Groundbreaking was all show, Destiny ex-CFO says

Friday, March 31, 2006

By Rick Moriarty, Staff writer

Three thousand people came for Destiny USA's groundbreaking in October 2002. As a band entertained the crowd, Gov. George Pataki and other politicians joined Robert Congel on a stage inside a huge white tent set up in Carousel Center's parking lot.

Congel, one of the nation's biggest mall developers, spent a half-hour signing some of the 2,000 free shovels given out.

"It's unbelievable how many people came out," he said.

Afterward, construction workers pounded a steel beam into the parking lot, the first support pile for what was to be a parking deck for the 1,300-room Grand Destiny Hotel.

But the groundbreaking was not really a groundbreaking at all, according to the mall's former chief financial officer.

In a deposition given in a lawsuit in June, David McDonough described the event as not much more than a "public relations event" and "photo op."

He said Destiny was applying for economic development incentives at the time and, with Pataki and other politicians on hand, decided to "have a big showing with handing out free shovels and hardhats and all kinds of that good stuff."

He said no construction documents were produced for the proposed hotel, though "vast number of different renditions" were.

". . . What I can say definitively is there was absolutely, to the best of my knowledge, there is absolutely no construction documents for Destiny, Grand Destiny Hotel, never were any, and I'd be surprised if there were ever even any construction documents for the parking deck," he said.

"As I said, this was . . . this was all part of a public relations venue in trying to push to get certain things to all come together, and being able to drive a pile in the ground while we had all the VIPs in town is a great photo op," he said.

McDonough said he served as chief financial officer from December 1999 to December 2002, first for Pyramid Management Group and then for Carousel Center and its expansion plans. In that role, he analyzed the financial impacts of expansion plans and worked on securing economic development incentives, setting up legal entities and managing accounting, he said. He said he left the company because no progress was being made on the Destiny project.

"When I agreed to take the job, with the Carousel Center team, which eventually became the Destiny team, we were to be built up and opened by December of 2003, at the full expansion, and well, by December of 2002 we hadn't put anything except for a test pile in the ground," he said.

McDonough, who is a self-employed financial consultant, said he also left because he was dissatisfied with Congel's management style.

". . . (A)s somebody once said, you meet every day and basically you tell Bob Congel what you did in the last 24 hours and he tells you what you're going to do in the next 24 hours, OK, and I'm an adult, I think I don't need to be supervised that closely 24 hours a day," he said.

That description was at odds with Congel's description of his role in the Destiny project. In a deposition he gave in the same lawsuit in September, he said he was more of a visionary and "the guy that hangs out and thinks."

McDonough did not return phone calls and an e-mail seeking comment Thursday.

He gave the deposition to lawyers for J.C. Penney Corp., which is suing the mall's owner, Carousel Center Co. Penney's alleges driving the piles into the parking lot and storing steel on the site violate its lease. It is seeking to stop Congel from expanding the mall without the store's permission.

A 146-page transcript of his deposition had been sealed by U.S. District Court Judge Howard Munson but was unsealed Tuesday at the request of The Post-Standard.

Destiny executive David Aitken said Thursday the company had "every indication" that construction on the Destiny hotel would begin after the groundbreaking. He said detailed construction plans were drawn up.

"Given the scope of the project and the strong interest from the public, it was appropriate to host a ceremonial groundbreaking," he said.

Construction was delayed and eventually canceled after the city told the company construction of the hotel would not activate a 30-year property tax exemption for Destiny, he said. Under the tax deal, Congel has to build at least 800,000 square feet of leasable space, and the city said that meant retail space, not hotel space.

Aitken described the work environment at Destiny to be "a fast-paced, action-oriented environment." While the environment might not be for everyone, the project has attracted talent from around the globe, he said.

2006 The Post-Standard.