LANSING, N.Y.—Generally speaking, the Tompkins County Industrial Development Agency (TCIDA) is quite accommodating to its tax incentive recipients. Projects may be revised, job goals may not be fully met, issues may arise. As long as the explanation is reasonable and the paperwork is revised, the IDA allows a tax abatement or payment in lieu of taxes (PILOT) to continue. It may be reduced in size, but otherwise, they allow the applicant to keep the awarded incentive.
With that noted, if there’s an applicant who’s thoroughly failed to provide the community with the expected benefits, the IDA has options—namely, the recapturing of taxes not paid as part of the agreement, a procedure known as a “claw back” provision.
“Let me just say as the administrative director for the TCIDA, we take our jobs very seriously. As a public authority, we’re given broad powers to provide financial assistance to projects that provide community benefits, primarily in the form of phasing in new property taxes, the abatements,” said Ithaca Area Economic Development’s Heather McDaniel.
One of the projects that received IDA incentives is Lansing Meadows. The $14 million mixed-use project consists of the BJ’s Wholesale Club that opened in 2012, wetland creation (done outside the area, in the Cayuga County town of Montezuma), and a residential component on Oakcrest Road that was a stipulation of the Village of Lansing as part of the creation of the Planned Development Area, which is a specialized zoning code unique to the property.
The project has a PILOT agreement with the IDA, which was controversial when granted, as PILOTs and tax abatements for retail projects are generally discouraged. A wetland area presented as a bird sanctuary and 12 senior apartments were features included to help sell the deal to the IDA and the village.
“Back in 2010, this project was delivered incentives by the IDA and the benefit was really going to be the 12 units of senior rental housing in a more densely populated urban area […] The village wanted it,” McDaniel said. “There was some very marginal wetland on-site (created by accident from the mall’s stormwater runoff), so they were going to have to build a better wetland essentially, improve it but and in a bird habitat and a berm and associated infrastructure with that. At the time, the IDA hired a third-party accounting firm to do a financial analysis, and they did find a financial need for the project since it had a low rate of return, so the IDA approved some incentives.”
As the years went on, the sentiment was that the developer, Eric Goetzmann of Triax Management Group d/b/a Arrowhead Ventures LLC, was dragging his feet on the residential portion. Meanwhile, the bird sanctuary was never created as intended, replaced with the Montezuma wetland project.
As Dan Veaner at the former Lansing Star noted back in 2019, the Lansing Meadows project had at least nine major changes over nine years (now eleven), and was a discussion topic at no less than 58 meetings. Several previous articles about the development can also be found on the Voice here.
A few years ago, fed up with Goetzmann’s reluctance to follow through on his side of the PILOT deal, the county IDA had started to take legal steps to claw back the dollars Goetzmann saved from his PILOT benefits before he finally put forth more concrete senior housing plans. Even then, the residential portion had to go through a few iterations in order to come to a mutually acceptable plan with the village. The final set of plans were approved in June 2019.
As approved in 2019, the residential components consisted of two phases. Four one-story triplexes (12 units total) were to be ready for occupancy by the end of July 2020. Two more triplexes (6 units) would be built in a second phase to be ready for occupancy in December 2020. All units are senior rental housing, set aside for those aged 55+.
The project has again fallen behind schedule, first to July 2021 for the completion of the first phase, which the IDA and village permitted, and now Goetzmann has failed to meet that delivery date as well. The interiors and exteriors are largely complete, but they lack road access and water/sewer hookups.
Those missing features stem from Goetzmann’s latest request to subdivide the 18-unit project into 20 lots—the 19th is a lot set aside for stormwater management, and the 20th is a private access road. The subdivision requires a special ruling because these are townhouse-like units, and they do not meet the yard setback or lot size requirements for individual home lots in the village. A subdivision would allow Goetzmann to sell the units instead of operating them as rentals. The Planning Board for the village of Lansing has made it clear they are unhappy with the proposal and Goetzmann’s overall handling of the situation. If he wanted a subdivision, he could have pursued it years ago with much less grief for everyone involved.
“The IDA incentives were approved in 2011. It is now 2021 and the project has changed significantly over time, the applicant has been before the village several times to change the project, which in our view changes the financial need and investment analysis…We gave Mr. Goetzmann an extension to July of this year and the project not been completed. It’s not done yet and the fact of the matter is, these are public monies that went into this project and it’s been ten years,” said McDaniel.
The long story short is, Goetzmann under-delivered, delayed plans, and regularly argued with the village and the IDA, constantly changing his plans and not abiding by what he agreed to back in 2010. Some of you are familiar with the more strongly-worded version of the phrase “[mess] around and find out”. Well, Goetzmann messed around. Now he’s finding out.
“The IDA has determined that it wants to terminate the PILOT,” said McDaniel. The vote by the IDA was unanimous. “There’s a little bit over $1.2 million of public tax dollars of incentives (already used) and another five years left that would equal $437,000 more. The IDA determined he is in default. The project has not been completed, he has not reached his milestones, and we’re going to move to recapture the funding that has gone to Mr. Goetzmann.”
“The IDA went into with the best of intentions,” said Tompkins County legislator and IDA voting member Martha Robertson. “the IDA and the village of Lansing have made every accommodation (to Goetzmann) that was reasonable, and many that were not reasonable….I think it’s time to take this action.”
According to McDaniel, only one other project in recent memory has undergone a “claw back” to pay taxes that had previously been written off as part of an incentive – in the late 2000s, Emerson Power Transmission was a few years into a reduced tax agreement when they decided to close their South Hill plant and lay off hundreds. In that case, Emerson paid off the clawed back taxes within thirty days as McDaniel recalled. McDaniel did note that there have been a few cases where tax abatements were terminated because the original recipient sold the project to someone else, and in the case of a bankrupt and closed business, it would be very difficult to recoup any awarded benefits.
From here, it could still be a drawn out process. “The attorney for the IDA, Russ Gaenzle from Harris Beach, has been directed to send a letter to Mr. Goetzmann stating we believe he’s in default and we will demand recapture of those funds. Mr. Goetzmann will likely have an opportunity to come before or respond to the IDA and the IDA will have decisions to make from there,” said McDaniel.
“I think the important here is that the IDA has taken a stand. This is public money, it’s gone on long enough, he’s clearly in default, he has not delivered what he intended to deliver all those years ago. There’s no public benefit here.”