ITHACA, N.Y.—The rather contentious saga of the “Gateway Apartments” proposal for 401 East State Street is adding another chapter. Citing rising costs, the developer is seeking to add another floor and a few dozen more apartments to already controversial plans for the east end of Downtown Ithaca.

Now re-addressed as 445 East State Street, the original proposal called for 321 apartments with 235 parking spaces, largely contained inside a lower-level parking garage with apartments on the upper floors for a combined six stories. It also has the usual complement of lighting, stormwater and landscaping improvements, including plans to enhance and extend the Creekwalk to the eastern end of the property, currently a large surface parking lot with a small commercial building on the east side.

The project has engendered some controversy from members of the city of Ithaca’s Planning Board and Board of Zoning Appeals (BZA). The project originally sought to build up to seven floors and 71 feet in height on its sloped site at the base of East Hill, but while the Planning Board gave that idea preliminary approval 6-1, it faced reluctance from the BZA. The project team hastily sliced off the seventh floor to gain the BZA’s approval.

Even then, at a bare quorum Planning Board meeting, the plan was unable to gain final approval, as one of the four members in attendance that day, Elisabete Godden, had long opposed the project due to its size and location, and was about to change her mind. A second meeting with additional members in attendance had to be scheduled in order to fit the project’s timeline for construction financing. That was September 2021. A year on, and the project has yet to break ground.

Now we know why. Citing issues with rising mortgage rates and inflation, the project has so far been unable to receive construction financing sufficient to move forward. Internal tweaks to the parking and apartments failed to resolve the issue. In a bid to try and make the finances pan out and obtain financing, the project is heading back before the Planning Board this month with a revised plan and seeking approvals for the revised project from them and the BZA.

“Since our final approval with you in September of last year, we closed on the property (sale). […] Given the state of construction costs and the financial market, we hit a pause on the start, just trying to get some clarity on where things were headed. We’re positioning ourselves to start construction in Q1, Q2 of next year, and as we’ve been evaluating everything, we’ve come back with a modified variance request that we’re proposing to BZA and have in front of you today,” said developer Jeff Githens at the Project Review Committee (think of it as pre-Planning Board “gut check” meeting) last week.

“This is an attempt to absorb some of the (cost) increases we’ve faced in all categories. It’s somewhat similar to the plan we had but modified originally, with a seven-story building throughout. […] What we would like to do is maintain the current approval, but give us the ability execute a modified plan if the variance is approved (by the BZA).”

In the revised plan, the seventh floor would come back, but only for the west side of the building. The east side would stay at six floors. The parking remains the same, while the project would add 45 apartments, for a total of 376 apartments.

One aspect that may benefit the project is the plans by developer Frost Travis to convert the Gateway Center building at 401 East State from commercial office to residential. Office uses have much higher parking demand per square foot, so that frees up surface parking next door that could be rented to Githen’s potential tenants.

“For my piece, I’m very happy to see this back from the dead,” said Planning Board Chair Robert Lewis, to chuckles from architect Donny Kim. “I’m really liking this version, I like the variation on heights, it helps push back on the monolithic nature of some of what we saw earlier.”

“Time gives us so much perspective. I don’t see a problem adding the seventh story. It adds some definition to the two separate wings. On the State Street side, I feel that it works fine,” said board member Emily Petrina.

The project benefits to some extent because the review was conducted for a seven-story building; the taller version had full review, and this being smaller size-wise as it’s half a wing, certain components won’t need to be reviewed again. However, it’s a big enough change that it needs some amount of re-review before the Planning Board. Planning Director Lisa Nicholas said she didn’t see anything wrong saying that both the six-story version could remain approved while the project tries to sell the BZA on a half-sized seventh floor.

The Planning Board will hold a modified review at their meeting later this month, though it should just be a one-meeting event barring any curveballs. Not to count chickens before they’ve hatched, but it appears re-approval from the Planning Board is likely. The question is really whether the BZA will entertain the idea at their next meeting in November, and if that happens, whether shovels hit the dirt in the spring.

Brian Crandall

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