Ithaca Builds

Mapping, photos and information for Ithaca construction and development projects


Ithaca’s Walkability

November 17, 2013 // by Jason Henderson



As Ithacans are well aware, one of the key advantages to living in Ithaca is its walkability. Proximity to groceries, pharmacy, work, etc. make downtown a convenient place to live, and one of the most common tools to measure this metric is the Walk Score® algorithm. Walk Score® uses several geographic data sources (primarily Google Maps/Places) to feed a formula that determines Walk Score ranking from 0 to 100 (0 being least walkable, 100 being most walkable). The more amenities within the immediate area (.25 mile radius accounting for street geography and various obstacles), the higher the Walk Score ranking. Although I couldn’t get the raw data from Walk Score®, I was able to get a heat map for Ithaca showing the walkability, and the average Walk Score ranking for the City of Ithaca’s roughly 30,000 inhabitants. Here’s how we compare with the major US cities with high Walk Score rankings:

From Walk Score’s Most Walkable Cities in the US

#1 New York with an 87.6
#2 San Francisco with an 83.9
#3 Boston with a 79.5
#4 Philadelphia with a 76.5
#5 Miami with a 75.6

Commuting-mode to work is also a very important metric. As shown in the chart below, based on the 2006-2010 American Community Survey, the City of Ithaca boasts a 41% share of walking to work (charts from the Ithaca-Tompkins County Transportation Council). Tompkins County as a whole has a very high walking ratio compared to the rest of the nation, as noted in a New York Times article a couple years ago- 15.1% of Tompkins County commuters walk to work, compared with a national average of 3.5%. On average nationwide, walking, cycling, and public transportation are vastly overshadowed by the private automobile.


Property Taxes, Exemptions, and Cornell: Some Thoughts and Figures

September 29, 2013 // by Jason Henderson

2013 City Heat Map: Property value assessment per acre

Tompkins County has a lot of property value that is tax-exempt: just over 40% of property value in the county is levied zero property tax. For the purposes of this discussion, I’m focusing on Cornell since this topic is most commonly discussed in regards to Cornell because of its size and influence.

Whenever the exemption is brought up, it always seems to carry a two-sided commentary that goes something like this:

“It’s unfair that Cornell’s monetary contribution to the City under the Memorandum of Understanding is so low, and it forces everyone else to pay higher property tax rates” -OR- “Cornell contributes so much to the community via its payrolls, student population, and programs so the property tax exemption is fair because of those benefits”

Both these viewpoints have merit, and they attempt to answer the same question: do Cornell’s positive externalities justify the gap in the public provision of services for Cornell versus what Cornell pays directly under the MOU?

I don’t know the answer, but my intention is to provide a rough snapshot of the situation in this article. In both cases, the reality is contingent on many complicated factors: even though Cornell only voluntarily pays a small share of the tax burden it would be charged if it weren’t exempt, it wouldn’t be fair to assume that everyone else’s tax rate is exactly higher by the exempted amount. As for the flip-side argument, Cornell’s local positive externalities are hard to measure, and include things that can’t feasibly be measured at all. In addition, Cornell’s full tax burden were it not exempt would be exorbitant, and clearly way beyond the value of public services it consumes.

I ran a basic analysis below with the 2013 Tax Roll GIS data from the Tompkins County Department of Assessment to figure out what Cornell and Ithaca College would have been levied if they weren’t tax exempt. I ran filters for Owners, Roll Section, City/Town parcels, adjusted for duplicate objects, and then used the 2013 rates based on assessment value.


New York’s Real Property Tax Law Section 420-A (RPTL 420-a) defines the property tax exemption for Nonprofit organizations (including educational institutions) at the State level.  At the federal level, income revenue is exempt due to the designation as a 501(c)(3) corporation. The federal not-for-profit status also allows for sales tax exemptions on many types of sales in various states; Cornell has exemptions in 14 states plus DC. The RPTL nonprofit exemption originally dates back to 1799, but the differences then versus now in the nature and practices of many nonprofits, and especially educational institutions are legion. Back then it was highly unlikely to afford the opportunity or the time to go to college, and institutions were small. Nowadays, both private and public universities have grown enormous, and tend to operate like businesses, competing internationally to attract customers to the products in education they offer. Tuition and fees certainly make-up a large portion of the operating revenue, but there are also other major sources (see operating revenue below, in this Year End 2012 financial statement).


