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Legislature Supports IDA Bonding for Lansing Development

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Legislature Supports IDA Bonding for Lansing Development

Tuesday, December 7, 2010
The Legislature, after two hours of thoughtful discussion, provided the approval needed for the County's Industrial Development Agency (IDA) to proceed further in considering bonding for a mixed use development project in the Village of Lansing, adjacent to the Shops at Ithaca Mall. The vote was 8-6, with Legislators Peter Stein, Will Burbank, Carol Chock, Dooley Kiefer, Pam Mackesey, and Legislature Chair Martha Roberston (who also chairs the IDA) voting no and Legislator Kathy Luz Herrera excused.. Action was based on a member-filed resolution from Legislator Jim Dennis. Last week, the Legislature's Planning, Development and Environmental Quality Committee, in a split vote, failed to recommend an identical measure to the full Legislature.

The action authorizes the IDA to issue up to $2.3 million in Recovery Zone Exempt Facility Bonds for the Arrowhead Ventures project and to make available dedicated payments under a payment-in-lieu-of-tax (PILOT) financing agreement (known as PILOT increment financing) to support debt service on the bonds or other qualifying project costs. The project, proposed by the Triax Management Group, would include a BJ's Wholesale Club, 12 units of senior housing, and expansion of a reclaimed wetland for bird habitat--'the senior housing and wetland development elements required by the Village of Lansing. The recovery zone bonds, made available as part of the federal stimulus program, expire at year's end. The IDA must still approve the financing. All taxing authorities in question also need to approve the increment financing, with the Ithaca School Board yet to act.

Debate before the vote reflected the difficulty of the decision for many Legislators. Legislator Chock and Chair Robertson were among those who questioned the public benefit the project would create to justify the tax abatement financing and, with developers maintaining that the PILOT financing arrangement would assist with the housing portion of the project, not retail, providing an abatement for 12 senior housing units. And while they were assured repeatedly that BJ's was not receiving the benefit and would pay taxes and market rental rates, several expressed concern that it might set a troubling precedent for the IDA, which has not provided incentives for big-box retail. Several said they had started out skeptical about the project, but in the end found they couldn't ignore the projected economic benefits to the county, both through as much as $750,000 projected in sales tax revenue (recapturing sales now occurring outside the county) and the construction and retail jobs the project is expected to create.

A proposal to separate the bonding and increment financing portions of the action failed by a vote of 5-9. IDA president Michael Stamm said approving the bonds without the financing arrangement would kill the project.

Among a dozen people addressing the Legislature prior to the vote were City of Ithaca officials including Mayor Carolyn Peterson, who expressed city concerns over tax abatements for retail, and Lansing Village Mayor Don Hartill, who called the project important to the community's well-being.

IDA action is scheduled at a special meeting Monday, December 13.