Syracuse, N.Y. — The developer of a six-story, $25.2 million hotel and apartment building at St. Joseph’s Hospital Health Center has applied for a tax deal worth $7.2 million over 15 years.
BWI Hotel Acquisitions 1 LLC, a subsidiary of RPS Holdings LLC, is seeking the deal from the Onondaga County Industrial Development Agency.
The company has proposed building a 90-room, extended-stay TownePlace Suites by Marriott at 401-413 Prospect Ave.
The building would also contain 26 market-rate apartments for medical professionals working at the hospital and a two-level, 130-space underground parking garage for guests and tenants. The apartments would come furnished and receive weekly cleaning and linen service.
The building would connect via a sky bridge over East Laurel Street to St. Joseph’s recently completed $220 million surgical tower.
Five vacant homes on the block would be demolished to make room for the project.
Though the hotel would be open to the public, it primarily would serve visitors to the hospital, as well as some pre- and post-surgical patients, according to the company.
“Patients can vacate a hospital bed while remaining under observation or in rehab during the postoperative phase of outpatient surgery, saving both the hospital and the patients thousands of dollars,” the company said.
The tax deal would give BWI Hotel Acquisitions a full exemption for 10 years from increases in the assessed value of the property that result from the project. The exemption would be phased out over the following four years, so the building would be fully taxable by the 15th year.
Over the term of the deal, BWI would pay $2.1 million in payments in lieu of taxes, compared with $7.4 million in property taxes without the exemptions — a savings of $5.3 million. In addition, the company would save $1.8 million in sales taxes on construction materials and $122,895 in state mortgage recording tax.
The agency has scheduled a public hearing on the application for 10 a.m. June 25 at the Onondaga County Office of Economic Development at 333 W. Washington St., Suite 130.
Richard Pietrafesa Jr., a partner in BWI, said the tax exemptions are needed to make the project financially feasible because of the costs associated with building the underground parking.
“Structured parking is very expensive and difficult to finance on its own,” he told members of the development agency during a meeting Tuesday.
He said the project will boost the city’s “medical tourism” by allowing St. Joseph’s to attract patients and their families from longer distances because they will have a place to stay close to the hospital.
As an extended-stay hotel, each room will contain a mini-kitchen, allowing guests to save money by eating in.
The company said it hopes to begin construction later this year.
Applications for tax deals in the city usually go to the Syracuse Industrial Development Agency. However, the city agency asked BWI to apply to the county’s development agency because one of the city agency’s members, Kathleen Murphy, is Pietrafesa’s wife, which posed a conflict of interest for her.
Published in Syracuse.com