For Cornell, tuition and fees accounts for about 28% of total operating revenue (and this most recent fiscal year shows an operating loss of over $158 million, although total net assets show a lesser decline on the consolidated statement further below).  Keeping the tuition proportion low makes sense in order to attract students with financial aid, and also from a business-perspective for a diversified revenue structure. However, non-tuition-based revenues have been a point of contention for local taxpayers at Universities elsewhere.

The revenues from licensing intellectual property have landed Princeton University into another round of disputes with its New Jersey neighbors, and this time, the matter is in a New Jersey Tax Court, with residents claiming suit against both the University and the Town of Princeton.  Cornell’s parcels account for about 60% of the exempt value of property in Tompkins County, and just over 70% of the exempt value in the City.  See below for the exemption summaries in both the County and City.


Cornell University pays about $1.2 million a year to the City of Ithaca under the terms of the MOU (increase pegged to CPI until 2023), and it was about this time last year that Mayor Svante Myrick suggested Cornell increase its payment to $3 million. The same case was made back in 1995 under Mayor Benjamin Nichols, whom went to the extent of holding building permits for Cornell until negotiations progressed (under the premise of inadequate parking due to zoning), and meanwhile over a hundred construction workers demonstrated outside City Hall due to their inability to start work (New York Times articles below). Nichols was able to get an increase from $143,000 the current year to $250,000 the next fiscal year, and an escalation to $1 million to 2007. Taking a different approach, Mayor Alan Cohen negotiated in 2003 for the current 20-year MOU, which bumped-up Cornell’s payments further with the provision that Cornell would be treated equally and fairly under the planning and building approval process.

The long span of the tax exemption has indirectly supported Cornell’s construction of top-notch facilities, since these improvements on their land parcels are not taxed (although Cornell must pay building permit fees for construction, which is .7% of total construction costs).  The long run expectation has been set, so it’s understandable for Cornell to operate very defensively in this regard.  The consolidated statement below shows net land, building and equipment value at just over $3.3 billion as of June 30th, 2012.  This will surely increase further as additional buildings come online (Gates Hall, Klarman Hall), and the future two million square foot Cornell NYC Tech Campus is developed on the 2.5 acres of Roosevelt Island.


One crucial point in this discussion is the consideration of the context in which Cornell operates. Cornell competes vigorously with other education institutions for customers internationally so its stance is naturally much different than the gross majority of businesses in Ithaca that compete regionally and locally. Not to say that Cornell is “above” local politics, but rather the opposite: Ithaca unfortunately has little to offer compared to a major metro area for many students. A commentator on Ithacating’s blog made a great point about this:

“I know many applicants don’t even consider Cornell because of its rural isolation – I definitely had no intention of coming here for college and I only applied for my PhD on the suggestion of an advisor who recommended some of the faculty. I would have never considered it over a school close to a major airport or rail line, even if that school were lower ranked. And it’s not just student preferences for these things that matter – if the school struggles to attract top faculty, that has an effect on student recruitment and selectivity as well.”

Ithaca’s a supremely nice place to live, but as far as major real-world opportunities (especially the sort that can be readily paired with a professional education), Ithaca has difficulty competing. The NYC Tech Campus is a natural and strategic reaction to the reality that proximity and mobility to outside opportunities matter, sometimes even more so than a degree. The Tech Campus will allow Cornell to compete in an environment where technological education paired with work outside of the classroom has become a highly-desired and necessary education program.

To get back to the point at hand though, what does Cornell contribute to the local community that would typically be outside the purview of other types of businesses/institutions?

I don’t have enough information to begin to quantify Cornell’s total positive externalities, but here’s a list of some major considerations:

-Sales tax exemption vs. use of local vendors for both Cornell and students: whatever Cornell cannot do in-house it must purchase from a vendor, and many of these vendors are companies located here. In addition, since Cornell brings a massive student population to town, many retail/service sectors benefit in sales, which are taxed through sales tax and indirectly through property tax on those businesses.

-Student housing: most of Cornell’s customers must actually live here, therefore one could logically count the revenues and pursuant property taxes of off-campus student housing as a positive externality (although this could be treated as a break-even in this context, since off-campus housing consumes public services conceivably equal to the property taxes paid). Not many types of businesses require their customers to relocate to their area of operation, so I think it’s justifiable to count this as an atypical externality when compared to a typical business. On the other hand, Cornell’s employee payrolls and pursuant taxes on their properties, local purchases, etc. don’t seem like a logical externality: most businesses would have their employees live locally anyways, so if Cornell were instead a large manufacturing operation, the same logic would apply.

