Syracuse officials review interlocal tax‑sharing, public infrastructure district for West Davis corridor

Syracuse City Council members reviewed a draft interlocal tax‑sharing agreement that would have taxing entities pledge a share of future incremental tax receipts to a public infrastructure district (PID) to fund infrastructure for the Syracuse West Davis Corridor Gateway reinvestment area.

In a presentation to the council, a city official said the PID and a community reinvestment area (CRA) would use future property tax generated by converting farmland into commercial development to repay bonds that front the money for sewer, stormwater, roads and trail construction. “The PID gets its money upfront because what it does is it goes out to bond, sells a bond to a private entity…they front the money, and they get it back with interest over a long period of time,” the speaker said.

The council heard that taxing entities have been asked to pledge 50% of the new tax increment; part of that pledged increment would pay the PID bond debt service and part would remain with other taxing entities. Staff said the city’s approach intentionally excluded any provision that would transfer or rebate sales tax revenue to an individual developer, noting that recent state law changes limit some types of incentive agreements. “In this case, there is none of that. The entire sales tax that would come to the city is coming to the city,” a presenter said.

Council members asked how bonds will be sold and who might buy them. Staff explained the PID — a separate governmental entity with its own board — will decide whether to offer bonds publicly or in a private placement. “They can either decide to do a public offering…or they may do what’s called private placement, where they bid for a single entity that buys all of the bonds. And that's really their decision. It’s not ours,” staff said, adding the PID has begun preparing materials for a bond sale but had not yet issued bonds.

Speakers also emphasized limits the council set on the PID’s authority: the city asked that the PID not be given broad taxing power and that any taxing authority be restricted to the bond repayment being sought. Staff said that limitation was included in the current draft: “We did not allow for that to happen. It was a choice that we consciously made, so they don't have the power to tax.”

Council members were told this financing structure would let the city build infrastructure without reducing the city’s sales tax revenue or adopting a direct city incentive to a retailer. Staff framed the approach as a tool to make a previously uneconomic development feasible and to accelerate infrastructure that would otherwise be delayed until parcels were sold and developed. No vote was taken; staff said remaining paragraphs of the development and interlocal agreements are still under negotiation and that Costco’s attorney and the PID board will propose final language.

The council directed staff to continue finalizing the interlocal and development agreements and to circulate updated drafts before the business meeting where formal consideration will occur.