ITHACA, N.Y. —The Tompkins County Industrial Development Agency’s (IDA) Board of Directors granted a $3.7 million tax abatement Wednesday for the development of “The Citizen,” a five-story apartment building from Visum Development Group. The total abatement — which constitutes sales, mortgage and over $2.9 million in property taxes — will be realized over the course of 10 years.
The tax abatement comes to just over 14% of the project’s estimated cost, which is about $26.3 million, according to Visum’s abatement application. Estimates of The Citizen’s taxable value made available by the IDA projected the apartment building’s taxable value to grow from about $14.6 million to over $17.5 million in the next 10 years.
With a vote of 6-0, The Citizen was approved for its tax abatement by the IDA’s seven member Board of Directors. Board member Jeff Gorsky, a partner at the accounting firm Sciarabba Walker & Co., abstained from voting.
The Citizen will occupy 602 West Buffalo Street, once the site of a beloved local eatery, Joe’s Italian Restaurant. Building plans promise a total floor area of 92,800 square feet, a first floor filled with retail space, and 80-units of market-rate apartments in a structure that appears poised to continue shifting the character of Ithaca’s West End.
Based on the apartment sizes and cost per square foot provided to the IDA by Visum, it would cost about $1,700 per month to rent a studio apartment at The Citizen, and about $3,000 for a two bedroom apartment.
Theresa Alt, a member of the Ithaca chapter of the Democratic Socialists of America, was one of two members of the public to address the IDA Wednesday. She voiced her objections to a tax break going to The Citizen over what it would cost to rent an apartment there. .
“The Citizen is market rate housing, the kind we don’t need more and more of,” Alt said.
Most Ithaca residents wouldn’t be able to afford living at The Citizen, Alt argued. The median household income in the City of Ithaca was $40,973 in 2021, according to the most recent estimate available from the U.S. Census Bureau.
“We don’t need more gentrification in the West End. What we need is housing that the people who work in the city can afford,” Alt said.
Visum requested an abatement for The Citizen as a financial need for the project. The Citizen is in the density district of the City of Ithaca’s Community Investment Incentive Tax Abatement Program (CIITAP). The tax incentive program — which was first developed in partnership between the city and the IDA — is aimed at encouraging development and promoting density in the city.
It creates terms of eligibility for developers to receive a tax incentive that lasts for seven years, such as requiring that a project must increase the assessed value of a property by at least $500,000 in order to qualify.
To receive the 10-year tax abatement from the IDA, applicants must demonstrate financial need to complete the project through a review conducted by the IDA’s administrative staff.
Heather McDaniel, president of Ithaca Area Economic Development, which oversees the IDA, recommended to the IDA’s board that financial need had been “demonstrated” by The Citizen, citing reasonable financial projections and a return on investment that is expected to remain less than 10% for the the apartment building’s first 10 years.
As a condition of receiving the tax break for The Citizen, Visum will have to contribute $528,000 over the course of three years to the Community Housing Development Fund, a program that supports the development of affordable housing throughout Tompkins County. Contributing to the fund becomes a requirement for projects seeking an abatement from the IDA when at least 20% of the development’s units are not set aside for housing priced at 80% or less of area median income.
IDA board member Ducson Nguyen, a member of the City of Ithaca’s Common Council, said Wednesday that the Community Housing Development Fund is “kind of an imperfect neoliberal approach to building affordable housing, but it is the system we have, and half a million dollars total is not insubstantial.”
Rich John, a Tompkins County Legislator and chair of the IDA’s Board of Directors, called The Citizen a “net positive” before voting at the IDA’s Wednesday meeting. He cited the added tax revenue it would bring into the City of Ithaca, Tompkins County and the Ithaca City School District.
IDA board member John Guttridge, founder of the development company Urban Core LLC, noted that, over the course of 10 years, The Citizen is projected by the IDA to multiply tenfold the tax revenue currently coming from the parcel the building is being developed on — even with the abatement.
When the abatement ends in 10 years, the IDA’s projections show that over $2.5 million in taxes will have been drawn from The Citizen, versus $217,040 at the parcel’s currently assessed value.
Guttridge further explained his support for The Citizen saying that he thought The Citizen was taking a “pretty profound amount of risk.”
He noted that the apartment building will be in a flood zone and is situated between two highways — North Meadow and North Fulton Streets — and that Ithaca’s West End is an “untested area” for market rate housing in the city.
“We understand that these private developers are taking that risk, and the benefits to the community of doing the project are significant,” Guttridge said. “And it’s in our CIITAP density zone, which is where we want to see the density. So I think, all the way around, it’s good.”