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Shoppers stroll through Destiny USA in December. A report by Good Jobs First ranks the Pyramid Cos., the company behind the mall, as one of the biggest recipients of economic development subsidies in the nation.

(Dick Blume | dblume@syracuse.com, 2013)

Syracuse, N.Y. — Government subsidies for Destiny USA total nearly $704 million, making the Syracuse shopping mall one of the biggest recipients of economic development dollars in the nation, according to a new report.

Destiny USA, formerly named the Carousel Center, has received 15 government tax subsidies, the value of which will total $703.6 million over 30 years, according to the report, "Subsidizing the Corporate One Percent." The report was released Thursday by Good Jobs First, a research center in Washington, D.C., that reports on economic development deals around the country.

Pyramid Cos., the Syracuse-based company that built Destiny, is No. 20 on the report's list of the top 100 parent companies in terms of the value of government subsidies received.

All 15 of the subsidies Pyramid has received are related to Destiny USA, the sixth largest shopping mall in the U.S. The biggest of the subsidies — what the report calls a "mega-deal" — is a 30-year property tax exemption worth an estimated $600 million. The city of Syracuse and Onondaga County approved the exemption as an incentive for developer Robert Congel to expand the mall, which opened in 1990 in what had been a scrap yard south of Onondaga Lake.

The report cited government records and media reports as its sources for the value of the subsidies. One of the sources it cited was The Post-Standard, which estimated, based on Destiny USA's property tax assessments before completion of a 1.3-million-square-foot expansion, that the 30-year exemption would be worth a total of about $600 million.

Pyramid is not done seeking subsidies for the mall. Destiny USA executives said earlier this month they intend to apply to the Onondaga County Industrial Development Agency for tax exemptions for a planned 252-room hotel across Hiawatha Boulevard West from the mall.

Greg LeRoy, executive director of Good Jobs First, said it makes no sense for a community to give such huge subsidies to a retail center because most retail jobs are part-time and pay low wages. And he said retail developments generally do not bring new money into a community.

"We don't think it's an appropriate use of incentives," he said.

Destiny USA executive David Aitken, in an emailed response to a request for comment, said the methodology of the report is flawed in its calculation of government benefits, in part because it does not not take into account the sales tax revenues the mall has generated or the jobs it has created.

"What the project received is consistent with what other developments across the state have been awarded and reflective of the significant investment we've made in Syracuse over the past thirty years," Aitken said. "What also gets lost in this report is that we've generated far more in increased tax revenues for government and jobs for area residents than we've received in performance-based economic development benefits."

He said the company has pledged to invest the government benefits back into the mall. He said the mall has more than 5,000 employees and is one of the most visited destinations in the state.

Three-quarters of all the economic development dollars awarded and disclosed by state and local governments throughout the United States have gone to just 965 large corporations, the report said.

Some of the big recipients — including aircraft maker Boeing, which topped the report's list with $13.2 billion in subsidies — are well known

for aggressively seeking tax breaks by pitting states against each other for jobs, the report said.

It said 16 other companies have received awards totaling more than $1 billion, often to subsidiaries with names bearing no similarity to their corporate parents. Warren Buffett's Berkshire Hathaway has received 310 subsidy awards totaling $1.06 billion to subsidiaries with names such as Geico, NetJets, Nebraska Furniture Mart, General Re Corporation, Lubrizol Advanced Materials and Webb Wheel Products, according to the report.

LeRoy said local and state governments might be better off directing their limited economic development resources to smaller, growing businesses in targeted fields that create good-paying jobs. He said small businesses are creating more new jobs than large corporations and are less likely than big companies to move out of a community or send jobs overseas.

"We're not economic development theoretical gurus," he said. "We're saying, look at how lop-sided this is. We hope it raises the debate about a smarter allocation of resources."

Good Jobs First said New York has given out more in subsidies than any other state. Since the mid-1980s, the state and local communities have awarded more than $21 billion in subsidies, with the largest amounts going to Alcoa, Global Foundries (formerly AMD), IBM, Pyramid and Goldman Sachs, it said.

Below is the report's list of the top 100 recipients of economic development subsidies in the U.S.:

Good Jobs First Report

Contact Rick Moriarty at rmoriarty@syracuse.com or (315) 470-3148. Follow him on Twitter @RickMoriartyCNY and on Facebook at rick.moriarty.92.