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Officials of smaller municipalities often cast the City of Ithaca as a Goliath that drives policies that are not always to their liking in Tompkins County.  This time the Village of Lansing is taking the role of David.  Village Mayor Donald Hartill says that self-interested commercial developers and city legislators are trying to stall or kill a PILOT Increment Financing (PIF) agreement between Tompkins County and the developers of a mixed use project that is slated to include a BJ's Wholesale Club and senior housing.  He says it is simply about the money.

"I've had a very significant education in politics in the last week," Hartill told Village Trustees Monday.  "Had this been done two years ago when money was flowing it would have been a piece of cake.  They want the sales tax, pure and simple."


If the PIF is approved by the Tompkins County Industrial Development Agency (IDA), Arrowhead Development and Triax Management Group, LLC. (which manages the Shops at Ithaca Mall) will build an 82,000 square foot retail building that will house a new BJ's, 12 senior housing units, and wetlands and a bird sanctuary on land to the north of the mall, just behind the YMCA.  Some of the property taxes assessed to the retail portion of the project would go to guarantee the mortgage on the housing part of the development.

The assessed value of the property will increase by about 40% in the first five years, meaning that the four taxing authorities would immediately see a 40% increase in the property taxes they currently get from the property.  Over 20 years that would increase to the full assessment.  In addition three of the four would see an increase in sales tax (school districts do not get sales tax revenue).  Hartill says that part alone would amount to aabout three quarters of a million dollars for the County.  He notes that the combined tax impact for the village would be about $300,000, and insists that the PIF provides no benefit to the commercial side of the project, and only benefits the senior housing part, which is something the Village wants very much.

Vocal opponents include representatives of the University Park, Florida-based Benderson Development Company, LLC, which owns South Meadow Square, the large retail development that includes the Ithaca Walmart, Lowes, and KMart.  Village officials speculated at their Monday meeting that those developers want to kill the Arrowhead project in order to lure BJ's to their own property, and that city legislators want the retailer within Ithaca boundaries in order to reap the sales and property taxes for Ithaca.  Hartill says that the developer's representative has threatened legal action if the PIF is approved.  And village officials charge that city interests have mischaracterized the PIF to make it seem as if the retail store will benefit from it.

"I think the City made a concerted effort to describe this as some sort of benefit to the commercial component," says Village attorney David Dubow.  "That it's money being given to a retail operation, when in effect the retail operation is going to pay 100% of their tax.  This is purely a proposal that would divert some tax revenues for the benefit of senior housing.  The County's comprehensive plan, the Village's comprehensive plan -- everybody's comprehensive plan has been encouraging this."

Dubow says that all four property taxing entities -- Tompkins County, the Ithaca School District, and the Town and Village of Lansing -- have to agree to participate in the PIF for the project to get the full amount that is needed for financing the senior housing.

"My understanding is that it might not fly at all if even one of the taxing authorities opts not to participate," he says.  "It diminishes the amount that's available to underwrite some of the cost of the residential component."

Hartill noted that when the Legislature’s Planning, Development and Environmental Quality Committee voted 3-2 to not support the PIF, the three who voted against it all have close ties to the city.  He also says that he has heard many times that the Village has not weighed in on the project.  He wrote a letter to IDA chairwoman Martha Robertson that he says was only distributed to the IDA and TCAT, while a letter opposing the project written by a student received much wider distribution, including to the County Legislature.

"The reason we are in this situation is that we very much want to preserve the nature of the Village, in particular as a mechanism that goes from high traffic commercial to residential," Hartill says.  "It would be very desirable housing because it is within walking distance of all of your needs.  The sketches that we've had are very attractive.  It's the kind of mix of housing that makes (the Village of) Lansing Lansing.  We are exploring subsidized housing in a different part of the village that compliments this kind of a development.  It's the kind of thing that we aspire to do."

The David and Goliath situation has put Triax and Arrowhead between a rock and a hard place.  They have to build the housing component in order to get Village approval, but without the PIF they won't have the funding for it.  Dubow says that there is a time issue as well, to do with stimulus funding that expires if it is not allotted by the end of this year.

"Triax has said they won't be able to afford it if they don't get the PIF," said Village Trustee Lynn Leopold.  "We have said we want the residential part or you don't get to do BJ's.  Those two projects were tied together, because we had no interest in rezoning that parcel for high traffic commercial use.  We've already been through that with Home Depot's effort to locate here.  That left a very bad taste in everybody's mouth.  We weren't willing to entertain yet another effort to rezone this piece unless we got something out of it.  They (Triax) approached us.  It was their idea.  They said, 'If you give us this PDA we'll give you senior housing.'"


Village officials expressed surprise that county officials would vote against the PIF because of the amount of revenue the County stands to lose, and also because the mixed use project helps realize goals that the County as well as the Village has incorporated into their planning.

