Syracuse officials want to trade away city-owned building in unusual deal with housing authority

Syracuse, N.Y. — Mayor Ben Walsh’s administration is looking to trade a city-owned Eastwood apartment building to the Syracuse Housing Authority in exchange for an East Adams Neighborhood site targeted for a new children’s center and YMCA.

The unorthodox transaction proposal is generating skepticism from city lawmakers in large part because they don’t yet know current values of the two properties.

The Walsh administration says the agreement would push forward a pair of neighborhood improvement projects valued at more than $50 million. But the Syracuse Common Council wants to be sure city taxpayers don’t lose out in the swap.

The proposal, first brought to the council last week, involves the city-owned Eastwood Heights senior housing building on Sunnycrest Road and an SHA-owned parcel at the corner of South State and East Taylor streets.

Transferring Eastwood Heights to SHA would allow it to move forward with a Rochester-based developer to close on state financing for a $22 million renovation of the existing 48 apartments and buildout of four additional units within the structure. But instead of paying the city for the apartment building — which was the plan when the project first surfaced in 2022 — SHA now seeks to give the city the parcel where the nonprofit Blueprint 15 plans to build its $31 million Children Rising Center. The city would lease the property to Blueprint for $1 per year for 99 years.

While saying they support both projects, several councilors have expressed concerns about trading properties without getting updated appraisals completed. They don’t want to turn over one property in exchange for another that could be worth considerably less.

“I think we can’t move forward unless we know the worth of each of these properties,” Councilor Pat Hogan said at a study session on Nov. 6.

Hogan reiterated that position at a follow-up study session on Tuesday. Assessment Commissioner Matt Oja said his office will hustle to get contracts with appraisals secured for council’s approval at its Nov. 25 meeting, and hope that the results can be delivered by their Dec. 9 meeting.

Councilors learned for the first time Tuesday that approving the arrangement is time sensitive. Neighborhood and Business Development Commissioner Michael Collins said the state expects to close on financing for the Eastwood Heights project by the end of the year.

The prompted groans and gasps from a few councilors.

“So they have a deadline on this?” Hogan said. “That’s the first time we’re hearing this.”

Councilor Jimmy Monto, who represents the district where Eastwood Heights is located, said there’s been no outreach by the development partners to him.

“Typically they would be in contact with the district councilor, and this has been anything but typical, just so we’re clear,” Monto told Oja and Collins.

Eastwood Heights operated as a school from its opening in 1923 until the late 1970s. The city completed a project to convert it into apartments and has had SHA managing it since 1989. In bad need of repairs, SHA formed a partnership with Rochester-based Cornerstone Property Managers LLC to plan a renovation project and pursue the state’s low income tax credit financing.

SHA came to the council in late 2022 seeking a property tax abatement for the future renovated structure. Because the state would require the property be owned by a legal entity that Cornerstone and SHA jointly formed, it would be subject to property taxes. Councilors approved the deal, which would provide a minimum of $26,950 in annual payments to the city for 15 years.

At that time, some councilors asked if the city should consider gifting the property to SHA, and the Walsh administration resisted. They said the state financing would cover acquisition costs.

“It’s certainly the administration’s perspective that taxpayer-owned property should be something that we receive full market value, or close to it, for,” Oja said in 2022. “We’re not in the business of giving away city assets.”

That position has changed, Deputy Mayor Sharon Owens said last week, because the project’s updated cost structure has made an outright purchase not feasible for SHA. She said SHA proposed the idea of the property trade and the administration has been working since to get an agreement ready for the council.

SHA Executive Director William Simmons said in an interview Wednesday that the authority has had appraisals done on both properties and they are of comparable valuable, around $1.4 million. He said it made more financial sense for both projects to do a swap, rather than have either Blueprint 15 buy a site from SHA or have SHA buy from the city.

Simmons said they hope to begin construction work in early 2025 and be completed within about 13 months. Cornerstone will provide temporary living space for existing tenants while work on their units is done. About six units will be under construction at the same time.

Blueprint 15 has been raising money to build the Children Rising Center for several years and has a goal to be open by 2026. As of last summer, when $6.7 million in federal funding for the project was announced, it’s secured more than $20 million for a total project cost of about $31.5 million. Additional funds lined up include $2 million from the city’s American Rescue Plan Act budget and a combined $15 million from the private Alynn Family Foundation, New York state and Onondaga County.

The center would housing a new branch of the Central New York YMCA, an early childhood education program and family wellness services. It would be a key component of a larger $1.1 billion plan redevelop the city’s poverty-ridden East Adams Street neighborhood.

Collins said the Walsh administration believes the value of the two projects to the community outweighs a potential small profit from a property sale to SHA or charging a full-value lease to Blueprint 15.

“We always want to make sure that we’re dealing in the best interest for our constituents,” he said. “What we’ve landed on here is the fact that Eastwood Heights can be fully redeveloped, and as part of this transaction, we ended up with being able to position Blueprint 15 to build a Children Rising Center, which is phenomenal.”

City reporter Jeremy Boyer can be reached at [email protected], (315) 657-5673, Twitter or Facebook.