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North Shore project moves slowly-D&C Article-February 27, 2014

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North Shore project moves slowly
Seab Dobbin, Staff Writer

CANANDAIGUA – The one thing that nearly everyone agrees on is the vision.

In the mind’s eye of supporters, the North Shore project along Canandaigua Lake will turn an eyesore into a bustling, mixed-use hub of retailers, offices, apartments, and more.

Local businesses will benefit from the extra traffic and the tourism boost, and new retailers will spin off nearby.

And a parcel that currently generates about $125,000 in local property taxes will kick in $2 million annually towards the school district and local municipalities.

But even after years of discussion, that’s just the vision. Making the reality match up, the project’s developers say, requires 30 years of tax breaks and a five-phase rollout of the $120 million project.

And even for supporters of the project, that’s been harder to picture.

Developing the land along Lakeshore Boulevard has been a topic of conversation in Canandaigua for decades. The project has been on the agenda of the Finger Lakes Regional Economic Development Council for years, and ranked near the top of its list of priorities in 2013.

In a perfect world, a developer would take a look at the property across from Kershaw Park, write a $120 million, and build a beautiful complex without any help.

But so far, that hasn’t happened. Randy Farnsworth, a local auto dealer who also chairs of the Canandaigua Chamber of Commerce, doesn’t think that’s going to change any time soon.

“The reality is, we’re in competition for economic development with every city, town, and county in New York state, along with 49 other states,” said Farnsworth.

And the North Shore site has its share of complications, including some required contamination clean-up and weak soil which means a developer must dig a deep foundation to support a multi-story building.

The developer, a joint company created by Pittsford-based Morgan Management and Rochester-based LeChase Construction Services called Morgan-LeChase Development LLC, has asked the city of Canandaigua, the Ontario County Board of Supervisors, and the Canandaigua City School District to sign off on PILOT increment financing (PIF), which would fund $11 million of the project.

“This site is a Brownfield site and in addition to the Brownfield clean-up, there’s a lot of additional groundwork and field conditions,” said Jen Miglioratti, a spokesperson for Morgan-LeChase. “Those add significant upfront costs.”

As of now, Morgan-LeChase is a third of the way there: the city voted “yes” last week.

The school board will vote on the matter soon, perhaps as early as tonight. The board of supervisors will discuss the issue in March.

Should the PIF be approved by all three entities, then the Ontario County Industrial Development Agency would sign off on the project, and Morgan-LeChase would purchase the land from property owner David Genecco. Morgan-LeChase would then make an incrementally larger payment to the local taxing entities every year for the next 30 years, after which the property would return to the regular tax rolls.

“When you look at the numbers, it’s a benefit to the entire community, and the alternative would be the land would continue to be undeveloped,” said Mike Keegan, co-owner of American Made, a gift shop on Main Street. “It’s been an eyesore for a number of years.”

A handful of other Main Street business owners said they weren’t bothered by the PIF agreement, with Keegan saying it’s “become the norm to attract new development.”

A long commitment

But the length of the commitment is among a handful of things about the project that bothers Maria Bucci, who was the only member of Canandaigua City Council who did not vote for the PIF.

“It doesn’t mean I don’t want something to happen down there. It doesn’t mean this isn’t the right project,” said Bucci, a Democrat. “But there are a number of reasons that we need to be careful about these kinds of deals. Thirty years out is a long time, and there are a lot of assumptions that have been made.”

Among them, that the five-phase project calls for $10 million in state and “other” grants, not all of which has been secured. Bucci also said she feels that the developer should be fronting a greater percentage of the project cost, and that the majority of Canandaigua residents that she has spoken to feel similarly.

“If the dream is realized — the five phases — then I think there’s potential for some good things. But is it the best project we can get for the site? I don’t know that,” said Bucci. “This is considered to be a legacy project for our community. Is this the absolute best we can do?”

“Philanthropic” support

Supporters counter that the downside to passing on this project is too tremendous to ignore, and that another interested developer may not come along for some time.

“I don’t think that anyone can predict the future and that your decisions have to be made predicated on the past,” said Farnsworth. “I understand the mindset of why someone would be hesitant, but to try to predict the future — to think that in the next 10 years you’ll get a better deal — is kind of ludicrous.”

Farnsworth and others also point to a $33 million line item in the developer’s budget that will come from loans from private investors and local foundations. This money, called “philanthropic” support in the industry, isn’t charitable in the traditional sense, since the investors will be paid back over time. But the return on their investment is far lower than they could get in the free market.

Morgan-LeChase did not share the identities of these would-be funders, though it said in a recent meeting with city council that the company itself would be putting up about 25 percent of this philanthropic support. But while the identities of the other funders remains a mystery, supporters say the mere existence of this likely funding source is significant.

“I think it’s very odd that a project like this has a philanthropic investment line item and, I think that speaks to the desire of the community,” said Alison Grems, president and CEO of the Canandaigua Chamber of Commerce.

The school board has stayed quiet as to its intentions. Earlier this week, messages were left at the homes or businesses of each of the nine board members, and none returned the calls seeking comment.

“Nobody loves the idea” of tax breaks, said Grems. “But when the impact to a community can be felt as much as it could be for us, there’s a reason that incentives were put into place for this project.”

http://www.democratandchronicle.com/story/news/2014/02/26/north-shore-project-moves-slowly-vision-reality/5847509/