PEDC Recap: Green Street Garage redevelopment agreement passes on split vote

ITHACA, N.Y. –– It was a fairly straightforward meeting last night for the Ithaca Common Council’s Planning and Economic Development Committee. With some trepidation the committee gave its blessing to the contractual agreement and city-backed financing of public portions of the Green Street Garage development, advanced the new energy-focused supplement of the build code as part of the city’s Green New Deal plan and discussed a couple minor matters before the committee as well.

For those who like to read the background material before jumping to this monthly report, your link to 143 pages of not-so-light reading is here.

City and Vecino set terms of agreement for Green Street Garage rebuild

The special order of business last night was the Public Hearing on the Disposition and Development Agreement (DDA) for the western two-thirds of the Green Street Garage in Downtown Ithaca. Just as Rimland was before the PEDC last month for “The Ithacan” tower that redevelops the easternmost third of the Ithaca Commons, the Vecino Group must also get their DDA publicly heard, approved by the PEDC and by the full Common Council.

The spark notes version is that the DDA is the product of negotiations between the developer and the Vecino Group’s project team that allows the project to move forward under terms that the city is amenable to. It sets the terms of control and maintenance for the conference center space, the parking garage and the affordable housing. Basically, the DDA details who is responsible for various components, since this redevelopment is a rather complex public-private partnership. This has been hashed out for well over a year now, so apart from lingering though understandable worries about the finances of a post-pandemic conference center (let us pray it’s over by mid-2024), there weren’t any major issues to contend with going into the meeting.

Also bundled with the Green Street Garage DDA discussion is the adoption of a citywide Hotel Room Occupancy Tax, which would add a 5 percent charge on overnight stays starting April 1 to help fund the conference center’s operations (charitable and government-related stays will be tax-exempt) and would need to be renewed every three years. Alongside collection agreements with formal hotels and inns, the city is working with Airbnb to establish a collection agreement from the lodging platform’s users. The governor’s office tends to be picky about approving local hotel room taxes, but the county legislature signed off and Governor Cuomo gave the proposed tax proposal his approval.

The last component of the DDA vote is for “City Financial Support for Public Portions of the Project”. Without getting too technical, what would happen is that the Tompkins County Industrial Development Authority (TCIDA) would issue two sets of taxable lease revenue bonds totaling $42.48 million, to be paid back at 4 percent fixed interest over 33 years, starting in 2024, with revenue from leasing of the conference center space and with parking fees in the rebuilt garage.

The public hearing came and went because no one was there to make a public comment, written or spoken. However, going into the discussion portion, the PEDC was fully expecting a lot of questions on the topic. The DDA is a complicated piece of paperwork.

“I saw that the housing was 181 units between 40-80 percent AMI (Area Median Income),” stated Chair Seph Murtagh (D-2nd Ward). “Do we know what the breakdown is?”

IURA Executive Director Nels Bohn pulled up a document and responded that 16 percent of units are at 40 percent AMI, 24 percent of units are at 50 percent AMI, 47 percent of the units are to be priced at 60 percent AMI, and the final 13 percent of units will be priced at 80 percent AMI.

“I don’t think I have a question, and I think I’ve been clear from the beginning that I don’t support the conference center, and with all due respect I can’t support an agreement that continues to plan for the conference center, which I’ve always thought of as a bad idea but now I think is a worse idea than ever. I’m sorry but I can’t support this,” said councilor Donna Fleming (D-3rd). Bohn noted that because it’s a higher subsidy than usual per affordable housing unit, a community benefit needs to be included to appeal to the state. “Not only would it have to go through site plan approval again, it would likely face an uphill battle to get the funding for the affordable housing,” said Bohn.

Councilor Cynthia Brock (D-1st) also stated that, just as she had voted against the project in March, she would be voting against the project again now, citing concerns about the financial viability of the conference center as the country recovers from the pandemic, and the economic vulnerability and low pay of the hospitality industry that would be supported by the conference center. “It doesn’t build the type of economy and jobs that we need in our community to build diversity for our residentsIf we could have made the decision again, I would have preferred the money go towards something that could benefit the city at-large, such as a bus depot.”

