GreenStar Co-Operative Market Construction Update, 2/2019

2 03 2019

We’re going to rewind the clock a bit on this to before GreenStar. It’s early 2017. Two major regional medical service providers are eyeing locations in the affluent and growing city of Ithaca. The first is Cayuga Medical Center / Cayuga Medical Associates. The second is Guthrie Clinic / Guthrie Medical Group.

How bad did these two want to outdo each other and lock their rival out of the city? So much so that Cayuga Medical Center paid several times the value on Carpenter Business Park. So much so that Guthrie bought a site that would fail to meet their needs.

For neither CMC or Guthrie was it the best of moves, but not everything is done rationally. In June 2017, Guthrie paid $2.85 million for the properties at 750 and 770 Cascadilla Street, over the asking price of $2.7 million. For those millions they purchased 3.12 acres, with a 37,422 SF printing press/ warehouse built in 1980, and a 30,000 SF storage facility built in 1988. Cornell University had previously used the facilities as part of its printing press operations, and had been seeking to sell the properties since July 2016.

Guthrie started looking at its options at that point, and wasn’t liking them. But there appeared to be an opportunity. The developers of City Harbor, working on their mixed-use proposal a couple of blocks away, would provide Guthrie a convenient escape hatch to Pier Road, where they could build a structure from scratch that would suit their needs. In return, Guthrie would offer up its recently-purchased Cascadilla properties to GreenStar on a long-term lease, with an option to buy.

For GreenStar Co-Op Market, the site was a welcome opportunity of its own, a real estate version of “one man’s meat is another man’s poison”. Founded in 1971, GreenStar has been leasing its current location at 701 West Buffalo Street since the fall of 1992, following a fire that destroyed their store on North Cayuga Street. Satellite stores operate out of the DeWitt Mall at 215 North Cayuga Street in Downtown Ithaca, and at 307 College Avenue in Ithaca’s Collegetown neighborhood. Specializing in locally-sourced and organic foods, the co-op has enjoyed significant market growth in the past decade, with sales increasing by nearly 50% since 2011, to over $22 million annually.

That was both a good and a bad thing. As I wrote for the Voice back in April 2018, GreenStar makes a very small profit on sales, and relies on membership growth as a supplement. But their West End store was jam-packed, all built out with no more room and increasingly agitated co-op members. With other grocers moving in on the organic and natural food market, it was going to be grow, or perish, taking 200 jobs with it. GreenStar had been in talks with landlords and developers for a new space, and City Harbor’s project team was one of those who listened. Just as City Harbor’s Pier Road was Guthrie’s escape hatch, 770 Cascadilla Street was going to be GreenStar’s.

Plans were first announced in December. As a Co-Operative food market, GreenStar has to put any kind of move of this scale out to its shareholders for a vote, through paper and electronic ballots with a three week voting period in March of 2018. The vote for the move was 92% in favor. The project was approved by the city last July, and the groundbreaking was this past November. If all goes well, the lease agreement will allow GreenStar to buy the property from Guthrie in 2030; this passed the member vote with 97% saying yes.

The plan is to renovate 770 Cascadilla into the latest and greatest GreenStar flagship. 750 Cascadilla would come down for a 160-space store parking lot and landscaping. The new space would have an edible garden, outdoor cafe, mezzanine stairway and classrooms. The building would be refinished, insulated, and potentially net-zero energy compatible, meaning all the energy it consumes comes from renewable sources. Breaking it down, the new retail area will be 16,500 SF, there will (well, was, see the last paragraph in this entry) be 5,200 SF mezzanine space for office and administrative functions, and a 13,000 SF kitchen and events space. With the addition of the mezzanine, the warehouse will be expanded in square footage from about 30,000 SF to 35,219 SF. The Space @ GreenStar would be moved to within the new store, and shrink from a 225-person capacity, to 125, and once moved in the old Space @ GreenStar location will be put up for sale. The Space isn’t much of a revenue generator for the Co-Op, and is rarely utilized at full capacity.

The project will take a little over a year, from November 2018 to December 2019 (the store itself wouldn’t open until February 2020, after the equipment is in, shelves are stocked and electronics are tested). Local architecture firm STREAM Collaborative is in charge of exterior design, and architect Pam Wooster will handle the interior layout. Elmira’s Edger Enterprises will be the general contractor for the buildout. Delaware River Solar will supply the solar energy to power the building via an off-site array.

GreenStar, which is carrying out the project with its City Harbor partners (Edger Enterprises, Morse Construction and Lambrou Real Estate) as Organic Nature LLC, did apply for and receive a standard seven-year tax abatement worth about $625k, about 4% of the project cost. $130k in new taxes would be paid over the period. GreenStar’s project would add at least 40 full-time equivalent positions with most jobs in the $15-$16/hour range plus benefits (Starting pay will be about $13.50/hour plus benefits; GreenStar has previously been certified as a living wage employer, though they appear to have been just below it in 2017). Generally speaking, the abatement application was one of the less contentious public hearings, which could be due to GreenStar’s stature in the Ithaca community, its labor and environmental practices, and because dedicated opposition could put 200 jobs and the whole Co-Op at risk of closure.

According to GreenStar’s TCIDA tax abatement application, while the project is $4.9 million to build (hard costs), the overall project costs are $14.8 million. Other sources have said $3.7 million in hard costs, so YMMV. Along with $8.7 million in bank and credit union financing, and $4.6 million in cash equity, the Co-Op has launched a $2.5 million capital campaign to sell investment shares to owners to help cover the project costs.

At present, a large gap has been opened in the exterior of 770 Cascadilla’s CMU facade. This is where the entrance of the new GreenStar will be, and it was practically the only major design change during the review process. The steel sitting aside the building may be for building out the mezzanine. A pile of debris sits next to 750 Cascadilla, which will itself be a pile of debris in due course. About the biggest loss here will be some pretty fantastic street art.

In the past couple of weeks, the interior was revised as a cost-cutting measure, shrinking the mezzanine by roughly half and reducing the size of the classrooms from 108 seats to a single room of 33, with the former first-floor classroom space now replaced by offices for GreenStar staff. The opening also appears to have been pushed back by 1-2 months, to “early spring 2020”.

 

Early render

early render

final render

 


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12 03 2019
News Tidbits 3/11/19 | Ithacating in Cornell Heights

[…] But Guthrie transferred ownership of the parcel to “Organic Nature LLC” last month. Organic Nature LLC is a company owned by the project team building City Harbor. In short, the City Harbor developers are buying the Space @ Greenstar, and likely have plans for […]

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