GUILDERLAND — Pyramid Management Group, the owner of Crossgates Mall and developer of the long-planned Costco Wholesale on Western Avenue, recently notified the Guilderland Industrial Development Agency that it was withdrawing its application for already-approved tax breaks worth $2.2 million. 

The withdrawal came as a surprise to both IDA board members and staffers as attorneys for the agency were negotiating with Pyramid over the subsidy right up until the day before IDA Chief Executive Officer Donald Csaposs received the March 20 letter informing him that Pyramid would forgo the multi-million dollar exemption.

The letter gave no explanation for the withdrawal although Csaposs, during the March 25 IDA meeting, cited another company that had walked away from a grant because of obligations attached to it.

“I was surprised,” Csaposs said of Pyramid's withdrawal. “I got a call from company counsel letting me know this. Surprised to say the least.”

The move is all the more surprising considering that Pyramid has been a poster child for securing public funds for private benefit. 

Over approximately the past two decades, Pyramid ranks seventh statewide in the portion it has received of the over $60 billion in government-funded exemptions, grants, and tax credits doled out to companies in the name of economic development.

Between 2002 and 2022, Pyramid, by way of its affiliated LLCs, received over $973.5 million in taxpayer funds spread across 93 awards, according to Good Jobs First, a not-for-profit research organization that advocates for transparency and accountability of government-funded corporate subsidies.

While most of its success has been at the state level, Pyramid has also cashed in on federal handouts, receiving nearly $7 million in Paycheck Protection Program Loans during the pandemic, none of which had to be repaid. 

Tax certiorari cases

Pyramid is not only successful at receiving public funds, it’s also quite adept at clawing back its property-tax payments.

In Rockland County, a tax certiorari case that played out over a number of years was recently decided, as Pyramid sought to have the fair-market  value of its Palisades Center mall slashed by as much as 73 percent. 

Between 2020 and 2024, the municipality of Clarkstown said the fair-market value of the Palisades Center increased from $471 million to $578 million, while Pyramid argued that the value had dropped significantly, from $ 230 million to $155 million.

A judge ultimately found in favor of Pyramid  — the town and company came to an agreement on a $300 million full-market value — and determined that Pyramid was owed over $27 million property tax payments. 

In Syracuse, the company is locked in a three-year battle with the city to lower the assessed value of its Destiny USA Mall by $24 million, from $29.5 million to $5.15 million. The case is ongoing. 

A 2008 agreement between Pyramid and the city of Pittsburgh held the assessed value of the Champlain Centre mall steady at $36 million of assessed valuation over an approximately seven-year period. For the 2015-16 and 2016-17 tax years, the city increased the Champlain Centre’s assessed value to $49.4 million. The Champlain Centre challenged the increase and won, with the court ordering an assessment reduction to $28 million for 2015-16 and then to $25 million for 2016-17. 

Pyramid was back at just a few years later, as it successfully challenged its 2020 and 2021 $25 million assessments for Champlain Centre, receiving a $15 million reduction for both years, which translated to the city and school district having to send back $750,000 in tax payments. 

In March 2024, Guilderland and Crossgates Mall laid to rest their own multi-year property tax ordeal. The judge overseeing the case ordered that Crossgates’ 2020 and 2021 assessments be lowered to $258 million and $177 million, respectively. The town had valued the property at $282.5 million for both years. The March 2024 ruling also set the mall’s assessed value for 2022, 2023, and 2024 at $177 million. 

Costco

Pyramid first made its tax-break request to the Guilderland IDA in March 2023, shortly after the town’s planning board approved Costco’s site plan, allowing the project to move on to the zoning board for its special-use permit.

At the time, Pyramid’s ask was for $475,000 in tax exemptions: $400,000 in sales-tax relief and a $75,000 break on the state’s mortgage-recording tax, but the request did not last long.

Just two months later, Pyramid came back to the IDA seeking to quadruple its subsidy, looking for $2.2 million in tax exemptions: $2,123,600 in sales tax relief and a $75,000 break on the state’s mortgage-recording tax, and for the IDA to use its power of eminent domain to help it “acquire and extinguish any interest” the town has with roadways on the project site.

