Construction on the Syracuse University bookstore project will have to begin before the end of the year if the developer doesn’t want to lose its 30-year tax deal. The Syracuse Industrial Development Agency declared the development company’s tax deal in default after the company failed to begin its construction in a timely manner.

The requirement for the $20 million project was that the development company begin construction within a year of executing the agency lease, which Cameron Group, the company behind the construction, did not do, said Ben Walsh, SIDA executive director. He added that the agency raised concerns on Tuesday morning that the project had not started yet, and decided to declare the tax deal in default as a result.

“It’s making it very clear that the board expects to see the project commence within 30 days, and if they don’t, they reserve the right to terminate the lease with the company,” Walsh said.

The tax deal would allow Cameron Group to pay the city of Syracuse $64,400 annually during a 30-year period, instead of $379,000, the fully taxed amount per year for the 85,000-square-foot property on 601 University Ave. The deal is considered a PILOT, or a payment in lieu of taxes.

The deal itself was controversial when it was proposed because Cameron Group is a private development company, which, unlike SU, is not a tax-exempt institution. Under this arrangement, SU would lease the space to Cameron Group for $1 a year.

The deadline for construction to begin expired on Aug. 21, Walsh added.

SIDA has given the group 30 days to begin construction on the property before the PILOT opportunity is lost, said Kevin Quinn, senior vice president for public affairs at SU, in an email.

Thomas Valenti, a partner with the Cameron Group, said he believed construction for the SU bookstore project had already begun when it paid a fee to National Grid to remove power lines on University Avenue for the construction, and was waiting for a storm water management permit to be approved before moving forward.

He said he felt it was strange that the agency would issue this default status while Cameron Group was waiting for a city permit to begin construction.

Valenti added that construction will begin as soon as the proper permits are given, which he said should be within the next two weeks. He said the construction process will not be delayed as a result of its default status. Cameron Group and the university will meet this Thursday to discuss the final plans for the bookstore, he said.

Although the bookstore was anticipated to be completed earlier, he said, it’s more likely that it will open by winter of 2015 because of unexpected difficulties. Valenti added that the delay is unrelated to the default status declared by the agency.

“Plans took longer than was anticipated,” Valenti said. “Going through this process has been difficult in the sense that we have a lot parties involved, a lot of people have to sign off on plans. It’s not your typical real estate development.”

Donald Maitland, the security coordinator at the SU Bookstore, said bookstore administration declined to comment on the situation.

Valenti added that he believes Cameron Group will meet the requirements to get out of the default status.

Said Valenti: “It’s a 30-day notice to cure, and we can easily cure within the 30 days.”

Published on November 21, 2013 at 12:56 am

Contact Alfred: [email protected]

@alfredwkng