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Destiny USA

Arial view of Destiny USA.

Introduction

Destiny USA is the sixth largest mall in the United States of America ranking just after the Galleria located in Houston Texas. It is the largest Leadership in Energy and Environmental Design (LEED), certified retail commercial building in the world. At approximately 2.4 million square feet, it has more than enough room for the many stores and visitors that pass through the mall. The mall is located two miles from downtown Syracuse, New York off I-81, and attracts 26 million visitors each year. The mall welcomes all people, however, guests under 18 must be accompanied by a parent or guardian. The parking lot alone holds 5,500 cars and covers 1.7 million square feet. The city of Syracuse is home to Syracuse University which makes Destiny USA a great spot for students to gather over the weekends and shop for any necessities. In recent decades, Syracuse has struggled to rebuild its economy in the post-industrial landscape. The developer Robert Congel and his family are now prominent figures often followed by local news sources for various poor spending decisions and displays of wealth.  

The mall originally opened as the Carousel Center on October 15th, 1990, featuring 120 stores. The original ideas and plan for the mall can be described as over the top, visionary, and even senseless. The vision for the mall was create a miniature city, comparable to theme parks such as Disneyland. Congel envisioned a mall where people could live and was originally going to build a massive hotel complex within it.  

Since it opened as the Carousel Center, the mall has since been rebranded by the late Robert Congel and The Pyramid Companies to Destiny and now includes over 250 stores. The sprawling complex includes four floors, with various forms of entertainment such as the Regal movie theater, an RPM raceway, escape rooms, and a kids rope course. There are also hundreds of retailers such as Dicks Sporting goods, TJ Maxx, Puma, Michael Kors, Nordstrom Rack, Coach, and Hugo Boss. Over the years many businesses have left including Best Buy, Abercrombie, Disney, Lord and Taylor, and most recently Macy’s. There is also an extensive food court that features both popular and lesser-known businesses including Taco Bell, Starbucks, Dunkin Donuts, Auntie Anns, Cheesecake Factory, Buckle, Levels, Sip Sip Hooray, and others.  

The developers had many goals in building Destiny one of which was creating the worlds largest Leadership in Energy and Environmental Design (LEED) store another was to revive Syracuse’s economy. The federal government gave Congel $228 million dollars in tax-exempt “green bonds” to create and LEED building. Unfortunately, the building is estimated to be worth $203 million but has accumulated $715 million in debt. The future of Destiny is uncertain as malls are replaced by internet shopping and are becoming more irrelevant to the economy. The mall has also struggled, as most businesses have under the COVID-19 pandemic.  

History

The Carousel Center prior to the rebrand to Destiny USA.

In 1987, The Pyramid Companies announced plans to build a 1 million square foot shopping mall over the landfill named Marley Scrap Yard. Two major companies opposed the creation of The Carousel Center; Wilmorite Corp. and Eagan Real Estate Inc which both had several malls within the Syracuse Area. They claimed the creation of this mall would affect the sales of their malls. Eagan Real Estate Inc even filed a criticism with the city. The Carousel Center, which originally opened on October 15th, 1990, was a relatively small mall that consisted of 120 stores ranging from upscale to discount department stores. The Carousel Center featured a Skydeck which was used for many public and private events. Robert Congel, the founder of The Pyramid Companies and developer of The Carousel Center, proposed an immense expansion of The Carousel Center in the early 2000’s that he promised would transform the Syracuse economy by bringing in people from around the country and the world. The idea was to turn Syracuse into a large commercial and residential center. The original plans contained blueprints for a 1300 room hotel, recreation of the Erie Canal, Tuscan Villages, massive indoor public parks, a lazy river, and an 850,000 square foot expansion of the original Carousel Center which would make it the biggest mall in the United States. Only one of these came into fruition. In 2012, the 850,000 square foot expansion of the Carousel center was completed, and Destiny USA was born.

Before removing things from the plan, Robert Congel demanded one thing from the city to build the expansion of The Carousel Center. He demanded a 30-year property tax exemption from the city because the expansion would transform the city of Syracuse. Once the city granted the property tax exemption plan, Congel removed most of the main attractions that were supposed to be added in later phases of the project. Congel never had the intention of creating a 3-phase project with multiple attractions. He wanted the tax deal so he made promises that he could not keep.

