Developer alleges conflict of interest is why COMIDA denied incentives to Westport Crossing

The developer of an oft-opposed multifamily residential community along the Erie Canal in Pittsford is claiming the $53 million project was denied tax incentives because of a conflict of interest by a County of Monroe Industrial Development Agency (COMIDA) board member.

Pittsford Canalside Properties, LLC, an entity owned by Rochester-based Mark IV Enterprises, alleges that COMIDA board member Joseph Alloco violated the agency’s conflict of interest policy by failing to recuse himself from voting on a $7.8 million tax incentive package in May for Westport Crossing.

In a lawsuit filed in state Supreme Court of Monroe County on Monday morning by attorney David Rothenberg of Rothenberg Law, Pittsford Canalside Properties also alleges Alloco improperly “attempted to influence other board members in connection with their votes.”

COMIDA and all seven board members are named as respondents.

The COMIDA board on May 16 denied by a vote of 4-3 an incentive package that included a 10-year tax abatement in the form of a PILOT agreement, as well as sales and mortgage recording tax exemptions.

Alloco along with Lisa Bolzner, Rhett King and Troy Milne voted against. Ann Burr, Norm Jones and Jay Popli were in favor.

The petition contends that Alloco, as the owner and/or manager of five residential communities within a six-mile radius of the Westport Crossing development site, had a duty to recuse himself from board proceedings because of the potential competition a new apartment complex would create.

Alloco’s firm, Alloco Real Estate Management, oversees operations at 11 multifamily properties, including five in reasonably close proximity to the 7.5-acre development site: Wood Creek Apartments in Pittsford, The Club at Lac De Ville in Brighton, Ellison Heights Apartments and Penfield Skyline Apartments in Penfield, and Park Lawn Apartments in the city of Rochester.

COMIDA policy defines a conflict of interest as “a situation in which the financial, familial or personal interests … come into ‘actual’ or ‘perceived’ conflict with their duties and responsibilities with the authority.”

The policy goes on to say perceived conflicts exist when there is the appearance that a board member “can personally benefit from actions or decisions made in their official capacity” and that “the perception of a conflict may occur if circumstances would suggest to a reasonable person that a board member may have a conflict.”

The petition contends there is both an actual and perceived conflict of interest because of the proximity of Alloco’s properties to Westport Crossing.

Following the oral yea and nay votes cast by board members at the May meeting, no explanation was given to Mark IV principals for denial of the incentive package.

Westport Crossing is a 156-unit residential community — primarily market rate apartments with about a 10-percent affordable component — that has been in the works for a decade. The project has faced a series of environmental and community approval obstacles, from redesign requirements to neighborhood group lawsuits, that have delayed commencement.

Throughout the process, Mark IV says it has invested more than $5 million for remediation of the development site. The state classified the canal-side property as a brownfield due to oil contaminants left behind by the Monoco Oil Co.

Continued environmental management of the site during construction will cost another $480,000, the lawsuit says.

Mark IV contends the project met affordable housing requirements for COMIDA tax abatements. The developer also says Westport Crossing should have qualified because of the investment made in brownfield remediation, in addition to nearly $2.5 million in other amenities and improvements such as sidewalks, public green space and public restrooms, public access to a boardwalk and dock, water main improvements and a traffic-calming median on Monroe Avenue.

In voting down the incentives and prompting Mark IV to delay or halt construction altogether, COMIDA has denied the Pittsford Central School District $3.2 million in tax revenue over the next 10 years from Westport Crossing, and more than $600,000 annually thereafter, court papers say.

The petition asks that the board reconsider the tax incentive proposal and that Alloco and board members with whom “Alloco discussed petitioner’s application” be excluded from any future voting on Westport Crossing.

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