Coming Up: Yet Another Round for CIITAP Revisions

9 03 2016

The city is trying yet another approach to CIITAP. This one involves cash payments.

Previously, the city considered a multi-faceted set of revisions, but a number of issues were raised – namely, there isn’t good documentation on stats such as the proportion of local labor typically involved in a CIITAP project. While the IDA voted in February to adopt a labor policy that requires solicitation of bids from local contractors and local labor participation in CIITAP projects, that’s more to provide future guidance after some projects have submitted documentation, and doesn’t achieve any near-term changes in CIITAP as requested from some corners.

So here comes the latest iteration, a lump sum deposit into a “community benefit fund” for general use (hopefully a formalized HOME/CDBG type of disbursement and not just a grab-bag for different programs). The idea was raised at the last PEDC meeting and the IURA explored options.

The overlying theme is to select a plan that doesn’t change affect bottom lines – not to make any easier on developers (the accusations of the current CIITAP being too easy is what brought about this revision in the first place), but to not chase them out to a hay field in Lansing either, costing the city a fund payment, jobs and future tax revenue, not to mention encouraging suburban sprawl. The IURA looked at a bunch of different proposals, shown below.


The preferred option goes for a 1% upfront cost and a total abatement on increased property taxes for three years, and then moving to a 70% abatement on new construction for year 4, tapering to full taxation after year 10. This option was determined to have the least impact on a project’s financial feasibility.


There’s a positive and a negative to this approach. If a developer is proposing a $20 million project, forking over $200,000 to the city right off the bat could be a major obstacle towards getting a loan and bringing an approved project into reality. But it might be overcome if they can effectively explain to an investor or potential lender the tax benefits in the financial analysis. It definitely makes the development picture more complicated, but this might be the only way to keep the current version of CIITAP, which has done a lot to help redevelop downtown. The Common Council members will share their at their Wednesday meeting.



5 responses

9 03 2016

Sometimes I’m amazed any developers would think it worthwhile to deal with the rules/regulations that go with a project in Ithaca/Tompkins county. I wonder what the area would look like and how the local economy would fare with less roadblocks from development friendly governments.

10 03 2016
drill deep

Developers are certainly not required to apply for tax breaks.
Avoiding the rules and regulations of CIITAP is easy.

The idea that a tax incentive is required to develop a location is bizarre, and must have something to do with the tax structure, no? That is another column though.

10 03 2016
B. C.

Writing about the issues with the tax structure wouldn’t be another column. It would be a novel.

Unfortunately, because of time, effort and individual whims of lawmakers and local lobbyists, it’s not going to be “fixed” anytime soon.

11 03 2016

The political equation– buying the community off via capitalizing an upfront “goody fee” while simultaneously abating tax revenue– has all the operational elegance of STAR property tax rebates and such. Not clear to me that the wish for a formalized structure and not a “grab bag” is likely. Staff is recommending a scenario in which they dispense little bits of money that developers borrow at interest. It makes no financial sense, but it does make City staff goodies bestowers and not agreement enforcers. The latter is more what is needed.

11 03 2016
B. C.

Trust me, I’m not a fan of how byzantine the whole process is, not unlike STAR and New York State government. But Ithaca is often heavy-handed when it comes to government involvement – for example, the chicken debate, which at one point included permits, city inspections of coops and a mandatory training class in hen ownership. It seems a common theme is that the city recognizes an issue, and then they over-regulate to where nothing can get done, or they create several other problems in the process. And that’s not the city’s fault per se, there just happens to be a lot of vocal voters who are very passionate about specific but widely varying causes, and the city struggles to please everyone. I guess being goody (money) bestowers is a very high-profile way to placate those voters.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: