News Tidbits 12/2/17: The Changing Calculus

3 12 2017

1. Perhaps the big news of the week is that Visum Development Group’s project for 311 College Avenue (the Nines restaurant and Bar) was revived after negotiations with the seller moved in a favorable direction. This time around, it appears that Visum is bringing something close to an “A” game proposal; Jagat Sharma is still the architect of record, but Visum’s VP for New Market Development, Patrick Braga, had a heavy hand in the design work and historical research. The designs produced are more historically inspired and embrace some of the elements that make the old fire station attractive to the public – the first floor doors will pull up like garage bays or slide open to create a sort of open-air loggia on warm days, and a cornice element is retained. Floor to roof will be about 66 feet according to the Times’ Matt Butler, and still contain about 50 1-bedroom and studio apartments as well as 750 SF of retail. For the record, he and I did a bit of collaboration on describing the architectural features before we ran our respective stories.

The sketch plan had a kinder reception from the Planning Board this time around, if still cautious. Even though John Schroeder made it clear he would never accept any plan for The Nines, he said something to the effect of, if this design were proposed for any other MU-2 in Collegetown, he would have no problems with it whatsoever. The rest of the board did a quick poll to see if the other members would at least entertain a proposal, and no one else said no, so the project is considered active.

Now, things can get a little awkward from here. The city planning director, JoAnn Cornish, made it clear that they could move forward with design if they want, but there’s a risk that the property may get landmarked before they get approval. Speaking with the city historic preservation director Bryan McCracken the day after the article, he said that a decision on whether or not to move forward with the landmarking process would be on the agenda for the ILPC’s December meeting. If they move forward, it still has to go to Common Council. I had previously heard through the grapevine that the council was favorable to landmarking in the case of the Nines, but that was before Visum brought forward a new plan. The truth is, things are fairly unpredictable at the moment, and it’s a matter of waiting and watching how different stakeholders act and react.

2. I like Matt Butler, he has time to do the stories that I can’t. This time, a look into the plans for a centralized government facility at the site of the Central Fire Station on the 300 Block of West Green Street. That study is still active, under the guidance of Kingsbury Architecture and TWMLA, as is the second study for a combined Public Works facility. The appraisal process and estimates of cost are also still underway.

It’s kinda a given that this would have tremendous impacts, as noted in the Voice. A lucrative Collegetown site and other redevelopment sites would be on the market, and hundreds of workers and daily visitors would extend Ithaca’s core down State Street, which the city wants, considering it to be one of the few directions downtown can expand towards without compromising too much of Ithaca’s existing urban fabric. The ILPC would need to sign off on plans due to the fire station’s proximity to the “Downtown West” historic district (it actually contains the IFD’s parking lot for the sake of contiguous parcels), so “super-edgy hypermodern” probably isn’t on the table design-wise. The city also has to make a decision relatively soon – the current city hall (former NYSEG HQ, built 1939) and “Hall of Justice” (1920s, renovated/expanded 1964-66) are in need of major renovations.

3. Also on the visionary end of discussion are future plans (2020 onward) for Collegetown’s transit network. Here, it is often a delicate case of balance; it’s a dense, lucrative secondary core of the city, but parking and traffic are problems, as is the lack of infrastructure for pedestrians and bicyclists. One option being explored is a new bike lane up College Avenue that would eliminate 35 parking spaces (and was not well received), and the other is a more modest plan that largely keeps College Avenue as is, which many didn’t like either.

Perhaps the most interesting note from the article is that the city is examining the feasibility of expanding the Dryden Road garage by adding additional floors to the 1980s structure. The Dryden Road garage has the highest parking rates and a high occupancy, and is the most lucrative of the city’s four garages. The city is also looking at incentives for on-site parking, which to be honest, probably isn’t going to work in Collegetown for a number of planning and financial reasons (i.e. a developer will make a lot more from a rentable unit per SF, than from a parking space per SF).

