Monday, June 2, 2014

[UPDATED] Medley owner sues over tax incentives

Posted By on Mon, Jun 2, 2014 at 1:22 PM

In a move that should shock no one, Medley Centre's owner is suing the County of Monroe Industrial Development Agency, Monroe County, the Town of Irondequoit, and the East Irondequoit school district.

Attorneys for Bersin Properties filed the lawsuit this morning. It deals with a tax agreement that Bersin has with COMIDA and the local governments. Under the agreement, Bersin Properties made a yearly payment far below what it would otherwise owe in taxes. In return, the company was supposed to meet certain investment and job- creation milestones on the Medley project, which it hasn't.

Last month, COMIDA moved to declare Bersin in default. COMIDA, the town, and the school district gave Bersin Properties officials a deadline to pay $3.5 million in penalty payments and an overdue $392,381 yearly payment. At the last minute, the developer paid only its $392,381 yearly obligation.

The lawsuit claims that the penalty payment provisions in the tax agreement are unenforceable, and it asks a judge to declare as much. Of course, Bersin principal Scott Congel agreed to the milestones and the penalties when he signed the tax agreement in 2009. 

Bersin argues that state law lets COMIDA, as a state authorized industrial development agency, enter into these tax agreements, but it doesn't allow for the type of penalties laid out in the Medley Centre agreement.

"A contract executed by a government agency that exceeds its authority or contravenes a statutory restriction is invalid and unenforceable," the lawsuit says. 

If the lawsuit fails, Bersin Properties may ultimately have to pay full taxes on the Medley Centre property. County Executive Maggie Brooks has said that the county plans to take legal action to recoup money the developer owes under the tax agreement . The other local governments would likely be part of that action.

The complaint filed by Bersin Properties is attached below.

UPDATE — Irondequoit Supervisor Adam Bello released the following statement:
Five years ago, Mr. Congel signed an agreement with taxpayers - in exchange for significant tax breaks, he would invest in a multi-million dollar development at the former Irondequoit Mall. Clearly that investment has not been made, and terminating the PILOT agreement is an important step towards ensuring that taxpayers do not continue to subsidize a failed project.

Bersin Complaint by jmouleatcity


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