-Tompkins County Cornell Cooperative Extension: out of an $8.5 million budget in 2012, Cornell contributed nearly $2 million, paired with Federal Sources (chart below)

-Cornell contributes about $829,000 a year to assist in funding TCAT (Tompkins Consolidated Area Transit, a not-for-profit bus operator), which is also equally-matched by the City and County (and Cornell employees and students benefit with a deep transit discount called OmniRide, in addition to free evening rides). The largest revenue chunk (36% of a total $12.7 million budget) comes from NYS taxpayers: the DOT’s State Operating Assistance Fund (STOA)

-Cornell operates its own police force of 54 sworn officers, and a total staff of 70. I’m not sure what it costs Cornell, but the City of Ithaca has 63 sworn officers, and the Ithaca Police Department’s total budget is $11.66 million in 2013.

-Back in 2008, Cornell announced a 10-year $20 million strategy for boosting local housing and transportation infrastructure through their Government and Community Relations Department. There are a number of programs run through this effort, but for the sake of simplicity, we could peg this value at ~$2 million a year.

I’m probably omitting something worth noting, so please correct me if I have. I’m obviously omitting non-local externalities like academic research, tech discoveries, etc., which are far beyond this scope and magnitude.

Given this information, if we were to tally-up the positive externalities above and compare with the gap in public services provided to Cornell minus the MOU, I think we’d end up with an answer showing that the positive externalities far outweigh the public service funding gap, but because of the functioning of the tax exemption, there’s a mismatch in value capture for public service. In an ideal world, the funding for public services should be tied directly to the beneficiaries of those services in the proportion that they benefit. The benefits of these positive externalities don’t necessarily accrue directly to the City and County’s bottom lines- more likely, they may indirectly.

I highly doubt Ithaca and Cornell would ever end up with a situation like that in Princeton, but perhaps the goal should be to follow positive examples elsewhere. Yale and New Haven’s town-gown relations are commonly held up as a cozy relationship, and examples can be drawn from many other places, since almost every other college town has this exact same battle over budgets.

I would ultimately argue that Cornell’s chief concern is not the financial implication of paying more, but that of autonomy. An institution the size of Cornell is probably more concerned with being able to control exactly what is done with its finances, so taxes to a municipality providing services is much less desirable than a situation in which Cornell has the power to either provide those services to itself, or have the ability to closely oversee or control how their tax spending is used.

Any further obligation under an MOU is an agreement that Cornell is signing for which it has zero legal obligation to do so. Given Cornell’s stance, I think a reasonable approach would be to find ways to utilize Cornell’s self-interest to local benefits that are in common. Cornell is concerned with safe housing, transit for employees and students, local student opportunities, attracting the brightest people, etc.- so a firm strategy would be to bring aligned objectives to the table, and start there. City and County services don’t pay for themselves, but without a legal obligation to pay them, Cornell should only have an interest in negotiating through shared objectives.

The utilization of tools like value capture (essentially LVT per marginal increase) could be useful, whereby a municipality creates a new or improved infrastructure service or public program, and the private land that benefits is taxed to account for the increased value of the land. In the case of land already exempt, we’re not talking about a land value tax, but instead, a negotiated agreement to help fund specific projects that would benefit both the City/County, and Cornell’s operations (TCAT is a perfect example). It would help to know Cornell’s share of the current ongoing public service costs, and also how the cost share is determined, which would probably provide another set of complications.

I have no doubt that the perspective of approaching Cornell through shared objectives is the stance of Mayor Myrick and other local officials faced with this reality every day. Local governments in college-towns may have tremendously difficult budget constraints, but also opportunities distinctly unique to those places as well. The proposed 2014 City Budget this next fiscal year has a projected 1.9% gap in expenses to revenues, and Tompkins County Administration has announced a recommended 3.5% property tax hike for next year.

I imagine Cornell will keep the MOU as-is, but it will be interesting to see whether or not this discussion crops up again this year, and how it is received by locals, students, and faculty.


