right and I was wrong, and let’s get on to something else.” That’s exactly what he said. I don’t know what his motive was except that rather than getting into a discussion about it, he figured to get it out of the way.
Q: Do you think we’ve heard the end of this?
A: No. If there’s anything that I’ve learned about a developer, there will be another something. Something else will be planned, something else will be asked for. It just never ends. They got the PILOT, they got Empire Zone status, then they wanted the guarantees from the state for a proposed tourism center using $25 million in state money that I stopped. There’s always something else, and I really believe that they’re going to be back with some other proposal, whether it’s directly related to the Carousel Mall, or indirectly related, there’s going to be something else.
What about the oil reclamation park that they were going to have in the town of Salina, when they wanted to take 30-some odd businesses, not businesses that were failing, but ongoing businesses in the city of Syracuse? The Industrial Development Agency was in favor of it, of actually seizing these properties by eminent domain and then they got the Salina 29 {composed of those threatened businesses}, and they used to have meetings. It just was something else, something else. And the publicity was really drowning out 30 businesses. I joined forces with them to try to explain how insane it was.
That’s when I really looked into the eminent domain laws. And my understanding, when I went to law school—and I don’t practice anything relating to eminent domain, or real property—I thought a government could seize property by eminent domain for a public purpose. My understanding of a public purpose was roads, bridges, some parks or whatever was needed to do a design of a city or a county or an expansion of an area. But the law actually used presently is that as long as the public benefit has been defined so broadly, that if the project is going to bring in more tax revenues than you’re ultimately receiving from those properties that you want to seize, that’s a public purpose.
Now to me, the little guy has no hope under those circumstances. And that’s why they had a legitimate, serious concern. They were going to have some kind of arch over Route 81, like the arch in St. Louis. It just got so bizarre and everything was publicized like it’s going to happen.
Q: Do you recall what
happened with the Salina 29?
A: Eventually it turned out that Congel really had no plan. That’s what I kept asking for: “What’s going to go there? You want to seize the land before you even know what the tenants are going to be in the mall?” Finally as the mall was starting to fall apart, people finally started to see through it, and the IDA never approved it. They were close to pulling that off. That’s huge. That’s disrupting 30 not-so-small businesses; some of them were big businesses. They’re still there and still paying taxes, fortunately.
My heroes in this whole thing, as far as a small business, is Stella’s Diner {110 Wolf St.}. The Stellakis sisters didn’t know whether to buy the property because they didn’t know where the mall was going to be, what the footprint was going to be, and then they went ahead and bought it. And it’s a very, very successful small business that’s in the shadow of what was threatening to make it impossible for them to actually open that thing. But that’s the balance. A small businessperson can’t be just run over, and they would have been in that situation.
The most important thing to me is that people understand that I’m not against anybody expanding; I’m not against new stores coming in, exciting new stores. But the question is the deal, and what’s the deal? And, what you’re giving up, is it worth what you’re going to get? And when you have a 30-year additional tax deal on something else you’ve already got in hand, that’s ready to pay taxes, and you throw that away for a hope and a prayer, and it’s not even a requirement to build what the hope and the prayer is, then that deal doesn’t justify the proposed benefits, which never will be realized.
From day one, the reason I was so suspicious, it wasn’t only the original 30 years. But as you’ll recall, and this should have tipped off everybody, what Pyramid originally proposed was a strip mall in the location where the oil tanks were: an 800,000-square-foot strip mall. A separate project, they’d have to get a separate tax deal, they’d have to get separate benefits of whatever they could get from the city and the county, like they did on the first mall. But within a year that morphed into Destiny USA, and by combining it, they got the deal with the original 30 years on the mall, and 30 years on the new project—whatever they put in—in the hope of some major project that will outdraw Las Vegas for tourists {chuckling}.
It was no coincidence that the first phase of the mall was 800,000 to
900,000 square feet, exactly what they were proposing on the
stand-alone project. That was too much of a coincidence to me, and
that’s what I kept pointing to when you talk about a 3.2
million-square-foot mall; if that’s the case, it’s got to be in the
deal. Otherwise, you’re getting nothing more than what that strip mall
was going to be with the separate entrances, which is the most
successful thing these days, like Towne Center in Fayetteville by Cor
Development. That’s the model of the future. That was what they were
going to do, and it was just too coincidental that they were not going
to be committing to anything beyond that. That should have been enough
to say, “Hey, wait a minute; something’s wrong here.”