Brock also expressed concerns about the firm that would be in charge of managing the units, CRM Rental Management. Brock noted that CRM manages many smaller (40 unit) affordable senior and specialty needs housing, rather than 181-unit affordable housing building, and noted for comparison that Ithaca’s West Village is 225 units and “always has management issues”.

Bohn responded that CRM manages 5,000 units in a variety of locations and scales. “Their experience is broad and they’re based out of a Central New York office, in Rome, New York.” Project representative and architect Bruce Adib-Yazdi added that Vecino and its investors scrutinize their property managers very closely and would make sure the building and its residents’ needs are being met.

Councilor Laura Lewis (D-5th) spoke out in favor of the proposal. “I acknowledge that there is some risk with this project, especially with the inclusion of the conference center. I have supported this project in the past, and I continue to support this project because of the benefits to the community; the housing, the benefits to Cinemapolis, the huge benefit of the reconstruction of the parking garage. The conference center will not be opening until 2024. There will be measures in place to ensure there are financial reserves in place leading up to 2024. There is a partnership of community members and investors in the belief that this will benefit our community by providing diversity of housing in the center of the city, and it will provide jobs….I’m supportive of this. There are some risks, but I think sometimes it’s important to take measured and calculated risks going forward for the better long-term benefit.”

“I think this is visionary, I think this is an incredible project,” added Murtagh. “The conference center is the part of this project the people are most worried about. The amount of planning that’s gone into this, I’m very impressed. Building in layers of protection for the city is reassuring. There may not be an answer to this…have we looked into the industry with conference, is there an assumption that we will return to in-person conferences? My presumption is yes, because while Zoom conferences are cheap, they’re not very pleasurable for people. But are you concerned that there might be more online conferences in the future and the impact that could have on this?”

The response to Murtagh’s question was quite thorough. City Deputy Planning Director Tom Knipe responded that a December 2020 survey of event planners and the hospitality industry indicated that 38 percent thought conference attendance would return to pre-pandemic by 2022, another 45 percent thought attendance would return to pre-pandemic levels by 2023, and another 16 percent by 2024. So by the time this opens, 83 to 99 percent of planners think conference attendance will be back to pre-pandemic levels. Also, the relatively small size of the Ithaca Conference Center may make it more appealing to events that were previously a little too big for it, but are now expecting to downsize a little as they recover post-pandemic.The tax projection calls for a return to pre-pandemic levels locally by 2025, in an effort to be conservative and ensure the project financially works.

Peggy Coleman of Visit Ithaca, also on the Zoom call line, added Ithaca and Tompkins County are the “shining star for the way we have cared for each other…we’re a third-tier city. People will not be driving to New York City or flying to Los Angeles, they will be going more remote, as much as I hate to call us that, where their guests will be feeling safer in remote locations.” Gary Ferguson chimed in to say ASM Global has tentatively agreed to operate the conference center, with differential pricing to allow a discounted rate for in-community rates, weddings, charity dinners, and the like. ASM also operates the convention center in Syracuse and the new one in Downtown Albany, and would be paying a living wage at the Downtown Ithaca Conference Center. (Seriously now? The DICC? Come on.)

“I don’t think we’ll ever get back to the normality we had pre-COVID…but we will persevere and move past this terrible time, and we will emerge stronger because of it. I choose to be hopeful and I’m certainly conscious of the risk involved with this project,” said Murtagh.

The vote on the DDA carried 3-2 as expected, with Lewis, Murtagh and Councilor Stephen Smith (D-4th) in favor, and Brock and Fleming opposed. The concern is valid. The conference center, while desired for years, comes on the heels of a destructive black swan event (the pandemic) and the future is not at all clear. No one wants a “white elephant”. The hope is that by being very financially conservative, the project will fit within the budget lines. There was some nervousness about room taxes in general given the ebb and flow of the hospitality business, and worry was also expressed about getting Airbnb to comply, though Knipe noted the company has similar arrangements in other communities, including with Tompkins County’s government.

