East Irondequoit fines Medley Centre developers

Nov 20, 2012

Word that the Rochester Broadway Theatre League had reached an agreement with Medley Centre developers for a new performing arts center at the beleaguered mall site didn’t stop the East Irondequoit school board from assessing hefty financial penalties for lack of progress.

On Monday the school board unanimously voted to impose a $827,772 penalty against developer Scott Congel and his Bersin Properties LLC.

“We are trying to be fiscally responsible,” said Board President Carol Watt.

The penalty is called for by the payment-in-lieu-of taxes, or PILOT, deal brokered for the moribund mall in 2009 with the school district, town of Irondequoit and the County of Monroe Industrial Development Agency. Under the tax pact, Congel and Bersin Properties were required to prove a $90 million “milestone” investment in the property as of April 2012 or face a hefty fine.

Bersin Properties earlier this year submitted documentation purporting to show the investment benchmark was reached. The proof was accepted by COMIDA, but rejected by the school district. By the district’s calculations, Bersin missed the mark by about $24 million.

“We are obligated to our taxpayers to set this penalty amount and notify the developers and COMIDA,” said East Irondequoit Deputy Superintendent John Abbott. “Failure to meet the milestones came with specific financial penalties.”

The penalties were included in the agreement to ensure renewal at the site happened within a reasonable amount of time, he said.

While the apparent deal with RBTL for a 3,000-seat theater is a “good thing,” it doesn’t change anything, said Abbott, who said he had discussed details of the deal with Congel and RBTL Chairman Arnold Rothchild.

“Whatever is going on now with RBTL isn’t relevant,” he said. “We are talking about the past, not the future.”

Rothchild did not return phone calls seeking comment Monday afternoon. Congel could not be reached.

In 2010, RBTL announced plans for a $70 million performing arts center at the Midtown Plaza site in downtown Rochester. Medley Centre had been considered as a site then, but was ultimately rejected. According to contemporary news reports, the Midtown deal was predicated on the group securing $19.5 million in tax credits and $35 million in state and federal funding as well as a $600,000 annual operating subsidy financed by the city, county and trade unions. RBTL would also have to raise $15.5 million privately.

There has been no apparent movement on that project since.

For the city, the matter remains unchanged. Midtown is a good — if not the best — fit but RBTL needs to come up with enough private investment to make it feasible to ask for state, county and city taxpayer support. That includes a way of offsetting what the city estimates to be a $1 million-plus annual operating shortfall, city spokesman Gary Walker said.

“With some cost estimates in the $70 million range … in these economic times, it would be a tough sell to have taxpayers pay for the construction and operation of a performing arts center,” Walker said.

That said, if Medley Centre developers can offer RBTL a performing arts center for free, Walker said, “we certainly can’t compete with that.”

Irondequoit Town Supervisor Mary Joyce D’Aurizio was skeptical.

“Where is the financing going to come from?” she said. “I think it’s going to be the case like it is for so many things: There just isn’t the money, as much as we might want and long for things. But if they can do it, we will certainly welcome them to Irondequoit.”

Congel has proposed that the Medley Centre site become a $260 million mixed-use development called LakeRidge Centre, which would offer apartments, hotels, retail shops, upscalerestaurants and a movie theater complex. But no apparent work has been done since he bought the property in 2007. D’Aurizio has said Congel’s most recent plans for the site — which have not been made public — have a price tag of $750 million.

Congel has asked state legislators to consider a three-decade deal that would allow him to retain the state’s share of sales taxes generated in any redevelopment of the 54-acre mall site. He’s proposed using that money to repay more than $200 million in construction bonds for the property. The idea got a cold reception in Albany and was not approved.

Bersin Properties has not missed any of its scheduled PILOT payments.

The $827,772 “supplemental payment” will be added to Bersin’s upcoming PILOT, due in January. If the developer does not make the payment, it would be considered in default and the entire tax payment agreement would be terminated, said Abbott.

Bersin Properties faces another milestone date in April 2013, when the developer must show a $160 million investment in the project, or face additional penalties.

Rochester D & C