In Syracuse, N.Y., where winter skies drop an average of 115 inches of snow per year and unemployment hovers at 5.7% — eclipsing the national average of 5.1% — residents hope the long-awaited Carousel Center redevelopment will bring jobs to the beleaguered city and new status as an international tourist destination.
For more than a decade, Pyramid Cos., the Syracuse-based developer that owns 20 shopping centers in New York and Massachusetts and has developed 26 million sq. ft., has announced plans to expand the Carousel Center. Built in 1990, and anchored by Lord & Taylor and Macy's, the regional mall is to be transformed into Destiny USA, a mega-mall with more than 2 million sq. ft.
Pyramid's master plan envisions a center of even more grandeur located on 800 acres with more than 500 stores and restaurants, along with hotels. The total project cost: more than $3 billion. But despite many headlines, there was little evidence of progress untilgot underway last year. Now, steel girders are rising on the site.
Pyramid executive David Aitken acknowledges that the project has been in the works for more than a decade, but says it has been a complex process. “Carousel Center was built on a junkyard,” and the adjoining property, in a section known as “Oil City,” had several owners, which delayed the acquisition process.
Dozens of petroleum storage tanks dotted the property, and the contaminated site required remediation. “We are taking underutilized land within the city of Syracuse, waterfront property that's a brownfield, and converting it into a destination,” says Aitken.
The first phase started after Pyramid secured $540 million in financing in February 2007, Aitken says. The public-private financing package includes a construction loan underwritten by Lehman Bros. and Citigroup, and public bonds sold through the Syracuse IndustrialAgency. In addition, Destiny USA received tax incentives.
Aitken's description of the first phase differs from the city's information, which lists a cost of $325 million, and an 848,000 sq. ft. addition to the mall. The second phase, a hotel with more than 1,300 rooms, has been delayed, says David Michel, the city's director of. Aitken confirmed the delay, saying it was related to current widespread financing difficulties. In March, the developer laid off 45 workers and said it was restructuring.
Asked whether the company has, as some have claimed, made promises it hasn't kept over the years, Michel says, “Let's say that there have been considerable delays, and some people in Syracuse would say yes.”
But he takes the delays in stride. “Other people, including myself, recognize that this is a very complex development. They [the developer] certainly seem to be on track with the three phases that have been committed to the city, with the possible exception of a small delay in thepart.”
The trouble with the grand strategy for Destiny USA is the competition, says Michael Beyard, senior fellow at the Washington-based Urban Land Institute, a research organization. Other East Coast malls may offer a more convenient destination for wealthy international tourists, he says.
Still, economic development director Michel says he thinks Destiny is progressing. “I think they have every intention of building those three phases.”
But Michel strikes a note of caution. “You have to differentiate between what they've actually committed to and their total vision,” he says. “Their total vision is out of this world. I tend to focus on the three phases they committed to.”