I have a bad feeling this project may not make it through. I can't understand why Ithacans get so up in arms when it is one of the few upstate cities where people are willing to build new developments. I know they feel like the city gives away too much, but in the long run these projects will benefit the city.
From the Ithaca Journal
Hotel project to seek break on sales tax
Construction could cost $27M
By Krisy Gashler •
kgashler@gannett.com • Staff Writer • June 22, 2009
Developers of the proposed Hotel Ithaca on The Commons will seek tax abatements after all.
The hotel will be the first project to seek tax breaks under the city's newly revised density policy, which takes into account a variety of community incentives beyond just downtown density. The project will not, however, seek any property tax abatement, architect Scott Whitham said. They're seeking a break on sales tax for construction materials, he said.
In receiving permission from Common Council in April 2008 to purchase a small strip of land on Aurora Street from the city, developer Jeff Rimland said he would not seek tax abatements.
But while the project's estimated cost has ballooned from $17 million in 2008 to $27 million now, the national economy has tightened.
Downtown Ithaca Alliance Executive Director Gary Ferguson said the national economic downturn, plus problems with the state Empire Zone program, contributed to the need to seek abatements.
"The financing picture has gotten more difficult than it was 24 months ago," he said. "So I think there's just been a need to re-look at the whole picture to make sure you can squeeze every last piece out you can so you can make the whole picture work."
Michael Stamm, president of Tompkins County Area Development, which manages the agency that oversees tax abatements, said the agency has the authority to abate 100 percent of state and county sales tax on construction materials, furniture, fixtures and equipment.
"It doesn't cover any kind of operating expenses, just initial expenditure," Stamm said.
The downtown density policy has been used since 2002 to give tax breaks to the Gateway projects, Inlet Island Health and Fitness, the Cayuga Green development, and Seneca Place on The Commons, Stamm said.
Because downtown construction is more expensive than suburban or rural sprawl, the tax abatements were intended to even the playing field and encourage density downtown, Ferguson said.
The policy came under fire from critics, especially during discussion on Cayuga Green, who said the community was giving up too much money for not enough benefit, said Common Council Alderman Dan Cogan, D-5th.
Cogan chaired a subcommittee that revised the policy and created the Community Investment Incentive Program.
Now instead of just density, a project that seeks tax abatements must meet a minimum of 14 defined community benefits, out of a list of between 40 and 50 benefits.
Some of the benefits include rehabilitating historically significant buildings, hiring contractors who pay prevailing wage, promoting use of public transit and bicycles, producing permanent jobs and jobs that pay local living wage or better, achieving LEED environmental building standards, building affordable housing, making use of an underused site, generating at least $200,000 in property tax for the city and producing $100,000 in sales tax, Cogan said.
The Hotel Ithaca is a proposed 10-story, 130-room, four-star boutique hotel to be built at the southeastern edge of the Commons, at State/Martin Luther King Jr. Street and Aurora Street. The site is currently a surface parking lot.
Last April, the hotel was estimated to generate $277,245 in property taxes and $375,000 in sales tax when built.
The city will undertake its incentive program and decide whether to recommend tax abatements. The Industrial Development Agency, overseen by TCAD, makes the ultimate decision on whether to grant the tax breaks, Stamm said.
A public presentation and hearing on the hotel's tax abatement plan is scheduled for 6 p.m. Tuesday in City Hall, 108 E. Green St.
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RoyalProposition wrote:
Wow this gets me wound up!
Hey Gary, doing all you can given the circumstances, spare us the baloney about the economy and the Empire Zone. There is no real need to sugar coat the situation.
I don't want to crucify Mr. Rimland for wanting to dump $27 million into our fair city, and by all accounts he is a respectable man. Alot of downtown businesses have a difficult time keeping their own house in order and blame it eveyone and everything, so Rimland is fine by me. Make it 20 stories and blow $50 million...
On the other hand, can anyone name a single private project in the City within the last few years that didn't invlove a zoning variance, tax abatement or government contribution? You don't have to roll over for every line you are being fed. Sometimes it really does take 27 million dollars to build a 27 million dollar hotel.
Let's keep private enterprise private. Seriously.
What kind of room rebate can we all expect if these tax handouts are allowed? I thought so
6/22/2009 3:47:06 PM Wow this gets me wound up!<br />Hey Gary, doing all you can given the circumstances, spare us the baloney about the economy and the Empire Zone. There is no real need to sugar coat the situation. <br />I don't want to crucify Mr. Rimland for wanting to dump $27 million into our fair city, and by all accounts he is a respectable man. Alot of downtown businesses have a difficult time keeping their own house in order and blame it eveyone and everything, so Rimland is fine by me. Make it 20 stories and blow $50 million...<br /><br />On the other hand, can anyone name a single private project in the City within the last few years that didn't invlove a zoning variance, tax abatement or government contribution? You don't have to roll over for every line you are being fed. Sometimes it really does take 27 million dollars to build a 27 million dollar hotel.<br /><br />Let's keep private enterprise private. Seriously. <br />What kind of room rebate can we all expect if these tax handouts are allowed? I thought so RoyalProposition
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casinoroyal wrote:
Replying to hearfromalbert:
Standard BS policy hoodwinking....start with a lie then ask Carolyn and the gang to endorse it after the fact
Way to Gary !
