Schumer Launches Effort to Restore Hotel Syracuse as Anchor for Downtown Development, Bring $10 Million in Tax Credits to Historic Landmark – Recently Extended New Market Tax Credits Could Help Revamp Hotel, Boost Other Business Downtown
Revitalization of Hotel Syracuse Will Revamp Historic Anchor to Downtown Syracuse, Boost Tourism & Economic Activity at Businesses & Convention Center - Funding Would Pave Way for Hundreds of Jobs
Today, across from the Hotel Syracuse at the Syracuse Technology Garden, U.S. Senator Charles E. Schumer pushed a plan to bring critical funding to the Hotel Syracuse redevelopment project, which would renovate and add over 330 hotel rooms, provide a major boost to the Onondaga County Convention Center, and create nearly 400 jobs. Schumer fought successfully at year’s end to extend the New Markets Tax Credit (NMTC), and today urged the Department of Treasury to approve a pending application for an allocation of $75 million in NMTC for CenterState CEO to help finance major development projects in the region, including $10 million for their top priority project – Hotel Syracuse.
The project, being spearheaded by the City and County, involves the restoration of the historic Hotel Syracuse, one of the most significant buildings in the city’s downtown, which was built in 1924 and is listed on the National Register of Historic Places. New York State and Onondaga County have already allocated funds for the hotel’s rehabilitation, and this $10 million NMTC allocation could get this revitalizing project over the financing finish line and primed for redevelopment. Senators Schumer and Kirsten Gillibrand are both urging Treasury to prioritize Centerstate CEO’s application for New Market Tax Credits and provide them with the funding needed to move this landmark project forward.
Schumer was joined by Centerstate CEO President, Rob Simpson and other CCEO officials, County Executive Joanie Mahoney’s Office, Syracuse Economic Development officials and representatives from the New York Business Development Corporation.
“Hotel Syracuse has had its doors shuttered for far too long and I am here today to urge federal funding agencies to help return the hotel to its role as an anchor for downtown business activity and economic development,” said Schumer. “At the end of the year, I fought to extend the Department of Treasury’s New Markets Tax Credit program, aimed at revitalizing and reinvesting in urban areas like Syracuse, and this was exactly the kind of project I had in mind. The redevelopment of Hotel Syracuse is within reach, thanks to other forms of public financing, and now I am calling on the groups that disburse those new market tax credits to ensure that Central New York gets its fair share and that this top priority project gets over the financing finish line. With these federal credits, the historic Hotel Syracuse will be able to open its doors after a nine-year hiatus and once again accommodate the tourists and businesspeople who travel to the Onondaga County Convention Center and the region as a whole, all while helping to create nearly 400 construction and permanent jobs in the process.”
“CenterState CEO’s New Market Tax Credit allocation is critical to economic development projects across upstate New York, including the redevelopment of Hotel Syracuse, which is a treasured landmark that is just bursting with potential for economic growth,” Senator Gillibrand said. “With the help of New Market Tax Credits, this project will help attract new investments to renovate and re-open its doors. When we do, we’ll make places like Hotel Syracuse beacons for local economic growth that can attract more visitors, new businesses, support new jobs and help Syracuse thrive.”
“Revitalizing our urban centers takes significant private investment and the New Market Tax Credits are an important tool we can use to attract development and grow jobs in distressed areas of Upstate,” said Robert Simpson, president, CenterState CEO. “We believe dozens of projects, like the Hotel Syracuse, could benefit from an allocation of these tax credits based in the region. We are grateful to Senator Schumer for coming to Syracuse and providing his leadership and support for our efforts to obtain these tax credits.”
Schumer led the fight to extend the New Markets Tax Credit program in the year-end fiscal cliff deal, to help leverage private investment and jump-start construction efforts in communities like Syracuse. The NMTC program was established in 2000 in order to spur new or increased business investments into operating businesses and real estate projects in eligible urban communities. In this case, Centerstate CEO has applied for a $75 million allocation of New Market Tax Credits, and if approved, will subsequently provide NMTC to Hotel Syracuse’s redevelopment efforts. The Hotel Syracuse project will cost approximately $77 million. New York State and Onondaga County are providing $19 million in grants and loans; the project will use federal and state historic tax credits - about $14 million; developer equity of up to $14 million; senior debt of $20 million; and a $10 million NMTC contribution. The federal credits that CenterState CEO is seeking would provide the final funds needed to bridge the gap between what has been raised and the total project cost.
