News Tidbits 9/9/17: Shopping for Sales

9 09 2017

1. As Dan Veaner at the Lansing Star reports, the new owners of the Shoppes at Ithaca Mall (aka Pyramid Mall) are planning to roll out new tactics to counter the ongoing, nationwide retail apocalypse currently underway. Instead of leasing locations, the mall owner would like to subdivide retail spaces within the mall under a Planned Development Area (DIY zoning, in essence) so that tenants could potentially own their spaces instead of renting them, under the hope that when they own a store location, they are less likely to close it and will opt for closing rented spaces elsewhere. Because customary use-based (Euclidean) zoning is not suited for this unusual arrangement, a PDA has been suggested, and the village of Lansing seems amenable to the idea.

On a related note, another subdivision of the mall properties would open up a portion of the parking lot behind the Ramada Inn for the development of an extended-stay hotel. This would probably play out over a few years, given the time to design a project, secure a brand and ask for village review/approvals. Market-wise, it’s not implausible, since the other hotels planned, like the Canopy downtown or the Sleep Inn at 635 Elmira Road in Ithaca town, are geared towards the overnight crowd, and the overall market is growing at a sustainable pace. As long as the local economy continues its modest but steady growth, a medium-sized specialty property that opens in two or three years would probably be absorbed by the local hospitality market without too much fuss.

2. Meanwhile, over in the the town of Lansing, a couple of minor notes and some name changes. From the town of Lansing Planning Board agenda, it appears the 102-unit Cayuga Farms development is now going by the name “Cayuga Orchard”. The project, which has been stuck in red tape due to the stringent review of modular sewage treatment systems, is seeking modifications to their plans, which was summarized in the Voice here. The short story is that the project has the same number of units, but the impermeable area has been decreased and the number of bedrooms is down from about 220 to 178. That should help reduce stormwater runoff, and if the town sewer isn’t through yet, it could make the modular system more feasible.

Secondly, Cornerstone’s Lansing Commons Apartments are being rebranded as the “Lansing Trails Apartments”, which makes sense since there aren’t any “Commons” in the town, but the town center property is traversed by numerous recreational foot trails. The town has endorsed Cornerstone’s two-phase, 128-unit development plan for affordable rental housing, though the planning board did express concerns with the impact of dozens of additional school children on a property with 581a property tax breaks, which may result in a 4% increase in school taxes in the default scenario. The number could vary given the number of kids that actually live there – the board ballparked 80 for their back-of-the-envelope analysis, which given 128 units and roughly 208 bedrooms in the project, isn’t unreasonable.

3. On that note, it appears Cornerstone and NRP have applied to the county’s affordable housing funding grant for a bit of financial assistance towards their respective projects. Cornerstone is seeking funds for qualified units within the 72-unit first phase of its Lansing Trails project, and NRP is seeking funding for qualifying units within the 66-unit first phase of its Ithaca Townhomes project on West Hill. Each organization would receive $256,975, mostly in Cornell-donated funds, if approved by the county legislature. The money may be leveraged and with less needed from traditional affordable housing funds, it may make each project more appealing from a federal or state grant perspective, with demonstrated municipal interest and more “bang for the buck” on the grantor’s end.

4. The two-building apartment complex planned at 232-236 Dryden Road is one step closer to construction. According to Tompkins County records, Visum Development bought the two properties on which the project was proposed (114 Summit Avenue and 232-238 Dryden Road) for $7.65 million on Monday the 5th. The properties are only assessed at $2.55 million, but sellers tend to enjoy a hefty premium when developers have intent for their parcels.

The following day, the building loan agreement was filed. The loan, for $16,354,628, was granted by S&T Bank, a regional bank based in Pennsylvania that has no retail banking presence in Ithaca, but has served as the financier for several projects, including the Holiday Inn Express that recently opened on Elmira Road, and Visum’s just-opened 201 College Avenue project.

A breakdown of the costs shows the total project cost is $22,780,334. There’s $13,020,010 in hard costs (materials/labor), $7.65 million for the purchase, $475,000 in soft costs (architect/engineering/legal), $250,000 for the demolition, and the rest is for taxes during construction, interest reserve (interest on the construction loan during construction). $650,000 (5% of the hard cost) is set aside as contingency funds just in case the expenses clock in higher than expected.

Along with the loan, Visum and its investor appear to be putting up $6.325 million in equity. With these hefty sums, one has to be pretty certain of their investment. In Collegetown, they often are.

Visum CEO Todd Fox has previously stated construction is expected to start this month on the 191-bed apartment property, with an eye towards an August 2018 completion.

