The city is seeking to seize several properties in the CityGate – the latest in an ongoing battle with the developer over unpaid property taxes.
Anthony J. Costello & Son built the shopping district, but never paid his taxes, according to the city.
The foreclosure action involves some $ 737,000 in unpaid property taxes accumulated since the cancellation of a payment in lieu of tax (PILOT) development incentive agreement in 2018. In addition, the city is seeking a judgment for over $ 700,000 in overdue PILOT payments. This case remains in abeyance.
CityGate sits on the southern edge of Rochester, sandwiched between Westfall Road and the Erie Canal. The sprawling 8-acre development is anchored by national discount store Costco, which opened in June 2015, Five Star Bank, outdoor retailer REI, and a handful of other businesses. The lofts, offices and hotel projects were never realized.
Namesake and founder Anthony Costello passed away in March 2016. The company has since been mired in legal and financial matters.
Town action involves the Costello properties closest to the corner of Westfall and East Henrietta roads, continuing south to include the REI site. The Costco and Five Star Bank properties are independent properties, up to date on taxes and are not part of foreclosure.
With foreclosure, the city would have priority over a number of judgments already rendered or sought against Costello. This includes the $ 17 million unpaid construction loans owed to M&T Bank and nearly $ 8 million owed to S&T Bank, as well as $ 580,000 owed to REI for outstanding improvements the company has made to its. apartment building.
If the city was successful and then auctioned off the property for more than the taxes owed, additional proceeds would go to creditors.
A message left with Costello CEO Brett Costello was not immediately returned.