ITHACA, N.Y. –– One’s a local craft brewer caught in a bind due to the pandemic, and is seeking help to finish their new location. The other is busy drawing up expansion plans as part of a business move, and is hoping to be awarded breaks on the sales tax of construction materials and new equipment. Different strokes for different folks, but both Salt Point Brewery and Incodema will be heading to the Tompkins County Industrial Development Agency for assistance this month.
Salt Point Brewery
For Salt Point Brewery, the visit to the TCIDA stems from a case of things going wrong, beyond their control, at just the wrong time. Readers might remember that Salt Point owners Camilo Bohorquez, Chris and Sarah Hesse have spent the past couple years planning an expansion for their Lansing-based brewpub around the block on Auburn Road, as part of the future Lansing Town Center development. The 5,600 square-foot building would host a larger brewery space and a restaurant and gathering space for local residents to stop in for a pint. Well, construction was underway on the new digs when COVID struck.
The Hesses and Bohorquez have managed to keep Salt Point up and running, but without the summer tourists and seasonal events that make up the crux of the local food and hospitality industry, their bottom line suffered a major hit and some of the savings they planned to use towards opening the new space had to go towards covering the cost of operations. Hence, they’re approaching the IDA for financial assistance so they can have the money they need to finish out the new brewery and tap room (which is framed and roofed at present) by May, and hopefully be able to serve customers in the new Salt Point Brewery as the vaccine is distributed and, fingers crossed, COVID is reined in over the coming months.
Lansing is fairly unique in that it’s the only area outside of the city with a property tax abatement incentive program, approved several years ago to encourage development at the Lansing Town Center site. Salt Point Brewery is the first applicant under that policy (Milton Meadows used a different state-based program to reduce property tax assessments on affordable housing, known as (Real Property Tax Law) Section 581-a). It is similar to the city’s standard seven-year abatement, and is being sought along with a sales tax incentive for the remainder of construction, equipment, and fit out of the facility.
Now, normally in these kinds of pieces we’re talking about hundreds of thousands of dollars, or even millions of dollar in tax breaks. It’s not quite so high in this case. The property tax abatement would be worth $43,606, and the sales tax incentive would be $16,144, for a total tax break of $59,750, about 6% of the project’s $934,850 cost. For that, 2.5 jobs are retained, and Salt Point states they plan to hire six more staff over the next three years. Six construction jobs are also supported. New property taxes paid by the project in the seven years of the abatement would come out to $42,886 on top of the existing property tax bill for the acreage.
“We still feel strongly that the future of Salt Point Brewing in Lansing is bright and full of potential, and we are asking for this support now so that we can catch up financially in our new and expanded facility. With the help of (the) tax abatement, SPB will be able to gain a firm financial footing as we establish ourselves for years to come in Downtown Lansing,” wrote Sarah Hesse in the application. As the requested tax breaks are less than $100,000 total, a public hearing is not required.
The Incodema request is more of the typical IDA fare – a local company is planning an expansion with potential job creation and hopes to mitigate some of the expenses. More specifically, as previously reported, Incodema is planning a move from its current facility on the city of Ithaca’s Cliff Street, to 1920 Slaterville Road in the town of Dryden, a currently-vacant warehouse and office that will be purchased and renovated by local developer Lincoln Morse and leased to Incodema for their manufacturing activities. The lease will be a triple net lease, meaning Incodema is responsible for everything building-related, from maintenance to insurance to taxes.
Like the Salt Point application, the Incodema plan is a property tax abatement along with a sales tax exemption on the cost of interior construction materials and furnishings. It also includes a mortgage recording tax exemption, since it involves the purchase of property. According to the memo from Ithaca Area Economic Development’s Heather McDaniel, “I am recommending a schedule that will provide an established tax payment for 7 years that is based on the taxes associated with the current value of the building, followed by a three-year phase in of the estimated full tax payment. This structure is consistent with the IDA’s incentive for Emmy’s Organics when the company purchased an existing building in 2019.”
This is one again a smaller incentive package than most of what the IDA sees. The property tax abatement would be worth $46,377, the sales tax incentive would be $32,000, and the mortgage recording tax exemption is valued at $4,443, for a total tax break of $82,820, about 4% of the project’s $2,127,000 cost. As the requested tax breaks are less than $100,000 total, a public hearing is not required for this project either. In exchange for those benefits, 47 jobs would be retained, and Incodema states they plan to hire eight more staff over the next three years, noting that all their staff make more than a living wage. Twenty construction jobs are also supported. The existing assessment on the vacant building is not impacted by the abatement, only the improvements, so Incodema would still pay $323,440 in property taxes over the period of the $46,377 abatement.
According to the application notes, the development team is installing air source heat pumps where possible (which for a non-residential project is a pretty big deal, as electric heat pumps are more expensive than conventional fuels used in high-energy demand industrial operations), installing LED lighting and low wattage equipment. Water reclamation for the equipment will be implemented. The team is planning for a LEED green building certification after one year of occupancy in the building.
With neither of the applications too small in request to require a public hearing, both could in theory be approved at the meeting at 2:30 on Wednesday, assuming there are no major hang-ups. Should readers be interested, the live stream is here, and letters of support or opposition can be sent to the IDA’s Ina Arthur at firstname.lastname@example.org no later than 9 AM Wednesday morning.