At the time, project costs increased from $39,900,100 to $41,400,100, according to an amended application submitted on May 16, with machinery and equipment costs accounting for the entirety of the increase, from $8 million to $9.5 million. In its amended application, Pyramid increased the amount of requested exemptions, from sales and use taxes, from $5 million to $26.55 million. 

Two months after significantly increasing its exemption request, Pyramid’s benefits package was approved by the IDA. The project would languish for months as the final of many legal proceedings seeking to stop the Costco Warehouse played out. 

In June 2024, the justices of the state Supreme Court’s Third Appellate Division in Albany upheld the IDA’s decision to condemn and hand over to Pyramid town roads in the project site. 

The decision was the fifth in four years to uphold the town’s approval process of what was initially a three-site development proposal from Pyramid for: over 200 apartments and townhomes; a 160,000-square-foot warehouse-price club; and, only recently, a $55 million 120,000-square-foot regional cancer center. 

Four of the lawsuits were brought by the same petitioners — Westmere residents Thomas and Lisa Hart along with the owner of 1667 Western Ave., LLC, home to a Mobil gas station and Stewart’s Shop — while a fifth was brought by Save the Pine Bush. This final suit, which was the fourth brought by the Harts and their business neighbor, was filed 16 days after the IDA signed off on the $2.2 million in tax breaks and approved taking the roads; the town received $686,000 for its condemned property. 

But, even with all impediments extinguished, the project continued to bump along. During an October 2024 meeting,  IDA attorney A. Joseph Scott explained that the project was being held up by funding. 

“There were some changes in the straight lease transaction necessitated by some changes in their construction financing,” meaning that Pyramid had to go out and find another $6.5 million in construction financing, on top of the $7 million it had already borrowed. 

On March 25, Csaposs began his Costco update by reading the letter he received from David Aitken, Pyramid’s director of government affairs, who did not return a request for comment from The Enterprise. 

“I am communicating on behalf of Guilderland DevCo LLC regarding the Costco project,” Aitken wrote. “First, with the support of the Guilderland Industrial Development Agency, I am pleased to share that tree removal and preliminary site preparation has commenced on the Costco project.

“Second, we are writing to formally withdraw the application for financial assistance associated with the project,” Csaposs read. “We value the collaborative relationship with the Guilderland IDA staff and board to facilitate economic development, and look forward to working together in the future.”

Csaposs added that Pyramid had already filed for building permits, which he said could be issued once the site work was completed.

IDA board member Paul Pastore asked Csaposs,“Why now, and not before?”

Csaposs responded, “This piece of paper, [which] you have a copy now,” constitutes “the sum total of all that is known to me.”

As board members wondered why what just happened had happened, Csaposs sought to add some context to Pyramid’s application withdrawal. 

“Now, for those of you who have been on the board for a bit, this is not the first time this has happened,” Csaposs said of a company walking away from money on the table. “Several years ago, we approved a request for financial assistance from a company called Airgas, which was expanding their compressed gas storage facility at the Northeast[ern] Industrial Park.”

Csaposs said, “They came in. They gave us an application just like Costco did. We had a public hearing just like we did for Costco. We considered the application. We approved the application. We waited for a closing. And few months later, I contacted their council, and he said, “Oh, well, we’ve decided to proceed with the project without IDA assistance. Thank you very much.”

In January 2022, the IDA approved a $240,000 sale-tax break for Airgas, which earlier had received permission from the town to build a three-acre liquid argon gas storage and distribution facility in the Northeastern Industrial Park.

By March of that year, Airgas had said thanks, but no thanks to the money.

“The shorthand version,” Csaposs said at the time, was the “folks at the national level in Airgas decided that there was certain language in the agreement that they didn’t like, and they’ve decided not to go forward with the IDA transaction.”

The IDA’s attorney, Scott, who before recently retiring had served as attorney for 20 other development agencies in New York, said during the October 2022 meeting that he’d seen national companies in particular make decisions on whether to pursue tax exemptions based on the amount of benefit to be received versus the extent to which the company has to comply with ongoing obligations laid out in its IDA agreement. 

On March 25, Scott’s observation was made once again, this time by Csaposs. “You know, sometimes … big national companies don’t want to deal with all the restrictions that are associated with IDA projects. Sometimes there are other factors.”