City of Rochester
News Release
Mayor Richards Says the Plan Would End Decades of Limbo for the Sibley Building and Generate Tax Revenue
(Friday, August 31, 2012) – Mayor Thomas S. Richards announced today that he is submitting legislation to City Council that would allow for the sale and transfer of ownership of the Sibley Building to a Winn Development LLC (Winn) company, Sibley Redevelopment Limited Partnership, for the purpose of redeveloping the building for educational, residential, office and retail use.
“It is time we break with what was and move on to what will be,” said Mayor Richards. “The redevelopment and use of the Sibley Building is vital to our ongoing Downtown revitalization efforts. With the Midtown Rising project in full swing and the development of the Sibley Building about to begin, the anchors of our future City Center are in place.”
Under terms of the plan, Winn will purchase the property for $5 million. As part of the sale price, Winn has agreed to assume the City’s $3.1 million loan to Rochwil Associates L.P. (Rochwil), the current owner of the building. The loan was originally financed through the U.S. Department of Housing and Urban Development (HUD) Section 108 Loan given to Rochwil. The obligation to HUD was paid off by the City last month.
An application will be made to the County of Monroe Industrial Agency for a 20-year Payment In Lieu of Taxes (PILOT) agreement. The agreement will set a baseline tax payment that would increase as the Sibley Building is redeveloped and leased. The City would also collect embellishments and service charges from Winn.
The current owner of the Sibley building, Rochwil, will not be released from all outstanding obligations totaling approximately $19.9 million, which includes interest and penalties due to the City by Rochwil related to the delinquent PILOT Agreement, the City float loan and the HUD Section 108 Loan. While Rochwil will not be released from the Float Loan obligation or delinquent PILOT obligations, it is not anticipated that Rochwil will have assets to satisfy these obligations.
“For 20 years this building and its impact on Downtown has been held hostage to a well intended plan that failed and a debt burden that was not going to be paid,” said Mayor Richards. “We didn’t need a lament about the past we needed a solution for the future. This proposal frees at long last, the Sibley Building and Downtown from this legacy and directs our energy and funding to the future.”
The sale of the Sibley Building is a complex transaction that took many months of negotiation and is subject to approvals by City Council and the County of Monroe Industrial Development Authority (COMIDA). Key aspects of the plan include:
- Authorizing the Mayor to enter into a $3.1 million loan. The owners will be obligated to pay 1% annual interest payments and utilize a portion of their cash flow to pay down the principal balance. The loan would have a 10-year term with an option for two additional 10-year terms. The loan extensions are subject to the developer paying a minimum of 10% of the principal balance during the initial term of the loan, and subsequently the first extension.
- The City’s release of the $1.5 million float loan lien it currently holds on the property (financed from the Community Development Block Grant); and
- Paying the balance of the first mortgage loan held by the National Electrical Benefit Fund; local charges and assessments and related liens and closing costs.
In September 2009, Winn Development LLC (a subsidiary of WinnCompanies) entered into a site control agreement with Rochwil to purchase the historic Sibley Building. Winn has formed a new company, Sibley Redevelopment Limited Partnership to undertake the project. The project includes a 10 year plan to renovate the building for a mix of uses including educational, commercial, retail, and market rate and affordable residential units. Winn will undertake approximately $3.75 million in building repairs and tenant improvement costs over the short term. This will include repairs required to bring the property into compliance with the existing five-year lease with Monroe Community College. The cost of the complete renovation of the building over the 10 year period is estimated at $100-$150 million.
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News Media: For more information, contact City Communications Director Gary Walker at 428-7405.