4. Nothing much of note from the town of Ithaca Planning Board agenda. The owners of a former convenience store at 614 Elmira Road are seeking to perform minor renovations to the building for a bottle and can return (to be called IthaCAN & Bottle Return), and Maplewood is asking the town planning board permission to work on Saturdays in a mad dash to have the 872-bed complex ready for occupancy before August. Normally, renovations don’t need to visit the board, but the zoning for the Elmira Road requires a visit for each change of occupancy/use.

The city of Ithaca’s Planning Board memo is short as well, just the long-brewing plans for a garage-replacing addition to 115 The Knoll in Cornell Heights. The 1950s garage will be replaced with a 4-bed, 2-bath addition for Chesterton House, an all-male Christian interest group Sophia House, an all-female Christian group.  It appears the design has changed very little if at all since the plan first became public in May. The $349,900 addition, designed by STREAM Collaborative, would be built in the Spring and Summer of 2018 for an August opening. (Correction: Chesterton House is next door and owned by the same group. The project is for Sophia House. Thanks to Lyn for catching that.)

5. Local developers Steve Flash and Anne Chernish (d/b/a Rampart Real LLC) will be taking on a partner in the 323 Taughannock project. The couple sold a $203,000 stake in the 8-townhouse plan to Arnot Realty of Elmira (d/b/a 323T LLC) on the 22nd. For Flash and Chernish, it gives them a much bigger partner with experience and connections to contractors; for Arnot, it gives them a toehold in the buregoning Ithaca market, their first step into the city. The deed explicitly states this is a joint venture.

6. So this is interesting. On Friday 12/1, an LLC purchased an industrial/office building at 37-40 Elm Street in Dryden for $260,000. The property was built in the late 1980s and is about 25,000 SF, with a warehouse, manufacturing space, office space and three apartments.

The buyer was an LLC, but the LLC filing address traces back to 312 Fourth Street in Ithaca, a 13,800 SF complex of buildings and warehouses home to the All Stone & Tile Company, Ithaca Ice and Strawbridge & Jahn Construction. So either someone is growing out of space and the others are staying, or they are all moving. If they are all moving, that could be an opportunity. Zoning is B-4,  which allows a very wide variety of business and residential uses. Zoning is 4 floors/40 feet maximum height, 50% lot coverage, but being on the tip of the Waterfront/West End corridor, my suspicion is that the city could be a bit flexible with zoning variances for density and/or affordable housing. The only places one finds B-4 zones are the fringes of downtown, so it’s not well-suited for big projects, but there’s room to explore options. Of course, the electrical substation next door isn’t ideal, and the property isn’t even up for sale, but this is worth keeping an eye on.

7. So, there’s no real avoiding it this week – the tax bill in Congress. It really hurts Tompkins County. I did my one and only tweetstorm to cover some of the issues, and most of it still holds. Two last-minute changes softened the blow between then and now. One was the inclusion of the Collins amendment to reinstate a $10,000 cap on SALT (State and Local property tax) deductions, since the original Senate bill had no deduction. The other was raising the endowment from colleges with an endowment of $250,000/student, to those with $500,000/student. Cornell’s is about $310,000/student (6.8 billion/22,300 students). For the record, it wasn’t done to protect Cornell, it was done to protect conservative Hillsdale College after an amendment to give it an exclusive exemption failed. At least 30 schools were still hit, and this detail has to reconciled with the House Bill’s $250,000/student figure.

So apart from the SALT and college impacts I had already noted, one thing that got missed was that the bills allow prohibit schools from taxing out tax-exempt bonds to fund construction. For Cornell’s plan to add 2,000 beds, this is a problem.

So let’s just overview this real quick – a bond is a fixed-income investment in which an investor loans money to an entity, which borrows at a fixed or variable interest rate for a fixed period of time. When you buy a bond, you hold the debt for that entity. Most investors typically have some proportion of bonds in their portfolio – they typically are more stable investments than stocks, though the returns are typically less. Their relative safety is why financial planners recommend a higher proportion of bonds as one gets closer to retirement. The riskiness of a debtor not paying back is given by their bond rating. Cornell’s long-term debt rating is AA, which is very good, high-quality investment grade.