As for the hotel tax, that passed 4-1, with only Fleming opposed. Brock stated while she was opposed to the project, seeing as the committee voted it to move forward, she wanted it to be successful and the tax would support that. The bond discussion was uneventful, though it does seem like even with high occupancy that the parking fees in the garage will have to go up to cover the construction bond payments. The vote to ask the IDA to issue the construction bonds passed 3-2, with Fleming and Brock opposed. The full council will vote on the three items at their February meeting.

Also on last night’s agenda was the “Inter-municipal Agreement Regarding Historic Preservation Planning Staff Services with the Town of Ithaca”. The town of Ithaca is looking to create a historic preservation program for local buildings of significant architectural or historical significance, and plan to craft a law that mirrors the city’s. In trying to achieve this, it makes sense for them to reach out to a local planner with this specialty –– and that would be the city’s Bryan McCracken. They’ve reached out to the city and offered to supplement $7,000 of McCracken’s salary so that they can make use of him during normal business hours and compensate the city for leasing one of their full-time planners.

Discussion was fairly brief. Councilor Lewis was curious to learn more about what a joint city-town Ithaca Landmarks Preservation Commission would look like. McCracken said it would likely be nine members, with at least three members from the city, three from the town, and three with an expertise or background knowledge in historic preservation. Councilor Brock was curious what was driving the town’s interest now.

“The town feels that they have some historic resources that they would like to protect, like Forest Home,” said McCracken. “A lot of the discussion about creating a landmarks ordinance stems from the purchase of a Greek Revival house by a developer that was slated to be torn down…it was moved, but that was an impetus behind this ordinance.”

The PEDC seemed comfortable with the idea, given assurance that the city would not experience a decrease in quality of McCracken’s services. The proposal received a friendly tweak courtesy of Councilor Fleming, and the vote to send to the full council for approval next month passed unanimously.

It was a busy night for McCracken, as we was also before the board with a second request for consideration and vote. The Landmarks Society of Western New York (LSWNY), New York State Office of Parks, Recreation and Historic Preservation, and the Preservation League of New York State is looking to partner with a community to present a historic preservation conference, and in November 2021 they want that community to be the city of Ithaca. This year’s virtual event will consist of a day-long workshop on neighborhood revitalization through incremental development and another two days of sessions that address a broad range of preservation related topics.

As the partnering community, the City of Ithaca would help fund the Conference by securing a Certified Local Government (CLG) sub-grant in the amount of $22,464 from the New York State Office of Parks, Recreation and Historic Preservation. This would fund speaker’s fees, honorariums, workshop materials, an audiovisual consultant for the virtual setup, scholarship awards for about 100 of the 400 to 500 attendees, printing costs and mailing costs. The CLG sub-grant is 100 percent reimbursable, and no local match is required –– the city would just have to front the money and would be paid back later. City staff would be responsible for some minor administrative, reporting and accounting functions while most planning and execution tasks would be completed by the other partnering organizations such as Historic Ithaca. Basically, if the full Common Council approves, the Planning Department will formally apply for the grant, which is practically guaranteed from the state and will pay for all the conference expenditures. If they say no, then Ithaca wouldn’t be hosting, and many planners will be sad.

“It sounds like a great opportunity,” said Chair Murtagh. In response to a question from Fleming, McCracken said a private company would handle the online audiovisual work; not a bad thing, given last night’s PEDC meeting started almost fifteen minutes late due to technical issues. The November virtual aspects aim to play it on the safe side, as the grant needed for an in-person event would have been much greater, and the planners need to get their event together now. The sub-grant application and city’s role in the event was approved by PEDC unanimously, and will head to the full Common Council for potential approval.

An example score for a Collegetown project under the Ithaca Energy Code Supplement.

Lastly, an agenda item was voted on to circulate formally named the Ithaca Energy Code Supplement (IECS) and informally called the “Green Building Policy.”  IECS is part of the city’s “Green New Deal” plan. Quick refresher, voting to circulate meaning that it goes out to city departments and opens up for public comment. After a month, the PEDC can review all the comments receive, tweak the legislation accordingly, and decide whether or not to send on to Common Council for a vote to make it the law of the land. This means it would become part of the city’s legal code in March at the earliest, though it looks like they’re budgeting time-wise for an April or May approval.