"The projections are that this would amount to a $40 million sales enterprise," Hartill says.  "That's based on pretty reliable estimates.  It is also very unlikely to detract from the current sales tax revenue elsewhere in the county because this particular kind of store doesn't exist here.  The experience of other municipalities in surveys I have read is that the traffic increase from this kind of store actually increases the sales tax revenue."

Hartill was was among a dozen people who spoke for or against the project at Tuesdays County legislature meeting.  Supporters included representatives from Arrowhead and Triax, the Tompkins County Chamber of Commerce, Tompkins County Workforce Investment Force, and Julie Crowley, a merchant with locations in both the Village of Lansing and the City of Ithaca.  Opponents included representatives of the Ithaca Urban Renewal Agency, and City of Ithaca representatives.


Ithaca Mayor Carolyn Peterson said that the City's concerns go beyond where a business is located.  She said a business recently asked her whether it is true there are no abatements for retail businesses, and that granting the PIF would confuse the issue for businesses considering locating in the City in the future.  She said city concerns have more to do with setting precedents and having a clear process for giving aid to businesses.

"My bottom line question is what do I tell businesses in the City of Ithaca?" she asked.  "Do we have a well developed criteria from the County or the IDa of how to handle projects that may be coming forward to the City of Ithaca?  Are there, in fact, abatements available for City projects, and for retail?"

"We consider this project very important to our well being, of course," Hartill replied.  "But the project has three components.  The commercial part of that project is not part of the abatement.  It is the residential piece and the remediation to the wetlands that is, in fact, the subject of the abatement.  That needs to be clearly understood."

Triax Principal Partner Eric Goetzmann added that there has been a lot of misleading rhetoric in the approval process.  He noted that Triax paid for independent feasibility studies at the request of the IDA, and that they showed the presence of BJ's at the mall would help stem $144 million of sales that leave Tompkins County in part because there isn't a discount club store here.  He said that studies show it won't have a significant negative impact on existing businesses.  He also noted unequivocally that BJ's officials have stated that if they don't locate in the Village they will not seek a location in the City.

"BJ's has made it perfectly clear, not only to me, but directly to the IDA subcommittee in a telephone conversation, that they are not interested in being located in the city," Goetzmann said. 

He said that his group has been open with the IDA and paid for independent confirmation of projections, and reiterated that the economic incentives his group is asking for are necessary to make the project happen.

The proposal before the legislature included both the use of stimulus monies, which nobody opposed, and the County agreeing to participate in the PIF if granted by the IDA.  A proposal to separate the two was defeated 5-9, and the Legislature passed the resolution 8-6 in large part because of the sales tax benefit.  That makes two taxing authorities out of four.  The Town of Lansing and the Ithaca City School District has yet to sign on.  Hartill says the Town will almost certainly agree to participate, and he hopes the school district will see the financial benefit to their bottom line.

	Correction: The projected sales impact, not sales tax impact, is $40 Million.  IDA Chairwoman Martha Robertson points out that number should be modified to a net impact of $32 million to $34 million and then multiplied by the percent of non-taxable items such as food and pharmacy. The County recieves about $420,000 in sales tax and the village of Lansing $16,558.13.

Hartill says that with a projected sales tax impact of $40 million, the County has the most to gain by approving the PIF.  While most people assume the Village gets the lion's share of sales tax because the mall is located there, the reality is that the tax revenues are doled out according to a complicated formula that is based on population.  4% goes to the state off the top.  Of the remaining 4%, 2.25% goes to the County  (just under $1M), and 1.75% goes to the Towns and Villages.  He says the County retail community as a whole would also gain.

"When I drove through Big Flats after Thanksgiving the parking lots were jammed," Hartill notes.  "(According to a survey) Chemung County has a net influx of sales.  That same survey shows that there's about a $140 million leakage out of Tompkins County."

Hartill says that the IDA vote may be close because of the split between Ithaca IDA members and those from elsewhere in the County.  He says that IDA Chairwoman Martha Robertson (who is also Chairwoman of the County Legislature and a representative from the Town of Dryden) may  have the swing vote on whether or not to grant the PIF.  That may present a hurdle for the project, as Robertson questioned whether the public benefit of the project justifies the proposed tax abatement, and voted no on Tuesday.  Legislators Peter Stein, Will Burbank (also on the IDA), Carol Chock, Dooley Kiefer, and Pam Mackesey also voted no.

A public hearing is scheduled by the IDA next Monday at 8am.  While Hartill will be out of town, he encouraged other Village Trustees to be present to lobby strongly for the project.  He noted that the key advocates will rightly be the developers themselves.  Their capacity for convincing IDA members that the project will be beneficial to the County as a whole will determine whether David hits Goliath with a rock -- or ends up in a hard place.

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