ITHACA, N.Y. — GreenStar Co-Op’s plans for a new flagship location are moving forward – the co-op market is advancing its Tompkins County Industrial Development Authority application for tax abatements to offset development costs.
The formal application is set to be reviewed at the meeting on Thursday the 14th. Organic Nature LLC, which is a shared business entity between GreenStar the developers of City Harbor, is seeking the standard 7-year CIITAP tax abatement for the renovation and expansion of the 30,000 square-foot former Cornell Press warehouse at 770 Cascadilla Street into a new co-op with a larger market space, cafe, classrooms/meeting rooms and administrative offices for GreenStar.
Along with the 7-year graduated abatement to full market value, GreenStar is also seeking a pair of tax exemptions on the sales taxes for construction material, and on the mortgage recording. The three total $625,227. The project would pay an additional $130,246 in property taxes over that period, as the abatement phases out – an abatement doesn’t cover pre-existing assessed property value, only the increase in property value as a result of the project.
In exchange for the abatement and exemptions comes $14.76 million in private investment and its associated construction jobs, as well as forty permanent jobs after completion in late 2019. Most of these are in the sales and service activities of GreenStar – wages start at about $13/hour plus benefits for those working more than 20 hours a week (as 89% of their 240 employees do), with an average wage in the $15.25-$16.71 range depending on role.
As covered previously, the GreenStar project is as much about growing the co-op as it is about keeping it from being driven out of business by regional and national corporate competitors who have latched on to the growth in organic foods and products. Unlike the larger-scale competition, GreenStar has sought to emphasize its local roots and economic support in its application. “With this expansion project GreenStar is estimated to spend $9 million in 2020 alone on products grown or produced within 100 miles of Ithaca.”
Generally, New York State is stricter when it comes to IDA giving grants to retail and commercial service plans – however, projects in “highly stressed” areas qualify. Highly stressed means 30% or more of the project’s census tract is in poverty, and median income is 60% or less of the county’s area median income (AMI). Census Tract 8, which is Northside, Washington Park and the West End, has a 35% poverty rate and 50% AMI, according to the 2011-2015 data that the state uses.
GreenStar states in its application it’s not applying simply because it can – paying the full tax assessment would as soon as it opens would increase their operating expenses by 10%. This impacts their financial bottom line such that banks and credit unions are unlikely to loan to them because the risk of failure to pay back the loan would be too great. In other words, no abatement, no new co-op.
The city’s stake in the review (it endorses or opposes per the IDA’s CIITAP procedure) is mostly finished. The project is expected to receive final planning board approvals later this month, and the tax abatement meeting hosted by the city on April 30th was lightly attended and more of a discussion than a vent session. The membership also voted to approve the new co-op location, with 93% approval. Interestingly, it was noted in the city’s meeting session that there is a separate project in the works for The Space at GreenStar location at 700 West Buffalo Street, after the current Space vacates its current location and merge into the new building. It’s expected to be announced in a few months.