News Tidbits 5/14/18

15 05 2018

1. Let’s start off with the new entrant to the Ithaca development scene – Trinitas Ventures. The Indiana-based firm is scouting out Varna for a potentially large rental project geared towards students (but, to be clear, open to anyone).

I’ve already filed my report, and unfortunately will not be at the open house this Monday (there was initial confusion over what say it was, so I’m honestly not sure any reporter made it). Trinitas appears to do everything from multi-story mixed-use urban living to more suburban duplexes and townhouse strings. To be frank, for Varna, they’d be better off going with the latter for size and scale. There’s this running joke among Ithaca developers that Varna is the next frontier for development, but only recently has there been much movement in that direction, and even then, it’s a ‘tread with caution’ approach. Recall the struggles of Varna II and 902 Dryden.

According to the town of Dryden planning board minutes posted after my article, the Lucentes’ vacant Varna II lands are the proposed site for Trinitas project (and which they likely already have a purchasing option on). From their portfolio, their independently-developed project appear to be in the ballpark of 600-700 beds in 150-300 units. Even the more suburban properties look to be on 20 acres or less. A rough estimate of the old Varna II plan is 15+ acres. Most of it is Varna Hamlet Residential, with small amounts of Varna Hamlet Traditional Zoning and Varna Hamlet Mixed-Use. VHRD is 6 duplexes, 4 apartments or 11 townhouses per acre, with potential density bonuses for green energy or redevelopment. This means that if they do mixed-use retail/apartments along 366, and townhouses in the rear along Mount Pleasant Road, they’ve got the space they need for one of their projects. Through the off-record chatter I’m hearing 225 units, mid-600s for total number of beds.

On the bright side, at least they’re being transparent with the open house approach – Trinitas seems to have some awareness of community concerns (maybe after their Ann Arbor debacle), so we’ll see what they propose in a formal submission.

2. Moving to something smaller, the Ithaca Landmarks Preservation Commission is providing early guidance for a new apartment house at 204 Williams Street, on the west edge of Collegetown in the East Hill Historic District. Beyond the massing concepts (hipped vs gambrel roof), it looks like 14 bedrooms and perhaps four units, ostensibly geared towards students. Mid-sized Collegetown landlord Pam Johnston has owned the property since 2002, and she’s more of renovator than a developer, but this is unique – the original house burnt down in the 2000s, and the space has been an informal parking lot ever since. With rising land values, redevelopment looks like a better financial prospect. Historic design specialist Jason K. Demarest is in charge of design for the small infill project.

3. Caution light turned on. The Tompkins Center for History and Culture requested and received an extra $445,100 in appropriations, raising the county’s investment to $3,345,100. The extra cost is attributed to bids coming in over projections and additional design costs. The vote was 12-1 with Legislator Leslyn McBean-Clairborne voting no, but this is probably about as much as the county legislature and general public will be willing to accede without significant backlash or denial of funds.

The Legislature unanimously awarded construction contracts for the Tompkins Center improvement project to Marchuska Brothers Construction, LLC, of Endicott, for the General Work Contract ($561,000); Johnson Controls, Inc., of Rochester, for the Mechanical Contract ($502,638); and Richardson Brothers Electrical Contractors, Inc., of Ithaca, for the Electrical Contract $135,550). Marchuska is a fairly recent addition to the Ithaca area, and is finishing up a gut renovation of a manufacturing facility into medical offices in Lansing village.

4. Whether or not one approaches this with some election year political cynicism, the proposed $22 million expansion of the airport, largely funded by the state;s recently-announced $14.25 million grant, has significant potential to bolster the local economy. Given Ithaca’s relative isolation and definite distate for new highways, an expanded airport, sometime pushed by airlines rather than quixotic bureaucratic dreams, can help retain existing business and grow the leisure/hospitality trade. The announced move of the NYS DOT from its prime waterfront property to a vacant parcel next to the airport is an added bonus, because once they move, the space will be turned over to the county to do as it wishes – which in this case means an RFP for mixed-use development that could create over $40 million in new private investment, according to the 2015 study.

Plans call for the expansion to start construction this fall and open a year later, which sounds a bit ambitious. The expansion would likely have its environmental review conducted by the village of Lansing, which is not known for its haste or ease of process. Renders of the project (all interior) can be found here.

