SYRACUSE — The board of directors of the Syracuse Industrial Development Agency (SIDA) on Dec. 17 approved a preferred-developer agreement for a proposed project to redevelop the Hotel Syracuse into a 261-room Hyatt Regency Hotel.
“It lays the terms by which SIDA would proceed with eminent domain as a means to acquire the property,” says Ben Walsh, SIDA director.
The SIDA board also agreed to serve as the lead agency in an environmental-review process on the property. The agency will also conduct a public hearing on the proposed project in early 2014, Walsh says.
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It would be a nearly $57 million project.
The proposal provides for a convention-center hotel that is “sorely needed,” preserves and protects an historic asset, and would anchor the southern end of downtown, Walsh says.
Walsh wasn’t able to say how much SIDA would have to pay to acquire the property in a negotiated purchase. A judge would determine the value of the property if SIDA would decide pursue the eminent-domain option if the owner doesn’t agree to a negotiated purchase.
“It’s hard to say at this point,” Walsh says.
The preferred developer is Syracuse Community Hotel Restoration Co. 1, LLC. Edward Riley is the sole member of that corporation, according to Walsh. Riley, of Camillus, currently serves as a consultant for the Boston–based Pyramid Hotel Group.
Riley has “upwards of 30 years of experience developing and operating hotels,” Walsh says.
GML Syracuse, LLC, a company based in Israel, currently owns the Hotel Syracuse.
When asked if he has concerns about GML opposing any attempts at an eminent- domain proceeding, Walsh says it’s not yet clear, but “it’s certainly a possibility.”
It’s not Riley’s first attempt to acquire the Hotel Syracuse property, according to Walsh.
He had attempted to negotiate a private sale with the owner and had earlier attempted to acquire the hotel through a tax-foreclosure process with the city of Syracuse.
A last minute payment from the lien holder, Israeli–based Financitech, Ltd. “foiled” that effort, Walsh says.
The eminent-domain possibility is seen “as the last resort,” he added.
“We have a lot of confidence in the developer [Riley], given his experience in the hotel industry. We have confidence in his vision to redevelop the property into a Hyatt Regency Hotel,” Walsh says.
SIDA also considered the implications of not taking action as it has “real concerns about the condition of the property,” he adds.
Riley is requesting a mortgage-recording tax exemption, a sales-tax exemption on construction materials, and payment-in-lieu-of-taxes (PILOT) agreement for the purposes of property-tax relief, Walsh says.
Contact Reinhardt at ereinhardt@cnybj.com
