ITHACA, N.Y. — There’s an inefficiency in our local government that costs Ithaca taxpayers money, creates unnecessary headaches for local businesses and does little to help the public.
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Tom West, director of engineering for the City of Ithaca, has a plan to fix it.
Here’s the current situation: Right now, 10 chunks of land along Elmira Road are technically owned by the city, and have been for several decades.
But every year they’re leased to businesses on the road — and that’s a process that makes for lots of bureaucracy with little clear public benefit, according to West.
“Although some of these pieces of land may have some public works use in the future, many are artifacts of past land acquisition that have little value to the city other than as fee generators,” West wrote in a February memo to Mayor Svante Myrick.
But even this limited public use — having the leased land work as “fee generators” — doesn’t translate, in reality, to revenue for the city, according to West.
“Agreements have been written, fees have been disputed, fees have been collected and fees have been ignored,” West writes.
“Unfortunately, the time and effort to establish and collect fees probably exceeds the income generated.”
Then there’s an additional problem: The city has to pay taxes on the land that it’s fighting to collect fees from.
“The balance is further tipped when those properties are recognized as revenue generators by the County assessor and they become subject to County property taxes,” West writes. “It hardly makes good business sense for the City to keep these properties.”
West uses an example: Fat Jack’s Restaurant at 344 Elmira Road, which appealed its 2012 license fee.
West notes that the appeal, which leads to more paperwork for both the city and business, revolves around an assessed fee of $3,236.70.
By contrast, West estimates that if the city simply sold the land to Fat Jack’s it could do so for a price of $44,000. Then, each year, the city would be saved the annual hassle and expenditures — in staff time and paperwork — and would only be losing control of land with limited public use anyway.
And, West adds: Because of new property taxes, the city would still net an additional $500 to $600 per year in property taxes from Fat Jack’s, with little extra effort.
So where’s that $348K in the headline from? West has drawn up a list of 10 properties — including Moe’s and Denny’s — that would be relevant to this reform of the city’s fee policy.
He includes the following chart to demonstrate his point:
As you can see, the estimated value from these sales would reach $348,300, according to West.
The timetable for this process: Tonight, the city’s administration committee is expected to take up a resolution sexily titled, “Request for funding for divestiture of various portions of Elmira Road Right of Way.”
The resolution — which, even if approved by the committee, must be voted on by the full Council Council — calls on an expenditure of $52,000 for for “legal services, surveys and appraisals” to figure out the sale of these properties to the Elmira Road businesses.
The idea is that by spending these tens of thousands of dollars, the city will be positioning itself to net hundreds of thousands — and cut down unnecessary bureaucracy in the process.
While it’s not clear how the Common Council will vote on the proposal, Mayor Svante Myrick said West had shown “great initiative” in pursuing it.
“I believe his proposal is a big win for city taxpayers,” Myrick said in a statement. “I’m confident Council will give this thorough consideration.”