5. Going back to Varna – 1061 Dryden is for sale, blueprints and all. The asking price is a fairly optimistic $2 million – Gary Sloan, the current owner/developer paid $285,000 for the property in October 2015, which contains an existing home. To quote the ad:

“Shovel ready development site within 1.7 miles or 3 minutes from Cornell University Vet College! Very rare opportunity in the Ithaca area and already approved to build 36 Townhouses. Unit configuration; A Unit (12) 3 bedroom 2.5 baths One car garage. B unit (24) 2 Bedroom 2.5 Baths One car garage. Financial analysis are available to Qualified developers indicating a CAP rate of 7! Confidentially agreement required to obtain financial information on the development.”

CAP rate, or capitalization rate, is a measure to evaluate the potential return on investor for a real estate developer. It’s basically Net Operating Income / Property Asset Value. So if I make 50,000 a year in net operating income on a $1 million property, my cap rate is 5%. In general terms, higher cap rates mean high potential return, but are generally seen as indices of higher risk projects as well.

However, because different markets have different risks and amounts of risks, what is an acceptable cap rate in one area may not work in another. For office space for example, a cap rate of 3-4% in Los Angeles or New York would be sufficient, but for Phoenix it’s 6%, and Memphis 8%, because the stability and growth of the market isn’t as great. Also, CAP rates for multi-family properties are generally among the lowest in asset classes because they’re often the most stable. So CAP rate is a valuable indicator, but it doesn’t tell the whole story.

I hadn’t heard of any issues before this hit the market, and all the approvals are there. The town of Dryden was told not to expect construction to start on this 36-unit property for at least a year. Whether it actually happens is anyone’s guess.

6. Also new to the market this week, a commercial building with redevelopment potential. 622 Cascadilla Street is a one-story, 4.896 SF commercial building occupied by the upscale Zaza’s Cucina restaurant. It also sits in WEDZ-1b zoning, West End Mixed-Use, allowing for a second floor and 90% lot coverage.Nearby, several major projects are approved or in the concept stages, including West End Heights, City Harbor, and the Carpenter Business Park (Cayuga Med) development.

The property is assessed at $875,000, and its current owner, a Massachusetts-based businessman who has been controversial, has been steadily offloading his properties. Should the buyer look like something or someone interesting, expect a follow-up.

7. This is running rather late, but longtime local developer Rocco Lucente passed away earlier this year at the age of 88. The patriarch of the Lucente family of developers (Lucente Homes, later Lifestyle Properties), Lucente started in 1950 as a builder of modest homes and apartments – not ostentatious, but well-suited for Ithaca’s growing middle-class. While it may not have been as profitable per unit, it allowed Lucente to survive the local market crash of the late 1960s, when many of his competitors did not. Lucente also pioneered the idea of renting his newest houses out for a few years before selling them at higher prices thanks to tight supply and value appreciation. With over 700 homes and apartments to his name, much of Cayuga Heights and Northeast Ithaca exists because of Lucente Homes – the town dedicated a section of Briarwood Drive “Rocco Lucente Way” in 2014.

Lucente was not without his controversies, however – the last of his Northeast Ithaca subdivisions, the 47-lot Briarwood II, which was halted by the town over stormwater drainage concerns in the late 2000s, first via moratorium in 2006-07, and then in 2014 by SEQRA concerns and changes to best practices, which led to a lawsuit from Lucente that he lost. This is the forested space between Sapsucker Woods Road and Briarwood Drive.

I had a chance to speak with Rocco a couple of times in my work with the Voice (it started with the Village Solars), and I always found him to be engaged and animated, more than I’d expect for a gentleman of his age. He’d often extol the features of his properties, which I would respond with a polite laugh, because it wasn’t my place to sell them, but he was a businessman through and through. But generally, I found talking with him to be a pleasure. Rocco was a capable developer, working up until the end not out of need but for a love of the work. He will be missed.





News Tidbits 7/15/17: Ess Ess, Dee Dee

15 07 2017

1. Hamilton Square. There’s a lot to say here.

First, the neutral segment. The website is up, www.southstreetproject.org. Plenty of renders (definitely not cookie-cutter), site plans, housing prices, everything one needs for a fair assessment. The units are no more than 2 floors, mostly townhouse format. 47 affordable rentals units, 11 affordable for-sale units, and 15 market-rate for-sale units for a total of 73 on a 19 acre site. That’s less than 4 units per acre (0.26 acres/unit, comparable to the older 0.25-0.5 acre lots on Pennsylvania and South Streets), and fits zoning. The units are interspersed throughout the property. Parking ratio is 2 spaces per units, units are a mix of 1-3 bedrooms. There will be aging-in-place and energy efficient home options for sale, as well as in the rentals. The project will host a playground and nursery/daycare facility geared towards low and moderate-income households. Much of this comes from the result of constructive community feedback.

