ITHACA, N.Y. — A rift has emerged over a proposal from Tompkins Legislator Will Burbank to temporarily freeze a tax incentive program that encourages development in downtown Ithaca.
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Mayor Svante Myrick, several Tompkins lawmakers and other local business leaders say the “moratorium” is a bad idea that will exacerbate the city’s affordable housing crisis and kill crucially important development projects.

“For us to say we don’t want to listen to proposals anymore is just nonsense,” said Jim Dennis, a Tompkins County legislator.

But other lawmakers — including prominent Tompkins Legislators Martha Robertson and Nate Shinagawa — support the plan, arguing that officials shouldn’t allow the tax break program to continue until it incorporates more of the community’s desires.

1 — Why halt the tax break policy for developers?

Legislator Burbank says he wants to put the brakes on a program called “CIITAP,” which essentially gives developers some tax relief if their projects meet certain criteria.

See related: How can Ithaca make its tax incentive policy meaningful?

Burbank said the policy should be revisited amid a building boom in the city. A group of local residents has urged officials to revise CIITAP for three principal reasons, he says:

A) So it forces/encourages developers to hire more local labor during the construction process;

B) So it ensures stricter environmental standards;

C) So it guarantees that the projects create long-term, well-paying jobs.

As initially reported by The Ithaca Times, Burbank first suggested a temporary freeze on the tax abatement policy at a recent meeting of the Tompkins County Industrial Development Agency, the final decision-making board for CIITAP and other local tax abatement policies.

“We have had community groups for a number of months saying that the abatement system needs to address serious concerns,” Burbank said in a separate interview with the Ithaca Voice.

“I want a breather to address these different issues.”

It’s important to address community concerns over the tax abatement project before more major developments are approved, said Legislator Robertson. (Burbank has added that he wants to freeze tax abatements for all projects in the county, not just the CIITAP one relevant to the city.)

See related: How should officials respond to Jason Fane’s ultimatum?

“Let’s not keep OK’ing projects without coming to a resolution on this issue,” Robertson said in an interview this week. “I think it’s a good time to put the brakes on and see what the changes might be.”

Shinagawa similarly worried that — without the moratorium — there won’t be a clear, clean break between the old tax abatement policy and the new one.

The current policy, Shinagawa said, does not do enough to reflect community desires for developers to employ local labor and promote environmental sustainability.

“I fear our old policy will continue for a very long time,” Shinagawa said.

2 — Mayor, other officials respond to freeze proposal

Myrick agrees that the policy should be revised, and made doing so a key promise of his “State of the City” address at the beginning of this year.

But because of the inordinate expenses that come with building in the city, the mayor said, even a temporary break in the tax abatement policy could set back or kill planned developments that would lead to more money and revenue that the city needs.

“The abatement policy is working. It’s doing what it was intended to do: To reduce the last three decades of suburban sprawl … and tax flight out of the city,” he said.

“Some people want the program improved, and we can do that — and it’s a good thing … but I don’t think we have to take two steps back to take one step forward. I think we can just move forward.”

Myrick said that a similar moratorium proved disastrous in Collegetown, where a lack of development projects for several years drove up housing prices as the number of tenants grew.

The mayor added that Common Council member Ellen McCollister is chairing a committee to reform the CIITAP program.

“We expect those changes by the end of the year,” he said. “But in the meantime, to freeze all projects I think is just short-sighted.”

(Burbank responded that he believes the city committee’s work won’t be done until November, and that many projects will be approved in the meantime under the old guidelines.)

However, Dennis, chair of the IDA and a Tompkins County legislator, also criticized Burbank’s proposal and said he agreed with Myrick.

“It’s a bad idea,” he said of the moratorium. “If we say we’re going to have a moratorium that would essentially put us (the IDA) out of business.

Dennis added that the changes and incentives for developers could be improved, but that he was “sandbagged, frankly” by what he called Burbank’s unexpected proposal.

“I’m opposed to it for a whole bunch of reasons — the chilling effect this would have on any developer out there looking for us to come to us to build,” he said.

“I think the CIITAP program has worked extremely well. At some point, people might think it’s working too well; I don’t, frankly. I think our goal has been to densify the city — we’re looking for people to live down, because the city needs that.”

Two other local business leaders — IDA board member Jennifer Tavares and Heather Filiberto, of Tompkins County Area Development — also said they worried about the impact of the moratorium proposal.

“We’re creating a more vibrant downtown — people are spending more money downtown, which is helping other businesses downtown,” Filiberto said. “So to just stop altogether for a really unknown period of time has the potential of stopping projects or killing projects that are in the pipeline.”

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Jeff Stein

Jeff Stein is the founder and former editor of the Ithaca Voice.