ITHACA, NY – Last week, Ithaca officials discussed just how far they wanted to push energy standards for developers looking to build in the city’s downtown core.
The discussion is part of the ongoing revisions to Ithaca’s Community Investment Incentive Abatement Program, or CIITAP. The program ultimately aims to strike a balance between creating incentives for developers while also benefiting the community through regulations on things like use of local labor and sustainability standards.
Last week’s Planning and Economic Development Committee meeting focused on creating more strict energy standards. The recommendations were outlined in a memo by Sustainability Coordinator Nick Goldsmith.
Under the proposed guidelines, developers would need to meet the following energy standards to apply for the standard seven-year CIITAP tax abatement:
1 – Conduct annual benchmarking of energy usage for the term of the abatement
2 – The building would need to be constructed to use at least 10 percent less energy than required by New York State’s energy code, which will go into effect this October
In order to obtain the longer-period “enhanced” version of the tax abatement, a developer would have to exceed the state-required energy standards by 30 percent instead of 10. Goldsmith also proposed a possible alternative that would bump that number up to 40 percent. Developers would still be required to submit annual energy benchmarks.
Goldsmith explained that the enhanced standards are in-line with the 2030 District Standards, which aim for a goal of net zero energy construction by the year 2030. In other words, any building constructed under these standards would create as much energy as they use.
One of the major concerns — something that’s been a part of most CIITAP discussions — is how to find the balance of something that is attractive to developers while also beneficial to the community.
Nels Bohn, director of the Ithaca Urban Renewal Agency, suggested that it might be best to approach this issue by ratcheting the standards up more slowly. This approach was also discussed for the local labor standard.
“You start a little bit lower and if we see people are achieving it, it shows that people are actually utilizing the program, then we can increase it a bit, make it a little more stringent,” Bohn said. “We wouldn’t got to go to low. It’s a balance, right? We want value for the incentive.”
Opposition, support for new energy standards
Attorney Nathan Lyman, who represents several Ithaca developers, spoke in opposition of the proposed standards during the public comment portion of the meeting.
“My question is: do you want urban core development to increase density, grow the tax base and provide residential housing or not? There’s already a rigorous, energy-efficient building code in this state. It is already prohibitively expensive to build in the urban core which is why you enacted CIITAP in the first place,” Lyman said.
Lyman went on to say that Goldsmith’s recommendations failed to take into account the real costs such energy standards would add to a project. He estimated that they could hundreds of thousands, if not millions of dollars to the cost of already-expensive urban core projects.
“If you take back the benefit of a tax abatement by increasing the cost of overhead and construction, you might as well simply abandon CIITAP,” Lyman said, describing the tax breaks as “relatively modest” to begin with.
He added that CIITAP could follow in the footsteps of its predecessor, the Community Incentive Investment Program, or CIIP — by adding so many stipulations, the program would simply fail to actually incentivize development. CIIP was active from 2007 to 2012, and during that period only one project took advantage of it. By comparison, five projects have utilized CIITAP since it was first instituted in 2012.
Others spoke in favor of the changes, including Ithaca residents Theresa Alt, Sarah Hess and Brian Eden.
Eden, who is the Chair of the Energy Committee of the Tompkins County Energy Management Council, offered evidence that seemed to counter Lyman’s assertions.
“Our thesis, based on data and case studies, demonstrates that you can build very high-performing buildings at about the same cost as you can a traditional building,” Eden said. “You have incremental cost increases as the building becomes tighter but when you reach a certain point, the cost begins to decline because you need less mechanicals and ductwork and so on, and your energy costs also go down.”
Eden said that he’d spoken with several local developers who had been receptive to discussing the ideas. He also stressed the importance of working toward these goals, given the urgency of climate change and the city’s goals of reducing its greenhouse gas emissions.
(Featured photo: Main office of Taitem Engineering, the first LEED platinum building in Ithaca.)