Grains of Salt (v47): Seize the Delinquencies

Folks here in the Syracuse area have been hearing, for longer than I can remember, about the battle between Onondaga County and the owners of the now nearly-empty ShoppingTown Mall in Dewitt.

In a nutshell, the mall owes the county over $9M in taxes, and refuses to pay. Well, let me correct that - they refuse to pay what they owe, but offered $10,000 as a good-faith payment while discussions and court cases continue on what their assessment should be and how much they really owe us. The latest salvo? A bankruptcy filing for the property, which will tie things up even longer. It's a mell of a hess, if you know what I mean.

And they're not the only business that's behind in their tax payments - for example, there's Great Northern Mall, another once-thriving retail center, which owes over $3M for their 2018 and 2019 tax bills.

But now, the County Legislature has a new plan for dealing with delinquent commercial properties like the malls. According to multiple media reports, including this one from WAER,

Onondaga County lawmakers have thrown their support behind a new strategy that could lead to the seizure of certain tax-delinquent properties. The county executive's plan to create the Onondaga County Accountability and Reinvestment Corporation is seen as another tool to go after commercial properties with the goal of future development.

The new corporation will be responsible for seizing delinquent properties when all other efforts have failed, and would hold the title while the Onondaga County Industrial Development Agency works to get the property re-developed. Some properties would continue to be auctioned off following current guidelines.

There's about $45M outstanding on commercial properties, the report notes, even though we mainly hear about the big ones like the two malls. Or, we hear about the vacant, tax delinquent residential properties in the City of Syracuse, which we'll discuss in another post.

Legislators expressed some concern about taking property from a private owner, but ultimately, it comes down to fairness.  Here's Legislator Miles Bottrill:

I certainly believe in a property right, and this is a very significant issue relative to property rights.. However, this is really an abuse to the taxpayer and to this community.

One parcel has already been identified for transfer to the county - the former Syracuse Energy Power Corp. plant in Geddes, near the Fairgrounds. There's about $1M owed, and the county had to get a court order to make sure the out-of-state owner didn't dismantle any more of the property and sell it off for scrap. There are developers interested in the parcel, it seems, and that helped convince legislators that transferring this particular property is a good deal. Legislature Chair Dave Knapp noted

There have actually been some phone calls to the administration saying that, when the time comes, there could be some interest. It's in an industrial zone right off a railroad. It's an attractive piece of property for industrial use. 

No properties will be transferred to the new corporation without the legislature's approval. In addition to the Geddes parcel, there are others, including industrial sites, a hotel, and a marina, that could be transferred if there's no resolution to the delinquency. According to County Exec Ryan McMahon,

Many of (the delinquent parcels) are performing commercial properties that are receiving revenue that are just not paying taxes. So, that's why we look for a carrot and stick approach, but at this point we're coming down with a stick on these property owners to force their hands.

If you ask me, this is the kind of program we need to have, and be willing to use. I get that $45M may not seem like a lot of money out of a $1.3B budget, but it's a whole lot of unfairness for residents and businesses that have been paying their property taxes all along. Having this option in the county's toolbox is a good thing.