Now, in the case of non-profit schools, typically the tax-exempt bonds are issued with the approval of local and state authorities. The project to be financed by the bonds is determined by the school. The school does its internal approval of the project and bond plan, and the project it goes up to the community for planning board/environmental review. Once approved, the school chooses an approved issuer of bonds, often a state or local development authority (ex. The Dormitory Authority of NYS). A working group is put together to establish a timetable and structure for the bonds, and once the bond structure is settled and reviewed for issues, a public hearing is held on the bond issue, so that any issues or concerns are made clear before issuance. Barring no problems, the government signs off on the tax-exemption for the bond issue, a closing date is established and the bonds are marketed and sold, mostly to banks and big investment firms. The received funds are disbursed to pay for the project.

That’s getting taken away by this tax bill. That means any future bonds will be taxable, and have a much higher interest rate. Borrowing just became more expensive. A 30-year AA tax-exempt bond might be 2.76%, and a taxable bond 3.37%. That might seem a small difference, but a 2,000 bed project is on the order of $200 million (recall Maplewood is 872 beds and $80 million). So we’re talking millions of dollars more that Cornell will now have to pay to make those dorms happen. It opens up a distinct possibility that the project could be scaled back and/or delayed, which impacts the overall housing market. Probably the federal SALT tax cap is going to hurt much more.

Really, this bill was practically designed to decimate real and perceived enemies of politically conservative groups as much as it was designed to help billionaire donors and corporations. Poorly conceived, ignoring multiple non-partisan analyses and relying on overly optimistic projections, hastily put together and shoved through, blowing the debt trillions higher and immediately or eventually raising taxes on tens of millions. This is every cartoonish stereotype of Republicans amplified in one piece of legislation.

I don’t like to get political, but I’m a registered Republican, and have been my whole life. As a pragmatic never-Trump moderate, I joke that I’m a New York Republican and a Texas Democrat. When one writes about government red tape, the Cargill Mine, and Ithaca’s progressives attacking affordable housing, it tends to reaffirm beliefs.

But hell, this tax bill is throwing every principle out the window with this bill, causes a ton of damage to a place I care about, and with a morally deficient and unstable president at the helm, I can’t do it anymore. I mailed off the form today to become an independent. After this, I just can’t see myself voting Republican again, not for a long time.

 





News Tidbits 9/16/17: The Big Surprise

16 09 2017

1. Ostensibly, the biggest newsmaker of the past week was the announcement of the Green Street redevelopment in Ithaca’s downtown core. To be frank, I was freaking out at my desk. Even more astounding was that the city slipped it out so casually, embedding it in a monthly PEDC meeting file that typically focuses on more mundane legal and planning concerns.

All photos that follow are from Jolene – pardon the marginal quality, we were both in note-taking mode, and these presentation papers weren’t given out to the public. North is towards the top of the floor plan images.

While the documents have yet to be uploaded to the city’s website, some basic details were released during the meeting – the number of parking spaces for the whole complex is 525. There would be two towers with residential units, a U-shaped west tower and a boxy east tower with projecting corners. 15 floors apiece. 350 units, “designed to appeal to a broad demographic”. Abatement likely, with the details to be ironed out as the percentage of affordable units is determined. The middle portion will also have residential units on top of the existing garage. 30,000 SF of conference space is planned under the eastern tower, if my notes are right.

The first floor appears to have at least two retail spaces, a lobby area, and an office, probably for management of the complex. The middle section will retain access to Cinemapolis and the garage. On levels two and three would be rebuilt garage sections (note the center section was rebuilt ten years ago and unlike the ends, is in good shape). Another floor of parking will be added.

Cooper Carry is the architect, and the initial design looks fairly safe, attractive if not particularly inspired. After the Marriott, it’s good to be wary of potential value engineering. It appears to use brick veneer, Nichiha-like metal panels and maybe fiber cement. Also, with Harold’s Square and City Centre off to the left, this would arguably create a broad-shouldered if stubby skyline for downtown Ithaca, more impressive than many communities Ithaca’s size.