Tompkins County Selling Biggs Property to Ohio Development Group

September 26, 2013 // by Jason Henderson

The NRP Group LLC of Cleveland, Ohio partnered-up with Better Housing for Tompkins County to respond the the County’s July 2012 Request for Proposal (RFP) for acquisition and development of the former Biggs property, a 25.52-acre wooded site right across from Cayuga Medical Center, at the end of Harris B Dates Drive on the left (see tax map and google map below). The site is assessed at $340,000 and the purchase offer is set at $500,000 with proposed contingencies that the County will provide funds for off-site pedestrian and transit improvements.
The NRP group mainly focuses on multi-family development, senior housing, and LIHTC (low-income housing tax credit) projects, and Better Housing for Tompkins County is a local not-for-profit that promotes and incentivizes affordable housing in rural areas by offering purchase assistance, rental housing, and various home repair programs. Since this project will be next door to Cayuga Medical Center, I imagine that the target housing demographic is low-income seniors. Post-publish, there was an Ithaca Times article introducing the project as a 30-90% median income clustered townhouse project with 60 units of one to four bedrooms. The rents translate from $300 to $1300, some units single story and others two story.
If I had a bone to pick with this proposal, it’s this: I think incentivizing low-income housing and senior housing is appropriate, but this sort of development is exactly the kind of thing that gets municipalities into fiscal and transportation trouble. Single-use facilities beyond urban fringes without realistic walkable neighborhoods and amenities aren’t as desirable or fiscally-sustainable as urban mixed-use developments with walkability. Ithaca is a tough development scenario because there’s a shortage of flat, developable land in the urban core, but I think if land held by the public is being transferred to private hands for a specific project, there should be a public disclosure of the lifecycle public costs, as well as a fully-fleshed-out plan for development. (The Town of Ithaca Planning Board will be reviewing this Fall)
Given the new information in the article, I think mixed-income is a good move, and it will be interesting to see the actual proposal in Town Planning, and whether or not there is housing demand information from Cayuga Medical Center staff. The article references plans for walking paths and a neighborhood-style layout, but we’re still looking at a single-use facility 3 miles up West Hill from downtown.

Assessment report and Tompkins County Legislature minutes embedded below.




Making Room Exhibit: Museum of the City of New York

September 13, 2013 // by Jason Henderson

Swung down to the Making Room Exhibit in NYC this week and wanted to share some photos from this project put on by the Citizens Housing Planning Council. The Making Room initiative works on:

“cutting-edge housing and demographic research, new design proposals, and pragmatic policy recommendations that would expand housing options in New York City to meet the needs of our diverse and growing population.

The Making Room initiative is specifically focused on three new housing types for the New York City marketplace:

1. Small, efficient studios designed for single person households;

2. Legal shared housing options for unrelated adults;

3. Accessory units to make a single family home more flexible for extended families or additional renters.”

Many of the zoning and building codes in NYC and across the US were written under the premise that housing rules could enforce a lifestyle of traditional households and “the ideal American family.” Over time, it’s led to the development of a housing stock that leaves out a large portion of the population that would prefer to live in units or developments that have been made illegal. The mismatch of supply and demand primarily hurts housing consumers.

The plan has been to identify these specific issues, inform, and analyze what policies should change in order to allow for the development of a better housing stock.

By far, the most interesting thing in the exhibit is the micro-unit (it’s 325 square feet, but you’d be amazed by how big it actually feels, due to the clever design, and space-saving built-ins- here’s a link to better images of the unit). Parts of the showcase included information on other projects that are being planned or have been built all over the world. All in all, it was very interesting.

Ithaca-based Taitem Engineering is working on LEED, Commissioning and more in collaboration with nArchitects, the adAPT NYC Design Winners for the My Micro NY project [thanks Jan!].



Thoughts on Parking and Minimum Parking Requirements

September 3, 2013 // by Jason Henderson


There’s been a lot of discussion generated on minimum parking requirements for new developments in Ithaca, and I thought I’d throw in my two cents.

Firstly, to define: minimum parking requirements are rules that determine how many parking spaces must be supplied on a proposed development based on various features of the proposal (number of planned dwelling units, square footage of planned office space, etc., Central Business District not included).

Given that the City of Ithaca now has a parking director, and the Board of Public Works has announced their support of abolition, my hope is that a discussion on minimum parking requirements for new development resurfaces once the new director has established a “current state of affairs” and a sound plan of action for parking managed by the City.

