What the Mall Does for the City

This week, the Post-Standard reported that Destiny USA may default on its mortgage.

The mall was the defining issue of the 2000s—like I-81 is of the 2010s—and a lot of people are still bitter that Syracuse gave away so much public money in exchange for ridiculous and ultimately unfulfilled promises (an aquarium, an imitation Erie Canal Village, a hotel shaped like grass).

For those people, this news is the ultimate ‘I told you so moment’ and a dream come true: the opportunity to unmake the mistake of subsidizing the mall in the first place, wiping the slate clean and allowing a new thing to happen at the mouth of Onondaga Creek.

That’s not going to happen. If Shoppingtown’s taught us anything, it’s that doomed malls die slow deaths. And anyway, as Rick Moriarty reported, it’s all probably just a play by Pyramid Companies to get a better rate on their mortgage.

Even if the Mall were to fail, that wouldn’t be a great thing for the City. Destiny has centralized retail in the Syracuse metro area, and that benefits the City proper by making public transportation more effective and by giving City Hall leverage in negotiations with the County.

 

Centralized Retail

Macy’s only has one store in the Syracuse market, and that store is at Destiny. The same is true for Lord & Taylor, JC Penney, and dozens of other retailers. If those stores weren’t located at Destiny, they’d be somewhere else in the County—probably somewhere in the suburbs like Penn-Can, Shoppingtown or Great Northern. Destiny beat all of those other locations out, and it pulled their tenants into the City.

 

Transportation

If you get around in a car, then it doesn’t much matter whether Macy’s is in Clay or Cicero or DeWitt or Syracuse. This is a 20-minute-city, after all. If you get around by bus, though, it matters a lot. Neither Clay nor Cicero nor DeWitt can support good bus service, but Syracuse can, and Destiny has some of the best bus service in the entire County.

That good service has made the Mall the most popular bus stop in Centro’s network by far. That matters because the Mall is a major center of employment—especially entry-level employment. Getting all those jobs within reach of all those buses is exactly the kind of thing that economic development should do, and it’s a rare, major, unsung success in this town.

 

Negotiating Power

City Hall and Onondaga County just renewed the sales tax sharing agreement that Joanie Mahoney and Stephanie Miner negotiated in 2010. A lot of people want to hold that agreement up as a symbol of increased cooperation and goodwill between the City and its suburbs, but it’s really a symbol of the City’s growing economic power.

The basic question is this: should City Hall charge and collect its own sales tax within the city limits, or should it leave that up to the County in exchange for a cut of the County-wide revenues? If there’s not much retail activity in the City, then there’s little sense in giving up even a small cut of the County-wide revenues. The County understands this, and it used to be able to get City Hall to accept a small sliver of sales tax revenue. City Hall negotiated from a weak position and got screwed.

Now that Destiny has drawn so much retail activity into the City, though, City Hall has a much stronger position in those sales tax negotiations, and that empowers the Mayor to get a better deal.

sales_tax

The Mall has a rocky relationship with the City. It’s tricked Syracuse out of a lot of property tax revenue at a time when City Hall needs all the money it can get. It closed the door on the possibility that Downtown would ever be a major retail destination like it was 60 years ago. It’s currently trying to get a $3,600,000,000 hole bored through Syracuse for no good reason.

But the Mall has also been good for the City in ways that don’t get much attention. By centralizing the metro area’s major retailers, it put a lot of jobs within access of public transportation. By bringing that retail activity within the city limits, it has strengthened City Hall’s negotiating position with the County.