Ithacating in Cornell Heights

This project combines a pair of things that are up and coming. One is development along the State Street Corridor, the other is Visum Development Group.

Visum (Vih-SUM) is the startup firm launched by local businessman Todd Fox. Fox doesn’t really fit the normal profile of Ithaca real estate landlords. Most are older, more formal in attire and appearance, and reluctant to engage with news media and the public – “everyone’s been burned over at least once,” one 70-something year old developer once told me. Fox, on the other hand, is a different culture. He’s in his mid 30s, eschews the suit and tie for buttondowns and casual shoes, and sports what I suspect is a half sleeve tattoo on his left arm. One of Ithaca’s few millennial developers, he’s also more inclined to speak out than most – that doesn’t always make for the best headline for him, but it makes my job for the Voice easier.

However, even though Fox is a different vibe, there’s no doubting he’s good at what he does. Visum is one of the fastest growing firms in Upstate New York. 501st nationwide in 2018, and 610th this year, according to Inc., with a three-year growth of 820%. The small if growing firm got its start in 2015 as a spin off of Modern Living Rentals, which was led by Fox with developer Charlie O’Connor. But Fox and O’Connor have different approaches to development, so they pursued their own interests, O’Connor as MLR, and Fox as Visum. Since that time, Visum has developed tens of millions of dollars’ worth in property, and has tens of millions more in the development pipeline. Projects include 201 College Avenue, the Lux (232-236 Dryden Road), 210 Linden Avenue, 118 College Avenue, 707 East Seneca Street, and several smaller projects. More recently, the company is pursuing projects beyond Ithaca – a residential conversion project in Downtown Elmira, a 75-unit building in Boise, and recent signals that they’re scouting locations for a project in Raleigh.

Generally speaking, most of its projects have been geared towards students, and from a purely business standpoint that makes sense. Students are a lucrative, stable market in Ithaca – as long as your location is good, you’ve got a safe real estate investment. But with Cornell’s Maplewood and North Campus Residential Expansion, most local developers are shying away from the student market. Some are sitting on their earnings and just hoping to roll with the punches, others are pursuing new opportunities. Travis Hyde Properties is planning new senior housing, Lambrou Real Estate is pursuing a waterfront project, and Visum, the low-moderate income (LMI) affordable/workforce housing bracket.

That’s pretty unusual for a for-profit entity. Frankly, the complicated process to assemble financing to build LMI housing is exhausting and often uncertain, so most avoid it. About the only other ones I can think of with a local presence are Cornerstone Group and Vecino Group, both much larger firms than Visum.

Visum is serious about it, though. 327 West Seneca would be their first affordable LMI project (at least two more are planned, though the city appears to be actively trying to kill one of them). As planned, it’s smaller-scale urban infill (yes Historic Ithaca, I’m aware you don’t like me calling any project that involves a demolition/deconstruction “infill”). A humdrum two-story, three-unit apartment house replaced with a three-story, 12-unit apartment building totaling 7,845 SF, with six studios (442 SF) and six two-bedroom units (708-744 SF), to be priced in the 70-80% area median income (AMI) bracket, so around $1,200/month for the two-bedroom units and $900/month for studios.  Zoning on the site is B-2d, which allows 4-story buildings with 75% lot coverage, and no vehicle parking requirement for all-residential structures like this one. It will have a bicycle rack. While a 4-story building was allowed, they would have needed a second set of fire stairs per state fire code, which made the extra floor cost-prohibitive. The target market is one-person and two-person working-class households.

Yard setback variances were required, and early on two versions of the building were presented, one with smaller units and no need for setbacks, and the larger version, which has marginally larger units but in need of variances. The Planning Board let the project team know early on that they encouraged the larger workforce housing units and would support variances, which is a strong voice of support to the Board of Zoning Appeals, and though self-created, the BZA accepted the Planning Board’s advice and granted the variances.

As with many Visum Projects, STREAM Collaborative is the architect (the filing docs suggest architect Jacob Marnell‘s work). The relatively simple design is intended to quietly fit in with the apartment houses that neighbor it on either side. The new structure would be finished in Dryvit synthetic stucco (color Benjamin Moore “Sunny Days”) and fiber cement clapboard and batten board (color Benjamin Moore “Indian River”). Certainteed 3-tab asphalt shingles (Timber color) will be used on the gable roof, Anderson 100 and 400 Series windows with off-white trim, black steel canopies and unpainted larch wood screening will also be used. Keeping with the warm colors, the doors will be painted BM “Jupiter Glow”. Main entries are on the sides, but one apartment is accessed via the front entrance. Heating is electric baseboard, but I don’t see anything about heat pumps in the planning docs.

The project was first proposed in June 2018, and approved in November. By Ithaca standards, the process was fairly quick and painless; there was practically no opposition to the proposal, and the design remained pretty much the same from start to finish, with the exception of some window treatments and finishes (gutters). The SIte Plan Review document suggests a six-month buildout, though I dunno if that includes the demolition; either way, a completion by the end of this year is likely, given that it’s a concrete slab and wood-framed buildings like this tend to go up quickly.

Construction costs are estimated at $1,275,330. At least $200,000 of that is covered with a joint city-county-Cornell Community Housing Development Fund (CHDF) grant – as they split it up, $170,000 from Cornell, $30,000 from Ithaca, though to be clear, the project is not Cornell-affiliated in any way. Developer equity and bank financing will cover the rest. As one city official told me with 510 West State Street, the city is nervous about its ability to lock in affordability from for-profit developers; but given that Visum plans to pursue a CHDF there as well, the threat of a costly clawback of funds plus legal costs is a pretty strong deterrent to that kind of behavior. By pursuing housing a notch above the usual 50-60% area median income sought with affordable housing, Visum doesn’t need as many grants to make a project work, and their ample developer equity (i.e. existing cash on-hand) makes affordable lower-middle income projects like this appealing for lenders and their construction loans.

Demolition permits were granted in late May. The existing house has been cleared and the site is graded. Keep an eye out for footer excavation and foundation pours in the coming weeks.

May 18th, 2019

June 14th, 2019