But what started off on a polite note is getting really ugly, really quickly. It is not a good sign when my editor calls me and tells me that, as a person of color, she felt uncomfortable at the latest meeting.

Given the transparency of this process, which still hasn’t even been submitted for formal planning board review, I find comments about this being “hidden” or rushed through to be a stretch. The project hasn’t submitted anything for formal review yet. Nothing but a sketch plan has been done, and multiple community meetings, and 30-minute small group listening sessions. It really does not get much more personal than that.

One of the questions that was raised was that people are unable there are many more affordable rentals than for-sale units. There are two reasons why that is. For one, funding for purchasable units is more difficult to get. The government is more likely to disburse a grant if it knows there are buyers waiting in the wings. That’s why the buildout for the for-sale units is 2-8 years. For two, for low and moderate-income households often don’t have much money saved for a big expense such as down-payment, and far more are capable of renting versus buying.

There are valid concerns that need to be addressed. For example, traffic. A study is being conducted with a third party. The typical thing I hear, affordable housing, or any project really, is that “they’ll lie, they’re in XYZ’s pocket”. If no one trusts you to do your job properly, no municipal board will sign off on accepting your study, and you’re finished as a firm. Likewise with stormwater analysis and civil engineering. School system capacity is checked with the district, which basically just sends a letter saying “yes, we have room” or “no, we don’t have room”. The study is being conducted and will be made public long before any approvals are granted, people can weigh in after reading it to say whether it’s comprehensive and adequate, and feel free to say something and explain why it may not be. That’s the purpose of SEQR, to determine impacts and mitigate unavoidable impacts.

On a related note, a board’s job is to review the objective components of a project. It is not appropriate, or legal, to decide on a subjective trait like whether the people who will live there fit the “Trumansburg way of life” or that the project is “too Ithacan”. Who decides what those things are? Because too quickly, it degenerates into a look or an image, and a train of thought that should never be a part of any development conversation. Because it’s subjective, those terms meant something quite different in 1997, and something quite different in 1977.

Also, there seems to be this idea that poor people in urban neighborhoods will be forced out here, and they will be a burden on TrumansburgThere are plenty of people who live and work in Trumansburg who need affordable options in a rapidly-appreciating real estate market. The one bedrooms will be rented to individuals making $22k-$48k. That could be a store manager, a barista, a school teacher or a retiree. Tenants are screened, visited at their current home and interviewed before being offered a unit. Qualified affordable home buyers will mostly be in the $42k-$64k range (80-120% AMI). Think nurses, office workers, tradespeople (following INHS’s sales deeds, I actually see a lot of ICSD teachers). The market rate units will offer whatever the market allows price-wise; new townhouse-style housing in Trumansburg would likely fetch $250k+, so think upper-middle income.

It would be nonsensical to make people in Ithaca move into housing in Trumansburg that they don’t want and would drive up their costs; however, those who want to live there, whether because they admire Trumansburg, work there, or both, will seek the opportunities it provides.

For a county that seems keenly aware of its housing issues, there tends to be an uncomfortable amount of pushback against affordable housing, whether it be Fall Creek, South Hill, Lansing or Trumansburg. Does that qualify as being “too Ithacan”?

2. Taking a look at the county’s records this week, it looks like 210 Linden Avenue’s construction loan has been filed. Elmira Savings Bank is lending Visum Development (Todd Fox and associates) $3.15 million, with $2,358,783 towards the hard costs (materials/labor) of replacing the existing 12-bedroom student apartment house with a 9-unit, 36-bedroom apartment building. Elmira Savings Bank is one of the biggest single-family construction loan lenders in Tompkins, but they have only been the lender for a few multi-family projects. The only other multi-million project in the past few years was the 18-unit Rabco Apartments at 312 Thurston Avenue in Cornell Heights – a project that, along with the cancelled 1 Ridgewood, so incensed deep-pocketed permanent residents nearby that they petitioned and succeeded in getting the city to downgrade the zoning.

