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In a special Monday morning meeting the The Tompkins County Industrial Development Agency (IDA) approved bonding support for the Arrowhead Ventures project that will bring a BJ's Wholesale Club, senior housing, wetlands, and a bird sanctuary to the Shops At Ithaca Mall.  The $1.2 million project will divert property taxes collected over a 15 year period from the retail store to support financing the senior housing portion of the project.

"This was an important step in getting the project to move forward," says Project Advisor Andrew Sussman.  "We need to start construction right away.  It's our goal to build this thing as quickly and efficiently as we can.  Everybody's looking forward to getting this business open and get the housing built."

In order for the Payment In Lieu Of Taxes (PILOT) Increment Financing (PIF) agreement to go forward it must be approved by all the affected taxing authorites.  Last year Tompkins County and the Town and Village of Lansing voted to participate in the agreement.

That leaves the Ithaca City School District.  School Board member Brad Grainger chided the IDA for disenfranchising the school district by giving them almost no notice before giving the district a deadline for a vote.  The district also proposed an alternative distribution of property taxes that would bring more income to the schools.  IDA members rejected the new proposal on the grounds that taking the time to consider it would legally require actions that would effectively kill the project by extending the time needed to come to an agreement.

The school board was expected to vote on whether or not to participate in the PIF Tuesday.  However no action was taken when the school Finance Committee, which met Monday night, did not send a recommendation to the full school board.  Granger says that a proposed resolution on the PIF is expected to be on the school board's agenda for its meeting next Tuesday.

IDA members voted 4-2 on the revised project after rejecting the original proposal in December.  IDA members Larry Baum, and Legislators Nathan Shinagawa, Jim Dennis, and IDA and Legislature Chair Martha Robertson voted for the proposal, with IDA members Jeff Furman and Dan Cogan voting no.  Legislator and IDA member Will Burbank had to leave before the vote, but said that while he commended Robertson and the developers for coming up with a 'better project,' he would have voted no because he thinks it sets a precedent that will 'disadvantage other businesses'.

Burbank charged that the Village of Lansing was intransient when asked to unlink the residential and wetlands part of the project with the retail part.  Robertson said that Village of Lansing Mayor Donald Hartill's repeated refusal to consider alternatives could have avoided the need for any PILOT financing at all.  But Village officials say that the project meets the needs of their comprehensive plan, creating a buffer between retail and residential uses.

"It's been an interesting exercise in local politics," Village of Lansing Mayor Donald Hartill said at a Board of Trustees meeting Monday evening.  "I'd just as soon not go through it again, but it came out reasonably well."

Robertson turned out to be the swing vote, explaining that the combination of a better project and staggering income losses the County is facing.  Increased costs coupled with state reductions and an impending tax cap have largely threatened county social programs, notably youth services.  Total sales tax generated by the new store are estimated to be around $748,000 per year.  That money will be split among Tompkins County municipalities, not including the City of Ithaca.  The County itself will realize about $430,000 of that.  By the 15th year of the PIF developers estimate the store will generate $986,970 in sales tax.

"That's more than one percent of the tax levy," Robertson says.  "That's real money for the County.  That would give us one more tool to possibly save the youth programs that really affect kids in the school district."

The bottom line is that if the project goes forward Tompkins County and the other affected taxing authorities will receive much needed income that is sorely needed as most are looking at budget and personnel cuts.  That will help mitigate state cuts and New York State's effort to limit the amount of taxes local municipalities can raise.  Robertson has been a vocal advocate of mandate relief in the face of the proposed 2% property tax cap that State legislators seem almost certain to impose.  She returned from Albany last week where her arguments seemed to fall on deaf ears.

"We're doing all we can, but it seems to not matter," she says.  "They're real good at lip service in Albany.  They have all promised 'we will never do a tax cap without mandate relief.  But that's exactly what we're going to get.  Without mandate relief.  I've never seen it this bad.  I'm so frustrated.  I don't like broken promises."

Construction Manager Jim Bold says that a change in the construction materials used to build the residential part of the project will lower construction costs, part of what developers hoped would make the project more palatable to IDA voters.

"We're using a pre-cast concrete wall panel that will be pre-insulated and fabricated on-site," Bold says.  "That system provides some cost savings, and that, in part, is how we were able to reduce the amount of the PIF."

IDA members were presented with a spreadsheet showing how the new terms are better for Tompkins County than the version they rejected in December.  The length of the PIF has been reduced from 20 to 15 years.  Under the terms of the PIF BJ's will pay the full amount of taxes, but some of that will be diverted to help finance the construction of the senior housing piece of the project.  Less will be diverted each year until the full amount is paid after 15 years.  The base amount of taxes calculated on the current value of the property will continue to be paid to the affected taxing authorities, with a percentage of new taxes being diverted in the PIF.  In addition the residential piece was removed from the PIF -- full value property taxes will be paid on the rental units from day one.  The return on investment to the taxing jurisdictions will increase by over 150 percentage points.

Developers say that they hope construction can begin as soon as possible with the goal of opening the store some time this year.

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