Success in the art of the deal requires focus on the primary objective. When parties with varied interests are negotiating agreements each seeks common ground, but the one who comes away with the upper hand is the one who stays focused on the true issue of importance.
A fascinating case of intricate strategy and negotiation stretched from the mayor’s office and common council chambers of Syracuse City Hall up University Hill to the administration of Syracuse University and then around an alley to the offices of the private developer Cameron Hill LLC. Along that route the taxpayers and residents of Syracuse had a great deal at stake with all sides claiming to be fighting for their interests.
This negotiation was not one side against another. It was a collection of alliances, triangular relationships, business interests, government interests and academic interests all rolled into one. Two municipal bodies narrowly voted to approve 30 years of 83% reductions in property taxes on the property that is being developed as a combined bookstore, fitness center and retail space.
By the time that tax deal is complete the current class of graduates from Syracuse University will be eying retirement, grandchildren and the bills generated by their children’s college education. This was a choice and decision that will last longer than a generation.
This is a deal made more palatable to a handful of common councilors by adding sweeteners that had no business being tossed into the property tax mix. The councilors who engaged in an attempt to improve on the work of the Miner Administration did not remain focused on the big number of 30 years of tax payments of some $64,000 instead of nearly $380,000 per year.
They allowed the developer and the University to appear magnanimous. The developer pledged to hire ten minority workers as apprentices on the labor end of the construction project. The developer also promised to suggest to its retail space lesees that they also favor minorities in hiring. They admitted they can’t tell them to do that, but they can suggest it.
The university pledged to let Syracuse teens utilize some of its fitness space and create some as yet unnamed exercise programs so the full benefit of the new gym will be felt in the community. Documents that detail the agreement call for annual reports of progress on these fronts.
Those two negotiation victories can hardly be labeled secondary to the deal. Tertiary may be too much praise. The five of nine councilors who approved the deal got caught up in the same song we heard with the Destiny deal. The one that says this project could never work without a 30 year tax deal. 30 years!
There was a time when payment in lieu of taxes deals were meant to help an outfit get a project off the ground by limiting some of the up front costs. Maybe three to five years of tax breaks to allow construction to be completed and actual revenue to come through the door. Does Cameron think it will take 30 years to get the project off the ground?
I know some of the negotiators on the city side feel this is a winning deal because they are tapping blood from a stone. They are reaching into the world of untaxable property that is owned by not-for-profits like university’s and hospitals. They are reaching in and pulling out a few bucks. The same few they will be depositing for the next 30 years.
This is a rich deal indeed, but only for the developer and the university. This is locked and sealed. If the environment of taxing not-for-profits morphs in the coming years, this deal will still stand.
In the art of the deal it is common that several sides feel like they grabbed the long end of the stick. But, after one of the parties signed the paper they tip toed away happy to let the other keep the long stick while they toast the trap of distraction that allowed them to reach their primary objective.
Any questions or comments please forward them to mattsmemo@CNYcentral.com. I may even use some of your thoughts on NBC 3 News at 5:00, the 10:00 News on CW6 or on CNYcentral.com.
The opinions expressed in this blog are the sole responsibility of the author and are not reflective of the views