Also filed this week was a $415,000 construction loan from Tompkins Trust to the owner of Hancock Plaza on the 300 Block of Third Street in Ithaca’s Northside neighborhood. The 19,584 SF shopping plaza, built in 1985, is assessed at $1.485 million and has been under its current ownership since 2002. Most might know it for the DMV, but it also hosts Istanbul restaurant, a bookkeeping service, and a gas station and convenience store that opened in renovated space in 2015. There’s no indication in the loan as to what kind of work will be performed, about $363,000 has been set aside for hard costs like materials and labor, and the work is required to be finished by March 2018.

3. Also filed in both sales and construction loans this week was paperwork for 306 North Cayuga Street, right next to DeWitt Park on the edge of Ithaca’s downtown. Also known as the C. R. Williams House, the 8,798 SF, ca. 1898 property was assessed at $900,000 and on the market for $1.4 million last year. The sale price was $1.3 million.

I was privy to an email chain that engaged an out-of-state condo developer to look at the property, but that person was not the buyer.  The LLC traces back to Travis Hyde Properties, just a few blocks away.

According to Frost Travis of THP, the plan is to renovate the live/work space to allow for more space for THP, which is outgrowing its North Tioga Street location, and four apartment units. Exterior changes will only be cosmetic, but any substantial changes will be subject to ILPC approval, as the property sits in the DeWitt Park Historic District. Elmira Savings Bank is lending $1.24 million for the renovation, of which $1,204,752 is going towards the actual construction (so apparently, this was a big week for ESB). The project is expected to be complete by next summer, according to the loan filing.

4. For the aspiring homebuilder or developer – new to the market this week, a run-down though salvageable 1830 home at 1975 Dryden Road just east of Dryden village, and 101 acres of developable vacant land currently rented out for agricultural use. The sale price is $795,000. The county GIS lists the property at 112.4 acres, but without a map in the listing, it’s hard to tell if there’s a typo or if there might be a subdivision somewhere. The assessment is for $531,900, $401,300 of which is the land. It appears the property has been in the ownership of the same family since 1968. The property is listed as a rural agricultural district, which is geared towards ag uses, but permits office, one-family and two-family homes as-of-right; multi-family and box retail require special use permits. Zoning is one unit per two acres, but in the case of a conservation subdivision that preserves open/natural space, it’s one unit per acre – either way, only about 50 units allowed here. Technically, a PUD (aka DIY zoning) is also an option, but would need adequate justification. Kinda hoping it doesn’t become conventional suburban sprawl, but will reserve judgement for when this sells.

 

5. Ithaca is once again competing for $10 million in state funds as part of the regional Downtown Redevelopment Initiative. The funds are intended to spark investment in urban cores and improve infrastructure for communities throughout the state, ten cities selected each year, one in each region. Readers may recall Elmira won last year. This year, Ithaca is competing against two of its Southern Tier peers – Watkins Glen, with which it competing with last year as well, and Endicott, a struggling satellite city over by Binghamton, that is entering the competition for the first time. Reports suggest the Ithaca submission is largely the same as last year’s. Winners will be announced in the fall.

 

 

 





News Tidbits 12/10/16: Missing Out On the Fun

10 12 2016

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1. We’ll start off out in the town of Lansing this week with a new business startup looking to climb to the top of the pack. Reach Works, the brainchild of an academic family that relocated to Ithaca, just earned final site plan approval to build a professional-grade climbing wall and facility at 1767 East Shore Drive, next to The Rink. The $1.2 million, 10,400 SF building will have a noticeable impact on the Lansing shoreline, as the building will reach 56 feet in height. South Hill’s George Breuhaus will be the architect in charge.

According to the Times’ Cassandra Negley, the owner looked at Chain Works for an opportunity, but those plans fell through. The finalizing of the wall design is underway now, and Reach Works hopes to begin construction in March and be open by next fall. Between the pro shop and the wall, they hope to employ five full-time and ten part-time, with most making about the living wage of $15/hour (although, the application on file with the town says six employees). The hope is that it also becomes a regional attraction, drawing in hardcore climbers from the Rochester, Syracuse and Binghamton metros. Best of luck to them.