The social, economic, and physical implications are well studied, and I recommend turning to this short and excellent video of Cornell’s Michael Manville (link courtesy of Daniel Keough) for a brief overview of what has been identified in modern studies:



A philosophical basis for arguing in favor of abolition has roots in the inequity of placing the burden of provision on the private sphere, specifically, new building developments. Just about everywhere in the US, municipalities have decided that parking should be built municipally and provided at a cost to willing consumers, and thus we have municipal garages, metered street parking, and of course, “free” parking, which is parking that carries a public and social cost, but is free to the consumer. One could argue that public entities shouldn’t be in the business of providing parking at all, and furthermore, that car owners should establish their own private arrangements for vehicle storage, but in this case, that’s beside the point.

Any planning rule, especially minimum provisions, imply an enforced sponsorship upon the developer/owner of the good that must be supplied on the development parcel. Minimum parking requirements create one of the most extreme situations, because it involves the mandated supply of a good that generally takes up a lot of land space, making the opportunity cost high, and in addition, parking itself is not a very productive use of space. In turn, the owner must shift this burden onto the consumers of the building space, whether they are apartment tenants, office, or retail tenants.

The enforcement of this burden works a lot like a tax. Let’s use a new apartment development as an example: the development will charge higher rents because a burden of supplying parking has been put on them (and oddly enough, the building itself was contingent on whether or not it could supply the required parking). In turn, a portion of rent from apartment renters can be attributed to this burden.

Apartment renters in this example are sponsoring the cost of vehicle ownership regardless of whether they own a vehicle or not, and in addition, are sponsoring the automobile ownership of existing drivers in the area. Ideally, those that decide to own a car should pay for the full cost of that ownership and usage. These rules enforce a “me first” policy for existing drivers, whom are commonly the political constituents of those in office with the power to make change.

There seems to be an American (especially young, urban) trend against automobile-use in general, and there are countless other reasons as to why that is, but in this case, it’s quite clear that the argument in favor of the abolition of these sorts of rules is rooted in sound logic of fairness.

Of course, if minimums were done away with, then you get parking spillover into areas with “free” parking, or un-metered street parking. In this case, as mentioned in the video, the remedy is to price parking. “Free” parking is not economically free. Taxpayers right now are paying for the space regardless, and it would be a fairer and more efficient policy to price parking provided by a municipality. Parking benefit districts, restrictions, and permitting are all logical and efficient policies that should be utilized in favor of minimum parking requirements.

San Francisco’s SFPark is one example of this sort of policy, aimed at using demand-driven information to establish pricing. This sort of system is probably out of reach for Ithaca for quite some time, but given the small size of Ithaca, it probably wouldn’t take long to figure out what pricing would be appropriate, and what permitting system would work best for everyone.

As for new developments, it’s not hard to imagine that developers tend to have a good understanding of what parking demand they will see in their proposed developments, so if there is demand for parking on-site, it will be planned to meet that demand (with the consideration of opportunity cost), and will come with a price, as it should.

The Ithaca Commons, A Salute to Nearly 40 Years

August 20, 2013 // by Jason Henderson

As we roll towards 2014, I couldn’t help myself from digging-up the original Ithaca Commons (then the “Ithaca Mall”) plans done by Anton J. Egner & Associates back in 1974. It’s hard to imagine Ithaca without the Commons; it’s an enduring icon of our downtown, and I think it’s unlikely to ever revert back to a street serving automobiles. Just as Ithaca has experienced over some recent years, pedestrian malls in many towns have tended towards decline, but changing urban demographics are reversing this trend, as younger and even older generations flock towards more urban areas offering a walkable lifestyle. I can’t help but think this is a positive trend, due to the inherent economic efficiencies found in urban areas.
Pedestrian malls are much like town squares, plazas, or piazzas in function. They provide a necessary open public space for events and public assemblies. You could think of the town square as the oldest idea in urban planning, essentially pre-dating written history, when villagers arranged tents or huts in a fashion as to allow for a central open space to gather around a fire to stay warm. The modern versions in urban areas are significantly different in appearance and amenity, but not so different in the fact that they still function as a societal center or heart. People play music, display or make art, gather, speak, rest, eat, shop… it may not have a campfire or huts, but the idea hasn’t changed- it has adapted to the modern context.
So I hope you enjoy browsing these images, and if you’re interested in the full as-built set, you can download them here. Stay warm.



