I-Team 10 follow-up: Medley Centre dispute widens, school district votes to charge penalty

Posted at: 12/09/2013 3:28 PM
Updated at: 12/09/2013 10:49 PM
By: Brett Davidsen

The East Irondequoit School District is digging its heels in over money it says is owed by the developer of the stalled Medley Centre.

Many people have been frustrated with the progress of the project and the eyesore and tonight, the East Irondequoit School Board is expected to put the owner of the former Irondequoit Mall on notice.

The District says it won't agree to amend any tax agreements with mall owner Scott Congel until he pays them close to $4-million. In an effort to settle the dispute, Congel and his partner have countered with what they call a best and final offer.

The battle over a tax agreement given to the Medley Centre appears to be coming to a head. For years, mall owner Scott Congel has been promising to invest hundreds of millions of dollars to re-develop the site. Behind the scenes, he and the East Irondequoit School District have been locked in a battle over supplemental payments the district says he owes for failing to meet investment milestones.

Assistant Superintendent John Abbott says that amounts to $3.8-million. “That money is due to our taxpayers. We have to recognize the realities of the situation that he's in, but we also have to protect our taxpayers."

Congel has been trying to modify the payment in lieu of taxes, or PILOT, agreement in hopes of pushing out those milestone dates.

In a letter sent Sunday from Congel's partner to the District, he says they need the modification to secure financing necessary to move forward with the project. The letter disputes that they owe anything and called the district's terms "over reaching and unacceptable."
“What do we do as a community when essentially money is being extorted and holding hostage tens of thousands of jobs. I mean, that's what this is about.” Arnie Rothschild does not work for Congel but as chairman of the Rochester Broadway Theatre League he does have a stake in the outcome. The development plans for the mall site include a new performing arts center.
Arnie Rothschild: "Pure and simple, there's one entity that's standing in the way of this project moving forward. It's not the developer whom they vilify. It's the school district.
Brett Davidsen: “What is the likelihood Congel walks away from the whole thing?”
Rothschild: "Well, that's a possibility.”

In the letter, the developers did offer a $2.1-million compromise, to be paid over time described as their best and final offer. Abbott was unimpressed. “There's an offer to pay $2.1-million, but there's no certainty to the money and our concern has been if there's no way to be sure we're going to receive the money, then it's simply a promise that we can collect on if things do go well, but there's no guarantee we'll ever see it."   

In a statement from Congel's partner James Giuliano, he accused the district of throwing up roadblocks saying, “For two years, we have been frustrated and silent about our negotiations with the school district. The school district is estimated to receive over $15-million in fees and payments from the project and they are making demands for more money we do not believe is owed to them."

As an alternative to their compromise, the mall owners have also suggested allowing the courts to decide how much is owed, something the district has not been willing to agree to.

UPDATE: The East Irondequoit School District has voted in favor of charging the developer of Medley Centre with a supplemental payment.

The district says Scott Congel owes $3.8 million for failing to meet investment milestones. The two sides have been trying for more than a year to settle this dispute. In a letter sent to the district on Sunday, the mall's owners labeled the terms "unacceptable" and offered the district $2.1 million as a compromise.

District officials say they plan to talk with Congel about the letter.

Deputy Superintendent John Abbott says, "We are going to respond to him in the next couple of days. We haven't discussed that fully with the board but I think it's safe to say we won't accept that agreement."