ITHACA, N.Y.—Ithaca-based Visum Development Group is bringing its newest project before the Tompkins County Industrial Development Authority (TCIDA) this week, seeking financial assistance before construction is slated to begin.
Visum is arguably the most active development firm in town, with projects underway that range from student housing to waterfront apartments, but their latest proposal takes a new direction: lower-income supportive housing. They hope to make their Stately Apartments proposal a reality with some help from the TCIDA, to the tune of about $2 million in tax breaks over 30 years while bringing in about $1.3 million in additional property tax revenue.
The Stately Apartments plan for 510 West State/Martin Luther King Jr. Street represents Visum’s first foray into lower-income housing. The company has dabbled in workforce housing projects before, which are generally designated for households making around 80-100% of area median income (80 percent of area median income was $64,150 per household of two in 2022, according to the Ithaca Urban Renewal Agency). The Stately project, on the other hand, is aimed towards households making 30-60% of area median income (between $24,050 and $48,120 annual total income for a household of two).
Visum is partnering with an experienced affordable housing developer, Arbor Housing and Development of Corning, to develop and execute the project.
The proposal itself calls for the replacement of a one-story retail building and a duplex with a 60,480 square-foot mixed-use building, five floors in the front on West State/Martin Luther King Jr. Street and four floors at the back on West Seneca Street. The building would host 1,373 square-feet of commercial retail on West State Street, and 58 apartments. One would be a manager’s unit, while the others (one studio, 18 one-bedroom and 38 two-bedroom) would be set aside for households making 30-60% area median income.
The development will also host amenities like a community room, indoor bike parking, exterior resident patio, tot lot, gardens, common laundry room, bulk storage spaces for residents, supportive service rooms, and a management office.
According to the application filed with the IDA, 20 of the 57 apartments are being supported by New York State Empire State Supportive Housing Initiative (ESSHI) in partnership with Catholic Charities of Tompkins/Tioga (CCTT). Of these 20 units, five apartments (three one-bed, two two-bed) will be reserved for homeless survivors of domestic violence, and the other 15 units (11 one-bed and four two-bed) will serve homeless individuals with a history of substance use disorders. An additional six units will be accessible for people with mobility impairment, and three other units will be fully adapted for people who are hearing and visually impaired. All units will be visitable and adaptable.
In short, a sizable percentage of these lower-income apartments won’t just be affordable housing, they will be supportive housing, with nearby access to social support services within Ithaca’s urban core.
Stately Apartments faces a rather complex tax situation. Affordable housing falls under a section of NYS Real Property Tax Law called 581-A, which does allow a tax assessor to decrease assessed value based on net income. Yet as noted by other IDA applicants like INHS with their 210 Hancock development, 581-A is designed for conventional all-residential construction, meaning non-residential components, like the retail component required by city zoning in Stately, aren’t eligible for the law.
The Green Building Policy, also a city requirement, cannot be considered under 581-A, even though it raises upfront construction costs. Land acquisition costs, soft costs like legal and design/engineering work, and environmental remediation work are also ineligible.
The Stately Apartments proposal has received grant money from New York State, and that certainly helps the overall funding picture. However, that is largely allocated in the form of low-income housing tax credits (LIHTCs), which are meant to be sold to banks to fund initial construction. If it looks like a project will run deep in the financial red ink every year for the foreseeable future and it isn’t operationally sustainable, the banks will not buy the project’s LIHTCs, making it more difficult to build.
Visum and its partners plan to pursue a similar arrangement to the 210 Hancock affordable housing project by Ithaca Neighborhood Housing Services, in the form of a 30-year Payment in Lieu of Taxes (PILOT) agreement that pays 12% of net operating income with a 2% annual increase on that income. The agreement proposed for the $29.6 million Stately Apartments plan would save the owners $2,012,614 in 2023 dollars over the 30-year period. Over that same time period, the project would provide $1,381,675 in additional property tax revenue versus if the existing properties were left as-is.
As is often seen with these projects, the job creation aspect is limited to construction jobs, estimated to be 75-100 in this case. The indirect jobs created by the retail occupant, property manager and social services support staff to assist tenants, cannot be counted towards job creation, as they are considered indirect job creation. Visum won’t be the one issuing their paychecks, therefore they don’t count.
If the PILOT is approved, the plan is to start construction in October of this year, with initial occupancy in April 2025. Joining Visum and Arbor Housing are Rochester-based SWBR and Lecesse as architect and general contractor respectively (Ithaca’s STREAM Collaborative also did design work for the project, so it is not totally clear which architecture firm did what). Stantec will be the environmental engineer, and Marathon Engineering will provide civil engineering services.
The Stately Apartments and its PILOT request will begin discussion before the IDA’s board at their 2:30 p.m. meeting on Wednesday, July 12, and livestreamed here. Quick reminder, review of major IDA applications like this one always takes at least one month before decisions are made, so there will be time in the coming weeks for the public to compose thoughts, spoken or written. Written comments can be sent to IAED’s Ina Arthur at inaa@ithacaareaed.org.