ITHACA, N.Y. — As the review process continues, the Asteri mixed-use project proposed for Downtown Ithaca approaches another step in its substantial to-do list: asking for a tax abatement from the Tompkins County Industrial Development Authority (TCIDA).
According to documents provided by developer The Vecino Group to the IDA, the latest iteration of the Asteri housing portion of the project includes 217 affordable housing units, for tenants making 30-80% of area median income, with the price point dependent on the specific unit. The housing units will be distributed with 85 studios, 114 one-bedroom, 10 two-bedroom and 8 three-bedroom units. There tend to be fewer three-bedrooms in affordable housing projects because housing demand is strongest at the one-bedroom and two-bedroom range, and most families looking for three-bedrooms look for single-family homes, especially for-sale homes in the less expensive outlying towns.
Similarly to its sister project Arthaus on Cherry Street, the project is partnering with Tompkins Community Action to include 40 units dedicated for supportive housing targeted to populations at risk of homelessness, though unlike Arthaus this does not appear to be limited to younger individuals. Supportive services for these residents will be included as part of overall property management, with offices and staff onsite. Building amenities and communal spaces will include outdoor space, fitness facilities, on-site laundry, indoor bike storage and community rooms. The project would be built to Tier II NYSERDA energy efficiency standards (25% more efficient than building code requirements).
However, affordable housing alone doesn’t qualify for tax abatements. What does are the other portions of the 394,000 square-foot project. Vecino would build four new levels on top of the center portion of the Green Street Garage while renovating the existing lower levels, for 243 new parking spaces (total 350). The lowest three levels of the 12-story tower would also host the new 54,921 square-foot Downtown Ithaca Conference Center. While a Vecino legal entity (“Asteri Garage LLC”) will own both the Parking Garage and Conference Center, Vecino will not profit through the operations of the garage or conference center. The conference center will be leased by a to-be-determined entity controlled by local authorities, and the garage will be leased to the City of Ithaca.
The requested tax abatement is unique. Typically, there’s a sales tax and mortgage tax exemption, which are fairly minor, and then the property tax abatement that makes up the bulk of the benefits, and the controversies. Here, along with those minor exemptions, the property tax exemption is a 30-year payment in lieu of taxes, or PILOT agreement. The PILOT for the residential portion of the project will be a fixed amount in each of the 30 years based on 20% of the projected net operating income. The PILOT for the parking garage and conference center will be fixed at zero for the 30-year term. County IDA PILOTs in New York usually come with a 1% administration fee, which Vecino is requesting be reduced to 0.5%.
Add it all up and the exemptions are worth $14,991,998 on a project estimated to cost $108,793,929. For that, Vecino pledges the housing, the garage, the conference center space, and whatever benefits those offer. The IDA estimates 27 permanent jobs created, mostly employees of the conference center, and all living wage. 160 construction jobs would be created, with a 30% local labor commitment, 30% of contractors paying prevailing wage, and 10% of contractors providing an apprenticeship program.
There’s also the projected visitors coming to events at the conference center (studies suggest up to 63,000 per year and $11.4 million in new tax revenue over 20 years, though the pandemic injects a lot of short-term uncertainty into that calculation), and millions in indirect spending from conference center attendees going out to eat, shop and visiting places around the city and county, estimated at $423 million over 20 years.
The requested abatement is a tall order, though the project does offer a unique and more substantial set of benefits than the “market-rate housing and tiny amount of commercial space” that usually draws out the angry public. The IDA would begin its review at Wednesday afternoon’s meeting, and likely come to a vote towards the end of the year. In the meanwhile, Vecino hopes to have preliminary approvals from the city of Ithaca Planning Board by the end of September. If the private portion of construction financing can be lined up in the desired time frame, and the grants come through as hoped, the project would begin construction in the first quarter of 2021, and finish up at the end of summer 2023.