CenterState CEO's plan, led by the City and the County, is to use the $10 million dollars to redevelop and reopen the historic Hotel Syracuse by renovating and adding 337 rooms. The project not only creates approximately 400 new jobs for the region, including construction and permanent, but also provides much needed accommodations for the nearby Onondaga County Convention Center, which has struggled because it lacks a nearby hotel. In addition, the project will make the building productive again by putting it back on the city's tax rolls. Although the hotel owes over $463,326 in back taxes, interest, and late fees as of Feb. 1, the city's policy to seize a tax delinquent property is contingent on receiving a purchase offer for it first—which has not occurred.
The historic, 590-room Hotel Syracuse has been a landmark in downtown Syracuse since it opened on 500 S. Warren Street in 1924. The hotel was a mainstay in the Syracuse region until it faced financial difficulties in the 1980's and 1990's, ending with bankruptcy and closure in 2004. Since then, Israeli company GMUL bought the Hotel and tried to reopen it, but the hotel was again shuttered in 2008 when GMUL itself went bankrupt. That same year, however, the hotel was added to the National Register of Historic Places due in large part to a notable speaking engagement by American aviator Charles Lindbergh at the hotel in 1924. Another Israeli company acquired the hotel in a bankruptcy sale in 2011, but the Hotel remains closed.
On January 3, 2013, President Obama signed the American Taxpayer Relief Act of 2012 which included an extension of the New Markets Tax Credit Program for 2012 and 2013. The tax credit allocation authority is $3.5 billion for each year. The CDFI Fund through the Department of Treasury is currently reviewing applications received under the 2013 round and plans to announce the awards in April. Schumer today urged groups that typically receive those awards from treasury to prioritize the Hotel Syracuse redevelopment project in their selection process.
A copy of Senator Schumer’s letter appears below:
Dear Secretary Lew,
I write today to issue my support and urge your approval of an application for $75 million allocation of New Market Tax Credits (NMTC) submitted by the Metropolitan Community Development Entity (MCDE), a partnership between the CenterState Corporation for Economic Opportunity and the New York Business Development Corporation (NYBDC). As you may know, CenterState and NYBDC are two of New York’s premier economic development organizations.
Upstate New York is a significantly distressed area, with a job growth rate which has been about ½ the national average over the last 30 years. While I appreciate the great impact the NMTC program has had throughout New York State over the years, I also want to insure that these federal allocations of credits are equitably distributed throughout Upstate New York where the need is great. That’s why I am very encouraged to see this new partnership for Upstate New York and trust that they will insure these credits have an immediate impact in Upstate communities.
NYBDC is New York’s leading lender of 504 Small Business Administration (SBA) loans. In collaboration with its 127 member banks, NYBDC has assets of approximately $180 million. Their bank membership gives NYBDC broad geographic reach into every part of New York State. Moreover, NYBDC is an experienced lender, with significant expertise in managing and underwriting loan portfolios.
CenterState CEO is an organization created after the merger of the former Greater Syracuse Chamber of Commerce and the Metropolitan Development Association. Together, CenterState CEO and its predecessors have over 150 years of experience in economic development. The allocation of NMTC will be used to achieve two important goals. First, the allocation will provide loans for small businesses at below market interest rates, and other favorable terms which will make it less expensive for small businesses to obtain financing. Second, the balance will be used to attract investment in large projects with economic significance, like the Syracuse Hotel revitalization project, in Syracuse, NY. Moreover, these dollars will support projects to redevelop brownfields, rehabilitate other historic properties and to create new jobs in distressed areas.
MCDE has also pledged to invest at least 25% of its allocation in non-metro counties, which will make sure that the benefits of the program will be spread equitably throughout the state. And lastly, MCDE has obtained commitments in excess of $180 million from lenders and investors within the state to provide equity and to finance projects.
I appreciate your attention to this request. Please do not hesitate to contact me should you require any further information.
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