My notes are that Marriott co-developer Jeff Rimland had non-public information about the Green Street garage because he owns the ground facilities under the garage’s eastern deck, and would be impacted by renovations. He was made aware of city looking at their options and put something together. The city only learned about the plan four weeks ago, and mayor Myrick wanted to make sure it was brought forward for public discussion and to determine if it was a wise choice to move froward. Ostensibly, if this came out as a surprise, a hornet’s nest of opposition would be stinging. Being transparent now helps later.

It seems the intent is an RFP for the garage for the sake of fairness, but I dunno how effective that will be. Rimland has a big advantage as owner of a portion of the parcel, since any other developer would need to arrange legal agreements with him in order to carry out a project. It was suggested by Brock, who has never been a fan of development, and I cynically wonder if this was an attempt to ensnare or at least stall the proposal. An RFP does put the city in a more legally comfortable position, perhaps. On the flip side, I cringe at the thought of another Old Library-like mess.

On a final note, there’s also a name, seen in the lower right of the rendering – “Village on the Green”. Very punny guys.


2. The other big news item of the week was 311 College Avenue, more commonly referred to as “The Nines replacement”. The Nines is a much-loved restaurant and bar that has long been a part of Collegetown’s drinking and musical scene – in the late 2000s, if I had to describe Collegetown bars, where Johnny O’s was the “fratty frat” bar and Chapter House the erudite tweed-clothed crowd, The Nines was the laidback, indie band geek-turned-rocker. Add in its location in a ca. 1908 fire station, and one of the few sizable outdoor patios in Collegetown, and one can understand that a project on this site was never going to be warmly received.

Granted, I’ve been raked over the coals a couple of times for the article, whose first headline said The Nines was being kicked out. It was an honest copy-editing mistake. For breaking news I publish ASAP, like with the Green Street development. However, that’s discouraged because the business pieces are useful for filling slow periods during the day, or to give time for others to prep articles during the early morning. Many of my articles are written in the late evening, submitted to the schedule, and skimmed through before hitting the website. In this case, I submitted Sunday night, my editor Jolene read through it early Monday morning, she thought the opening lines implied an eviction and changed the title (the original was a generic “Apartments Proposed for The Nines”). Sometimes title get changed for clarity or Search Engine Optimization (SEO), but this particular time it created a false statement. I didn’t see it until I was at work on Monday, and uncomfortable conversations ensued. Sorry all. The next article won’t wax poetic.

Anyway, with that error noted, it makes this next opinion segment more uncomfortable. I’m not a developer. But if I were one, and heard the property was being put up for sale, I’d probably have steered clear. With all due respect to Todd Fox, my gut feeling is that the cons outweigh the pros.

Ithaca is not an easy city to do a project in. A developer has to pick and choose their battles. In this case, the battle is taking a building with some degree of historic value, but more importantly a lot of local sentiment attached, and proposing to replace it with, frankly, a mediocre design with high-end student units. I understand the economics of the site, the market, and the unfortunate though economically necessary impacts building flush to lot lines has on the ability to install windows on the sides. My concern is external impacts, by creating an emblem for opposition to organize around, because it wraps several perceptibly negative impacts into one proposal. That may make future projects that much more difficult. I worry that whenever a controversial plan is brought forth in years ahead, it will be pejoratively described by NIMBY types as “just like that Nines replacement”.

It has taken years for Ithacans to become slowly more amenable to density and development. Proposals that inadequately address community concerns threaten that progress. Consider the case of Jason Fane. He toyed with the city plenty of times. Eventually it caught up to him and he got burned. The sad part is, 130 East Clinton was a solid project, and to this day I believe that had it been another developer, those apartments would have been built.

Anyway, the ILPC would like to preserve it as-is, which draws the question why the discussion never moved forward 18 months ago when they had the chance. I don’t think that’s likely at this stage, and an overbuild probably wouldn’t work due to development costs (foundation shoring, elevator if 4+ floors) with respect to developable area – the big front yard setback is an impediment to that. I heard that an offer was floated to Neil Golder to move his house at one point during the 201 debate, so maybe moving all or at least the front (1908 wing) of the old station No. 9 is possible, but the expense would be great. As for the new building’s design, maybe modest fixed windows in the north/south brick faces, or glass block features like on Sharma’s 307 design, or even something as minor as a mural on the CMU blocks would help.