Well played....anyone else see a problem with Carolyn being on the board for downtown Ith partnershp and being the mayor?
So we are to believe that "construction" materials have gone up 100%...seriously???
As far as I'm concerned they can have the tax breaks as long as they repay them 150% out of the first 5 years profit...
I'm not here to subsidize the fact that an accountant cant add his numbers
I call "Bu*****t!"
AGREE completely! During the time the UN-Planning Department, major and common council PLANNED the Green Street Parking re-construction it was 2 years instead of 8 months before downtown had any parking near the Commons. How about a tax abaitment for all the businesses that lost so much money and some their businesses because of the poor planning by the city.
6/22/2009 3:19:22 PM <p class="replyingto">Replying to <span class="author">hearfromalbert</span>:</p><blockquote>Standard BS policy hoodwinking....start with a lie then ask Carolyn and the gang to endorse it after the fact<br />Way to Gary !<br />Well played....anyone else see a problem with Carolyn being on the board for downtown Ith partnershp and being the mayor?<br />So we are to believe that "construction" materials have gone up 100%...seriously???<br /><br />As far as I'm concerned they can have the tax breaks as long as they repay them 150% out of the first 5 years profit...<br />I'm not here to subsidize the fact that an accountant cant add his numbers<br /><br />I call "Bu*****t!"</blockquote><br /><br /><br />AGREE completely! During the time the UN-Planning Department, major and common council PLANNED the Green Street Parking re-construction it was 2 years instead of 8 months before downtown had any parking near the Commons. How about a tax abaitment for all the businesses that lost so much money and some their businesses because of the poor planning by the city. casinoroyal
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hearfromalbert wrote:
Standard BS policy hoodwinking....start with a lie then ask Carolyn and the gang to endorse it after the fact
Way to Gary !
Well played....anyone else see a problem with Carolyn being on the board for downtown Ith partnershp and being the mayor?
So we are to believe that "construction" materials have gone up 100%...seriously???
As far as I'm concerned they can have the tax breaks as long as they repay them 150% out of the first 5 years profit...
I'm not here to subsidize the fact that an accountant cant add his numbers
I call "Bu*****t!"
6/22/2009 2:35:54 PM Standard BS policy hoodwinking....start with a lie then ask Carolyn and the gang to endorse it after the fact<br />Way to Gary !<br />Well played....anyone else see a problem with Carolyn being on the board for downtown Ith partnershp and being the mayor?<br />So we are to believe that "construction" materials have gone up 100%...seriously???<br /><br />As far as I'm concerned they can have the tax breaks as long as they repay them 150% out of the first 5 years profit...<br />I'm not here to subsidize the fact that an accountant cant add his numbers<br /><br />I call "Bu*****t!" hearfromalbert
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Andy123 wrote:
Replying to Jackiecat64:
No, we don't. Between the new hotels and Mack Travis' eyesores downtown, Ithaca is no longer the charming town it once was. I cringe everytime I drive down Green Street between the library and the Gateway buidling.
I know! Between the indoor plumbing and the wood houses, I cringe when I try to hunt for my food where there used to be wild forest and now there's human settlements! Down with taxes, down with civilization!
6/22/2009 2:32:50 PM <p class="replyingto">Replying to <span class="author">Jackiecat64</span>:</p><blockquote>No, we don't. Between the new hotels and Mack Travis' eyesores downtown, Ithaca is no longer the charming town it once was. I cringe everytime I drive down Green Street between the library and the Gateway buidling.</blockquote><br /><br />I know! Between the indoor plumbing and the wood houses, I cringe when I try to hunt for my food where there used to be wild forest and now there's human settlements! Down with taxes, down with civilization! Andy123
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RoyalProposition wrote:
Are we to believe that the original cost estimate of $17 million has increased to $27 million? Something is not right here.
Putting aside the downtown Ithaca development debate for a moment... the developer promised not to seek tax breaks. And is now looking for a tax break. Or abatement. But only on construction material sales tax, so you see, it's really not the same as NOT PAYING TAXES, it's just a small abatement. You and I will make up the difference. No worries.
Let's not buy into the notion that downtown "is more expensive than suburban or rural sprawl". Who said anything about sprawl? Who believes that this project could be successful in say, Danby? Why don't we evaluate the project on its own merits and not be scared into thinking everyone is fleeing downtown because Rt. 13 is cheaper?
The rich get richer. The rest of us get luxury hotel rooms, upscale condos or cheesy government buildings that we can't use. And we get to pay the developers taxes too.
6/22/2009 8:32:44 AM Are we to believe that the original cost estimate of $17 million has increased to $27 million? Something is not right here.<br /><br />Putting aside the downtown Ithaca development debate for a moment... the developer promised not to seek tax breaks. And is now looking for a tax break. Or abatement. But only on construction material sales tax, so you see, it's really not the same as NOT PAYING TAXES, it's just a small abatement. You and I will make up the difference. No worries.<br /><br />Let's not buy into the notion that downtown "is more expensive than suburban or rural sprawl". Who said anything about sprawl? Who believes that this project could be successful in say, Danby? Why don't we evaluate the project on its own merits and not be scared into thinking everyone is fleeing downtown because Rt. 13 is cheaper? <br /><br />The rich get richer. The rest of us get luxury hotel rooms, upscale condos or cheesy government buildings that we can't use. And we get to pay the developers taxes too. <br /> RoyalProposition