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2. Maplewood is almost ready. The city is set to give its final approval this month, and the town is expected to give preliminary approval before the Christmas holiday. The latest changes to the FEIS include the following details:

– The amount of money for traffic calming measures has been increased from $20,000 to $100,000. $30,000 goes to the city and town, and $70,000 will be allocated by EdR and Cornell for streetscape improvements that they will build.
– Recycled building materials will be incorporated into the buildings.
– A revised estimate states that 100 to 150 construction staff will be on site during construction. They will park behind the East Hill farmer’s market space and are expected to walk over to the site. They will work on weekends, with noisy work commencing after 8 AM.
– The units closest to the East Hill Rec Way have been moved another four feet back from the trail.
– Initial property taxes in 2018 will be $2.25 million. IT is assumed they will go up 3% each year thereafter.

Oh, and the questioner who freaked out over the East Hill Village plan online – that SWA plan dates from about 2007.

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3. Cayuga Med’s plans for a 6,000 SF addition to their Behavioral Health Unit has been approved. At this point, the project needs a minor zoning variance for height,and then CMC has to apply for certification from the New York State Office of Mental Health for the facility to be approved- specialized medical facilities, like CMC and Brookdale, have to prove there is a need before they’re allowed to build. The hospital hopes to open the project to bidding early next year.

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4. So ICYMI, the Masonic Temple rehabilitation is moving forward. Six months later than anticipated, but it is moving forward. The project is valued somewhere north of $1 million. There is one other project on the Ithaca Landmarks Preservation Commission (ILPC) agenda that I thought of writing an article about, but decided it was too minor – the Alpha Phi Alpha house at 421 North Albany will be doing a reconstruction of a non-historically significant rear porch. If it were a full reno, I’d do a write-up for the Voice.

Also on the ILPC agenda – a discussion of Collegetown Historic Resources. I have the feeling this is being spurred by Novarr’s 119-125 College Avenue project, the College townhouses. Three historically significant but non-landmarked apartment houses were taken down to make way for the project, which is expected to go up for preliminary approval later this month. The city did a review after the document was first published in 2009, and landmarked the Snaith House at 140 College and Grandview House at 201 College – they could be considering making a move towards landmarking other properties – some of the historic structures on the 400 Block of College Avenue, and the 100 blocks of Oak Avenue, College Avenue and Linden Avenue are possibilities. Novarr has another project rumored for 215 College Avenue, but that building, dating from the 1870s and renovated/expanded numerous times, was not on the 2009 list.

5. Staying Collegetown, a big sale this week – 113 College Avenue sold for $1.7 million. That’s a very impressive price for an outer Collegetown apartment house – the tax assessment has it pegged at $610,000. The bones of the 13-bedroom, 3,738 SF building date from the late 1800s, but like its twin next door, it’s been the subject of a very unsympathetic renovation (records suggest the renos were done around 1980). The house has been owned by the Tallman family since 1987.

The property is zoned CR-4 – four floors, no parking required. CR-4 is the same zoning as Novarr’s townhouses and Visum’s latest pair of proposals. And, because what goes around comes around, the buyer is the same LLC that sold Visum’s Todd Fox 201 College Avenue for $2.65 million back in June – Russell Johnson’s PBC & Associates LLC. He also picked up a CR-3 building at 233 Linden Avenue for $750k back in the fall. Price suggests redevelopment, but the buyer isn’t known for that – he might have just paid big for a long-term investment. TL;DR, he might be planning something, he might not; we’ll see.

On a side note, the county’s going to make some money raising the property tax assessment on this one – offhand, I’ve noticed most of the houses sold this week (excluding a couple in Ithaca city) have gone at or well under assessment, which is a bit unusual, and probably not something that the tax assessor’s office wants to see.

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6. Good news and bad news from the Regional Economic Development Council awards. The good news is, the area’s getting money. Cargill gets $2 million towards their salt mine project (they requested $5 million), Cornell gets $250,000 for a startup business alliance, County Waste gets $355k for a food waste transfer station at the recycling center site, and the Sciencenter gets $150k for renovations. Several smaller awards are to hire staff for cultural and arts programs.

Now the bad news – one project, marked priority, was not funded – the Collegetown Travel Corridor proposed by the city of Ithaca to connect Downtown and Collegetown. I asked to make sure, and the Planning Department was just a little deflated in their response. Major bummer. I don’t doubt the value of arts programs, but $38,500 for a theatre director and $41,000 for a workforce expansion isn’t sustainable, it’s one year’s salary. That’s nice, but how does that benefit the area in the long-term? The Travel Corridor would have further encouraged urban development downtown and Collegetown that could have indirectly supported the arts through patronage, or directly through taxes that are used to fund local-level grants.