Tax Break Approved for $3,500 Apartments on Ithaca Waterfront

Categories Housing & Development, Ithaca, Politics

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By Josh Brokaw

The Tompkins County Industrial Development Agency [IDA] has approved a 10-year property tax abatement for the “323T” project planned on Inlet Island between Kelly’s Dockside and The Dock.

All five IDA members present voted to grant the abatement during a meeting on Wednesday morning, January 10. Members in attendance were Tompkins County Legislature chairperson Martha Robertson; Ithaca Mayor Svante Myrick; county legislator Rich John; Tompkins County Chamber of Commerce president Jennifer Tavares; and Grace Chiang of Chiang O’Brien Architects.

The approval means that project developers Steve Flash, Anne Chernish, and Arnot Realty, president Peter Dugo, will pay no more property taxes other than what’s currently assessed on the property in the first year after completion. The 10-year “step-up” style abatement will charge no property taxes in the first three years, and 10 percent of the full assessment value in the fourth through six years. The property owners are currently paying about $7,000 in taxes per year.

Schedule of tax abatements for 323T project.

The $4.53 million project calls for eight studio apartments, that could also be used as retail or commercial space, and will rent for $1,400 to $1,500 per month, and eight two-story townhome style apartments that will rent for $3,400 to $3,500 per month.

Five commenters and one sign-holder appeared to show their opposition to granting the abatements; the least that was asked of the IDA was that they wait until February, when the new IDA is seated, to make a decision on the 323 Taughannock Boulevard project.

Commenters echoed Amanda Kirchgesser’s arguments, published on TruthSayers on January 9, that abatements should not be made for market-rate housing.

Read More: IDA Planning Vote on Abatements Wednesday, Before Seating New Members

It was also argued by abatement opponents that the 323T project should not receive an “enhanced” abatement for promising to use green energy.

“It’s not green if it forces the people who work here to live further away, and drive more and more,” Theresa Alt, Ithaca Democratic Socialists of America chair, said.

Alt read an emailed comment from another person regarding green energy: “Whether they have their own remote solar location or solar farm, their cost should be less than the NYSEG regular rate. There should be absolutely no reason they need additional subsidies from Tompkins County taxpayers from this.”

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Theresa Alt, standing, speaks at Wednesday January 10, 2018, IDA meeting. Josh Brokaw/TruthSayers

Deborah Dawson, a newly seated county legislator, added her concern before public comment:

“The thing that concerns me is given the soil and the high cost of energy efficient construction he’s proposing, if that’s the model, that’s a model that’s going to require CIITAP and TCAD and IDA subsidies every time someone follows that model,” Dawson said. “One of the reasons is that if we’re subsidizing energy efficient construction for developers at the expense of smaller taxpayers and individual homeowners who cannot afford to make those improvements to their own property, this is simply another example of socializing risk and cost.”

To receive abatements from the IDA, development projects are supposed to provide community benefits. The developer also has to show that they are not making 20 percent or more “return on investment” (profit) to demonstrate financial need.

In the community benefits worksheet provided to the IDA, the 323T project developers say there will be no on-site jobs created, but the project, even with the abatements, will add $262,322 in property tax revenues over 10 years.

323 Taughannock – Community Benefits Memo (Text)

Regarding the IDA voting on this abatement, Robertson said this was a “normal process of transition” at the beginning of the year.

Robertson and Ithaca Mayor Svante Myrick gave lengthy talks after public comment about their efforts to make housing more affordable in Tompkins County. Both asked commenters to go around to town and city boards to support affordable housing projects that might be in the works.

Myrick said a new inclusionary zoning plan is in the works for 2018, with “slightly different” details  than the last attempt to require developers include affordable units in otherwise “market-rate” projects.

Robertson said that according to one number she’d seen, affordable units each cost $350,000.

“It’s not affordable housing. we get it,” Robertson said. “We would need to figure out a way to pay another $310,000 times 16 to get affordable housing on that site. And I will point out this is not a zero sum game. There is no limit to the number of abatements, it’s not like there’s a bucket of finite money. It’s not like if we give this abatement we’re not able to abate the next project that comes along. That’s not how it works.”

Myrick said he was “frustrated” he has not been able “to make my thinking on this issue understood” despite many attempts in meetings and the press. He said there was “little to no support of people in this room” during deliberations over the Spencer Road and 210 Hancock projects built by Ithaca Neighborhood Housing Services in the past couple years.

Myrick repeated the argument that he’s made before, like during deliberations over Harold’s Square,  that because this project is not demolishing units it’s not making housing more expensive.

When the wealthy come in to buy houses or rent, assessments go up and rents go up, Myrick said.

“We could allow them to displace us, either through their rents or buying a home, they could displace us. Or we could build more homes for them,” Myrick said. “You might say, and you’d be right, these wealthy people have money, and can afford to build homes wherever they want. This is true. The question is do we want them to build homes wherever they want. I say no. Why? Because when they build homes on outskirts of the community … every time you do that, that’s what we’ve been doing for last 50 years there is the hidden subsidy to suburbinization. Which is that you buy your house. You force the county to start plowing roads they never had to plow before. Paving roads they never had to pave before. Building and maintaning infrastructure never had to maintain before. You have to dream up a new TCAT route. Who’s paying for that? The taxpayers.”

The city received the application for CIITAP [Community Incentive Investment Tax Abatement Program] on November 1, and there was a public information session on November 20, 2017, at City Hall. There’s no requirement that any body vote on CIITAP approval before a project is passed along to the IDA.

In other business, the IDA approved a sales tax abatement and a Payment in Lieu of Taxes agreement for two SUN8 solar installments in the Town of Dryden. The sales tax abatement is about $2.1 million for the two sites, and the PILOT charges $6,000 per megawatt produced with a two percent increase annually for 30 years.

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Featured photo: Screenshot of proposed 323 Taughannock Boulevard project, from Planning & Development Board documents.

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Josh Brokaw is an independent reporter based in Ithaca, N.Y.
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Twitter: @jdbrokaw

2 thoughts on “Tax Break Approved for $3,500 Apartments on Ithaca Waterfront

    1. Demarest is still the architect of record, but yes, that plan changed quite a bit since we wrote that Inlet issue 2 years ago.

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