5. The Old Library property sale is official, on an 11-3 vote. Legislators Kiefer, Chock and McBean-Claiborne voted no, none of which are an big surprise since, as members of the Old Library Committee, they found something to dislike with every proposal back in 2014. If anything, the surprise might have been legislator Kelles, who while not a fan, supported the mixed-use project. Travis Hyde Properties will bring 58 senior apartments, community space administered by Lifelong senior services, and a small amount of commercial space when the building opens in 2019.

6. So this is interesting. Josh Brokaw is reporting over at Truthsayers that Cayuga Medical Center wants to move the Community Gardens off the land. That is a story being covered further by my colleagues at the Voice, but notable to this blog’s purview are two nuggets of information.

One, Guthrie and CMC had *a bidding war* for the property, which explains a couple of things. It explains why CMC paid $10 million for a property the Maguires only paid $2.75 million for, and it offers a clue as to why Guthrie purchased the neighboring Cornell warehouses. They both have had plans for that area, and working together isn’t a part of them.

Two, Park Grove Realty is involved with CMC. They’re a young Rochester-based company generating lots of news in Lansing with a lawsuit-laden 140-unit townhouse project, and they purchased the Chateau Claire apartments and renovated them into the upmarket Triphammer Apartments, which generated its own share of controversy.

Anyway, it makes the commotion down by Carpenter Business Park that much more interesting. Nothing has come public yet, but keep an eye on it.

7. On a related note, it’s not much of a physical change, but Maguire is using some of that cash windfall to officially acquire the former Bill Cooke Chevy-Olds-Caddy dealership on Lansing’s Cinema Drive. The franchise rights were transferred over ten years ago, but the property itself was still under the ownership of the Cooke family. Thursday’s sale was for $2,015,000. The 4 acres and 19,857 SF building was assesses at $1.8 million, so it appears the sale price was a fair deal for both sides.

I would be remiss not to point out that the buyer was “Maguire Family Limited Partnsership”. No LLCs cloaking this purchase like with Carpenter Business Park.

7. Now that the state has okayed the Cargill expansion, the above-ground portion of the project has to go before the Lansing planning board. The surface facilities, expected to cost $6.8 million, consist of a 10,000 SF administration building, a 2,100 SF maintenance building, a 2,600 SF hoist house, parking, landscaping and signage. A hoist house is essentially an industrial-strength engine room for operating the lift that brings people and equipment up and down from the shaft. It’s likely the primary cost contributor in the surface portion of the project.

As seen in the renders above, it’s designed for functionality rather than aesthetics, though Cargill did attempt to make the shaft building barn-like to blend in better with the farms. Construction on the above-ground structures is expected to start next year and run for about 18 months (the mine is being built from the bottom up). Although not shown in the renders, trees will be planted around the developed area to provide a green screen and help dampen noise.





News Tidbits 7/2/16: Not the (City Centre) of Attention

2 07 2016

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1. Let’s start this off with the big news of the week – the proposal for 201 College Avenue was approved by the Planning Board. The debate was spirited, to put it most politely; catty, to use the official write-up in the Voice; and in the follow-up phone call I had with my editor, who attended the meeting with a Voice summer intern, she described it by saying “both sides were pretty awful”. I am sympathetic to Neil’s predicament, although I think it’s also a fairly unique case; I hope some sort of arrangement with the solar panels is worked out.

The observations regarding age and view of the project is actually pretty similar to a conversation the Journal’s Nick Reynolds and I had on Twitter about the City Centre project – older Ithacans often have starkly different views on density and urban development than younger residents, who tend to be more pro-density and pro-urban infill/growth. The young aren’t naive and more so than the old are obsolete; but they are products of different times. Today’s older Ithacans are the same ones who were frowned upon by the old Ithacans of their youth (the Silent Generation and the Greatest Generation), who were much more politically conservative and made up the large majority of the city’s Republicans from when Ithaca was once a contested city, and the Boomers were moving in and tilting it leftward. A sociologist could probably make a good research paper studying Ithaca’s generational views of urban environments.

Anyway, construction on this project is supposed to start in short order; funding has already been secured, and Binghamton-based W. H. Lane Inc. will be the general contractor for the $6 million project.

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2. Meanwhile, City Centre’s sketch plan was also reviewed at the Planning Board meeting. The initial reaction seems muted, gauging from Nick Reynolds’ Twitter and the lack of comment from my Voice colleagues.

