ITHACA, N.Y. — As it always does around this time each year, the City of Ithaca’s Planning Department has released its annual report of activity – completed, underway and soon to come. Like a post-season analysis, this report is useful in getting an idea on what the status of real estate development is at this time, and what needs to be considered as the city moves ahead into 2019.
Here at The Ithaca Voice, we’ve delved into the numbers and identified key points and surprising details from the 2018 report, including mention of a major 900,000 square-foot mixed-use project planned for Collegetown.
1. It’s an annual snapshot. But that doesn’t mean it’s a good snapshot.
The opening line to the report says this:
“As with any annual report – this one is a snapshot in time that may not accurately reflect the larger context.”
There’s a reason for that. Look at the number of site plan approvals in 2018. The number plunged to only six approvals, a total not seen since the Great Recession. The number of staff approvals, which are typically for new single-family homes or other smaller development plans, was fairly consistent with previous years.
Another value that plunged – the number of housing units approved for construction. In 2018, a grand total of 19 were approved. Twelve of those are LMI (low-moderate income, another phrase for affordable housing) units at 327 West Seneca Street. Another five are in 128 West Falls Street, which was a re-approval of a project that was first greenlighted four years ago. The other two approved units are not described; they fall under “scattered-site development”, the catch-all for the staff-level approvals mentioned above.
For comparison, 2017 was a really big year for approved development in the city, when a grand total of 568 housing units are approved. Looking further back, in 2016, the city approved 62 housing units, 95 units in 2015, and 129 units in 2014. So once again, 2018 was the lowest total for new housing units since the recession.
The dismal housing production statistic for 2018 is not an issue. It’s a statistical quirk. For the record, 473 housing units are under construction in the city at the moment, it just so happens that most of those were approved in 2017 (and most of the 203 housing units expected to start construction in 2019 were also approved in 2017). Meanwhile, other big projects like Cornell’s 2,000-bed North Campus Expansion went through most of their environmental review in 2018, but have yet to be approved. This is the equivalent of being told you got a score of 60 percent on a test, only to find out the average was 60 percent. You don’t get the full picture with one year.
2. Cornell paid the city some hefty project fees
While housing permits and site plan reviews were way down in 2018, it was actually the most lucrative year ever for planning department fees, a little over $208,000. That’s because of Cornell.
The 800-pound gorilla of projects, the Cornell North Campus Residential Expansion is expected to add over 2,000 beds and about 800,000 square feet of institutional/dormitory space on Cornell’s North Campus. As one would expect for a very large project, it comes with a large construction cost, which the city estimated at $128 million (the project is worth $175 million, but that higher figure includes soft costs like design, engineering and legal work, and is reflective of what it would be if assessed for market value, not what it costs to build).
As one might expect, such a large project generates a large fee. On the city’s graduated system ($1.50 per $1,000 for construction projects that cost $100,000 or more), that meant $192,000 in fees, the vast majority of the fund received in 2018.
Side note – if you look closely, the two charts above have different fee totals for 2018, with the figure in the first chart stating $201,000. According to planning board staff, that was a miscalculation, and the $208,127 figure in the second chart is the correct total.
3. No one neighborhood dominates this year’s report.
In previous years, the Planning Report is primarily filled with projects in Collegetown and Downtown, which given the city’s 2014 revision of zoning in Collegetown, and its push for urban mixed-use spaces, that made a lot of sense.
This year, however, thanks to the relative dearth of projects, it kinda ends up all over the place. Cornell has its big project; Stewart Park has its playground; 128 West Falls Street and Falls Park are Fall Creek and Fall Creek adjacent; GreenStar and 327 West Seneca Street are on the West End; and in the State Street Corridor respectively; while Maguire and 744 South Meadow Street are down in the big box mecca of Southwest Ithaca.
In fact, there are no Downtown or Collegetown projects in the list of new site applications filed, which is a first since they started putting these reports together about a decade ago. Once again, this probably is more a statistical quirk in timing than those neighborhoods suddenly looking like terrible investments.
4. Student housing’s lost its luster. Affordable housing creation is still struggling.
If you look at the past decade of new housing creation in the city of Ithaca, the majority of it is private student housing. Since 2008, 1,550 housing units have been built, which includes 34 LMI/affordable for-sale units, and 23 affordable market-rate for-sale units. Of the 1,493 rentals, 1,103 are student rentals, 189 are LMI/affordable rentals, and 201 are market-rate rentals geared towards the general public. Long story short, 71 percent of the housing units built since 2008 are geared towards students, which is not something most of the public wants to see or hear.
However, over the past couple of years, the housing pipeline has taken on a decidedly different mix. There are 473 housing units underway right now across the city. Nine of those 473 are geared to students, just 2 percent. The reason for that is purely pragmatic. The student housing developers are hesitant to add more to the market because they know Cornell’s readying itself to add 2,000 beds to the student market and mandating sophomores live on campus, actions which will make a significant dent in the student market. Plus, the addition of Maplewood in the town of Ithaca has already created a little more slack than the student housing developers are used to, or want for that matter. So they’re holding off for a few years, plain and simple.
However, of the remaining 464, none are LMI/affordable, and none are for-sale. They’re general market apartments, projects like Harold’s Square and City Centre and Library Place (the Old Library site, which is senior housing but still gets grouped in this category).
The major problem with affordable housing isn’t getting projects in the pipeline – it’s getting them funded. As previously covered here, it’s a very competitive and complicated process to get the grants and tax credits needed to secure construction loans, since affordable housing doesn’t have the profit margins needed to secure bank financing. Only one project, Visum Development’s 327 West Seneca Street, has committed to a 2019 construction start, and Visum has a little more flexibility than most affordable developers because it has student housing in Collegetown to help subsidize the costs. Secondly, its affordable units are slotted on the moderate side of LMI, 80-90 percent of area median income, vs. the 30-80 percent or 50-80 percent seen with most affordable housing developers. Meanwhile, projects from Lakeview and Finger Lakes ReUse are still trying to obtain funds to build their affordable housing plans.
5. There are very big plans in the works for Ithaca.
If you’re an avid reader of the Voice, most are these are familiar. Carpenter Business Park. South Hill student housing, which is 815 South Aurora (and actually has 49 units with 141 beds, not 151). The Visum projects on West State and West Seneca. City Harbor. The Green Street Garage Redevelopment by The Vecino Group. The Immaculate Conception redevelopment by INHS (which has a community meeting on the 12th to scope out ideas on how to get those 50-75 units). The Chain Works District, which instead of the 915 units over 15 years as is often said, the figure used is 444 units over 5-10 years.
Then there’s that last one, “Collegetown Projects.” That’s new. It’s been rumored for a couple of months now, but this is the first time there’s been any mention of it in a public document.
“As for the Collegetown project, we can’t give a statement other to say that we expect a Planned Unit Development application in time for the March 13th Planning Committee Meeting. We do think it will be transformational for the City. More to come,” said City of Ithaca Planning Director JoAnn Cornish.
In the meanwhile, if the Voice has any news to break on that mystery project, we will get it out there as soon as possible.