Detailed section plans: ithaca_mall_2






The Old Fountain that was removed: ithaca_mall_8



Planters and planting layouts:





Entry sign:



Section & Paver Plans:ithaca_mall_13









Hart Hotels, Holiday Inn Project, Taxes

August 13, 2013 // by Jason Henderson


The Ithaca Journal has announced that the City will be hosting a public information session on Hart Hotel’s new tower project, now no longer a Holiday Inn-branded project. Hart Hotels has done mostly Holiday Inn-branded projects, but has several homegrown-branded hotels under management. What’s more, they will be applying for a tax abatement (much like the Hotel Ithaca Marriott project) through the Community Investment Incentive Tax Abatement Program.

One of the factors at play may be mortgage interest rates. This project is going from about 3.5% to a likely 4.2-4.4% within the next year, so for a $17.8 million project, that’s about an extra three million in financing costs over the course of a 30-year mortgage. The seven-year tax abatement program would save about $1.24 million in tax expenses (see chart, not counting inflation), assuming taxable improvement equals project cost, and we hold the total mill rate constant. Since the Marriott got an abatement, Hart Hotels would be wise to go for it.


Taxes are awfully high in the City. If the parcel’s total value at the end of construction is assessed at $25 million and they financed $17.8 million at 4.3% for 30 years, debt service payments would be $1.057 million per year, City + County + BID taxes (22.16985 mill rate) would be about $554,246 per year, and School taxes (16.9534 mill rate) would be $423,835 per year holding current rates constant.

Real Estate Taxes: $978,081 per year
Debt Service: $1,057,000 per year

So for this example, real estate taxes are not far from being equivalent to the 30-year financing costs of this project per year. If taxes were significantly lower, there may not be so much financial pressure to participate in the tax abatement programs.

IURA’s Cherry St Parcel

July 2, 2013 // by Jason Henderson

The Ithaca Urban Renewal Agency (IURA) has officially announced that it is accepting Requests for Expressions of Interest (RFEIs) on its 6-acre agency-owned Cherry St. Parcel that was divested from the City of Ithaca (whom retained ownership of 2.25 acres of the original 8 acre site for the preservation of wetlands). The surroundings are an industrial park, the railroad, and a future extension of the Black Diamond Trail.
I’m not aware of any solid proposals or developers interested in this development opportunity, but I’m sure it’s been on the back-burner for some. Industrial parks can be a difficult environment to develop: zoning is I-1, so one could conceivably build a 40 foot high building on 50% of the 6-acre lot (getting you to 1/2 million SF at 4 stories), but who would fill it? There’s a lot of enthusiasm in Upstate NY about a resurgence in local manufacturing, local goods, etc., but the growth of these industries will obviously be quite subdued compared with the past. However, it will be interesting to see what comes of this, particularly because it will trigger conversations about the future of this area of Ithaca.



Ithaca Bike Boulevard

June 10, 2013 // by James Douglas

Perhaps this post should be called the Safe Routes to School project, but we’re gonna go with Bike Boulevard Plan for this one. Building on the trend of creatively and effectively applying for grants, the City of Ithaca together with the Ithaca City School District were able to secure close to $300,000 from the NYS Department of Transportation to construct what is essentially the City’s bike boulevard plan, adopted September, 2012.
The proposed system will be made up of dedicated bike lanes on select streets (Third from Cascadilla to Thirteen, and Tioga from Court to the Commons are proposed), and other streets made more bicycle and pedestrian appropriate by lowering the speed limit to 25mph, added signage, and traffic calming measures like speed humps/tables.
The plan, shown below, is made to make Boynton Middle School, the High School, Fall Creek elementary, and BJM elementary accessible by bicycle for residents of “The Flats.” Beyond schools, the route makes going from the Ithaca Falls to Wegmans a much simpler ride.
Given that the adopted route was made before funding was secured under a different pretense, expect certain changes to be made on the route, such as extending the boulevard down Cayuga St to Boynton, and perhaps responding to any commentary from the public, which the City intends to solicit soon. It is estimated that the construction of the Bike Boulevard/Safe Route to School will happen in 2015. More on this as it develops.

Land Assessment in Ithaca

May 23, 2013 // by Jason Henderson

I decided to post this since I have a hunch that folks interested in development in the area are also interested in zoning and taxation (I am too). The following post goes nowhere near a full analysis of the situation as far as land taxation in the City of Ithaca, but I hope it will provide some food for thought. It’s largely inspired and replicated from a talk I went to by Joe Minicozzi of Urban3, an urban design/analytics consultancy based in Asheville.