During the creation of Destiny USA, The Pyramid Companies and Robert Congel encountered many legal disputes over the 30-year property tax deal with the city and with lenders over the financing of the mall. Within the property tax exemption, there was a provision that allowed The Pyramid Company to stop building and keep the tax exemption. Congel had to declare that it was the final phase of the project. This was known as the final phase clause. Some people within the development of Destiny and the city government claimed they had no idea about the final phase clause including Minch Lewis, a former city auditor. There was a chance to repeal the tax deal by Mayor Stephanie Miner. Destiny USA violated the tax deal because they missed the deadline to finish phase one and start phase two of the project. Even though Mayor Miner was a critic of the tax deal from the beginning, she agreed to extend the deadline two times and allowed Congel to pay 1 million dollars for the first six-month extension and 1.5 million dollars for the next six-month extension.

Economics

The Erie Canal was also an important part of Syracuse's economy.

To understand why Destiny mall was built, we must first understand the economic history of Syracuse. In the 19th century Syracuse’s defining industry was salt production from salt springs at the southern end of Onondaga Lake. In the early 1900s the salt industry became more irrelevant and other industries moved in such as the manufacturing of automobiles and furniture. Some of the most prevalent companies at the time were the Franklin Automobile Company and Century Motor Vehicle Company, as well as The Carrier Corporation which opened headquarters in Syracuse in the 1930s. During WWII the area experienced a significant increase in production and post-WWII more factories opened plants in the area such as General Motors and Chrysler. This was the peak of Syracuse’s economy, unionized, factory jobs were easy to come by, and the population peaked in 1950 at 220,000.

After its peak population of 221,000 in the 1950s Syracuse experienced a mass of white flight to the suburbs and dropped to its modern-day population of 142,000. As the population shrank, the demographics of the city shifted significantly from a 2.1% Black population to 30.0%. Wealthy whites fled to the suburbs, leaving a divided and highly impoverished city. During this time the major companies of the area slowly downsized and eventually shut down production. This reflects a nationwide trend of deindustrialization, as companies mechanize and move production overseas. Carrier, which once employed 7,000 workers, significantly decreased their labor force in Syracuse throughout the late 20th century, and officially began to close their two manufacturing plants and move labor overseas and out of state in 2004. The shift in employment was not limited to Carrier, and between 2000 and 2003 Syracuse suffered the loss of 20% of its manufacturing jobs. New Process Gear, sunk from its peak of 4,000 jobs to 400, and finally closed in 2013, and General Motors and Chrysler have both had significant layoffs.

As these large manufacturing companies have closed or moved out of Syracuse, others have opened using the scarce job market to pay workers low wages. Tessy plastics which opened in 1973 and manufactures toiletries and plastic parts for medical devices, employed 830 people in 2012 with a starting wage of $8.25. The poverty rates in Syracuse have risen to 31.0% which is significantly higher than the county’s average of 13.1% and unemployment has hovered around 6%. The city has generally struggled to find an identity in the post-industrial landscape.

To revitalize the post-industrial economy, city and state governments encouraged real estate developers to build Destiny USA. They gave Destiny generous tax breaks in the hopes of generating jobs and rebuilding the economy and supported the zoning of the building. As of 2014, the mall supported 6,000 employees. However, many of these jobs are part time and pay minimum wage, leaving workers with few benefits and little security. The mall was built in the 90s, when malls where the main place to buy affordable clothing, play games, and watch movies. However, with the rise of internet shopping malls have become an increasingly irrelevant part of shopping culture. Destiny has continued to expand, despite its lack of revenue and excessive debt.

Controversy

The construction and presence of the Destiny USA mega mall has garnered controversy on multiple fronts. Founder Robert Congel, founder of the Pyramid and main builder of the Destiny USA mall, recently passed at the age of 85 years old. Over the past few years, Congel’s health was quickly deteriorating, leading to his decision to pass the company over to his son, current CEO Stephen J. Congel. Born in Syracuse, Congel made it a point to contribute to his hometown and help the economy in any ways he could – which occurred through imagination, construction, and the success of smaller shopping plazas and malls. These smaller beginnings were eventually included in his various properties, earning him and the city of Syracuse a good profit. The project concerning Destiny mall itself was full of different legal issues and delays concerning financing and construction. Despite legal problems with lenders, Congel, known for his business sense and lively attitude, won the legal battles and successfully added 850,000 square feet to his plans, renaming the mall Destiny USA. Such a massive addition made Congel’s creation the largest mall in New York and placed within the top 10 largest malls in the country (6th). Destiny USA was the beginning of a mass transformation for the city of Syracuse, turning factories and abandoned buildings into newer residential areas and cleaner office spaces. The death of Robert Congel marked the end of a lively man who was determined to help out his hometown in his own way, resulting in one of the largest and well – known mega malls in recent history.

