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A fiasco foretold

The sorry state of Medley Centre in Irondequoit has long begged for action. That finally happened last Friday, when the County of Monroe Industrial Development Agency delivered a notice of default to Scott Congel, CEO of mall owner Bersin Properties LLC, and threatened to terminate the firm’s lease and payment-in-lieu-of-taxes agreement.

The COMIDA letter details a long list of alleged failures that violate the terms of its pact with Bersin. These defaults range from not submitting nearly $3.5 million in supplemental payments to not creating 300 promised jobs (100 of them full-time) to not keeping the mall property in a safe and sound condition.

Fixing the Medley Centre mess could take a long time. As Monroe County Executive Maggie Brooks noted, the COMIDA action only begins the process of holding Mr. Congel and his firm accountable.

Nonetheless, it’s not too soon to ask what’s been learned from this failed project. How did it go so wrong?

From the start, the grandiosity of Mr. Congel’s plan ought to have been a red flag. His announcement in October 2008 of plans to build a $250 million “destination center” should have been greeted with prudent skepticism. (Remember, this was a month after the rapid escalation of the global financial crisis.)

The PILOT signed in 2009 contained numerous milestones to protect taxpayers and ensure that Bersin carried out the plan, but COMIDA’s first action to hold the developer accountable comes more than five years later. Clearly, the agreement needed a tighter timeline.

And what about Mr. Congel’s ability to line up financing? Shortly after the PILOT was approved, an in-depth RBJ story asked: Where is the money? Officials saw the PILOT as sufficient protection against a stalled project. Yet they had heard nothing from Mr. Congel about how he would secure financing.

Now, as COMIDA notes in its May 2 letter, a suit recently filed by Bersin against its lender reveals that Bersin knew before signing the PILOT agreement that its financing for Medley Centre was in jeopardy.

There’s no way to turn back the clock, and the need to move forward is painfully obvious. But learning from the Medley Centre debacle surely could help prevent future fiascos.

5/9/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email [email protected]


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