ITHACA, N.Y.—Local firm Visum Development Group’s efforts to develop affordable housing in the city of Ithaca received a major boost late last week. New York State has announced the award of a major funding grant to help bring a project on West State/Martin Luther King Jr. Street from vision to reality.
The $30 million “Stately Apartments” development, located at 510 West State/MLK Jr. Street, received over $9.2 million from the New York State Department of Homes and Community Renewal (NYS HCR). It was one of 20 projects funded statewide in this latest round, and one of two to be funded within the Southern Tier region. NYS supportive housing grants are only awarded a few times each year, and typically fewer than one in three applicants are funded in an application round.
Also referred to in some planning documents as “510 MLK,” the Stately Apartments plan would remove a one‐story commercial building fronting State/MLK Jr. Street and a two‐story wood-frame house fronting West Seneca Street, and replace them with a 60,953 square-foot building that’s four stories at its back (West Seneca) and five stories at the front (West State/MLK Jr.).
Plans call for 57 dwelling units (plus a manager’s unit), affordable to households making 30‐ to 60‐percent area median income, community spaces, indoor bike parking, and 876 square feet of retail space fronting State Street. According to the state’s press release, 20 apartments will be set aside for previously homeless households, funded through the Empire State Supportive Housing Initiative (ESSHI).
The project was first proposed in January 2019, rescinded due to strong pushback from local officials that resulted in a downzoning of the property, and then resubmitted as a smaller proposal in February 2021. The revised project was approved in August 2021.
Rather unusually, the project is a joint effort between for-profit developer Visum, which generally pursues market-rate housing with a couple middle-market “workforce housing” proposals in the works, and a non-profit housing developer, Arbor Housing and Development of Corning. Arbor Housing, which has developments in other Twin Tier cities, has unsuccessfully explored projects in Tompkins County. With Visum as partner, this will be Arbor’s first property in the Ithaca metropolitan area. Initially, Visum planned to work with Providence Housing on the Stately Apartments project, but changed partners as it worked over the past year and a half to obtain state funding.
In contrast to market-rate housing where construction costs are typically covered by the developer’s cash equity and a commercial lender, the low return on investment that affordable and supportive housing make those projects less desirable for conventional loans. That leads developers, usually non-profits, to seek alternative funding to cover the financial gap so that construction can move forward. Affordable housing financing is complex, cobbled together from a variety of public and private funding sources, from bank loans to tax-exempt bonds to tax credits, and all these different sources have to fit together in a certain way for maximum financial leverage.
Generally, NYS HCR asks developers to refrain from public announcements of their own following the award of grant funding, and as a result Visum declined to issue a formal statement. An estimated construction start for the project is not yet available. Ithaca’s STREAM Collaborative is the project architect.