Destiny USA’s main source of controversy was mainly about the debt the building accumulated over a long period of time. The COVID-19 pandemic has led to the struggles and slow production of multiple businesses and shopping malls. The reopening of certain places does not change the threat of value drops and tall debt. Since 2014, Destiny USA has lost about $500 million of its value, topping the lists of malls and companies who have suffered because of the pandemic itself. Recent financing and having to figure out the money that these malls owe has shown a downward trend of malls losing large parts of their value with the effects of the pandemic. Destiny itself was in a financial hole where they owed more than they could pay, leading to questions surrounding the future of the massive, 2.4 million square foot mall. Yes, Congel was determined, but achieving one’s dreams can regularly come at a steep cost and this is the one that Destiny USA and many other malls had to pay. COVID-19 has reintroduced the effects of rational property prices, with debt being exposed during the success of these malls before COVID-19 forced retailers to shut everything down. There are also questions regarding how much Destiny USA is really helping the community around it, as there are still parts of Syracuse that are more run-down and unkempt, particularly where more people of color are living. New stores and chain restaurants will always be coming and going through Destiny USA’s walls, but there are still groups of people in the city of Syracuse who could never afford to shop at a place like Destiny in the first place.

Lasting Impacts/Future

One of the goals of Destiny USA was to revive the economy in the city of Syracuse. While the retail and entertainment complex may be in debt, it continues to employ and attract people from many places. Around 5,000 people are employed at the mall and serve those visiting from 20 countries and all 50 states each year. The center is also a major source of tax revenue for Onondaga county. The mall hosts an annual job fair that brings together more than 250 local employers and 1,000’s of job opportunities. However, these achievements fail to meet the aspirations of the developer Congel, and the Pyramid Management group is facing 715 million in debt thanks to Destiny USA. Sitting right off the highway it attracts people passing by but falls short of its original goal of bringing tourism to the city fails since it does not require tourists to make the trek downtown.

View of Syracuse from I-81.

Malls across the country have been declining in value for years. The emergence of COVID-19 has hastened the transition to online shopping and further replaced the revenue of in-person shopping. Destiny USA was greatly impacted by the pandemic as former governor Andrew Cuomo mandated shutdowns around the state in order to protect citizens' health. Another factor that hurt the mall’s revenue was the closing of the Canadian border. Thanks to Canada’s proximity to Syracuse and duty-free rules on merchandise, travelers from up north have contributed to a substantial fraction of Destiny’s revenue. The lack of traffic for Destiny was not helpful to its already considerable stockpile of debt. With the end of lockdown, increasing vaccination rates, and the reopening of the Canadian border, retailers, mall executives, and former employees are all hopeful for a steady reopening and growth of the mall.

As of 2021, community leaders and the New York State Department of Transportation have decided on a community grid plan rather than the rebuilding of the I-81 route that cuts through the city. This plan aims to increase connections in the local street network. Ideally, this will encourage more of a connection between Downtown Syracuse, business districts, and residential neighborhoods. Considering that Destiny USA sits right off of the interstate, there are some concerns that this plan will harm the mall, as through traffic would be rerouted and not have an obvious course to the mall. However, this is unlikely to have any large impact on the mall. Pyramids’ complaints can be seen as a way to shift blame from business already leaving. Anchor stores and large chains such as Macy’s, Lord & Taylor, and Michaels, have already left Destiny.

Despite the challenges the mall has faced, there is always hope for its survival and a prosperous future. Similarly, to other malls across the country that are faced with the competition of online shopping, a focus is being placed on the entertainment and experience aspect of visiting a mall. Destiny is home to one of the main movie theaters in Syracuse, a raceway, escape rooms, and many restaurants. Another factor in Destiny’s favor is the citywide effort to revive the economy. However nervous the Pyramid group may be about the community grid plan, any city planning or revival of downtown is likely to positively affect the mall. The opposite is also true, if these plans fail and the mall is unable to keep up with its growing debt, foreclosure is always a possibility.