But, all that might be grasping at straws. This was always going to be controversial. I won’t fault someone for seeing an opportunity, even if it’s not a plan I’d advocate. It all depends on one’s appetite for development opportunities, and sensitivity to potential blowback.

3. For sale: 405 Elmira Road. 0.74 acres of parking lot next to Buttermilk Falls Plaza. List price: $465,000, courtesy of Pyrmaid Brokerage. Also noting – the chain hotelier who bought the former Tim Horton’s next door from the same seller for $640k in January 2016. Timmy Ho’s 0.75 acres is a little small for a hotel on its own, but combined with this lot, suddenly plans start to look quite viable for a mid-sized chain in the city’s suburban-friendly SW-2 zoning. Someone else may come along and buy it, but let’s see what happens.

4. It appears the 24-unit Pineridge Cottages project is off the table. The project, planned for the corner of Mineah and Dryden Roads in Dryden town, was greatly scaled back by developer Ryzward Wawak after water tests led to concerns about having enough to supply all the units. At this time, the plan is for four cottages, each a two-bedroom unit.

5. The Times’ Matt Butler has a nice summary and brief interview with Lakeview Health CEO Harry Merriman regarding the 60-unit affordable housing plan for 709-713 West Court Street. Some of the obstacles the project faced wouldn’t be a surprise to readers of this blog – the soils require a more expensive deep (pile) foundation, and land acquisition costs are climbing, which increases the overall costs involved with bringing a proposal into reality, let alone a plan that focuses on affordable housing. The increase in units from 50 to 60 was driven by the need to balance out revenue with expenditures and make the affordable housing economically feasible. Incremental cost increases per unit are significantly less than overall structural costs, so the per-unit expense for 60 units is less than 50, making the project more appealing in competitive grant processes.

Of the 22 units to be set aside for formerly homeless individuals, six will be reserved for HIV-positive clients of STAP, the Southern Tier Aids Programs. Those infected with HIV tends to experience much higher homelessness rates than the general population, with at least 81 homeless HIV-positive individuals in Tompkins County alone. This makes it hard to do things like refrigerate medication. These six units are a small number perhaps, but for those six folks it will make a huge difference.

6. Another feather in the cap of the local STEM sector of the economy. Biotech startup Jan Biotech Inc., based out of the Cornell Business Park by the airport, has received a $3 million grant from the National Institute of Health (NIH) that will be used in the research and production of an HIV diagnostic for detection and quantification of latent HIV-infected reservoirs in patients –  cells that have the virus but aren’t actively producing HIV, which current anti-retroviral therapies struggle with. Potentially, the diagnostic could help test new medicines for their ability to target those cells, and lead to a true cure for the virus before AIDS can occur.

Along with new equipment and renovated facilities, the grant is expect to result in the hiring of another 5 to 10 scientists and engineers for the four-person firm. Which is great, but truly, it’s their work to try and improve our treatment and medicine of a deadly virus that’s more important. The very best of luck to them.

7.  A bit of news from the Cornell Daily Sun regarding the additional 2,000 beds Cornell would like to build on its North Campus, as part of its freshman expansion and “Sophmore Village” plan. The university would like to begin construction on the first dorms in 2018, and start increasing student enrollment by 2020. For that to happen, the plans pretty much need to come forward for formal planning board review within the next few months. Presumably, they’d like to have the dorms ready by August 2019 – these will be used as flex space initially, so that existing dorms like Balch and Clara Dickson can start renovation. At a bare minimum, it takes three months to go through the city planning board. Given this project’s proximity to Cayuga Heights, the local patricians will want to have their say as well, even if it is just outside village lines. With the size of the project and a minor amount of inter-municipal complexity, four months from sketch plan to approval seems realistic. Considering the need to request and award contract bids, it would seem plausible that Cornell puts the dorms forward this fall for review, with approval expected by late winter. Bids would be requested and awarded during the Spring, and construction would start by June. Whatever the case, the first construction plans are likely not far off.