In the past 20 years Ithaca has seen an enormous amount of development happening where “the cars go.” I’m not going to argue the ethical pros and cons of this type of development, but every taxpayer should be aware of some of the incentives at play. One of them is taxation. All across the US, cities generally tax the land of large, strip-mall and suburban-style parcels at less per acre than downtown parcels, but still have to provide the same, or sometimes more infrastructure and public service.

Why land assessment?
Land assessment is synonymous with a “land value tax” or LVT, which is the levy on the land itself. LVT disregards buildings, fixtures, paving, etc., and all other improvements to the land.

This is an important distinction because it establishes an independent economic signal for the ownership of the land, thus a lower land assessment per acre signals a less desirable parcel, but a higher assessment per acre signals a more desirable parcel (if we were to use the assessor’s valuation as the basis for market price).

Many factors affect the land’s actual value, but land assessment can show us how governments view their value. Tompkins County assesses land values separately from the total assessment value, so when we look at our property tax assessment, there are two components: land assessment, and total assessment. Land assessment is lumped-in with total assessment, so if you subtract land assessment from the total, you get the assessed value of everything but the land.

The City and County both tax a flat rate on the total assessment. Unfortunately, it is not a split-rate system. What’s a split-rate? It’s when you shift the tax burden from the building assessment to the land assessment. Why would you do this? If more land is more expensive to hold, and more building is less expensive to hold, then you end up with more building on less land, meaning greater density. Density is important because it’s generally less expensive for cities to provide services to: fire trucks have fewer roads to travel, shorter water and sewer pipes provide more service to a greater number of people, fewer roads mean less potholes to fix, etcetera. Density also pays a greater share of tax revenue per acre. A one-family suburban-style home on one acre will pay less than a 30-unit garden style apartment complex on one acre. Cities rely on density for tax revenue.

From an urban design standpoint, there are also criticisms of taxing the non-land portion, since a higher finish-grade building will get taxed more than a lower finish-grade building since it has a higher value, meaning a higher risk for the developer (in future taxes, marginal construction expenses for higher finish-grade, and possible vacancy due to rent premiums to achieve a return on investment). It leads some developers to go with “run of the mill” designs, less expensive finishes, etc., but that’s another story. Many cities and school districts in Pennsylvania have actually turned to a split-rate system and have seen success- Pittsburgh is a notable example: in the midst of the steel decline, the city still fared quite well.

Henry George, an American writer and political economist from the late 1800s actually proposed that governments need only to establish a single tax on land; however, the idea never really took off in the US, but did in Denmark in 1903, and a few other countries around the world (this economic philosophy is referred to as “Georgism”).

Now the fun part: I have some images I took from a quick GIS analysis I did of Ithaca’s 2011 taxation and zoning. Each map is essentially a “heat map,” one for allowed maximum “zoning density,” and one for land assessment per acre. The zoning density measure is a bit crude- I just used allowed maximum building height multiplied by allowed maximum lot coverage, but it gives a rough idea of what sort of building volume is allowed on each parcel as dictated by 2011 zoning. The “zoning density” map is important to compare to the land assessment per acre map because, in a perfect and predictable world, each parcel (if flat and history and politics didn’t exist) should correlate with how it is zoned i.e., what amount of density is allowed.



There are multitudes of other considerations in deciding land assessment on each parcel and those that take the time to fight their assessment rises probably fare better, but it’s clear that there is some discrepancy. The take-home point here is that regardless of the minor discrepancies in land taxation per acre, look at the parcels where the cars go!

In 2011, Walmart’s parcel (easy target, sorry) had a land assessment of $189,000/acre and consequently paid $3,611/acre in land taxes (if we use the total millage rate in the City of Ithaca for 2011: 19.109240)…. meanwhile, let’s take one of Shortstop Deli’s parcels (the west one) and do a comparison. Shortstop’s parcel’s simple zoning density measure is less than half of Walmart’s, but its land is actually assessed at $463,776/acre, and consequently paid $8,862/acre, more than 2.4 times per acre than Walmart paid.

Unfortunately, similar comparisons yield similar results- take the William Henry Miller Inn for instance: this parcel paid just shy of $11,000/acre, and the office building next door on Aurora? Over $7,200/acre.

Obviously, these are just a few examples, but this analysis begs an important question for long term urban planning in Ithaca, i.e. How can Ithaca better achieve its desired “Smart Growth” if not enough incentives are there to do it? What are the other parts to this equation and what changes need to be made now to create the community that Ithaca wants in the future?