ITHACA, N.Y.—It’s been nearly a year since plans were discussed for a city-owned parking lot on Inlet Island. Following a competitive Request for Proposals, the “Finger Lakes Development” team, led by businessmen Steve Flash and Jeff Rimland, was named the preferred developer for the 2.65-acre site, which is under the control of the Ithaca Urban Renewal Agency (IURA).

Although somewhat controversial for its density and lack of active-use streetfront offerings, the approval to enter an exclusive negotiation period with the IURA was granted by the Common Council late last summer. Now, as the agreement is being hashed out, some hurdles have arisen, while refined details of the plan have come to light.

First, a quick refresher. Finger Lakes Development (FLD) has proposed an been granted preferred developer rights for a now-$53 million plan that consists of two five-story buildings, called “the Stays,” an extended-stay “hometel” concept, and “the Anchor,” a low-moderate income apartment building that would be developed in partnership with Ithaca Neighborhood Housing Services (INHS).

As part of the project, the Finger Lakes Boating Center would be retained and renovated. A new pedestrian bridge will link the Inlet Island site to the proposed Agora neighborhood, and parking facilities would be shared with the Agora project

An extended and improved Cayuga Waterfront Trail would wrap around the north side of the Inlet and provided green space includes picnic lawns, a dog park, a playground for young children, and public seating. There are 230 parking spaces included on-site as part of the mixed-use development. The plan calls for a 2025 opening.

The “Exclusive Negotiation Agreement” (ENA) between the city and the developer was initiated last December. A few weeks ago, the developer submitted the detailed development program as part of the final stages of the ENA, before they can write out the actual terms of the land deal, formally called a Disposition and Development Agreement (DDA).

Well, the DDA is delayed, because the city and developer have some disagreements with the submitted development program.

There are two major challenges that need to be worked out. The first is the cost of environmental cleanup of the city property, for which the developer proposes a set amount that could then spill over onto the city’s finances if more expensive than anticipated. FLD suggests an initial estimate of $1,173,950, not including “soft costs” such as monitoring and engineering design work. FLD believes the costs may run as high as $1.5 million, which they seek to account for by decreasing the purchase price of the land, meaning less money for the city from the sale.

The second is the public right-of-way (ROW). FLD suggests the city take on the expense to make the changes in the ROW as shown in their plans, but that wasn’t part of the initial agreement. This involves landscaped areas, parking and crosswalks, which not only have a construction cost, but a regular maintenance cost.

“The city has to agree to make improvements in the right-of-way, it’s not automatic that whatever is shown on a plan will be accomplished by the city at the city’s cost,” said IURA Executive Director Nels Bohn. “The default position should be, don’t expect the city to make improvements unless they’ve agreed to make those improvements in the right-of-way.”

“We want to make sure that this program proposal is as strong as possible, and addressing issues that have come up here and at Common Council. We believe that is still not developed sufficiently in this program, I think the developer is going to take one more crack at looking at some of the issues there, and that is where the majority of the unresolved issues are sitting,” said IURA Economic Development Committee Chair Chris Proulx.

With these major sticking points, the DDA is being postponed. The city is asking for a resubmitted plan by early October, with the hope that on the second try, they can come to terms and have a DDA to review by November 1st.

A third issue involves the matter of timing. One of the properties involved in the proposed development is the state-owned Coast Guard Auxiliary facility, which is the property of the NYS DEC. Previously proposed for renovation, it will now need to be torn down, and the transfer of land rights for revised access easements will likely take some time. [Disclaimer: I am a DEC employee, but I am not involved in this project in any way.]

“Bringing the program to fruition requires straightening the New York State access easement along the flood control channel, which requires tearing down the existing building at 508 Taughannock Blvd. Additionally, the DEC requires a permanent access easement […] The State estimates that they need a year for their process to transfer their land and that this process will not begin until the City initiates it,” says a letter from project consultant and landscape architect Jacob von Mechow of Whitham Planning and Design.

This extended time frame may create additional uncertainty — and uncertainty is seen as a pox by otherwise-interested financiers, whether state grant authorities or private lenders. The developers can’t prove they have site control, and in this time of enhanced inflation, it’s harder to budget construction if it has to wait as long as a year.

In a follow-up phone call, developer Steve Flash sought to downplay potential impacts, stating that the transfer process would be concurrent with DDA discussions and Planning Board review.

“Will this cause a one year delay, in and of itself? No,” he said. “While the city has a process to go through, it will be going parallel with the other processed to get the various approvals that we need, we’re not just going to sit back and wait. We’re working through their issues and working to get our project approved through the entitlement process at the same time.”

Some details have since been fleshed out in the ENA documents. The shape of the buildings has been modified, as has the landscaping. “The Stays” will have 88 apartment-style units; 12 studios, 38 one-bedrooms and 38 two-bedrooms. Rents for the units, which have hotel-like services but rent like extended-stay suites or time-shares, would range from $1,900-$3,400/month depending on unit size and location.

“The Anchor” by INHS (I will beat this drum until it changes, please don’t name your affordable housing something synonymous with “the deadweight”) will have 55 apartments, 9 studios, 32 one-bedroom units as 14 two-bedroom apartments, ranging from 30% to 90% area median income (the median unit is 50% AMI). Three units would be set aside for veterans or people with disabilities vulnerable to homelessness, and six more would be for those in recovery from substance abuse. The building, designed by HOLT Architects like the hometel, will be built to Passive House sustainability standards.

With the Coast Guard Auxiliary building now slated to be removed, would boating services and a meeting room for educational programming would be provided in the Boating Center. In addition, plans for solar panels to create a renewable energy-generating “microgrid” on Inlet Island have been removed due to “feasibility study results”, with the solar array now proposed for construction off-site.

Lastly, FLD proposes to pay the city $2.3 million for the land. This is based on a $3.2 million fair market value, minus land that is undevelopable due to easements, and a $300,000 reduction to reduce the cost-burden on INHS for the affordable housing component (they would pay $700,000 as a share of developed square footage, but the proportional value is $1 million).

With these obstacles and challenges, there’s likely to be a lot of debate over the financial and development proposal details in the coming months, and it’s not clear if the city and developer will come to terms in time for the October IURA Economic Development Committee meeting. Proulx, for his part, is optimistic.

“I think there’s a bit more work to go. We think we can get this done in the timeline that you have now seen…hopefully getting this to the finish line,” he said.

“People are working in good faith to move this process forward,” added the project team’s Scott Whitham. “It’s complicated, all these pieces are going to take some time, but we’re working full speed on it.”

Brian Crandall

Brian Crandall reports on housing and development for the Ithaca Voice. He can be reached at bcrandall@ithacavoice.com.