Syracuse Industrial Development Agency ends lease for Exit Towers, returns property to tax rolls after lender moves to sell

The Syracuse Industrial Development Agency on Monday voted to declare Towers Realty in default, terminate the landlord-lease structure and related PILOT agreement for the Exit Towers property, and return the site to the tax rolls.

Outside counsel Sue told the board the building’s lender has pursued a foreclosure for roughly 18 months and recently indicated it would complete a short sale to remove the property from foreclosure; a receiver began collecting rents about a year ago. "I felt that I needed to come to the board and ask that we actually declare the default and terminate the lease structure and put the property back on the tax rolls," Sue said.

Why it matters: terminating the lease removes the agency’s redevelopment benefits for the existing owner and restores the property to taxable status. Counsel told the board any new owner who proposes a qualifying project could return to the agency to request benefits, but the current owner does not retain previously granted, nonassignable benefits without the board’s permission.

Counsel summarized litigation tied to a subterranean garage beneath the plaza, saying the lender had amended its foreclosure complaint to name the city of Syracuse and assert violations of debtor-and-creditor law. Sue said she did not believe that claim would have been successful and that a transfer of the property should resolve the outstanding dispute. She also said CIDA (the agency) was not named as a defendant and that the agency’s exposure in the foreclosure was minimal.

Board members asked for clarifications about timing and exposure. Counsel said the foreclosure complaint is a public court filing and that, based on the information she had received, a transfer could occur within days. She recommended the agency terminate the lease and collapse the existing structure so the property would revert to the tax rolls.

Following the presentation, a board member moved to adopt counsel’s recommendation; a second was recorded and the board approved the motion by voice vote. The meeting record shows no detailed roll-call tally in the transcript; the board declared the motion carried.

The agency’s action means the Exit Towers site will be removed from the agency’s lease structure and treated as taxable property. Counsel said a new owner who proposes eligible redevelopment may apply for agency benefits in the future but that previously granted, nonassignable benefits do not automatically transfer.

The board adjourned after taking the vote and said it expected to meet again in a few weeks for any necessary follow-up.