The IECS will require that all new buildings are constructed in such a way to produce 40 percent fewer greenhouse gas emissions than New York State code requires and will require that new construction be net-zero by 2030. The policy will use a points-based system for new construction projects in Ithaca, which will be awarded points for efficient electrification, affordability improvements, renewable energy and other aspects like walkability and adaptive reuse.

New buildings — both residential and commercial — will need to achieve six points to be approved. For example, under “efficient electrification,” a building can get five points for ground source heat pumps and one more point for electric stoves and ventless heat pump clothes dryers, with a prerequisite being no fossil fuels in the building. Since the August 2019 draft, one awardable point was added for kitchen equipment electrification (vs. gas stoves and the like), and scoring was added for on-site electric vehicle infrastructure.

The IECS is also circulating for town review as well (both Ithacas, city and town, have adopted the policy), and it will include a reference manual for property owners and builders, the IECS itself, and a copy of the ordinance’s legal language. Once approved, the IECS will become the official policy within a few months, and automatically tighten to a more stringent standard in January 2025. By 2030, only net zero energy buildings that are free of fossil fuel use will be permitted. As pointed out to me by environmental advocate Sara Hess, practically all major building projects underway have adopted structural designs and engineering systems that will comply with the first (pre-2025) stage of the IECS.

Several members of the Ithaca hub of the Sunrise Movement emailed to or spoke at the PEDC meeting to express disappointment with the IECS, which they felt could be stronger from the onset and do a better job addressing social and racial justice aspects. “We need to be thinking holistically, not just about sustainability in the Green New Deal, but social concerns,” said Climate Justice Cornell’s Zasu Scott.

“There was one substantive change (from the agenda) where we incorrectly stated the grace period was nothing, when really it’s 90 days between adoption and effective date, in line with state code,” said Nick Goldsmith, the Sustainbility Coordinator for the city and town of Ithaca.

The PEDC noted the Sunrise Movement comments about increasing the points, and concern about the verbal framing. Goldsmith said he’s received a couple hundred comments and changes have been made to the document, adding he’d be happy to address the latest comments. Murtagh raised the idea of raising the six point first stage system to 12 points, or as Goldsmith phrased, why not move up the timelines sooner.

“12 points immediately, I’m a little hesitant to do that, because I’d like to see how (the IECS) works first, and the twelve points is also based on the grid getting cleaner,” said Goldsmith. “A lot of projects have been already using this as a yardstick, as a tool.” Goldsmith added that they thought of adding the NYS Stretch Code as the Sunrise Movement suggested, but by making it mandatory, it detrimentally impacts the costs of constructing affordable housing projects at what staff felt was a limited gain in greenhouse gas reductions. The code does allow one point for renovations of a building that currently uses natural gas is made and proven to be more energy efficient, even if it still uses natural gas.

“Most of the developers are looking at it and are trying to hit those marks because ultimately it’s going to be less expensive and more environmentally-friendly for them,” added city Planning Director JoAnn Cornish. Taitem Engineering’s Ian Shapiro noted that with the cost of residential heat pumps coming down, that they make as much sense economically as they do environmentally. The issue has been business/workforce projects, as businesses tend to have higher energy needs. In response to a question from Murtagh, Goldsmith suggested natural gas could be banned from residential projects given the move to electric heat pumps, but for commercial-grade energy needs, such as industrial/laboratory uses, it would probably not be feasible at this time. Cornish and Goldsmith did promise that the Sunrise Movement concerns would be addressed, and if it makes sense to change the code, that the recommendations would be brought back to the committee.

The vote to circulate the IECS passed unanimously, pending some revisions to be carried out this week. The revised version will be emailed out and posted on the Ithaca Green Building website (www.ithacagreenbuilding.com) by next Monday. Expect more discussion on the topic at the PEDC’s meeting next month.