ITHACA, N.Y. — Site preparation is already underway, but City Harbor isn’t ready to move forward with construction just yet. One of the priorities on their to-do list: applying to the Tompkins County Industrial Development Agency (TCIDA) in the hopes of obtaining a tax abatement to offset some of the new property taxes.
The City Harbor project is an 11.09-acre mixed-use project planned for the former Johnson’s Boatyard along Pier Road, across the street from the city golf course. As planned, this 4.35 acre slice of the project would include 156 apartments, a full-service 5,400 square-foot restaurant, some small-scale retail, a full-service marina, waterfront pedestrian promenade and a community center, to be built in two phases.
The proposed Guthrie medical office building and new GreenStar Co-Op are not a part of the tax abatement application because they’re in charge of building out their own projects. GreenStar already received an abatement, and it’s not clear if Guthrie will apply for a tax abatement as they move forward with their new 60,000 square-foot building.
As planned, phase one would consist of two five-story market-rate mixed-use buildings with the restaurant, health and wellness amenities, retail and 96 apartments (16 one-bedroom units, 13 one-bedroom units with den, and 77 two-bedroom units). The 1,700 foot-long pedestrian promenade would connect to the Cayuga Waterfront Trail and be built in phase one, as would the marina build-out. A series of pocket parks and plazas would provide ample green space and public gathering areas; the city Planning Board had made it clear during review that the large amount of surface parking planned should be limited as much as reasonably possible (even then, the site still includes 452 parking spaces, some of which will be shared with Guthrie depending on the time of day).
City Harbor’s project team consists of a number of local and regional business people. Father-and-son developers Nick and Costa Lambrou, Jodi Edger and Jessica Edger Hillman of Edger Enterprises, Lincoln Morse of Morse Project Management, and local businesswoman Elizabeth Classen Ambrose. The Edgers will handle the buildout. The application states that they have 75 full-time construction tradespeople in the region and plan to use them and local subcontractors in the construction – many of them will transition over from the GreenStar project wrapping up, to the City Harbor site.
The project team’s requested abatement has multiple components. The sales tax exemption on construction materials would be worth $1,839,257. The exemption from the mortgage recording tax would be worth $89,670, and the ten-year, gradually decreasing property tax abatement would be worth $4,732,138. Part of that includes the new enhance energy incentive – the project will use air source heat pumps, use effluent flow of the nearby wastewater treatment plant to heat the buildings in winter and cool them in the summer, and plans to meet the city’s more stringent 2024 standard for Green Building Policy. Since using wastewater for heating and cooling is more expensive than a standard HVAC system, the project is seeking the energy incentive to offset some of the costs.
While this all makes for a substantial $6,661,065 tax abatement, the property would still pay an additional $2,363,266 on top of the current property tax abatement for the ten-year period (abatements do not apply to existing property tax assessments, they only apply to new property value generated – so here, the total taxes with the existing tax payments would be $3,209,988). The overall project cost for City Harbor is estimated at $44.1 million.
From the jobs angle, about 175 construction jobs are expected to be created by the project. Four permanent jobs will be created for building clerical, services and maintenance, with an average salary of $64,000. If one wants to be technical, yes, all four positions are living-wage. The restaurant and retail space can’t be counted towards the job creation total because they’re indirect job creation – City Harbor’s not paying to staff the restaurant, whoever rents the space will. Likewise, the 75-100 jobs created by Guthrie can’t be counted because Guthrie hires them and is handling their own buildout.
“The owners are confident this project will be the ‘crown jewel’ of the public’s access to Ithaca’s waterfront. We believe the final result will benefit the City and public long after its completion. These benefits are much more than the economics of additional property tax and commerce that will occur as a result of this development,” say the applicants.
“One of many examples of this assertion relates to tourism as we believe this project will benefit the city’s tourism. For example, the connection of the Cayuga Waterfront trail to the public promenade opens this development up for all to enjoy access to this amazing natural resource. Public access is not mutually exclusive to the local community but also to the City of Ithaca’s expanding tourism and visitors’ market such that all will to be able to enjoy City Harbor’s waterfront as a result. In addition, we are also extremely proud of the effluent energy recovery system that will be used to heat and cool City Harbor, and ownership is committed to reducing the carbon footprint of this community as a result of this innovation.”
While the project does much-needed dredging and seawall work, makes major strides in sustainability features and plans to rely on local labor for much of its buildout, one component that will likely inspire some debate is the lack of affordable housing with the project. The IDA did not implement the city’s inclusionary zoning mandate because of issues with the way it was proposed and will be bringing forward its own inclusionary zoning policy in the next couple of months.
“This project provides so many public amenities and access to the waterfront, all of which do not earn any revenue, that the financial feasibility is precarious at best. The new sea wall and associated site work on this site are adding to the costs. A significant amount of owner equity will need to be committed to the project upfront, which tremendously reduces the return on investment for the local development team,” says a memo provided by Tompkins County Area Development (TCAD).
The IDA is only reviewing the application this month, with a vote on the abatement not possible until at least March. According to the application, if the abatement is approved, construction would likely start this spring (dredging for the new docks and seawall is already underway). The Planning Board is likely to issue their final approvals for the project in February or March, and financing is being lined up to pay for the project (the application notes the project team is investing $8.2 million from their pockets, and about $35.9 million will come from a construction loan). The first phase is expected to open in late 2021, and the second phase with the third, 62-unit apartment building will tentatively open in April 2022. A 5,500 square-foot community building to be shared with the city as a clubhouse for the golf course is still being negotiated.
T.G. Miller‘s Dave Herrick is the lead civil engineer for the project, and Ithaca-based HOLT Architects designed the buildings. The staff of Whitham Planning and Design are serving as project consultants and as the landscape architects.