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According to the sketch plan submission, the vast majority of units (240 of the 255) will be studios (120)¬†ranging from 457-563 SF, and one-bedrooms (120) ranging from 580-754 SF. The other 15 will be two-bedroom units, eight 914 SF units and seven 1,370 SF units. All units are market-rate, with target demographics including young professionals and downsizing empty nesters. Students are allowed, though the units won’t be marketed to them. Ground floor retail will be 10,700 SF at the corner of State and Aurora. 7,220 SF fronting State Street will be “Leasing/Club Space” for building and tenant functions. The 71-space parking garage will be accessed via East Green Street, car share membership will be included in the rent, and there will be indoor bike racks.

With the mild initial reaction noted, we’ll see how the project details shape up as the summer progresses, and the board potentially launches formal project review (Declaration of Lead Agency) as soon as late July.


3. Hitting the market this week is a potential opportunity for the deep-pocketed investor/developer. The property is 2248 North Triphammer Road in the village of Lansing. The sale consists of two parcels totaling 3.42 acres – a 1.53 acre parcel with a 2,728 SF M&T Bank branch built in 1992 and holding a long-term triple-net (NNN) lease; the other, an undeveloped 1.89 acre parcel to the rear that the listing notes could be developed out into 13 housing units. The price for the pair is $2,125,000.

A triple-net lease means the tenant pays everything – insurance, maintenance and real estate taxes (formally, net insurance, net maitenance and net real estate taxes on the leased asset – the three nets).¬† Because of this, the rent is substantially lower than it otherwise might be. There are certain cases where a landowner might want to do triple-net – like when they’re a tax-exempt entity leasing out to a for-profit company. A quick check of the records shows the properties are owned by Cornell, and were acquired in 1953 and 1960. What the property has been to Cornell is a fairly safe investment (though with a lot of fine print to determine who pays for things like if a tornado hits or the foundation cracks), generating a modest amount of rent and functioning like an inflation-protected bond, but guaranteed by the lessee rather than the government. All the better when the tenant is stable and signed on for the long-term, as is the case here.

The county has the bank parcel assessed at $635,000, the undeveloped parcel at $140,000.¬† Lansing village zoning has Commercial High Traffic for the bank property, and High Density Residential for the vacant parcel. HDR zoning requires 6,000 SF of land per dwelling unit in a 35′ tall multi-unit building, and 1.89 acres = 82,215 SF, so that’s where the 13 units comes from. For comparison’s sake, single family is 12,000 SF, and duplexes 15,000 SF (or, doing the math, one could in theory carve out six home lots, or 5 duplex lots for 10 units, though with lot setbacks, the property’s triangular shape probably lowers those figures).

4. On the other end of the sales process, the former Maine’s supermarket has been sold. The six year-old, 26,146 SF building at 100 Commercial Avenue in the city of Ithaca was purchased for $4,150,000 on Thursday the 30th, by Illinois-based Agracel Inc., well above its $3.1 million assessment. Agracel is an industrial space and warehouse developer, fitting for a property once described as a “food and party warehouse”. The former Maine’s appears to be a little on the small side compared to the rest of their portfolio, but there is the possibility of expansion, or even a teardown and rebuild if they really felt the need.

Readers may recall that Maine’s closed its Ithaca store in February, which along with a closing in suburban Rochester reduced its stores from six to four.

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5. Work on the new Storage Squad facility has begun on the 1400 Block of Dryden Road east of Varna. Right now, the focus is on site clearing; the house was used by local fire departments for training exercises, and will come down in a controlled burn later this summer. The 79,000 SF storage facility should be ready for use by February 2017. One full time and a few part-time jobs will be created.

And for the record, I think that’s my middle finger.

6. So this is curious. The city recently uploaded a couple of older documents detailing development plans off of Floral Avenue on the southern tip of Ithaca’s West Hill neighborhood.

The first dates from Febraury 1992, and is a filing to create a 27-lot cluster subdivision on 4.15 acres at 452 Floral Avenue. The paperwork indicates that the intent was affordable housing, by a company named House Craft Builders. The city’s then-Planning Director, H. Matthys Van Cort, wrote a recommendation for negative declaration of environmental significance, and the project was approved in June 1992, but it never moved forward, and 452 remains vacant land today. It appears House Craft was dissolved in 2012; the officer was an architect for Ecovillage who has since retired and moved out of state.

The second is a subdivision requested by INHS in 1987. The filing requested 236 Floral Road be split into two parcels, with the intent of renovating a decrepit 236 into a for-sale affordable single-family home, and build a new house on 224. This was approved, and eventually, 236 was renovated and transferred to its owner in 1996, and 224 was built in 1994.

Now, as interesting as this all is, the city doesn’t upload decades-old subdivision files just to amuse nerds. The $64,000 question is, why were they uploaded now?