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Medley Centre millions in dispute

Irondequoit, N.Y. - The owner of the Medley Centre Mall submitted a "best and final offer" to the East Irondequoit School District in the hopes of satisfying an ongoing dispute over penalty payments. 

The East Irondequoit School Board rejected the offer Monday night by voting to send the owner a $4 million bill.

"We need to get back to educating our kids and stop spending time with the mall," said Kim Lasher, school board president.

The penalty payments stem from the current tax break deal (called a PILOT or Payment In Lieu Of Taxes) between the mall's owner, Scott Congel known as Bersin Properties LLC, and local governments. (Specifically Monroe County in the form of COMIDA, the school district, and the Town of Irondequoit)

Congel was expected to prove investments in the property totaling $90 million by April 2012. The school district contends he only invested $64 million and is demanding a penalty payment (called a "supplemental payment") be made. The county and town have agreed to accept that Congel invested around $94 million and are not aggressively seeking penalty payments for that.

However, in April 2013 Congel was expected to show he invested more than $160 million in the property and that documentation has not been produced at last check. That would subject him to penalty payments as determined by a formula contained in the tax break deal.

"He entered into an agreement to do that amount of investment in the property of his own free will with knowledge of the economic conditions he was facing and he has to live up to that agreement," explained John Abbott the Deputy School Superintendent for East Irondequoit.  "He's not a stupid man, he's a good business man, he's run some very successful malls.  He knows what he's doing and he made this agreement knowing the economic conditions."

Congel's "best and final offer" includes two options.  The first is to pay the school district $2.1 million in a few installments to satisfy the district's claim.  The second is to settle this in court with a judge serving as a third party arbitrator.  In both offers Congel lays out steps towards re-negotiating the tax break deal so he can move forward with his project.

But the district contends that Congel owes more in the neighborhood of $4 million.

"At the end of the day this developer, who by the way should talk more and never does, this developer is trying to advance a project to the benefit of our community and the school district is just saying yeah you can do that if you pay us off," said Arnie Rothschild the Chairman of the Rochester Broadway Theater League (RBTL) that has partnered with Congel in the hopes of including a new Performing Arts Center in the project.

"I have used the word extortion, I don't know where the line is but I got to tell you they've walked up to it they continually," added Rothschild.  "They say, the district, that we're looking out for the taxpayer's interest well how are you looking out for the taxpayer's interest to demand money you're not owed?"

At Monday night's school board meeting the board could accept one of these proposals or vote on a resolution demanding payment for the all the penalties they believe the district is due.  Those payments would be due in January but could be met by responding legal action from Congel.

Jim Giuliano, the lawyer who submitted this offer to the district on behalf of Congel's development group, issued the following statement:

"For two years, we have been frustrated and silent about our negotiations with the school district.  The school district is estimated to receive over $15 million in fees and payments from the project and they  are making  demands for more money we do not believe is  owed to  them.  They have  criticized us publicly for not moving the project forward, while throwing up road blocks to our doing so.  Instead, they insisted that we not only negotiate with their attorneys, but pay their attorneys as well.  We have offered to compromise or allow a judge to resolve our differences. We want to move this project forward to create jobs and economic development for the community."

Its unclear where Monday nights vote leaves the project.

The bill comes due in January, at which time Congel and the district would have to find some common ground, Congel would have to pay the entire bill or the district would have to decide whether to scrap the PILOT agreement.

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Washington Times